Vodafone Exits Japan
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Case Details:
Case Code : BSTR286
Case Length : 15 Pages
Period : 1999-2006
Pub Date : 2008
Teaching Note :Not Available
Organization : Vodfaone
Industry : Telecommunications
Countries : Japan
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts
Background Note
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Vodafone's forerunner was formed in 1982, as a joint venture
between Racal Strategic Radio Ltd. (Racal) (a subsidiary of Racal Electronics
Plc and winner of one of the first two cellular telephone network licenses in
the UK), Millicom, a US-based communications company, and Hambros Technology
Trust, a UK-based venture capital fund.
The JV was named Racal Telecom. In 1985, Racal Telecom launched the first
cellular network in the UK and the first call was made from St. Katherine's Dock
in London to Newbury. The network was christened Vodafone - 'voice and data
services over mobile phones'...
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Vodafone in Japan
Through the acquisition of the US-based Airtouch in 1999,
Vodafone acquired a 26 percent stake in J-Phone. Vodafone subsequently increased
its stake in J-Phone to 98.2 percent (Refer to Exhibit II for the details of
Vodafone's acquisition of J-Phone)...
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What Went Wrong
According to analysts, Vodafone decided to exit the
Japanese market as its efforts to turn around the business in Japan did
not yield the desired results.
Robin Hearn, principal analyst at
London-based technology research group Ovum , explained,
"Vodafone has
been struggling with its Japanese unit for some time and attempts to
turn it around have so far met with limited, if any, success. This has
frustrated Vodafone's management and investors alike."... |
Conclusion
Analysts were of the view that the deal was profitable for all the parties
involved - Vodafone received a tidy sum for its Japanese business and exited a
market where its profitability had been falling and SoftBank was able to add
cellular services to its existing portfolio of Internet, broadband, and fixed
line services...
Exhibits
Exhibit I: Vodafone Partner Networks in 2007
Exhibit II: Vodafone's Acquisition of J-Phone
Exhibit III: Mobile Phones in Japan
Exhibit IV: Vodafone J-Phone Logo
Exhibit V: Major Mobile Carriers - Number of Subscribers (January 2004 -
December 2004)
Exhibit VI: Major Mobile Carriers - Number of Subscribers (January 2005 -
December 2005)
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