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AT&T bid could fall apart

"If DoCoMo decides not to bid, that's reasonable from a credit point of view."

Minoru Yasuda, an analyst at Mitsubishi Securities Co

Japan's top mobile phone company NTT DoCoMo Inc might not bid for US-based AT&T Wireless because of the potential risks, newspapers reported yesterday, while the company declined to comment on its plans.

Two major Japanese newspapers, Yomiuri Shimbun and the Nihon Keizai Shimbun, reported yesterday that NTT DoCoMo, the world's second-biggest mobile-phone services company, was moving toward deciding against bidding for AT&T Wireless, because of the high costs.

Tokyo-based NTT DoCoMo, which is AT&T Wireless's largest shareholder with a 16 percent stake, is staying mum on whether it will make a bid for the US company.

"We are declining all comment on this matter," NTT DoCoMo spokesman Susumu Takeuchi said yesterday, adding that the situation remains complicated.

NTT DoCoMo will decide today whether to bid for its US affiliate AT&T Wireless, or sell a stake that may be worth as much as US$5.4 billion.

Executives will meet at DoCoMo's headquarters in Tokyo at 8pm Japan time, people familiar with the situation said. A deadline for bids for the US carrier, in which DoCoMo has a 16 percent holding, is set for 5pm today, New York time.

AT&T Wireless, the third-largest US cellphone operator, put itself up for sale last month, drawing suitors including Vodafone Group Plc and the parents of Cingular Wireless LLC, people familiar with the situation said. DoCoMo has faced investor pressure not to spend more on AT&T Wireless after writing down more than 90 percent of its original US$9.8 billion investment.

"If DoCoMo decides not to bid, that's reasonable from a credit point of view," said Minoru Yasuda, senior credit analyst at Mitsubishi Securities Co. "Competition is intensifying in the US and AT&T Wireless is losing money."

Vodafone, NTT DoCoMo's major rival in the Japanese market, confirmed its interest Monday.

The acquisition would require the British firm to sell its 45 percent stake in Verizon Wireless, the No. 1 cellphone company in the US.

Cingular Wireless, the second biggest US wireless company, has reportedly made a formal offer for AT&T Wireless.

NTT DoCoMo has been eager to find a foothold in the US mobile market, but officials have long been careful about further action on AT&T Wireless.

Raising its stake in AT&T Wireless would be costly at a time when NTT DoCoMo is just starting to recover from huge losses stemming from overseas investments, including its AT&T Wireless stake. It was also unclear whether the telecom will sell its stake after the US company is taken over by another bidder.
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