Mumbai/Tokyo: Tata Teleservices said on Wednesday there was no truth to a media report that Japan’s NTT DoCoMo will invest an additional $1 billion in the Indian telecom firm.
The Economic Times said DoCoMo, Japan’s biggest mobile phone operator, is expected to lift its stake to 35-40% from 26%, citing two people familiar with the deal.
“There is no truth in any such reports,” a spokesman for Tata Tele told Reuters in an emailed statement.
“Beyond that, as a Tata group company, we do not comment on market speculation,” he added.
The paper said the deal is expected to close in a few months, although not all the funds may go to unlisted Tata Teleservices as companies in the Tata group could sell some of their holdings.
A DoCoMo spokesman said nothing had been decided and declined to comment.
India is the world’s second-largest wireless market after China with more than 630 million mobile users but competition is intense amid price wars and after just-completed auctions for 3G and broadband airwaves cost far more than expected.
Fifteen players, including Bharti Airtel, Reliance Communications and Vodafone, are trying to gain more subscribers, while other foreign players like Telenor and Sistema are backing newer entrants.
DoCoMo, which controls about a half of the Japanese market and competes with KDDI Corp and Softbank Corp, first bought Tata shares in 2009, entering India as a saturated domestic market forced it to speed up expansion overseas.
It also took a stake in Tata Tele’s listed unit Tata Teleservices (Maharashtra).
Tata Teleservices had 72.5 million mobile subscribers as of end-June, according to data from Indian telecom regulator Trai, and a company executive said this month that it had added another 2.5 million users in July.
Subscriber growth has been fuelled by its per-second billing system it launched in mid-2009, which also led rivals to start similar bill plans.
India mobile penetration only recently crossed 50% and the number of subscribers is increasing by 16 million a month.