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

"Both parties (DoCoMo and Tata) should be able to find synergies because of the current timing that 3G services are about to be launched," he said.

NTT DoCoMo is not the first foreign operator to enter India.

Last month, Norwegian telecom giant Telenor ASA said it would buy up to 60 percent stake in India's real estate major Unitech's start-up telecom arm, Unitech Wireless, for about $1.23 billion.

In September, another Indian telecoms start-up, Swan Telecom, which has licenses to operate in 13 service areas, sold a 45 percent stake to Emirates Telecommunications Corp for $900 million, giving Swan a $2 billion valuation.

Bharti Airtel, in which Singapore's top telecom firm SingTel owns about 30 percent, is India's biggest mobile operator (GSM platform) with a pan-Indian network service and enjoys about a quarter of market share. It competes with No.2 Reliance Communications (owned by Anil Dhirubhai Ambani Group) and unlisted Vodafone-Essar, controlled by Britain's Vodafone Plc.

Thanks to call rates of as low as one US cent a minute, availability of cheaper handsets and expansion of networks to smaller towns and rural areas, the Indian mobile market has leapfrogged the US to become the second largest (after China) and the world's fastest growing mobile market in the world. With Indian operators adding 8-9 million subscribers a month, at the end of October, the total number of mobile users stood at 326 million and research firm Gartner expects the number to touch 737 million by 2012.