NTT Docomo Seeks 1 Trillion Yen Carrier Deals in Asia-Pacific

May 28, 2014 5:32 am ET

May 28 (Bloomberg) -- NTT Docomo Inc. 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. and KDDI Corp. offer promotions to boost subscribers. The company was the last of Japan’s three wireless operators to offer Apple Inc. iPhones in September and Tsubouchi said in March discounts for smartphones could eat into profit.

NTT Docomo shares rose 0.6 percent to 1,693 yen at 1:51 p.m. in Tokyo trading, narrowing its decline this year to 1.9 percent.

The company 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

The carrier, which paid 249 billion yen in dividends last year, has announced or completed $1.8 billion in acquisitions in the past five years, according to data compiled by Bloomberg.

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.”