NTT DoCoMo, Japan's biggest mobile operator, will sell its 16.5 percent stake in cell phone company U Mobile this month, pulling out of the Malaysian market.

The move follows South Korean partner KT Freetel's sale of its 16.5 percent stake in U Mobile earlier this year, which analysts said was due to lowered expectations for growth for the Malaysian company.

U Mobile entered the Malaysian cell phone market in the spring of 2008, providing 3G services to customers with technological assistance from DoCoMo and others. But it has been unable to take market share away from larger carriers.

NTT DoCoMo, which had hoped the stake would help it bring in new revenue streams, plans to sell to U Mobile's parent U Television for $100 million -- the same amount it paid for the stake last year.

NTT DoCoMo, which competes with KDDI Corp and Softbank Corp in the saturated Japanese cell phone market, has been seeking footholds in other parts of Asia to grow.

It has bought stakes in India's Tata Teleservices and in Axiata's Bangladesh unit.

Shares in NTT DoCoMo closed down 0.7 percent prior to the announcement, which had been well-flagged by Japanese media, in line with KDDI's 0.2 percent fall but outperforming Softbank's 1.5 percent decline.

(Additional reporting by Rhee So-eui in Seoul and Ashutosh Joshi in Bangalore; Editing by Edwina Gibbs)