The Hindu : Business : Tata Sons, DoCoMo announce open offer

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Tata Sons, DoCoMo announce open offer

Special Correspondent

Offer begins on January 8 and closes on January 27, 2009

— PHOTO: VIVEK BENDRE

OPEN OFFER: Ratan Tata, Chairman, Tata group, with Ryuji Yamada, President and CEO, NTT DoCoMo, at a press conference in Mumbai on Friday.

MUMBAI: Japanese telecom major NTT DoCoMo and Tata Sons have announced a Rs. 949-crore open offer to shareholders of Tata Teleservices Maharashtra (TTML), for purchase of up to 20 per cent equity at Rs. 24.70 per share.

The open offer, to begin on January 8 and close on January 27, 2009, is for acquiring 38.42 crore shares.

On Wednesday, Japan’s biggest mobile-phone operator NTT DoCoMo acquired a 26 per cent stake for $2.7 billion (Rs. 13,070 crore) in the unlisted Tata Teleservices (TTSL), which has more than 37 per cent stake in TTML.

About 80 per cent of TTSL’s equity is with other Tata Group companies while Temasek of Singapore holds about 10 per cent and investor C. Sivasankaran holds about eight per cent. Tata Group companies hold 66 per cent in TTML. Post transaction, 74 per cent will be with existing shareholders of which Tata Group companies will continue to hold about 60 per cent.

Addressing the media, TTSL Managing Director Anil Sardana, said, “Tata Teleservices will issue new equity as part of the deal and the details are currently being worked out. There will be a proportionate representation on the board of TTSL by NTT DoCoMo members.”

He said, “It is a key transaction in the strategic evolution of TTSL as we move to a pan-India presence in dual mode. We are a unique company and since launch in January 2005, the company has grown at 87 per cent CAGR (compounded annual growth rate) against the industry average of 60 per cent. We will soon be the leader in the Delhi-NCR region and plan to replicate this in all our other geographies.”

Ryuji Yamada, President and CEO, NTT Docomo, said, “NTT-DoCoMo will significantly help Tata Teleservices scale up its revenue in the non-voice segment using its experience in GSM and value added service (VAS) segment.” DoCoMo has a market share of over 50 per cent in Japan, and generates more than 40 per cent of average revenue per user (ARPU) from data services. About 11 per cent of Tata Teleservices’ revenues come from data services, which is higher than the Indian industry average of eight per cent.

NTT DoCoMo designs its own mobile handsets and TTSL will work jointly to develop and introduce high-end and low-end handsets for the Indian market.

Mr. Yamada said “We have agreed to buy 26 per cent in Tata Teleservices and have no intention to go beyond this for the time being.”

TTSL provides services on the CDMA platform and is launching services on the GSM platform from January. Also, the auction for 3G spectrum is expected to take place in January and DoCoMo has considerable expertise in this space offering 3G services since 2001. It is currently developing a next generation network to migrate to 4G service offering ultra high speed communication of about 100 mb a second by 2009 in Japan.

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