NTT DoCoMo still considering its Cingular future

NTT DoCoMo Inc. has yet to decide on the shape of its future relationship with Cingular Wireless LLC should the U.S. carrier gain clearance for its proposed takeover of AT&T Wireless Services Inc., NTT DoCoMo’s president said Friday. The Japanese carrier owns a 16 per cent stake in AT&T Wireless.

“We believe we now have much more options than before,” said Keiji Tachikawa, president and chief executive officer of NTT DoCoMo at a Tokyo news conference. “We have to find out what Cingular has in its mind and based on that, we will decide on our future approach. Nothing is decided at this point. We’ve talked with the management of AT&T Wireless and according to their explanation, Cingular seems to have an interest in DoCoMo as well so it’s up to future discussion.”

NTT DoCoMo picked up its AT&T Wireless stake in January 2001, during the height of the third-generation(3G) wireless frenzy, paying around US$8 billion. Most of the value of the investment is now gone. NTT DoCoMo wrote off almost its entire investment in the carrier in 2002 following a sharp drop in AT&T Wireless’ share price.

But an agreement still exists between the two carriers under which AT&T Wireless is obliged to roll-out a Wideband Code Division Multiple Access (WCDMA) 3G service based on at least 1,000 cell sites in four cities by the end of this year; otherwise, NTT DoCoMo can insist that AT&T Wireless buys back its stake.

That contract will remain in force should Cingular complete the deal and gain control of AT&T Wireless, said Tachikawa.

“Our position is that our rights will continue (should Cingular complete its deal),” he said. “I understand this is how contracts are interpreted in the U.S. In reality, I think they want to start roll out much earlier than December.”

“The AT&T Wireless 3G network is already prepared, the infrastructure is being made and handsets have been ordered,” he said.

As for NTT DoCoMo’s future relationship with Cingular, Tachikawa said that of four options available, only one appears unlikely at present: that of taking majority or 100 per cent control. Other options include a minority stake, technical alliance or simply friendship, he said.

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