Media reports last week sounded critical of DoCoMo’ so called overvaluation of Tata Teleservices with the latter yet to migrate to GSM service offerings and being positioned as number 2 in the CDMA space. But upon close observation, DoCoMo’s decision seems to be carefully crafted.

Tata Teleservices off late has gone aggressive in its VAS offerings. While new subscriber additions too remains a high priority, the company’s VAS bouquet has seen a phenomenal increase with introduction of Virgin Mobile services and wireless internet based services. The company is also on the verge of launching its GSM based services. While adding new GSM subscribers might be a challenge, churning subscribers from rival networks appears to be a viable proposition for most and for this 3G service offerings play an important role.

And DoCoMo’s expertise in 3G service offerings might provide Tata Teleservices the much required edge over its competitors.

DoCoMo has been offerings 3G services way back since 2001. This was the time when Indian cellular industry was at its infancy. The Japanese operator has consistently introduced new and advanced VAS services falling under 3G category. It has tied up with global operators for its range of 3G service offerings.

Its popular 3G services include i-mode and e-wallet. i-mode is an internet-based VAS offering of the company. DoCoMo says it has a subscriber base of more than 48 million for i-mode services. Next on the line is e-wallet services which in the generic form is mobile payment services. The subscriber base for this is more than 30 million. The company has also acquired VAS companies across the globe including some Chinese firms to consolidate its position in the VAS domain.  

The whole focus currently is on the 3G spectrum auctioning. But the immediate concern for successful bidders will be to be ready with their 3G service offerings. It is here where expertise of companies like DoCoMo comes into picture. And on the back drop of all these facts, DoCoMo’s decision to invest at a premium in TTSL finally seems logical.

DoCoMo could have bid as a stand-alone operator. But the country’s regulations would have required it to identify a local partner any way. Alliance with TTSL provides it ready subscriber base and the ideal platform to introduce its 3G service offerings in the country.