Vodafone buys BT's J-Phone stake

Vodafone's move puts it within striking distance of controlling J-Phone, Japan Telecom's mobile affiliate

In this story: Majority control within reach Stronger footing to take on DoCoMo RELATED STORIES, SITES

By Staff and wire reports

TOKYO, Japan -- Vodafone said on Wednesday it had agreed to buy British Telecom's stake in Japan Telecom, Japan's third largest telco.

Vodafone, the world's largest mobile operator, also said it would buy a 20 percent stake in Japan Telecom's mobile phone affiliate J-Phone from BT, and 4.9 percent of J-Phone's regional operating units.

Vodafone's increased stake strengthens its position in the crucially important Japanese cellular phone market. It also gives Vodafone steering power to better compete with mobile rival NTT DoCoMo.

Majority control within reach

Vodafone is paying a total of $5.34 billion for the Japan Telecom and J-Phone stakes.

Vodafone already holds direct stakes in the mobile operator and its regional units. The acquisition will boost Vodafone's holding in Japan Telecom to 45 percent from 25 percent, putting it within striking distance of majority control of J-Phone, the Japanese company's crown jewel.

By buying into Japan Telecom and its mobile affiliate, and then increasing its foothold, analysts say Vodafone is pursuing a strategy that focuses on investments in new markets.

"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.

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

Newspaper reports that Vodafone and BT would soon make the announcement boosted shares in Japan Telecom on Tuesday and Wednesday.

Shares in Japan Telecom closed in Tokyo on Wednesday at 2.64 million yen, up 17.86 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 allows Vodafone 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."

Reuters contributed to this report.

Vodafone buying up J-Phone control
April 30, 2001
DoCoMo says nationwide 3G by 2002
April 26, 2001

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