NTT Docomo Inc. will unload its 26% interest in Tata Group’s telecommunications company, Tata Teleservices Ltd, withdrawing from cellphone operations in India after a long struggle, Japan’s business publication Nikkei Asian Review reported on Thursday.

NTT DoCoMo will make a formal decision at a board meeting on Friday, the sources said, Report, Reuters.

The joint venture, operating under the Tata DoCoMo brand, had 63 million mobile customers at the end of March, ranking No.7 in the crowded Indian market.

NTT DOCOMO has announced that its board of directors resolved today to exercise option for the sale of the company's entire stake (1,248,974,378 shares, or about 26.5% of outstanding shares) in Tata Teleservices Limited (TTSL), a DOCOMO-affiliated company accounted for by the equity method, as soon as the conditions for such exercise are met. 

DOCOMO, TTSL and Tata Sons Limited (Tata Sons), Tata Group's holding company, concluded a shareholder agreement when DOCOMO entered into a business alliance with TTSL in March 2009.

Under the agreement, DOCOMO holds the right to require that its TTSL shares be acquired for 50% of the acquisition price, which amounts to 72.5 billion Indian rupees (or 125.4 billion yen 1) or a fair market price, whichever is higher, in the event that TTSL fails to achieve certain specified performance targets (the above-mentioned option).

                                

In the event that TTSL fails to achieve these performance targets by the end of the fiscal year ended March 31, 2014, DOCOMO plans to exercise the above-mentioned right in or before June 2014. DOCOMO expects to sell its TTSL shares in accordance with the agreement. It is uncertain how the option will be performed, however, and DOCOMO is not able to predict how events will unfold. The effect on DOCOMO's corporate earnings for the fiscal year ending March 31, 2015 cannot be forecast at this time due to these uncertainties.

In July 2013, The Wall Street Journal had reported that NTT DoCoMo is not looking to sell its 26% stake in Indian partner Tata Teleservices despite setbacks such as competition over tariffs and telecom licence cancellations by the Supreme Court. Tata Teleservices had three of its licences cancelled in the February 2012 verdict.

DoCoMo bought its stake in the joint venture for $2.7 billion in 2009.

Tata Teleservices Ltd was not immediately available for comment.