WITH THE EXAMPLE OF NTT DOCOMO’S JV WITH TATA TELESERVICES LIMITED
NTT DOCOMO, Inc. is the world's leading mobile communications company. DOCOMO serves over 53 million customers, including 46 million people subscribing to FOMA, launched as the world's first 3G mobile service based on W-CDMA in 2001. DOCOMO also offers a wide variety of leading-edge mobile multimedia services, including i-mode, the world's most popular mobile e-mail/Internet service, used by 48 million people. With the addition of credit-card and other e-wallet functions, DOCOMO mobile phones have become highly versatile tools for daily life. NTT DOCOMO is listed on the Tokyo, London and New York stock exchanges.
NTT DOCOMO has a global …show more content…
The Brand recognition and the reliability of the brand were very high. So, by using brand recognition it was possible to acquire GSM subscribers. Again, the TTSL advertisements have ranked number one in the major cities of India in terms of TV audience survey which was contributing to the brand recognition.
Japanese telecom giant NTT DOCOMO has picked up a 26 per cent equity stake in Tata Teleservices (TTSL) for about Rs.13,070 crore ($2.7 billion) or an enterprise value of Rs.50,269 crore ($10.38 billion).
With a subscriber base of 25 million in 20 circles DOCOMO has paid Rs.20,107 per subscriber to acquire the stake.
DOCOMO was to pick up the equity through a combination of fresh issuance of equity (20 per cent was supposed to be through this route) and acquisition of shares from the existing promoters.
In addition, DOCOMO, in accordance with regulations of the Securities and Exchange Board of India, was to make an open offer to acquire up to 20 per cent of outstanding equity shares of Tata Teleservices (Maharashtra) (TTML), in which TTSL has a 37% stake, through a joint tender offer along with Tata Sons. Though, they chose not to bid for those stakes.
DOCOMO’s Role in the New Company:
As far as DOCOMO was concerned, they had agreed to participate in the business and operations of TTSL to raise the value of the company. They jointly join and participate in making the business plan of the company. The