Japan’s NTT Docomo is thought to be planning to invest an additional US$1 billion in India’s Tata Teleservices (TTSL) to lift its stake to as much as 40 percent – though the move has been denied by the Indian operator. India’s Economic Times newspaper reported that the investment would lift Docomo’s stake in TTSL – the unlisted telecoms subsidiary of the Tata Group conglomerate – to around 35-40 percent, up from 26 percent today. However, sources say that not all the funds will be infused in Tata Teleservices as Tata Group companies could sell part of their holding. “NTT Docomo is interested in increasing its stake and Tata [is] most likely to slowly sell [its] stake till they hold a minority stake in Tata Teleservices,” said a banking source. A spokesman for TTSL subsequently told Reuters that “there is no truth in any such reports,” and refused to comment further on the speculation.

TTSL currently operates both GSM and CDMA networks in India and has around 72 million subscribers in total.  The firm’s GSM network – known as Tata Docomo – was launched after Docomo spent US$2.7 billion to acquire its 26 percent stake in TTSL in 2008. This investment valued TTSL at around US$11 billion, though it is now thought to be valued at below US$10 billion. Despite high build-out costs – and the cost of acquiring recent Indian 3G licenses – Docomo has said it expects the business to be profitable by 2012. It has not ruled out increasing its stake.