(AFP) - Japan's biggest mobile carrier NTT Docomo said Friday it would abandon a once-hopeful Indian telecoms business, becoming the latest major firm to run into trouble in the huge market.
The Tokyo-based company said it would move to unload its 26.5 percent stake in money-losing Tata Teleservices as it also announced that its annual net profit turned down.
Docomo, which had invested about $2.6 billion in the Indian firm over the past five years, held a board meeting Friday at which directors decided to exercise an option to sell the stake should the firm not meet performance targets, which will almost certainly be the case.
"We decided in a board meeting today that we will exercise our rights to sale all stakes we hold if TTSL has failed to reach the targeted performance in the fiscal year to March," Docomo said in a statement.
The move comes several weeks after Japanese pharmaceutical giant Daiichi Sankyo pulled the plug on its disastrous investment in India's Ranbaxy, while automaker Toyota was hammered by recent labour unrest at two southern Indian plants.
Other major firms have also suffered in the Indian market, including Britain's Vodafone which was slapped with a claim of more than $2 billion for non-payment of capital gains taxes.
South Korean steel giant Posco has seen its $12 billion project in southern India stalled over regulatory issues and claims of human rights violations tied to land acquisitions.
The Indian market had looked lucrative for Docomo, which is trying to counter a shrinking market at home.
The number of mobile subscriptions in India stands at 903.36 million – more than six times the number of mobile contracts in Japan – according to the Telecom Regulatory Authority of India.
But the venture formed in 2008 by Indian conglomerate Tata Group and Docomo struggled to break into the big leagues despite offering some premium services.
It was the first to offer 3G data services in India, yet was unable to attract enough customers. The firm ranks seventh in market share in the Indian telecom sector.