Vodafone Japan President: Tough Operations Conditions To Last For Now

TOKYO -(Dow Jones)- The Japanese unit of Vodafone Group Plc. (VOD) is likely to continue facing tough business conditions for the time being, but it will take various measures to remedy the situation, the newly appointed president of Vodafone K.K. (9434.TO) said Monday.

"I suspect that our current situation is going to continue for a bit longer here," Bill Morrow said, referring to decreases in the firm's net subscriber numbers in recent months.

Morrow was speaking at his first news conference since he took over as president on April 1 in a management shuffle aimed at reviving Vodafone's ailing business in Japan. He replaced Shiro Tsuda, an ex-NTT DoCoMo Inc. (9437.TO) executive, who relinquished the top position after only four months on the job. Tsuda has become the Japanese unit's executive chairman.

Morrow declined to reveal any specific business plans or numerical targets, but pledged to implement structural reforms to promptly meet Japanese customers' needs. While the Japanese unit will continue utilizing the U.K. mobile phone giant's global-wide technologies, it plans to release some Japanese market-specific mobile handsets, he said.

Due partly to Vodafone's worldwide strategy to launch the same handsets in global markets, many Japanese users - who prefer high-end, more advanced handsets - have chosen rival firms in recent months. Some users were drawn to discount services offered by rival firms, while others wanted the wider coverage areas and network quality offered by Vodafone's rivals.

Vodafone is far behind NTT DoCoMo and KDDI Corp. (9433.TO) in terms of customers. And it has been losing business. In March, it lost a net 7,400 subscribers, leaving it with 15.041 million customers - far less than DoCoMo, which has 48.825 million, and KDDI, with 19.542 million, both of which attracted more customers last month.

Another problem confronting Vodafone in Japan is that it hasn't been able to attract enough new subscribers to its third-generation mobile services to make up for losses in older 2G services.

Tsuda said the Japanese unit's 3G subscriber numbers have recently topped 1 million. Still, that pales in comparison to the performance of DoCoMo, which added a net 1.258 million users to its "FOMA" 3G mobile service in March, lifting the total to 11.501 million.

Morrow is an industry veteran who was once head of Japan Telecom, Japan's third-largest telecommunications operator.

-By Natsuo Nishio, Dow Jones Newswires; 813-5255-2929; natsuo.nishio@dowjones.com
-Edited by Kirsty Mackenzie

(END) Dow Jones Newswires"

Posted to the site on 18th April 2005