Bloomberg News
Redmond, Wash. — NTT DoCoMo Inc., Japan’s No. 1 wireless telephone company, completed its $9.8 billion investment in AT&T Wireless Group, gaining 16 percent of the No. 3 U.S. mobile carrier, AT&T Wireless said.
NTT DoCoMo bought shares of AT&T preferred tracking stock equal to 406 million shares of AT&T Wireless tracking stock, said AT&T spokesman David Caouette. NTT DoCoMo also acquired five-year warrants to buy 41.7 million more shares of AT&T Wireless tracking stock at $35 a share.
NTT DoCoMo sought an alliance with AT&T Wireless to add customers outside Japan to its mobile Internet service, i-mode. In December NTT DoCoMo added 1.75 million new i-mode users in Japan, for a total of 17.2 million, half the company’s mobile-phone subscriber base.
As part of the investment agreement, first announced in November, AT&T sold 178 million of its AT&T Wireless shares to NTT DoCoMo for $20.50 a share, reducing its interest in AT&T Wireless to about 70 percent. NTT DoCoMo also bought 228 million new shares of AT&T Wireless tracking stock at $27 a share.
After the NTT DoCoMo investment, about 14 percent of the economic interest in AT&T Wireless will continue to be represented by existing AT&T Wireless tracking stock traded on the New York Stock Exchange, New York-based AT&T said. AT&T first sold shares in AT&T Wireless in April at $29.50 each.
With NTT DoCoMo, AT&T Wireless is creating a new unit to develop multimedia applications for its current network and a new high-speed network that will deliver services such as video e-mail and wireless downloading of music files. NTT DoCoMo and AT&T Wireless will share the unit’s technical resources and staffing.
As part of its investment, NTT DoCoMo gained a seat on AT&T’s board, which it will hold until AT&T Wireless is spun off from AT&T later this year. NTT DoCoMo then will have a seat on the wireless company’s board. Both AT&T and NTT DoCoMo will choose executives for the multimedia unit. The preferred tracking stock held by NTT DoCoMo will convert to shares of AT&T Wireless after the spinoff.
AT&T Wireless will get about $6.2 billion from the NTT DoCoMo investment and use it to widen its service area and to add call capacity. AT&T will get $3.6 billion and use it to pay off debt.
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