Vodafone gobbles up Japan Telecom

NEWS Vodafone has paid £1.8bn for a controlling stake in Japan Telecom's mobile division J-Phone. The UK operator has bought an extra 21.7 per cent on top of the 45 per cent stake it had gained through earlier deals with UK rival BT Wireless (now O2) and AT&T. Chris Gent, Vodafone's CEO, said in a statement to the London Stock Exchange that Vodafone hopes to increase J-Phone's earnings by 30 per cent by the end of 2005. However, Neale Anderson, a mobile analyst at Schema, said the implications of Japan Telecom's debt are not known. The group also has to compete with Japan's number one telco, NTT DoCoMo, which is launching its 3G services next month. J-Phone's 3G services are not scheduled to launch until next June. Brian Winn, another analyst at Schema, said because of the high mobile penetration rate in Japan and the sophistication of the market, the deal gives Vodafone "a hell of a foothold". But he does not think Vodafone will be able to catch up with NTT DoCoMo. He said:" It puts them right in their territory to monitor them very closely." Anderson said Vodafone's push to become the dominant partner of Japan Telecom is consistent with what it has done in other parts of the world. He added: "With this in mind, I would not be surprised if Vodafone tries to squeeze out Japan Telecom's fixed lines." At a press conference in Japan, Chris Gent said no decision has been made about fixed line operations but he admitted the two parties are "already in detailed discussions". Vodafone has appointed the first foreigner to head a Japanese telco by naming American Daryl Green as CEO of J-Phone.