Vodafone to pay $4.7 billion for rest of its mobile phone unit in Japan

Deal raises doubts in light of AT&T Wireless bid


LONDON - Vodafone Group, the world's largest wireless phone company, said yesterday that it will pay $4.7 billion for the parts of its floundering Japanese operations that it does not own, increasing concerns about management's focus, particularly because the company made a failed bid for AT&T Wireless this year.

Vodafone is to pay 2.6 billion pounds in cash ($4.7 billion) to take full control of its mobile phone subsidiary in Japan, which has been losing money and customers to rivals that offer more advanced cellular services.

The deal is the latest in a series of moves by Vodafone to take control of its overseas operations. Over the past year, Vodafone has bought all, or nearly all, of the outside stakes in its operations in Greece, Hungary and the Netherlands.

Chief executive Arun Sarin said during a conference call that he would bring "serious change" to Vodafone Japan to reverse losses in market share. Vodafone has attracted less than 1 percent of the customers for the lucrative, fast-growing "third generation" services in Japan because the company has not made such service available as quickly as its competitors.

The company also reported that its sales increased 10 percent in the 12 months that ended March 31, to 33.56 billion pounds ($60.13 billion), and that the company's net loss for the year narrowed to 9.02 billion pounds.

Although Vodafone's cash flow is strong, its earnings are hampered by charges for former acquisitions, called goodwill amortization. Profits before taxes, goodwill and exceptional items were up 19 percent for the year, to 10.04 billion pounds, in line with analysts' expectations.

Vodafone's stock fell 5 percent yesterday, closing at 128.75 pence on the London Stock Exchange.

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