November 29, 2004

Heisei Denden Sues Softbank Over Cheap Phone Service

Tokyo, Nov. 29 (Jiji Press)--Telecommunications venture Heisei Denden Co. on Monday sued Softbank Corp. and its unit Japan Telecom Co., seeking a court injunction to stop Japan Telecom from launching a cheap fixed-line phone service.

In the lawsuit filed with Tokyo District Court, Heisei Denden claimed that Softbank, which had attempted to acquire the venture firm, illegally applied knowhow obtained from the company during their acquisition talks to Japan Telecom's new fixed-line phone service, to be launched Wednesday.

Heisei Denden launched a low-rate fixed-line phone service in November 2003 by installing its own switching equipment at related facilities of telecommunications giant Nippon Telegraph and Telephone Corp. .

Heisei Denden argued that Softbank's use of the knowhow obtained through the acquisition talks that continued from March to May this year is against a law to prevent unfair business practices.

While the negotiations broke down, Softbank, a major Internet business investor, acquired Japan Telecom in July.

Heisei Denden President Kenji Sato said that his company decided to sue the Softbank side, judging that Japan Telecom's planned service would illegally deprive Heisei Denden of its business profits.

In response, Softbank and Japan Telecom argued that they developed the new telephone service on their own, brushing aside the allegations that they used Heisei Denden's business knowhow illegally.END