NTT DoCoMo to Quit U.S. Mobile Market with AT&T Wireless Sale
Posted on: Wednesday, 18 February 2004, 06:00 CST
Feb. 18--TOKYO -- NTT DoCoMo Inc. will pull out of the U.S. mobile phone market by selling its entire 16 percent stake in AT&T Wireless Services Inc., the third-largest U.S. mobile phone service provider, to Cingular Wireless LLC, the second-largest, company sources said Tuesday.
The decision follows an announcement the same day by Cingular that it has agreed to purchase AT&T Wireless for $41 billion to create the country's largest mobile phone carrier in terms of subscribers.
The sale of the 16 percent stake in AT&T Wireless means that NTT DoCoMo will lose its foothold in the U.S. mobile phone market and will have to rethink its business strategy for the U.S. and other foreign markets, industry observers said.
In January 2001, NTT DoCoMo, the mobile phone arm of Nippon Telegraph and Telephone Corp., bought the 16 percent stake for $9.8 billion to disseminate its high-profile i-mode mobile Internet connection services among U.S. consumers.
Cingular Wireless is now offering to buy AT&T Wireless shares for $15 per share. This means that the value of the 16 percent stake would shrink to $6.49 billion.
NTT DoCoMo will negotiate the terms of sale with Cingular Wireless at a later date, they said.
NTT DoCoMo is aiming to sell the AT&T Wireless stake in the belief that it would be difficult to develop cooperative ties with Cingular Wireless, they added.
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(c) 2004, Kyodo News International, Tokyo. Distributed by Knight Ridder/Tribune Business News.
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