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Vodafone ups Japan stake
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February 27, 2001: 3:14 a.m. ET
Cellular operator buys 10% of AT&T's stake in Japan Telecom for $1.35 billion
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LONDON (CNN) - Vodafone agreed on Tuesday to buy 10 percent of Japan Telecom from AT&T Corp for $1.35 billion.
The acquisition gives the world's largest mobile-phone operator greater access to J-Phone, the Japanese company's cell-phone unit, as it rolls out keenly awaited email, Internet and video services.
The Newbury, England-based company snapped up a 15 percent stake in Japan Telecom in December from West Japan Railway and Central Japan Railway. After Tuesday's deal it owns 25 percent of Japan Telecom.
Japan Telecom owns 54 percent of J-Phone.
U.S. phone company AT&T (T: Research, Estimates) is selling its holding following NTT DoCoMo's acquisition of a stake in AT&T Wireless for $9.8 billion. NTT DoCoMo is Japan's biggest mobile phone company with 27.1 million subscribers.
For Vodafone, the Japanese market represents a vital test bed for third-generation mobile-phone services, designed to provide customers with email, Internet access, voice and video images. 3G services begin this year in Japan, before their availability in the rest of the world.
The agreement raises Vodafone's interest in Japanese cellphone operator J-Phone to around 40 percent and raises questions about British Telecom's 20 percent holding in Japan Telecom.
BT has said it is committed to Japan but needs to raise cash to cut a £30 billion ($42 billion) debt mountain.
J-Phone, one of three Japanese firms licensed to offer 3G services, has 3.9 million users with access to its Web-enabled mobile Internet service, called J-sky. NTT DoCoMo has signed on 15.6 million users for its rival i-mode service.
Vodafone is offering ¥2.458 million, or $21,125, for each Japan Telecom share held by AT&T, valuing the Japanese telecom operator at about $13.5 billion. That represents a 36 percent premium to Japan Telecom's closing price of ¥1.8 million on Tuesday.
Shares in Vodafone (VOD) rose 1.7 percent to 192 pence in early London trading. 
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