Japanese telecom major NTT DoCoMo has acquired a 26 per cent stake in Tata Teleservices (TTSL), the unlisted telecom entity of the Tata Group, for around $2.7 billion. In a conversation with Rajesh S Kurup, the company’s President and CEO Ryuji Yamada says that the investments wouldn’t have been made if India was only a CDMA-based technology country. Excerpts from an interview:
This is the biggest stake that NTT DoCoMo has taken in any telecom company outside Japan. What exactly is the reason, as earlier NTT DoCoMo has shied away from making large investments? The company has burned fingers after investing in 3G in Europe and had decided to pick up only a minority stake in overseas firms. Is there a change in policy?
This time around, we have made a decision to invest in India as the country is moving into the 3G space, where we have a lot of experience. If it were only CDMA, we wouldn’t have made this investment. The country has CDMA, GSM and is now on the verge of introducing 3G services, while we also expect other new technologies will be introduced.
Will NTT DoCoMo increase its stake by acquiring shares held by entrepreneur C Sivasankaran and Temasek in TTSL?
We have agreed to acquire 26 per cent stake in Tata Teleservices. However, there is no intention to raise the stake from the present levels at this point.
Why did NTT DoCoMo choose Tata Tele and how could NTT DoCoMo contribute as a strategic partner to the company?
There were many reasons — ranging from TTSL being a member of the Tata Group, a reputed company in India, and also a well-known conglomerate in Japan. There is huge growth potential in the country, now that TTSL is also planning to roll out GSM services.
DoCoMo has a lot of experience in 3G and other emerging technologies such as I-Mode (mobile Internet) and Long Term Evolution (LTE). We would look at providing technical know-how and can also assist TTSL in rolling out value-added solutions in the country.