Vodafone has agreed to buy 15% of Japan Telecom from two Japanese railway operators.

Vodafone, the world’s largest mobile operator, is reported to have agreed to buy 15% of Japan’s third-largest telecoms company, Japan Telecom (JT). JT is currently 70%-owned by various Japanese railway companies, 15% by AT&T, and 15% by British Telecom. The deal would see Vodafone buying shares from rail operators West Japan Railway and Central Japan Railway.

This move complicates the race for influence over JT, and its 54% holding in fast-growing mobile phone operator J-Phone. Until recently, Concert alliance partners BT and AT&T were the only Western operators involved with JT’s fixed-line business. Tension was more noticeable in J-Phone, of which Vodafone has 26% and BT 20%. But AT&T has just sold a 15% stake in its AT&T Mobile subsidiary to J-Phone’s archrival NTT DoCoMo. This makes a strategic involvement between AT&T and JT no longer desirable, and BT’s Concert involvement means it stands to pick up AT&T’s JT stake.

Elsewhere in the world, Vodafone has avoided fixed-line operations, focusing exclusively on mobile telecoms. So why has it just bought 15% of a predominantly fixed-line company? There are two plausible reasons. One is that it feels this will help provide support for the core network J-Phone is built on. Another is that it wants to ensure BT does not gain control of JT, and is prepared to make substantial investments just to keep its UK rival out. Had Vodafone not acted, BT could potentially have owned 45% of JT, with the rail companies still owning the rest. BT would then have been left in a good position to marginalize Vodafone in the J-Phone business.

It is hard to say what will happen in the long term. Vodafone would like to increase its J-Phone stake, but this would require either JT or BT to sell out, which would not necessarily be a good move for either. But more widely, the importance of this battle may be exaggerated. J-Phone is only Japan’s number three mobile operator, with 3.5 million subscribers to its J-Sky mobile internet service, compared to 14 million for DoCoMo’s iMode. AT&T’s DoCoMo alliance may put it in a better position than either of the UK operators.