Vodafone set to float J-Phone

TOKYO, Japan -- Vodafone, the world's top mobile phone company, may list Japan's number-three mobile carrier J-Phone after streamlining its operations.

In May, Britain's Vodafone added Japan to its global empire after lifting its stake in J-Phone parent Japan Telecom to 45 percent. It also holds a controlling 60 percent stake in J-Phone.

Vodafone also issued a challenge to NTT DoCoMo, which is trying to turn itself into a global player by leveraging the success it has had with wireless Internet access in Japan.

'Walk before we run'

"It would be a good idea at some stage to list J-Phone and have investors in Japan take a participating interest," Vodafone chief executive Chris Gent told a news conference in Tokyo.

He explained Vodafone's strategy in Japan, the world's second-largest telecom market, and appeared eager to dismiss concerns that Vodafone was not interested in Japan Telecom's fixed-line business.

"We're not coming here with any plots or plans," he said.

Still, many of the questions focused on J-Phone, whose regional firms, Gent said, would be combined into a single organization by the end of the year.

"We must learn to walk before we run. The first thing is to bring the regional companies together," he said.

J-Phone is three regional companies operated under a holding company.

Vodafone has various majority stakes in these companies as a result of stakes it acquired directly or through British Telecommunications.

Head-to-head with DoCoMo

Gent said there was much to learn in Japan's wireless Web-savvy market, where nearly two out of every three of the country's 63.39 million Web users access the Internet on credit card-size screens on mobile phones.

"Our primary interest is to improve the performance of J-Phone and give DoCoMo a hard time in this market," Gent said.

Given J-Phone's 7.48 million-strong base of Web-connected mobile users "there are also things we can learn from J-Phone," he added.

DoCoMo, which dominates nearly 60 percent of Japan's mobile user base, has been expanding its global presence and last year spent $14.4 billion buying stakes in wireless carriers overseas.

It will compete head to head with J-Phone for users when third-generation wireless services are launched. The rapid transmission speeds of 3G make fast Internet access and video downloads to mobile phones possible.

Gent laid out his plans for 3G services in Japan, saying Vodafone would move quickly to introduce dual-band phones capable of working on existing network areas as well as the new 3G networks.

Telecom groups are facing tough capital market conditions on concerns the sector may not get the returns on 3G needed to pay off the mountain of debt it has accrued.

Reuters contributed to this report.