DoCoMo to shun extra investment in KPN Mobile
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NTT DoCoMo Inc is expected to turn its back on a recapitalization of KPN Mobile NV and see its holding in the Dutch mobile operator fall from 15% to around the 12% mark.
To keep its holding at the current level, it would have to contribute $2.4bn, a move that would infuriate investors. In October, DoCoMo had to write off JPY 108bn ($893.2m) from the value of its investment in KPN Mobile NV as part of a JPY 573bn ($4.7bn) write down of its overseas assets.
DoCoMo issued a statement last Friday denying press reports in Japan that it had turned down KPN's request, saying a decision will be made this week "taking the entire business situation into account." However, KPN Mobile said it expects that DoCoMo would not want to invest again in the company.
DoCoMo bought stakes in AT&T Wireless, Hutchison 3G and KPN mobile at a time when wireless carriers were riding high on world stock markets. With growing doubts over the prospects for 3G, values have slumped and DoCoMo has been criticized for buying stakes too small to exert an influence over its overseas partners yet sufficiently large to have painful financial effects when the market slumped.
KPN Mobile is too small to survive long term as an independent operators, and there have been persistent rumors that it could merge with UK-based wireless operator mmO2 Plc.