Vodafone tightens strategic focus

5 Feb 2003

Newbury-based wireless group Vodafone [VOD:L] is reported to be locked in negotiations with Ripplewood Holdings LLC, a New York-based private equity fund, over the sale of its Japanese fixed line business. Vodafone acquired Japan Telecom, the country’s third largest telco behind NTT and KDDI, in 2001 paying USD11.5 billion for its 66.7% stake. Vodafone made the acquisition principally because of the company’s majority ownership of J-Phone, Japan’s third largest mobile provider. Since taking control of Japan Telecom Vodafone has sold the company’s high speed internet business to EAccess for JPY5.5 billion and cut staffing levels, moves which allowed the telco to return to profit last year. If a sale is agreed Vodafone will be able to focus solely on J-Phone, which claimed 13.3 million customers at the end of 2002 and has been used as a spearhead for the group’s 3G ambitions. Ripplewood may not have the deal in the bag just yet, however. Tokyo Electric Power Company (Tepco), Asia’s largest utility and a company which has made no secret of its ambitions to enter its domestic telecoms market, is also rumoured to be interested. If lady luck is smiling on Vodafone, it could just benefit from a financially lucrative bidding war.

Meanwhile, closer to home Vodafone has been tying up loose ends at two of its European subsidiaries, making offers to buy the outstanding shares in Europolitan Vodafone (Sweden) and Vodafone Telecel Comunicaciones (Portugal). The company has offered SKR47 for each of the Swedish shares and EUR8.5 for the Portuguese ones. As it stands Vodafone owns 75% and 61% of the Swedish and Portuguese companies respectively.

CIT’s Datafile of Asia-Pacific Telecommunications