Mumbai : Tata Teleservices has decided to drop the brand DoCoMo from its telecom brand Tata Docomo months before its agreement with Japanese mobile phone operator NTT DoCoMo to use the brand ends.
“The telecom venture of the Tata Group has decided against building the DoCoMo brand since the two will eventually part ways in near future. It is likely to undergo a brand makeover,” a person aware of the development said. The idea is to build a new brand sans the name Docomo, said the person, who did not wish to be identified, adding that the brand-building exercise is likely to start this year.
Till then, the company will continue with the current set of ads and not launch any new ad campaign. The transition will be on the lines of Hutch to Vodafone rebranding, the person said.
“As a policy we do not respond to market speculation,” said a Tata Teleservices spokesperson.
A mail sent to Mukund Rajan, brand custodian and membergroup executive council, Tata Sons did not elicit any response. When asked about the possible rebranding of Tata Docomo, Rana Barua, CEO of advertising agency Contract India, which handles the company account, said:”We are not aware of any such plans.”
In 2014, Japan’s NTT DoCoMo had decided to exit Tata Teleservices and asked the Indian promoters to buy out its 26.5% stake in the joint venture. The Japanese company had picked up a 26.5% stake in CDMA player Tata Teleservices for $2.7 billion, then equivalent to about Rs 12,770 crore. Under the agreement, in case Japanese venture wanted to exit, it had the option to force Tata Group to find a buyer for its stake at 50% of the investment amount or fair market price.
In July 2014, NTT Docomo invoked its option and asked Tata Group to find a suitable buyer to purchase its stake for about $1.3 billion (Rs 7,250 crore ) or a fair market price, whichever was higher. However, the company was unable to find a buyer within the deadline. In January this year, the Japanese company filed a case in London Court of International Arbitration to ensure that Tata Group finds a suitable buyer.
In June 2014, Tata and NTT DoCo-Mo reached an understanding under which Tata Teleservices was allowed to use the Tata Docomo brand name for at least a year. As part of the understanding, NTT DoCoMo agreed to let Tata use the brand name in lieu of a “marginal royalty”.