NTT DoCoMo is investing 8 billion rupees (US$176 million) in Tata Teleservices, a mobile services company in India.
The Japanese mobile operator holds a 26 percent stake in Tata Teleservices, and the investment is its contribution to a rights offering by the Indian company.
Payment of one portion of the funds has been made so far, and the rest of the investment is scheduled to be completed in May, NTT DoCoMo said on Thursday.
Tata Teleservices will be using the funds raised in the rights issue to expand the coverage and strengthen the quality of the 3G network it launched in November last year. It will be responding to increasing market competition for new customers, NTT DoCoMo said.
The company uses the Tata DoCoMo brand for its GSM (Global System for Mobile Communications) services.
Tata Teleservices spent 58.64 billion rupees last year in an auction for 3G licenses in nine of India’s 22 service areas. Indian mobile operators see 3G services as a way to go beyond commodity 2G services, where margins have fallen because of a fierce tariff war.
Vodafone said earlier today that it was spending $5 billion to buy out the share of Essar Group in its Indian joint venture.