Vodafone's £1.3bn battle plan in Japan

VODAFONE'S Japanese unit said today it will raise capital spending by 50% to £1.3bn to bolster its struggling 3G service.

The third-largest mobile phones provider in Japan has been losing ground to rivals NTT DoCoMo and KDDI as customers leave its problem-beset network.

Nearly 40,000 customers left in April, the fourth consecutive month of net subscriber losses. It now has 15m customers, down slightly on a year ago.

Vodafone says it will spend the extra cash on improving its network and plans to build 5400 antenna base stations by next March.

'Improvements of networks are a vital step to fight back in 3G services, in which we have slightly lagged behind our competitors,' a Vodafone spokesman said.

Vodafone's fight in 3G is crucial for the company in a country where the market is almost saturated and 3G is the only hope for real growth. But the battle is an uphill one. Vodafone's 3G service added only 141,300 subscribers in April, compared with 241,900 in March.

Adding to its problems, the government plans to allow three newcomers into the market and wants to make it easier for subscribers to swap between services while keeping their numbers.

Vodafone Japan will spend 260bn yen on capital investment in the current business year, up from 166.7bn yen last time.