NTT DoCoMo is going back to its corporate roots in a $40 billion deal that will bring it under complete control of NTT. The Japanese telecommunications giant already owns 66% of the mobile operator, which it spun off in 1991.

NTT, which is roughly 33% government owned, initially approached the mobile network operator with an offer in early August, and reached an agreement after boosting its price per share multiple times, the company said in a statement. 

Despite its majority control, NTT in a regulatory filing said it hasn’t been able to carry out decisions with the speed and vigor it deems necessary. It’s a high price to pay for more “flexible and agile decision-making,” as NTT noted in the filing.

The offer represents almost a 41% premium over NTT DoCoMo’s share price prior to the deal being made public. 

NTT DoCoMo is Japan's largest mobile operator with more than 80.6 million subscribers. It activated limited 5G commercial service in March, and previously said it will have 20,000 5G base stations deployed across the country by mid-2022. It ended its most recent quarter with 240,000 5G subscribers and is targeting 2.4 million 5G subscribers by the end of March 2021.

NTT DoCoMo was an early pioneer in the mobile networking space, reaching a valuation of nearly $400 billion in the summer of 2001. Its market cap currently sits at $98.1 billion, following a nearly 16% surge after the deal was announced.

However, the mobile operator’s net profit declined about 20% from 2017 to 2019. It competes against long-time rivals KDDI and SoftBank, and it faces new competition in the market from greenfield operator Rakuten Mobile, which activated the world’s first fully virtualized, cloud-native open 4G LTE radio access network in April. The upstart operator, which began as a mobile virtual network operator (MVNO) run by the e-commerce giant, is targeting growth with lower prices in a market deemed one of the most expensive in the world for mobile service.

As part of the deal, NTT DoCoMo said it is embracing multiple reforms to diversify its offerings beyond mobile-centric services. Moreover, by falling under complete control of NTT, the mobile operator said it intends to strengthen its competitiveness by taking advantage of NTT’s broader portfolio. Those efforts include a tighter integration of mobile, fixed, and WiFi networks, increased research and development on new mobile technologies, and schemes designed to lower the prices it charges customers.