UPDATE 2-DoCoMo may take stake in Tata Tele-sources
(Adds Tata Tele comment, background)
TOKYO, Sept 10 (Reuters) - NTT DoCoMo Inc (9437.T) is in talks to buy a stake in India's Tata Teleservices in a deal that may exceed 100 billion yen ($933 million), company sources said, giving it a foothold in the world's fastest-growing wireless market.
The news boosted shares in a unit of Tata Teleservices, Tata Teleservices (Maharashtra) Ltd (TTML.BO), as much as 5.1 percent in a weak Mumbai market. The shares closed 3 percent higher, bucking the broader market .BSESN which fell 1.6 percent.
DoCoMo, Japan's biggest mobile phone operator, is increasingly expanding its overseas presence as growth in the Japanese market slows. The Tata deal would follow its $350 million investment in Bangladesh's number three cellphone carrier TM International (Bangladesh) Ltd.
The sources said DoCoMo's investment would likely only amount to a minority stake and it was unclear if the Japanese firm would clinch the deal as other carriers were keen to take a stake in sixth-largest player Tata Teleservices, part of the Tata Group conglomerate.
A spokesman for Tata Teleservices in New Delhi declined to comment on the matter.
DoCoMo, which competes with KDDI Corp (9433.T) and Softbank Corp (9984.T), said in June it would seek more acquisitions overseas and particularly in Asia, and it would look into China and India if the chance arose. [ID:nT173322]
DoCoMo shares closed up 1.3 percent at 169,200 yen in Tokyo, bucking a 0.4 percent fall in the overall market.
India, with nearly 300 million mobile users, is the second-largest wireless market in the world after China, and still has the potential for further huge growth as just over a quarter of its billion-plus population use cellphones now.
Operators are signing up 8-9 million users every month, and Gartner, a consultancy, expects 737 million connections by 2012.
The growth potential has attracted foreign telecoms firms such as Vodafone (VOD.L), which last year bought a controlling stake in India's third-largest mobile operator.
Singapore Telecommunications (STEL.SI), South East Asia's top phone firm, owns more than 30 percent in Indian mobile market leader Bharti Airtel (BRTI.BO).
Also, India plans to allow operators to roll out 3G networks from 2009, which would allow faster downloads and multimedia applications, opening up new revenue streams for phone firms.
Tata Teleservices, which has about a 9 percent market share, has offered CDMA services and plans to add GSM services to tap more demand, requiring investment of about 200 billion yen in the next two years to set up networks.
Tata Teleservices has a tie-up with the UK's Virgin Mobile for youth-focused value-added services, and is also planning to sell up to 49 percent in its telecoms tower unit, which should help boost its valuations. (Additional reporting by Devidutta Tripathy in NEW DELHI) (Reporting by Noriyuki Hirata, Nobuhiro Kubo and Emi Emoto; Writing by Sachi Izumi; Editing by )
