Vodafone takes control of Japan Telecom — foreign ownership of fixed line and J-Phone (2001)

Swallowing a market you cannot digest

What is interesting about this acquisition is that the largest mobile capital in the world, spending freely, swallowed Japan’s fixed and mobile businesses in a single gulp and yet never mastered the manners of the market it had bought. With mark-to-market accounting and the unwinding of cross-shareholdings releasing shares into the market, and heavily indebted European players turning seller, Vodafone seized the moment and paid more than ¥1 trillion for control. But the distinctively Japanese evolution symbolized by picture mail and pictograms would not fit inside the logic of a common global handset and a common global brand.

The other thing visible here is how nearly continuous the completion of foreign control and the retreat from it turned out to be. From taking 66.7% to full ownership and then to withdrawal was less than five years. The fixed and mobile businesses Vodafone could not handle were both taken over by Son Masayoshi’s SoftBank, rebuilt for the Japanese market, and turned around with price and the iPhone. Where exactly the difference lay between capital that imports a global standard and capital that turns local peculiarity to advantage remains, even after the upheavals since, an open question.