Vodafone to Exit Japan in Favor of Developing Markets

6:00 am on March 7, 2006 | Category: Business, Mobile Devices

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According to some analysts, Vodafone’s recent decision to sell its Japanese unit to Softbank marks a long-term decision to move away from already developed markets like Japan, and into emerging economies such as China, and India.

“Companies are moving to tastier markets,” said Tetsuro Tsusaka, a Deutsche Bank telecom analyst based in Tokyo. “There’s not that much point in investing in markets that are already more or less solidified.”

When Vodafone first acquired its Japanese division, then called Japan Telecom, back in October 2001, Japan’s mobile phone penetration rate was still very low. As the only foreign firm to operate a major cell phone enterprise in Japan, however, Vodafone has struggled to keep up to locally based providers.

At this point, Vodafone has a lot of incentive to finalize the deal with Softbank, and spend more of its business expansion efforts on building a name in growing markets.

The question now, of course, is what this means for Vodafone’s presence in the American market. With a high mobile penetration rate in the US, some analysts have speculated whether Vodafone’s strategy of exiting already developed foreign markets could be extended to this continent.

There has recently been a lot of talk about Vodafone selling off its 45% share of US telecom giant, Verizon Communications. And Verizon itself now expressing interest in purchasing the share, the time for such a deal could be sooner rather than later.

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    2 Comments »

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    1. Why should Vodafone succeed in India and China?

      Comment by Ruud — March 8, 2006 #

    2. There’s no guarantee that they’d succeed, but India and China are both huge markets with a lot of potential customers.

      Pure statistics show the advantages of these emerging markets for a company like Vodafone.

      Comment by Jeremy — March 9, 2006 #

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