The Tata Group has reached an agreement with NTT Docomo to use the Tata Docomo brand name for the telecom services offered by Tata Teleservices Limited (TTSL) for a year following the exit of the Japanese company from the telecom joint venture (JV).

Under the agreement, Japanese mobile operator NTT Docomo has agreed to let Tata Group use the brand name in lieu of what is called a “marginal royalty”, which is likely to help Tata Group push up the value of the brand for buying back NTT Docomo’s  26.5 per cent stake in the JV.

Under an earlier pact signed between Tata Group and NTT Docomo, if a buyer cannot be found by June 2014, the Tata Group has to pay the higher of a market-linked price or at least Rs 72.50 billion to NTT Docomo (which is half the investment that NTT Docomo had made in the JV). However, with the Tata Group paying marginal royalty for using the brand name Docomo, the payout by the group is expected to increase marginally.

Earlier, in April 2014, NTT Docomo had decided to exit its JV with TTSL, since the operator failed to achieve certain specified performance targets by March 31, 2014. Following its decision to exist the JV, NTT Docomo plans to offload its entire 26.5 per cent stake in TTSL, which it had acquired for $2.61 billion between 2009 and 2011.