Rumors of a deal between NTT DoCoMo, Japan's largest mobile phone company, and KG Telecom (
Taiwan Cement, which owns a quarter of KG Telecom directly and through a subsidiary, said DoCoMo will purchase a 20 percent stake in KG Telecommunications for as much as US$543 million as early as this week.
"We have papers all ready and they [DoCoMo] can come sign anytime," said Chiang Cheng-hsiung, vice president of Taiwan Cement. He expects an agreement to be signed this week.
NTT DoCoMo, however, refused to confirm the report. "We have not put out any press releases regarding [our] relations with KG telecom, so we cannot confirm anything regarding this matter," said NTT DoCoMo spokesperson Miki Nakajima.
The Japanese mobile communications firm has been on a global buying binge recently, purchasing stakes and making agreements with a number of companies.
"We are considering a wide variety of potential partners in Europe, North America and Asia," said Nakajima. "We have already announced alliances with Hutchison Telephone Company Limited [Hong Kong], KPN Mobile [the Netherlands}, Hutchison 3G UK Holdings [UK] and AOL Japan."
KG Telecom, with 3.05 million subscribers as of mid-October, would benefit greatly from a hookup with DoCoMo. The Japanese firm is a leader in creating mobile Internet technology and Web content. DoCoMo would not only be able to help the young, Taiwanese mobile phone services operator build its wireless Internet capability, it could also help in KG Telecom's bid to win a 3G (third-generation mobile Internet) license in the Taiwan government's upcoming auction.
Chiang said NTT DoCoMo is likely to pay between NT$53 (US$1.6) and NT$57.5 a share for the 20 percent stake, which was previously owned by Bell Canada International Inc, a unit of BCE Inc.
The Canadian company in August exercised a sellback option, asking Taiwan Cement or other "designated parties" to buy its 20 percent stake for NT$53 per share. Under the agreement, Taiwan Cement will seek buyers for the 20 percent stake before Feb. 28, 2001 or it will buy any remaining shares.
Over the weekend, Japan's Jiji Press cited unidentified industry sources as saying NTT DoCoMo had reached a basic agreement to buy a 20 percent equity stake in the Taiwan company for ?60 billion (US$539 million).
DoCoMo is also in talks with the mobile phone arm of US telecom giant AT&T Corp, the report said, adding that the Japanese company is set to spend about ?1 trillion for a 15 percent to 20 percent stake in AT&T Wireless.
AT&T Corp is already the second-biggest shareholder in Far EasTone Telecommunications Co (
Far EasTone is running neck-and-neck with KG Telecom for third place in Taiwan's mobile phone market.
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