Vodafone Buys Into Japan Telecom

[London, ENGLAND] U.K. mobile operator Vodafone Group
announced Wednesday its purchase of a 15 percent stake
in Japan Telecom for 249.2 billion yen (US $2.19 billion).

Observers now believe there is a possibility that
Vodafone will find itself in a bidding war with
arch-rival BT which has a similar holding in Japan
Telecom for a further 15 percent slice held by

A few weeks ago, AT&T sold 16 percent of AT&T
Wireless to Japanese mobile phone operator NTT DoCoMo
for US $9.8 billion. Divesting itself of the Japan Telecom
shares would appear to be a logical next step.

Vodafone, the world’s largest mobile phone service
provider, prefers to have control of the overseas
companies in which it invests. At the very least it
would like to have greater influence over Japan
Telecom’s wireless division J-Phone, especially as
Japanese users are now the most active participants
in the mobile Internet revolution.

To obtain its 15 percent stake in Japan’s third-largest
phone service provider, Vodafone negotiated with two
Japanese railway companies, acquiring 8.6 percent
from West Japan Railway and 6.4 percent from Central
Japan Railway. The two railway companies retain
smaller holdings (1.6 and 1.2 percent respectively)
in the telecom operator.

“This transaction demonstrates Vodafone’s confidence
in the future of the Japanese telecoms market and the
future prospects of Japan Telecom and J-Phone, which
we believe will be a powerful force in an increasingly
competitive Japanese marketplace,” said Vodafone’s Chief
Executive Chris Gent.

According to Japan Telecom’s President Haruo Murakami,
Vodafone has definitely not ruled out taking a bigger
stake in the company.

Vodafone, which is said to be on the verge of
acquiring Ireland’s largest mobile phone operator Eircell
for around US $4 billion, may well view the Japanese
market as one of the keys to its future. In 3G services
its major global rival will be NTT DoCoMo which already has
over 15.6 million subscribers of its i-mode service.

Japan Telecom’s J-Phone operates a mobile Internet
service named J-Sky which has nearly 4 million
subscribers who surf the Web using mobile devices.

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