Sayonara Bland: BT backs out of Japan Telecom

NEWS Cash-starved BT will sell its stakes in Japan Telecom and its mobile subsidiary J-Phone to arch-rival Vodafone for more than £3bn. As the most advanced mobile market in the world, Japan is vital to both BT and Vodafone's global strategies. BT chief executive Sir Peter Bonfield, whose departure from BT is widely anticipated, staked much of his reputation on the success of BT's investments in Japan. Just two weeks ago, BT acquired options to buy a five per cent stake in J-Phone's operating subsidiaries, largely seen as a sign of its commitment to remaining in Japan. This move, however, is an admission that BT simply cannot afford it - the company has been reportedly preparing a rights issue to deal with its £30bn debt problem. The Japan Telecom sale will help BT delay, if not avoid, having to take this measure, which many shareholders resist. Sir Christopher Bland, who many feel does not have the private sector experience to successfully steer BT out of its present predicament, is generally considered the motivational force behind this latest move following his appointment as chairman last week. J-Phone represents just 16 per cent of the Japanese mobile market, but it has experience in marketing some advanced mobile technologies, including the successful J-Sky mobile internet service. Vodafone will now raise its stake in Japan Telecom from 25 to 45 per cent, and its holding in J-Phone will rise from 26 per cent to 46 per cent.