UK-based operator Cable & Wireless (C&W) has entered into an agreement with Japanese broadband provider Softbank Corp over the sale of its Japanese subsidiary C&W IDC. Softbank, which acquired a 66.7% stake in rival fixed line operator Japan Telecom in May 2004, will pay USD132 million (GBP72 million) for the 97.69% stake in IDC. The news has come as a bit of a shock, following C&W’s announcement last week that it had entered into the final stage of talks with private investment fund MKS Partners to sell the unit, and it would seem that Softbank pipped MKS to the post with a higher offer. The acquisition will give Softbank around 230,000 new corporate and residential customers, which it will add to the 527,000 it took on when it bought Japan Telecom. The sale is expected to be completed by the end of March 2005.
C&W has been looking to exit the Japanese market since September 2004, when it first entered into talks with Softbank and private investment fund MKS Partners. The telco said it was struggling to keep pace with its larger rivals in the country’s highly competitive fixed line market; KDDI, NTT and Japan Telecom became embroiled in a price war in September and have been undercutting each other in a bid to hold onto customers. Softbank plans to focus on the provision of broadband services in Japan, a market which has grown significantly over the past few years as basic voice services have slumped. At the end of September 2004 there were 13.5 million ADSL subscribers in the country.