Carlyle to increase Willcom stake, paper says

16 Mar 2009

Private equity fund Carlyle Group reportedly plans to increase its stake in Japanese personal handyphone system (PHS) operator Willcom by buying shares in a private placement, the Nikkei reports. It is understood Carlyle intends to up its ownership to around 65% from 60% currently, in the process reducing the stakes held by its partners in the venture, Kyocera Corp and KDDI, from the current 30% and 10%, respectively. Willcom is looking to begin testing a new PHS service capable of delivering transmission rates of at least 20Mbps – more than 20 times faster than its current service. The trials will begin in central Tokyo by the end of April, extending to Osaka and Nagoya in October 2009, the Nikkei said. However, Willcom will need at least JPY140 billion (USD1.43 billion) to build out its new high speed mobile network by 2013, the paper said.

TeleGeography’s GlobalComms database writes that in February this year US-based Carlyle Group abandoned plans to find a strategic investor for Willcom PHS and instead, revealed it was looking to use NTT DoCoMo’s network to cut down on network infrastructure costs. The Tokyo-based mobile operator had originally planned to spend USD2.2 billion by 2015 to develop faster data transmission technology, but has reassessed its objectives after the global financial crisis reduced the banks’ willingness to lend. The cellco had around 4.5 million subscribers at the end January 2009, down 77,000 from a year earlier, while one of its main mobile data rivals, eMobile, increased its subscriber base five-fold to 1.2 million over the same period.