Asia Express - East Asian ICT
Data Communications - Softbank Buys Out Japanese Arm of Cable & Wireless
November 02, 2004
Softbank has fired another shot in its ongoing campaign to dethrone NTT with the recent announcement of its acquisition of Cable & Wireless IDC, the fifth largest fixed-line telecom company in Japan. Softbank purchased the Japanese arm of the British company for 12.3 billion yen (US$115.2 million) in a deal that strengthens its newly minted status as a comprehensive provider.


In July 2004, Softbank sealed a deal to purchase Japan Telecom, the country's third-largest fixed line provider. This new deal will further raise the number of clients in Softbank's corporate subscriber base by 40,000 to a total of 210,000 companies. All of the approximate 700,000 shares held by the British company in their Tokyo-based unit will change hands to Softbank, and the company will also assume authority over 600 employees in Japan.


Softbank's revenue from fixed-line services is expected to reach some 420 billion yen (approx. US$4 billion) as a result of the acquisition, and if revenue from its ADSL business is factored in, annual sales from fixed-line services could reach as high as 548 billion yen (US$5.1 billion). Sales of such magnitude would put Softbank on par with KDDI, Japan's second largest telecom company.


C&W IDC specialized in international data communications services for corporate clients. As such, the purchase will make Softbank Japan's second largest provider of international voice services with revenue of 43.5 billion yen (US$408 million), about half the total of the market leader KDDI. Softbank will also assume 1.9 billion yen (US$17.9 million) worth of debt from the British company.