TOKYO/MUMBAI (Reuters) - NTT DoCoMo Inc on Monday said it has asked a London court to ensure Tata Sons Ltd finds a buyer willing to pay at least $1.1 billion (719 million pounds) for the Japanese carrier's stake in a struggling Indian joint venture.
DoCoMo was seeking arbitration after Tata failed to find a buyer for its 26.5 percent stake in Tata Teleservices Ltd, one of India's smallest mobile networks which has failed to grow its subscriber base at the same rate as its peers.
Price wars are commonplace in India's highly competitive telecoms industry, where foreign firms including Vodafone, Singapore Telecommunications Ltd (SingTel) and Russia's Sistema operate either through joint ventures or as separate entities.
DoCoMo decided to exit Tata Teleservices in July, saying the company had not met undisclosed performance targets, and gave Tata 90 days to find a buyer.
That deadline expired on Dec. 3, and under a pact, Tata had to sell the stake for $1.1 billion - about half the price DoCoMo paid initially - or fair market price, whichever was higher, DoCoMo spokesman Shunsuke Muraki told Reuters.
Tata Sons said in a statement on Monday it was trying to resolve the issue. Tata had tried to sell DoCoMo's stake, bankers with knowledge of the matter said, but it failed to get bidders due to concerns about Tata Teleservices' prospects.
Tata Teleservices' mobile user base increased by 2 percent at end-October from a year-ago to 64.78 million, lagging both the sector growth of 7 percent and market leader Bharti Airtel Ltd's nearly 10 percent increase, according to the latest figures from the telecom regulator.
A person with knowledge of the matter said Tata was willing, and had the liquidity, to buy DoCoMo's stake but could only do so with central bank approval.
It was not immediately clear if the central bank would okay the deal, as the rules prevent foreign investors from selling stakes in Indian firms at a pre-determined price.
DoCoMo paid $2.2 billion in 2009 for the Tata Teleservices stake. The company filed the arbitration request on Jan. 3 with the London Court of International Arbitration to ensure the stake is sold, Muraki said.
DoCoMo's exit from the Tata venture at a deep discount adds to a string of loss-making investments in mobile firms. In the late 1990s and early 2000s, it racked up about $13.6 billion in losses from investments in companies including AT&T Wireless, KPN Mobile and Hutchinson 3G UK. It later sold these stakes.
(Additional reporting and writing by Sumeet Chatterjee; Editing by Miral Fahmy)
Culled from Yahoo News.
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