Docomo Placated, Tata Must Exit Telecom

Two Indian businessmen went to war. A Japanese company won the spoils. Shareholders can’t stop cheering.

The bounty in question is a $1.17 billion payment from Tata Group to NTT Docomo Inc., its partner in a struggling wireless carrier. Tata Teleservices Maharashtra Ltd., the venture’s publicly traded unit, rose more than 19 percent on Tuesday in Mumbai.

It’s Stuffy in There

Tata Docomo isn’t even among India’s top five mobile operators

Source: Telecom Regulatory Authority of India
*Data for October 2016.

Making Docomo run from pillar to post for the money was widely believed to be one of the reasons scion Ratan Tata lost faith in his successor Cyrus Mistry, and ousted him as chairman of the salt-to-software group’s holding company in October. The bitter PR and legal battle that ensued is only now starting to wind down.

With Mistry out of the picture, the Indian company has finally decided to bury the hatchet. Or at least that’s what it told a Delhi court on Tuesday. 

Paying the Japanese telco was important. It was needed both to shore up the Indian group’s reputation for fair play and to burnish Ratan Tata’s image, which has been badly dented by the allegations of backseat driving and bad judgment hurled at him by a spurned Mistry.

At its core, the Tata-Docomo dispute was simple enough. Ratan Tata had persuaded Docomo to invest 145 billion rupees ($2.2 billion) in Tata Teleservices in 2009 by…

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