Vodafone is looking to spend around £1.2bn (212bn yen) to gain control of Japan Telecom.

The UK's largest telco is in talks with East Japan Railway Co. to buy two-thirds of the Japanese firm. It already holds a 15.2 per cent stake in Japan's third largest telco, and the latest talks would see it increase that to 21.7 per cent.

In holding around two-thirds of the firm's stock, Vodafone would have control over most business decisions, including mergers and director sackings, which would allow it to better compete against market leader NTT DoCoMo.

NTT DoCoMo has close to 60 per cent of Japan's $70bn mobile phone market.

Analysts, worried that Vodafone might only bid for Japan Telecom's J-Phone subsidiary, said the move was positive.