Japan's NTT DoCoMo to buy up to 26 percent stake in Tata Teleservices

According to Japan's Nikkei Net Interactive website, the companies will announce the deal on Wednesday afternoon.

The website said DoCoMo will obtain about 20 percent stake in the form of new shares and purchase the remaining 6 percent stake from existing shareholders in the Indian company.

Meanwhile, Japan's Sankei newspaper said, without quoting sources, that DoCoMo plans to spend $1.5 billion to buy 25 percent stake in Tata Teleservices.

DoCoMo said in a statement it had not made any such decision while Tata Teleservices has refused to comment on the matter.

If the stake buy goes ahead, it will give DoCoMo veto power as, under Indian laws of acquisition, stakes exceeding 25 percent give shareholders such rights.

Company sources said DoCoMo was in talks with Tata Teleservices since September.

According to a DoCoMo spokesman, the Japanese company will send one of its executives to sit on the Tata board.

The deal comes at a time when top Indian mobile operators are vying to acquire rights for operating high-speed 3G services. Tata Teleservices, an affiliate of the $66 billion Tata Group, is India's sixth largest mobile services provider with around 30 million subscribers, after Bharti Airtel, Reliance Communications, Vodafone-Essar, Bharat Sanchar Nigam Ltd (BSNL) and Idea Cellular. Of these, only Reliance Communications operate on the CDMA-based network.

According to Shinji Moriyuki, a telecoms analyst at Mitsubishi UFJ Securities, DoCoMo's latest acquisition would be positive for the company, especially with its extensive knowledge of 3G network services to which many developing countries are now moving.