Vodafone buying up J-Phone control

The increased stake in J-Phone gives Vodafone steering power to better compete with NTT DoCoMo

In this story: A global acquisition strategy Stronger footing to take on DoCoMo RELATED STORIES, SITES

By CNN's Kristie Lu Stout

TOKYO, Japan (CNN) -- Vodafone has snapped up AT&T's Japan Telecom stake, and is actively pursuing BT's stake to boost its holdings to over 45 percent.

Analysts say that by Vodafone buying into Japan Telecom and its mobile affiliate J-Phone, and then increasing its foothold, the UK-based company is using a familiar strategy.

Its objective is to force forward its vision through investments in new markets.

Vodafone's increased stake in Japan Telecom and J-Phone also gives the world's largest wireless carrier more leverage to compete against Japanese mobile giant NTT DoCoMo.

A global acquisition strategy

"Vodafone's worldwide acquisition strategy is of getting controlling stakes in investments. They think that's the way to create value as a global mobile operator," IDC mobile analyst Nick Ingelbrecht told CNN.

"So, unlike some other operators such as BT (British Telecommunications) and SingTel, Vodafone has a clear idea of where it wants to go and that involves management control in operators."

"That has always been the game plan."

On Monday, Vodafone reached an agreement to buy AT&T's 10 percent stake in Japan Telecom for $1.35 billion in cash -- raising Vodafone's stake in the company to 25 percent.

The Financial Times reported that BT agreed to sell its 20 percent stake in Japan Telecom and J-Phone to Vodafone for more than $4.3 billion.

The transaction would boost Vodafone's holding in Japan Telecom from 25 percent to 45 percent, and its J-Phone presence from 26 percent to 46 percent.

Stronger footing to take on DoCoMo

J-Phone, with over 9.7 million mobile subscribers, is the fifth largest wireless carrier in the Asia Pacific region after number-one China Mobile, NTT DoCoMo, China Unicom, and SK Telecom.

The increased stake in J-Phone gives Vodafone steering power to better compete with mobile rival NTT DoCoMo, Japan's leading wireless operator.

"The big game in Japan is competing with DoCoMo," says IDC's Ingelbrecht.

"DoCoMo sets prices and determines the technology. It's the market leader and the others follow, and Vodafone is anxious to break out of that."

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