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Vodafone Sells Japanese Business to SoftBank

 Vodafone and SoftBank logos 17th March 2006

Vodafone has agreed to sell its Japanese operations, Vodafone KK for the sum of £8.9 billion (¥1.8 trillion, €12.8 billion, $15.6 billion approximately) to SoftBank of Japan. Around £6 billion of the proceeds will be redistributed to Vodafone's shareholders.

SoftBank is a firm specialising in Internet services, fixed telephone lines and broadband access, and was granted a licence to run a mobile phone network last year. SoftBank's purchase of Vodafone KK makes it the third largest player in the Japanese mobile market.

SoftBank have given no indication as to the name of their new mobile network, after the sale finally completes by this time next year. The initial indications are that the Vodafone brand will continue to be used for the time being, perhaps under licence.

Crucially for Vodafone, the sales includes an agreement to "ensure that Vodafone continues to have access to the ongoing technological and service developments in the mobile industry in Japan." This might well mean that Vodafone will continue to be able to use Japanese UMTS 3G handsets such as the Sharp 903, 904 and Toshiba 803. These handsets are one of the key differentiators between Vodafone's 3G service and those of its competitors, and without them Vodafone would lose its unique positioning in this market.

The move comes after Vodafone's disposal of their Swedish business last year, and there is renewed pressure for Vodafone to sell their 45% stake in Verizon in the United States, as effectively Vodafone is only a sleeping partner with no real input into the business.

All of this is on top of a major boardroom crisis at Vodafone, with senior figures openly in conflict over the future shape of the business. Vodafone is currently the world's largest mobile operator, but for how much longer?

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