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KDDI, Tokyo Electric Power to Take Control of No. 2 Cable TV Firm

Posted on: Wednesday, 7 December 2005, 12:00 CST

By Kyodo News International, Tokyo

Dec. 7--TOKYO -- KDDI Corp. plans to take control of Japan Cablenet Ltd., the nation's second-largest cable TV company, by teaming up with Tokyo Electric Power Co., one of Japan Cablenet's major shareholders, sources familiar with the matter said Wednesday.

By gaining a controlling stake in the holding company of Japan Cablenet, known as JCN, both KDDI and Tokyo Electric Power want to jointly offer one-stop mobile phone, Internet and cable TV services, the sources said.

Apart from Tokyo Electric Power, Fujitsu Ltd., Secom Co. and Marubeni Corp. presently holds major stakes in the holding company that oversees the Tokyo-based JCN.

KDDI is now holding negotiations with some of these existing shareholders to gain control of JCN's holding company with Tokyo Electric Power, the sources said, adding it is trying to strike agreements with these shareholders as early as the beginning of the new year.

JCN, founded in March 2001, has capital of 34.87 billion yen and the customer base of 500,000 subscribing households. It controls 13 cable TV broadcasters in the Tokyo metropolitan area including the Kanagawa and Chiba prefectures.

KDDI has been enhancing its tie-up with Tokyo Electric Power in the optical fiber-based telecom service business.

The camp plans to replace JCN's copper cable-based broadcasting network with optic-fiber cables, the sources said.

The alliance wants to fend off competition from Nippon Telegraph and Telephone Corp., which is trying to hike the profitability of the NTT-led group of companies by consolidating its telecom providers offering overlapping services, they said.

KDDI has faced difficulties in securing customers for its optical fiber-based telecom services that encompass such services as Internet connection, cable television and IP phone.

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Copyright (c) 2005, Kyodo News International, Tokyo

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Source: Kyodo News International, Tokyo

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