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Softbank to Buy Cable & Wireless IDC to Strengthen Telecommunications Business

Posted on: Tuesday, 26 October 2004, 11:00 CDT

Oct. 26--TOKYO -- Softbank Corp. said Tuesday it has decided to purchase Cable & Wireless IDC Inc. from its British parent Cable & Wireless PLC in a bid to expand its telecom business.

The provider of broadband communications services said it will acquire 97.98 percent of the outstanding shares of the Japanese unit of the British telecom titan for 12.3 billion yen. Softbank said it will also shoulder 1.9 billion yen in C&W IDC's debts.

Tokyo-based C&W IDC offers international voice and data communications services. Softbank's purchase of the company is expected to pit it against its bigger rivals Nippon Telegraph and Telephone Corp. and KDDI Corp.

Softbank has been pursuing expansion of its mainstay broadband businesses. In line with the strategy, it acquired all issued and outstanding common shares of Japan Telecom Co. in July for about 143.3 billion yen.

Combined with this, the latest transaction will lift the Softbank group's communications business to the same scale as that of KDDI, the second-largest fixed-line communications provider in Japan.

Softbank will be able to enhance its services for corporate clients with the acquisition of the British telecom unit, which has corporate clients using 150,000 lines. The company plans to offer new discount fixed-line services to those clients from December.

Softbank officials also said the company can cut up to 8 billion yen in costs by streamlining cables and regional offices of Japan Telecom and C&W IDC.

C&W IDC, founded in 1986, had a net loss of 6.67 billion yen and a pretax loss of 7.65 billion yen on sales of 71.31 billion yen in the business year that ended in March this year.

With the acquisition, the Softbank group's sales in communications business including broadband services are expected to reach 550 billion yen.

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Source: Kyodo News International, Tokyo

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