AT&T, DoCoMo Deal Commences
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AT&T Wireless and Japanese wireless giant NTT DoCoMo said Monday that they have started implementing their previously announced alliance to develop third generation multimedia services on high-speed networks.
The most visible part of that alliance was the acquisition by DoCoMo of a 16 percent stake in AT&T Wireless for $9.8 billion. To that end, DoCoMo has acquired about 406 million shares of AT&T preferred tracking stock. DoCoMo also has acquired warrants to purchase additional shares. The stock will convert to AT&T Wireless common shares when the wireless unit is spun off from AT&T later this year.
The transaction means that AT&T still owns about 70 percent of AT&T Wireless. About 17 percent of AT&T Wireless is represented by the tracking stock. DoCoMo now has a seat on AT&T's board of directors until the spin-off. Then, it will have a seat on the wireless company's board.
In addition to the stock transfer, AT&T Wireless said it is creating a wholly-owned subsidiary to develop multimedia applications for its current wireless network and for forthcoming third-generation (3G) networks.