Japanese telecoms giant NTT DoCoMo Inc is seeking to sell its stake in a loss-making Indian joint venture with conglomerate Tata Group, likely at a deep discount, bowing out of the world’s second-biggest mobile phone market.
DoCoMo’s exit from India after just five years highlights the difficulties both foreign and local telecom companies face in a fiercely competitive market, where carriers rely on cut-throat pricing to attract subscribers.
DoCoMo paid $2.61 billion, or nearly Rs. 15,730 crore, for a 26.5 per cent stake in Tata Teleservices in 2009. Under the joint venture agreement with Tata, DoCoMo could sell its stake for about half of what it originally paid for the stake or at a “fair market price”, whichever was higher.
“We invested in India because at the time we saw excellent growth prospects in emerging countries and we wanted to be involved there,” DoCoMo Chief Executive Kaoru Kato told reporters on Friday after the company posted its earnings for the financial year ended March 31.
“We came to this decision (to sell) because the growth we’ve seen in five years is not what we expected,” he said.
Tata Sons, the holding company of the Tata Group, confirmed DoCoMo’s plans to sell its stake in Tata Teleservices.