NTT Docomo, the largest telecom company of Japan will now take away its name and partnership from its Tata tele services joint venture Tata Docomo. NTT Docomo invested in Tata Tele services in 2009 and till today they invested a sum of 2.61 billion dollars in this Joint venture. But now NTT Docomo will take out its business with sale of its 26.5% shares. A board meeting on Friday in Japan took this decision but no information related to buyer of the shares was given.
NTT Docomo came in to telecom business in 1991 in Japan. They turned as largest telecom provider there and started their business internationally. In 2009 they invested a huge sum in Indian telecom sector with a setup of Joint Venture with Tata Tele services. Tata Tele services was already in telecom sector with their CDMA services known as Tata Indicom. By the entry of NTT Docomo financial strength increased and Tata Docomo stepped in the GSM sector also. After this strengthening company showed a huge increase in customer base by adding more than 30 million customers in 2009-10 and near about 24 million customers in 2010-11.
After its continuous growth for two years company started facing declination. NTT Docomo invested a few more sum in the venture. Even after many steps Tata Docomo failed to show profit, not even a little. In FY 2012 Tata Docomo shown growth of -19% which was a great loss to the company. After continuous poor performance Tata Docomo turned up a loss making company in the market. In the telecom Spectrum which was held in Feb, 2014 company won zero spectrum band which gave sound to the rumors of its crackdown.
Still there is no conformation on the main thing that who will buy the 26.5% shares which NTT Docomo is having. Sources suggest that Tata group will take this step. We have seen that Tata Docomo hasn’t gave up and they shown this by introducing new services like Stretch Recharge, Full Talktime on every recharge and perks to Tamil Nadu customers. But still exit of NTT Docomo will surely leave a effect on Tata Docomo customers. This effect can come up in any form like hike in tariffs, reduction in STV benefits etc.
On this exit a DoCoMo executive said the 2009 deal gave the company an option to exit if Tata Teleservices did not achieve certain targets, and DoCoMo expects it has missed those targets in the fiscal year that just ended in March.
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