Japanese telecom giant NTT DoCoMo today said it plans to exit the loss-making joint venture with the Tata Group by selling its 26.5 per cent stake, possibly at a deep discount.
NTT DoCoMo plans to sell by June the entire 26.5 per cent stake in Tata Teleservices it had bought for 266.7 billion yen (USD 2.61 billion) in 2009 and 2011.
Tata Tele offers wireless mobile services throughout India. Vodafone is rumoured to be interested in picking up the stake, though the company declined to offer any immediate comments.
Tata Sons Ltd - the holding company of Tata Group - may buy the stake if it wants to retain control over Tata Tele and does not want its merger with firms like Vodafone.
The Japanese firm said that as per the 2009 agreement that formed Tata Teleservices, DoCoMo can sell the shares if the joint venture fails to meet performance targets in the fiscal year that ended on March 31.
The sale price would be 50 per cent of the acquisition price, which comes to Rs 7,250 crore, or a fair market price, whichever is higher, it added.
DoCoMo in a press statement said that "its board of directors resolved today to exercise option for the sale of the company's entire stake (124.9 crore shares, or about 26.5 per cent stake) in Tata Teleservices Ltd (TTSL)".
Tata Sons in a statement said it was not possible to predict how events will unfold.
"However, Tata Sons is cognizant of its responsibilities, and will act keeping in mind the interests of all stakeholders and in accordance with law. TTSL continues to be an integral part of the Tata group," it said.
In Tokyo, DoCoMo chief executive Kaoru Kato Kato blamed the joint venture's poor performance on a delay in introducing 3G mobile networks that can carry high-margin data services.
The joint venture has seen its mobile subscribers fall by a fifth to 63.14 million in less than two years, according to telecom regulator Trai's data.
DoCoMo, TTSL and Tata Sons had in March 2009 signed shareholder agreement for business alliance. DoCoMo picked up 27.31 per cent stake in Tata Teleservices for Rs 12,924 crore and 20.25 per cent in Tata Teleservices (Maharashtra) Ltd - the listed arm of TTSL - for Rs 949 crore. Overall, DoCoMo holds 26.5 per cent in Tata Teleservices.
TTSL has been struggling in the market. Its listed subsidiary Tata Teleservices Maharashtra Ltd (TTML) is a loss making unit.
TTML, which operates in Mumbai and Maharashtra service areas, reported loss of Rs 658.77 crore in the financial year 2012-13.
