Vodafone has agreed to pay £1.7bn in cash for a stake in Japan Telecom, majority owner of the country's third largest mobile phone operator.
The deal gives Vodafone the upper hand in its battle with BT to take control of Japan Telecom's mobile subsidiary, J-Phone. Vodafone already owns 26 per cent of J-Phone, while BT owns 20 per cent, and Japan Telecom currently holds the remaining 54 per cent stake.
The Japan Telecom shares are being sold by two of the seven railway companies that set up the company, West Japan Railways and Central Japan Railways. The deal will make Vodafone the joint second largest shareholder, holding 15 per cent along with BT and AT&T.
At the same time, Vodafone is said to be preparing a £5bn bid for the mobile phone arm of Australia's second largest carrier, Cable and Wireless Optus. The deal would give Vodafone control of 44 per cent of the Australian market, which may cause regulators to block the move.