NTT DoCoMo of Japan eyes 5% stake in PLDT

Japan’s NTT DoCoMo is reportedly considering a five-percent equity participation in telecommunications giant Philippine Long Distance Telephone Co. (PLDT) as part of a tie-up in 3G (third generation mobile communications technology) services, a new technology wherein PLDT subsidiary Smart Communications Inc. recently acquired a government license and frequency to venture into.

NTT DoCoMo, the wireless subsidiary of NTT Holdings, has confirmed that it was in talks with PLDT to acquire a stake in the largest telecoms firm in the country in its latest expansion step in Asia.

For its part, PLDT confirmed that NTT DoCoMo is indeed considering an equity participation in the former. PLDT chairman Manuel V. Pangilinan earlier informed President Arroyo that DoCoMo would invest $300 million in PLDT.

Another NTT Holdings subsidiary, NTT Communications which is in charge of the fixed line and data business currently owns a 14.6-percent stake in PLDT.

"It is true that we are in negotiations. But it is not clear whether these talks will go through," a DoCoMo spokesman said. The spokesman declined to comment on the size of a possible stake but the Nihon Keizai business daily said DoCoMo, Japan’s dominant mobile phone operator, may take around a five-percent stake in PLDT.

The move is the latest in a series of purchases as DoCoMo dips its feet back into international waters after seeing previous investments abroad turn sour. It earlier said it would buy a 10-percent stake in South Korea’s KTF Co. Ltd. for about $560 million, gaining a foothold in one of Asia’s most advanced mobile markets.

DoCoMo had spent nearly ¥1.9 trillion ($16.35 billion) in the past decade to buy small stakes in operators around the world to promote the use of its I-mode mobile Internet technology and ensure the adoption of high-speed 3G networks on the same WCDNA standard that it uses.

A PLDT official said DoCoMo’s investment may just be a realignment of the Japanese group’s investments in the local telco.

DoCoMo president Masao Nakamura last year said the company is looking to expand in Asia, as Japan’s mobile phone market is nearing saturation. The company also faces competition from KDDI Corp. and Vodafone Group Plc for users of 3G mobile phones, which offer high-speed Internet access.

DoCoMo, the world’s second biggest mobile phone operator, can help PLDT build its 3G mobile phone network. PLDT is spending between $230 million and $300 million over four years to offer nationwide high-speed Internet access.

As a possible use of the $300 million, President Arroyo was quoted as saying that PLDT, through its mobile phone unit Smart, plans to invest heavily in 3G mobile network after being granted a 3G operating license.