Japan telecom firms challenge $40 billion NTT takeover bid

Japanese telecoms firms argue a takeover of NTT Docomo would prevent fair competition
Japanese telecoms firms argue a takeover of NTT Docomo would prevent fair competition

Japanese telecoms firms appealed Wednesday to the communications ministry over a planned $40-billion takeover of the country's biggest mobile carrier by its government-backed parent, warning it would "prevent fair competition".

NTT announced in September its plan to buy out remaining shares in NTT Docomo, in a potentially record-breaking deal.

NTT currently holds 66 percent of NTT Docomo's shares, and its argues the move would enhance "competitiveness and growth".

But on Wednesday, 28 Japanese companies including Docomo rivals SoftBank Corp and KDDI sent a joint letter to the communications minister protesting against the move.

Making Docomo a wholly owned company "will create a powerful force that dominates the market", they argued.

"It will prevent fair competition in the telecoms market and user benefit created through competition could be lost."

The joint letter calls on the minister "to set up measures to protect an environment of fair competition and instruct and ensure compliance and implementation".

NTT's comes as hots up in the sector, with 5G on the horizon and pressure from the government for Japanese firms to cut the price of mobile phone services.

With full control of NTT Docomo, NTT may be able to push down prices quickly, forcing competitors to follow suit.

But the heads of both companies have denied that pressure over pricing was behind the deal.

The tender offer was launched in September and remains open until November 16, while the full buyout is expected to be finalised by the end of the fiscal year in March.


Explore further

Japan's NTT to spend $38B to buy out, take DoCoMo private

© 2020 AFP

Citation: Japan telecom firms challenge $40 billion NTT takeover bid (2020, November 11) retrieved 13 June 2021 from https://techxplore.com/news/2020-11-japan-telecom-firms-billion-ntt.html
This document is subject to copyright. Apart from any fair dealing for the purpose of private study or research, no part may be reproduced without the written permission. The content is provided for information purposes only.
4 shares

Feedback to editors

User comments