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Japan-based NTT DoCoMo has entered discussions to acquire up to 20 per cent of VoiceStream Wireless,  the flagship of Hutchison Whampoa's mobile-telephone business in the United States.

The deal is worth about US$47 billion, according to Japanese newspaper Nihon Keizai.

Bankers familiar with negotiations said VoiceStream could sell a stake to NTT DoCoMo by issuing new shares.

Hutchison owns about 23 per cent of VoiceStream.

However, this stake would be diluted to about 20 per cent after a new share issue of that size.

The Nihon Keizai yesterday reported NTT DoCoMo would underwrite a private issue of shares in an attempt to acquire a 15 to 20 per cent holding in VoiceStream worth an estimated of 400 billion yen (about HK$29.08 billion) to 500 billion yen.

A 500 billion yen price for the holding would represent a 10 per cent premium - at US$110 a share - based on VoiceStream's last closing price on Friday of US$100.375.

The transaction at that price would value VoiceStream at nearly US$23.5 billion.

The newspaper said DoCoMo planned to integrate its mobile-Internet capabilities in the US and Japan.

The newspaper said the company also would seek board representation in VoiceStream.

VoiceStream, spun off from Western Wireless a year ago, has been on a buying spree since Hutchison Whampoa became its largest shareholder in May last year.

Hutchison injected US$957 million into VoiceStream last June to fund the company's purchase of mobile-telephone operator company Omnipoint for US$2.04 billion.

Three months later, VoiceStream bought cellular operator Aerial Communications for US$3 billion.

These transactions enabled VoiceStream to operate in 23 of the 25 largest US markets and to bolster its subscriber base to three million from 2.25 million at the end of March.

While NTT DoCoMo might pay more than US$8,000 per subscriber for VoiceStream, analysts estimated the book cost of VoiceStream to Hutchison was as low as US$21 a share, one-fifth of its present share price.

By investing in VoiceStream, NTT DoCoMo would get a second chance at co-operation with Hutchison following an investment in Hutchison Telecommunications last December.

NTT DoCoMo bought a 19 per cent holding in Hutchison's local mobile unit, for US$410 million.

More co-operation in Europe, where both companies have targeted the third-generation market, is likely, analysts said.

NTT DoCoMo recently paid US$4.5 billion for 15 per cent of Royal KPN while last month Hutchison, in a joint venture with Canada's Telesystems International Wireless, paid GBP4.38 billion (about HK$50.87 billion) for a licence in Britain.



DoCoMo buying VoiceStream stake