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Vodafone Will Buy 15% Stake in Japan Telecom

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From Bridge News

British-based Vodafone Group said Wednesday it will take a 15% stake in Japan Telecom for about $2.22 billion, expanding its foothold in the world’s second-largest mobile phone market.

Vodafone and two Japan Railway companies said the JR firms would sell part of their stake in Japan Telecom to Vodafone, the world’s largest wireless phone company.

The deal gives Vodafone greater leverage over Japan Telecom’s wireless arm, J-Phone, and enables it to square up to its rival British Telecommunications, which also has interests in Japan.

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The two JR companies, among seven that make up the formerly government-owned railway operator, will use the cash to pare their massive debt.

Vodafone will become the second-largest shareholder in Japan Telecom, behind only East Japan Railway Co. British Telecommunications and AT&T; Corp. also own shares in Japan Telecom.

East Japan Railway said it will retain its 15.1% stake in Japan Telecom as the largest shareholder.

Vodafone Chief Executive Chris Gent said, “We look forward to working together with existing Japan Telecom partners BT and AT&T; and the JR companies.”

He said Vodafone’s decision to invest in Japan Telecom was due to faith in the future of the Japanese telecommunications market.

Market watchers said Vodafone decided to assume its stake in Japan Telecom in order to expand its influence over J-Phone, the mobile unit of Japan Telecom.

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Vodafone is already a minority shareholder of J-Phone Communications, the holding company of J-Phone Group.

Vodafone holds a 26% stake in J-Phone Communications, and BT has 20%. The remaining 54% is held by Japan Telecom.

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