Japan’s NTT seeks to take wireless unit Docomo private in potential $38b offer

Photo: Reuters

Japanese telecoms group Nippon Telegraph and Telephone said it is looking at taking full control of its wireless carrier business NTT Docomo Inc, in a tender offer that could be worth around 4 trillion yen ($38 billion).

The buyout will be discussed at a board meeting on Tuesday, NTT said in a statement following a Nikkei report. The value of the 34% of NTT Docomo’s shares not owned by NTT is based on a 30% premium to Monday’s closing price.

The move comes as Japan’s new prime minister Yoshihide Suga launches a fresh attempt to push the country’s top three mobile phone carriers into cutting carrier fees. The government is NTT’s biggest shareholder, with a 34% stake.

A deal will have broad implications for the sector, with any cuts in fees expected be followed by NTT’s peers KDDI Corp and SoftBank Corp, hitting profit margins.

NTT Docomo was spun off from Japan’s former state monopoly in 1992 as part of the government’s efforts to drive competition in the sector and listed in 1998.

“Post acquisition, Docomo will no longer be answerable to shareholders. If the government instructs it to cut prices, it will oblige,” Jefferies analyst Atul Goyal wrote in a client note.

The government hopes that lower carrier fees will help stimulate spending in other parts of the economy.

Pressure from Suga comes as carriers are investing in building out next-generation 5G services seen as critical to ensuring Japan’s competitiveness.

The telecoms ministry’s efforts to enhance competition include backing Rakuten Inc’s entry into the sector this year. Its model of offering low-cost plans could come under strain should broader prices fall.

Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.