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DoCoMo may sell off 16% stake in AT&T

By TAIGA URANAKA
Staff writer

NTT DoCoMo Inc. said Wednesday that it might sell its 16 percent stake in AT&T Wireless following an agreement by Cingular Wireless LLC to purchase the No. 3 mobile carrier in the United States.
Cingular said Tuesday it will acquire AT&T Wireless for $41 billion, or $15 per share. NTT DoCoMo's 16 percent stake is worth about $6.5 billion (about 690 billion yen).

"We were informed that Cingular agreed to buy AT&T Wireless, and we will consider options to maximize shareholder value," NTT DoCoMo spokesman Susumu Takeuchi said.

He said the company's holding in AT&T Wireless will probably be turned into cash.

For Japan's biggest mobile phone operator, the sale means losing its foothold in the giant U.S. market. NTT DoCoMo will have to review its overseas strategy because the domestic mobile phone market has almost reached the end of a steep growth period.

Hitoshi Hayakawa, an analyst at ING Securities (Japan) Ltd., said that without the stake in AT&T Wireless, it is uncertain how NTT DoCoMo will realize its aims of promoting i-mode and the W-CDMA format in the U.S. market.

"One of the benefits is that if W-CDMA spreads in Japan, NTT DoCoMo can lower the cost of handsets with the volume of the U.S. market," he said.

The company acquired the stake in AT&T Wireless in January 2001 to promote its i-mode mobile phone Internet service and the high-speed third-generation service based on the W-CDMA format.

NTT DoCoMo's investment in AT&T Wireless totaled 1.2 trillion yen, including additional share purchases.

It was later forced to write down the bulk of the investment -- some 900 billion yen -- due to the falling value of the shares. Even if the expected sale goes through, NTT DoCoMo will not be able to recoup its investment.

The Japan Times: Feb. 19, 2004

http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?nb20040219a1.htm