Japanese telecom firm NTT Docomo has decided to exit its joint venture with Tata Teleservices Limited (TTSL) in India.

To this end, NTT Docomo, Japan’s largest wireless operator by subscribers, plans to offload its entire 26.5 per cent stake in TTSL, which it had acquired for $2.61 billion between 2009 and 2011. Tata Group is likely to buy this stake.

Earlier, in March 2009, NTT Docomo, TTSL and Tata Sons (the holding company of the Tata Group) had entered into a shareholders’ agreement. Under the agreement, the Japanese firm holds the right that its shares in TTSL be acquired for 50 per cent of the acquisition price (which amounts to Rs 72.5 billion) or a fair market price, whichever is higher, in the event that TTSL fails to achieve certain specified performance targets.

NTT Docomo’s decision to exit the JV comes after TTSL failed to achieve certain performance targets by March 31, 2014.

TTSL, in the past two years, has lost the growth momentum that it displayed during 2009-10. It currently faces several challenges in the form of dwindling customer base, financial losses and mounting debt. It currently ranks seventh in terms of subscribers among the 12 operators in the Indian telecom market and has a wireless market share of 6.99 per cent (as of February 2014).