AT&T sells Japan Telecom interest

(Telephony) AT&T has agreed to sell its 10% interest in Japan Telecom to UK Based Vodafone Group for about $1.35 billion in cash. The proceeds from the deal, expected to be at about $1 billion, will be used to reduce AT&T’s $46 billion of debt.

The sale price represents a significant return on investment for AT&T, which purchased the equity in August 1999 for about $612 million.

This investment was made in conjunction with BT taking a stake in Japan Telecom. Together, AT&T’s and BT’s equity was used to establish Japan Telecom as a partner of Concert, the AT&T/BT joint venture that sells communications services to multinational corporations.

According to an AT&T spokeswoman, the sale will not affect Concert’s relationship with Japan Telecom.

“We’ve said in the past that we are looking to get rid of non-strategic assets and are looking for proceeds…to pay down debt,” the spokeswoman said.

The sale also was spurred by AT&T’s changing relationships with Japanese carriers, especially NTT DoCoMo--a competitor of Japan Telecom that recently made a $9.8 billion investment in AT&T as part of a partnership with AT&T Wireless--the spokeswoman said.

For Vodafone, the investment increases its interest in Japan Telecom to 25%. According to a Vodafone spokesman, the deal reflects his company’s enthusiasm for J-Phone, Japan Telecom’s mobile offering.