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Mar
06

Softbank to buy Vodafone Japan?

This entry was posted by on Monday, 6 March, 2006 at

This weekend saw some interesting developments in the Japanese cell phone market; apparently, Vodafone and Softbank are in talks regarding the possible sale of Vodafone’s Japanese operations to Softbank.

This is interesting on many levels, and although I really haven’t thought about it and made up my mind on what this will mean for everyone involved, these are my first thoughts about it:

– Softbank recently was given a new 3G license by the Japanese government to start up their own mobile phone service in Japan. If they now buy one of the original license holders, where does that leave the competitive situation? One of the reasons for giving out new licenses was to increase competion – the net effect of this deal is that we will only get one new major player in this market, not two as orignally planned. Will the government give out a new license to someone else?

– NTT DoCoMo and au (KDDI) should be scared by this news – they have been rather safe in the Japanese market for a while with Vodafone never putting up any serious competition, and personally I do not see eMobile (another new license-holder) being a big threat to the major players. Softbank was always the big threat to the other companies, but especially so for Vodafone who was the smallest in the market. If Softbank and Vodafone joins together, Softbank gets a quick start to its business and can move rapidly ahead with its presumed plans to revolutionize the cell phone market in Japan (at least that’s what everyone is hoping for/worrying about).

– I don’t want to be blunt, but I say this deal is also the beginning of the end to Vodafone (you read it here first, remember that). Whereas I see many positive comments about this in the news, I cannot see anything positive about this in the long run for Vodafone. Basically they are saying “we are not smart enough to be competitive in Japan, so we are quitting” – Japan is the most important cell phone market in the world, for crying out loud! It is a test bed for nearly all major technological innovations within the mobile phone market, and they are simply stepping out. Vodafone has lost its ability to grow organically, and where they find themselves in a bind, they leave (they sold their local company in Sweden too, a while ago). Mark my words, you will not see Vodafone on the cell phone market in a few years.

All in all, it is very interesting news – and I will follow it closely.

UPDATEIt seems that I was not the only one thinking in these terms – the other “new” license-receiver eAccess (eMobile) has apparently announced that they will submit a request to the government to withdraw the 1.7 GHz license from Softbank if they buy out Vodafone. Source: ItMedia (in Japanese)

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