Acquisitions, etc
VODAPHONE AIRTOUCH PLC
7 October 1999
VODAFONE AIRTOUCH INCREASES OWNERSHIP IN JAPAN
Vodafone AirTouch Plc (Vodafone AirTouch) today announces a series of
transactions that will give it an equity interest of more than 20
percent in each of Japan's nine regional mobile telecommunications
companies. By increasing its existing stake in those companies,
Vodafone AirTouch will become a major national participant in Japan's
rapidly expanding wireless market.
On 22 September 1999, Vodafone AirTouch acquired the entire equity
stake owned by Cable and Wireless Plc (Cable and Wireless) in Tokyo
Digital Phone Co., Ltd., Kansai Digital Phone Co., Ltd. and Tokai
Digital Phone Co., Ltd. On 30 September 1999, Vodafone AirTouch
acquired from Japan Telecom additional shares in the six Digital Tu-
Ka Group companies, which cover the regions of Kyushu, Chugoku,
Tohoku, Hokkaido, Hokuriku and Shikoku.
Effective 1 October 1999, the Digital Phone and Digital Tu-Ka
companies began operating under the 'J-Phone' name.
Vodafone AirTouch has also completed a definitive agreement with
Cable and Wireless to acquire its entire equity stake in each of the
former Digital Tu-Ka Group companies. The transaction is subject to
board approvals from each of the six operating companies.
Further building its stake in Japan, Vodafone AirTouch's wholly owned
subsidiary, AirTouch International, on 16 July 1999 completed its
acquisition of Metrophone Service Co., Ltd. from Distacom
Communications Ltd. of Hong Kong and Tiger Spirit Developments
Limited. Metrophone, a Japanese company, owns 12% of the issued
share capital of J-Phone Tokyo Co., Ltd.
The total consideration relating to the increase of ownership in
Japan is approximately $550m.
With the completion of these transactions, Vodafone AirTouch will
become the second largest shareholder behind Japan Telecom in the
carriers that serve each of Japan's nine mobile telecommunications
regions. Working closely as partners, Japan Telecom and Vodafone
AirTouch are now introducing the Digital Phone Group's J-Phone brand
in each of the six former Digital Tu-Ka Group companies, rolling out
the well recognised and respected brand on a nationwide basis. By
combining the operating experience and market knowledge of two of the
world's leading telecommunications companies - Vodafone AirTouch and
Japan Telecom - together with a prominent national brand, the J-Phone
companies will significantly increase their ability to compete
successfully in the fast-growing Japanese mobile telecommunications
market.
Total wireless penetration in Japan grew from 32.3% in June 1998 to
39.4% in June 1999. The total number of customers in these nine
regional companies rose in the same period from 4.6 million to 6.8
million, a 47.8% increase.
In addition to the acquisitions announced today, Vodafone AirTouch is
pursuing new opportunities for delivering next-generation ('3G')
wireless services in Japan. On 30 August 1999, Vodafone AirTouch
entered into a Shareholders Agreement with Japan Telecom and British
Telecommunications Plc in connection with the recent establishment of
the IMT-2000 Planning Co., Ltd. The IMT-2000 Planning Company was
founded on 30 November 1998 by Japan Telecom, Nissan Motor Co., Ltd.
and AirTouch International to pursue 3G business opportunities in
Japan. Vodafone AirTouch, through its subsidiary, AirTouch
International, has an equity interest of 26% in the new company, and
will be the second largest shareholder behind Japan Telecom, which
currently has an equity interest of 45.5%.
Upon completion of the announced acquisitions, Vodafone AirTouch will
have the following ownership interests in the Japanese mobile
telecommunications companies:
Vodafone Ownership at Pro Forma
Japanese Mobile AirTouch Completion Proportional
Telecommunications Ownership at of Announced Subscribers at
Operating Company (a) 30 June 1999 Transactions 30 June 1999 (b)
% % ('000)
J-Phone Tokyo Co., Ltd. (c) 15.0 28.8 555
J-Phone Kansai Co., Ltd. 13.0 20.2 223
J-Phone Tokai Co., Ltd. 13.0 20.2 284
J-Phone Kyushu Co., Ltd. 4.5 22.2 161
J-Phone Chugoku Co., Ltd. 4.5 21.7 105
J-Phone Tohoku Co., Ltd. 4.5 23.5 136
J-Phone Hokkaido Co., Ltd. 4.5 23.3 52
J-Phone Hokuriku Co., Ltd. 4.5 23.9 49
J-Phone Shikoku Co., Ltd. 4.5 21.4 36
Total 1,601
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Notes:
(a) Effective 1 October 1999, the Digital Phone Group and Digital
Tu-Ka Group companies have been consolidated under the J-Phone
brand name.
(b) Adjusted on a pro forma basis giving effect to the completion
of all transactions.
(c) Includes 12.0% of J-Phone Tokyo Co., Ltd. owned by Metrophone
Service Co., Ltd., a wholly owned subsidiary of Vodafone AirTouch
Plc.
For further information contact:
Tim Brown, Investor Relations Director, or
Melissa Stimpson, Senior Investor Relations Manager, or
at Vodafone AirTouch Plc
Telephone 01635 33251
or
Lulu Bridges
Tavistock Communications Ltd
Telephone 0171 600 2288