Softbank May Not Retain Customers Added in Vodafone Japan Deal

Following the Red Herring article last Friday that Vodafone might sell its Japan stake, comes this article in Bloomberg, which writes Softbank may have a challenge retaining Vthe odafone Japanese unit's 15 million mobile-phone users if the rumored deal goes through. According to the article, "NTT DoCoMo Inc., Japan's largest cellular-phone service provider, has 50.5 million customers and KDDI Corp. has 24.1 million. Vodafone K.K. has just 17 percent of the Japanese market and is losing customers to the larger companies."

Gerhard Fasol at Eurotechnology Japan K.K. said, DoCoMo and KDDI "are trying to add new services such as auction sites, credit card and movie downloads. Vodafone K.K. doesn't have a real edge at the moment. [Softbank] already got' content. All he needs is the network."

The article states that "Softbank was one of three companies granted wireless licenses last year as Japan opens its 8.5 trillion yen industry to competition for the first time in 12 years. Users will also be allowed to switch carriers without changing their numbers from November."

Robin Hearn at Ovum recently wrote in a research note that "[Softbank] acquiring Vodafone Japan would speed its market entry and give it a foothold in a market dominated by DoCoMo and KDDI. Of course, it also needs to do rather more with it than Vodafone has been able to.''

Darren Ward at Williams de Broe estimated that "Vodafone's Japan unit may be worth 8 billion pounds to 9 billion pounds. Credit Suisse analysts estimate the unit is worth about 7.5 billion pounds, according to a Feb. 28 research note."