New Delhi/Tokyo: Tata Teleservices, India’s No.4 mobile carrier, plans to raise Rs 3000 crore ($670 million) through a rights share issue that will be subscribed by major shareholders, including Japan’s NTT DoCoMo , two sources said.
The details of the rights issue are expected to be announced as soon as this week, the sources with direct knowledge of the matter told Reuters on Tuesday, declining to be named as the matter was not public yet.
DoCoMo already owns 26% of the Indian company and is set to maintain its holding after the issuance, the sources said, adding that proceeds from the issuance will be used to fund Tata Teleservices’ 3G rollout.
Tata Teleservices, a unit of India’s diversified conglomerate Tata Group, had said in November it had set aside $500 million for spending on 3G wireless data services.
The Indian company won rights in an auction this year to offer 3G services in nine of India’s 22 telecom zones for Rs 5864 crore ($1.3 billion).
With 3G services, carriers’ margins are expected to improve as data services offer a higher profit than voice, analysts say, but premium services may take time to pick up in a price-sensitive market like India.
NTT DoCoMo bought a 26% stake in Tata Teleservices for $2.7 billion in 2008, giving Japan’s top mobile operator a foothold in the world’s fastest-growing mobile market.