Monday, December 25, 2000		Article

Vodafone buys stake in Japanese Telecom
by Mark Milner

THE British mobile phone giant Vodafone’s global ambitions took a US dollars 2 billion step forward this week when the group bought a 15 per cent stake in Japan Telecom.

The deal increases Vodafone’s presence in one of the world’s fastest growing mobile phone markets and the first market to see the introduction of third-generation services.

But it could intensify the rivalry between Vodafone and British Telecom (BT), which also has a 15 per cent stake in the Japanese mobile phone company.

Both companies were at pains to play down the possibility of conflict, pointing to their existing good relations in Japan where both are shareholders in J-Phone, Japan Telecom’s mobile phone subsidiary.

With another Japan Telecom shareholder — AT&T — prepared to sell at least part of its holding, analysts scent a potential battle.

BT is perceived to be keen on the Japanese market while Vodafone, which has usually preferred to build up majority stakes in groups in which it has shareholdings, may not be content to stick at 15 per cent.

However, the deal with Japan Telecom does give the British group two seats on the board of the Japanese operator and both UK companies will be anxious to avoid being seen to be bringing aggressive Anglo-Saxon business practices to consensus-oriented Japan.

But, if a battle does develop over which British company will take the leading role at Japan Telecom, analysts believe that Vodafone could have an edge. "If it depends upon price, Vodafone has the deeper pockets," one analyst told the GNS.