NTT Docomo Seeks 1 Trillion Yen Deals in Asia-Pacific

NTT Docomo Inc. (9437) is seeking multi-billion dollar deals for mobile phone carriers in the Asia-Pacific region as Japan’s largest wireless operator hunts for growth overseas.

“If investing 1 trillion yen ($9.8 billion) can bring us a return, we will go ahead,” Chief Financial Officer Kazuto Tsubouchi said in an interview today at the company’s Tokyo headquarters. “We don’t set a cap on the investment size, since we have the ability to raise capital.”

NTT Docomo, which had 546.5 billion yen in cash and equivalents as of March 31, is seeking targets in countries that are growing and are also popular destinations for Japanese travelers, Tsubouchi said. The company would prefer to take a majority stake in other carriers although some nations limit foreign investment in phone operators, he said.

Generating growth at home is proving difficult for NTT Docomo amid a declining population and as smaller rivals SoftBank Corp. (9984) and KDDI Corp. (9433) offer promotions to boost subscribers. In September the company was the last of Japan’s three wireless operators to offer Apple Inc. (AAPL) iPhones and Tsubouchi said in March discounts for smartphones could eat into profit. Sales of Apple iPads will start June 10.

Photographer: Dhiraj Singh/Bloomberg

A woman walks past a shutter of a closed store displaying the logo of Tata DoCoMo in Mumbai. If Tata Teleservices fails to meet performance targets in the fiscal year ended last month, Docomo can sell the Tata shares for 50 percent of the acquisition price or a fair market price, whichever is higher, according to a statement from Docomo. Close

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Photographer: Dhiraj Singh/Bloomberg

A woman walks past a shutter of a closed store displaying the logo of Tata DoCoMo in Mumbai. If Tata Teleservices fails to meet performance targets in the fiscal year ended last month, Docomo can sell the Tata shares for 50 percent of the acquisition price or a fair market price, whichever is higher, according to a statement from Docomo.

NTT Docomo shares rose 0.5 percent to close at 1,691 yen in Tokyo trading, narrowing its decline this year to 2 percent.

Japan Destinations

China and Korea were the top destinations for Japanese tourists globally in January, according to Japan Tourism Marketing Co. website. Thailand was fourth, followed by Taiwan.

In 2001 and 2002, NTT Docomo invested a total of about $10.2 billion in AT&T Wireless Services Inc., Hiroko Shimoyama, a spokeswoman for the carrier, said by phone. The company sold its 16 percent stake to Cingular Wireless LLC. for $6.5 billion in 2004.

NTT Docomo “hasn’t given up” on overseas expansion, despite losses from previous investments, Tsubouchi said. Among the $1.8 billion yen pending and completed acquisitions during the past five years, about 55 percent were within the Asia Pacific (FAX) region, according to data compiled by Bloomberg.

NTT Docomo last month said operating profit may drop 8.4 percent to 750 billion yen in the fiscal year ending March, the third straight annual decline. The company is also open to alliances with other carriers as it seeks to expand overseas, Tsubouchi said.

Tata Stake

NTT Docomo plans to sell the 26.5 percent stake in Tata Teleservices Ltd. it acquired for 266.7 billion yen in 2009 and 2011.

If the Mumbai-based carrier fails to meet performance targets in the fiscal year ended last month, Docomo can sell the Tata shares for 50 percent of the acquisition price or a fair market price, whichever is higher, according to a statement from Docomo.

Tata Teleservices, India’s seventh-largest operator, reported a net loss of 34.9 billion rupees ($590 million) in the nine months through Dec. 31, according to data provided by Crisil Ltd., the Indian unit of Standard & Poor’s. It had a loss of 48.58 billion rupees in the financial year prior to that. Debt stood at 315 billion rupees as of Dec. 31.

“It is hard if the carrier is not influential,” Tsubouchi said, referring to the market share of Tata Teleservices. “It is a lesson for us going forward.”

NTT Docomo’s operating profit trailed rival SoftBank for the first time in the year ended March, according to data compiled by Bloomberg.

SoftBank added 649,500 net users in March to boost its total to 35.9 million, according to a statement from the company April 7. That compares with 515,500 new subscribers for NTT Docomo and 494,600 for KDDI, the carriers reported separately.

“I don’t think we were surpassed by others,” Tsubouchi said when asked about SoftBank’s rise. “When you are passed by someone in a marathon you don’t aim at passing them to become No. 1. You do what you need to do, follow your our pace. We could be the first one to reach the goal.”

To contact the reporters on this story: Takashi Amano in Tokyo at tamano6@bloomberg.net; Marco Lui in Tokyo at mlui11@bloomberg.net

To contact the editors responsible for this story: Michael Tighe at mtighe4@bloomberg.net Aaron Clark, Robert Fenner

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