UPDATE 1-Tata Tele to launch India GSM network with DoCoMo

* Tata Tele hopes to cover most of India in six months

* Spending $2 billion in building Indian GSM network

* DoCoMo exec says no current plan to up stake in Tata Tele (Adds details)

By Devidutta Tripathy

NEW DELHI, June 10 (Reuters) - India's Tata Teleservices, which is 26 percent-owned by Japan's NTT DoCoMo (9437.T), will launch GSM mobile services later this month and will spend $2 billion to build a national network on the popular platform.

Tata Teleservices [TATASL.UL], India's sixth-largest mobile operator with 35.7 million subscribers at the end of April, currently provides services on the CDMA in a country where three-quarters of the mobile population are on GSM.

The company will start rolling out GSM services in southern India in June under the Tata DoCoMo brand, and aims to cover almost all of India within six months, Tata Tele Managing Director Anil Sardana said.

The company has spectrum in 18 of India's 22 telecom zones and is awaiting for allocations in the remaining four, including the lucrative Delhi area.

India is the world's fastest growing mobile market, and, with over 400 million users, second only to China in size. Tata Tele's bigger CDMA rival, Reliance Communications (RLCM.BO), rolled out its GSM network in January, accelerating subscriber additions.

"Maybe we can just expect about 100 million net additions for the next three years," Toshinari Kunieda, managing director of DoCoMo's global business division, said of the Indian market.

Sardana declined to comment on subscriber targets, but said Tata Tele would have competitive tariffs. DoCoMo would help it introduce data services such as i-mode mobile Internet technology and mobile payment systems.

Falling call tariffs amid cut-throat competition to gain subscribers is lowering mobile firms' average revenue per subscriber (ARPU), a key metric in the sector.

Still, industry data shows the ARPU for GSM operators has been higher than for their CDMA counterparts, and with more than 10 million subscribers being signed up by operators a month, the revenue pie is getting bigger.

"Even though ARPU is decreasing, number of customers is growing. It means revenue is growing," Kunieda said.

DoCoMo completed its purchase of a 26 percent stake in Tata Teleservices earlier in March. Kunieda said there were no current plans to raise it. (Editing by John Mair)