Reports that Japan Telecom is in talks to sell its fixed-line business had markets abuzz early today, driving major stakeholder Vodafone's shares higher in London and the United States. At midday, Vodafone shares rose 4 percent on the London Stock Exchange and 1.5 percent on the New York Stock Exchange to $16.01.

Japanese newspaper Nihon Keizai reported that Japan Telecom was in talks with Tokyo Electric Power Co. (Tepco) to sell its fixed-line and Internet businesses. The report also cited Sony as a prospective buyer for the Internet-services division. The report fueled speculation that Vodafone aims to focus exclusively on J-Phone, the company's wireless-services division. In the report, Tepco denied it is in talks with Japan Telecom or Vodafone.

A Vodafone spokesman also indicates that the report is not true. Reading from Japan Telecom's statement, he says, 'Japan Telecom is considering various possibilities regarding the restructure of its businesses. Japan Telecom is not in negotiations regarding the sale of the divisions of its business as reported in the media this morning.'

The stakes have gotten higher in Japan's mobile-communications market, as it increasingly appears that the slot for the nation's No. 1 carrier could be in flux. NTT DoCoMo, still the carrier with the most subscribers in Japan with a 59 percent market share, has struggled to develop a subscriber base for FOMA, its 3G service. Meanwhile, KDDI edged J-Phone out of the No. 2 slot last month after it launched its 3G au service, garnering more than three times the total number of DoCoMo 3G users in its first month of offering the high-speed option. J-Phone, which was to roll out its 3G offering next month, in April delayed the 3G launch until December.

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3G Puts KDDI In Japan's Passing Lane 5/9/02
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