7 Dec 2016

The Nikkei daily has learned that KDDI (au) is looking to buy Japanese ISP BIGLOBE from Japan Industrial Partners IV Investment, in a move that would catapult it into second spot in the domestic internet market. The purchase price for the company, whose owner has been in the market to secure a buyer for it, is understood to be in the region of JPY70 billion-JPY80 billion (USD614 million-USD702 million); an ‘in principle’ deal is thought to have been struck, with an official announcement expected in the near future. Meanwhile, KDDI is also in the throes of completing a separate purchase, this time for the Japanese ISP and MVNO Nifty Corp, a subsidiary of Fujitsu.

KDDI Corp is treading water in its traditional telecoms market and, with smartphone sales stalling, it is looking to shore up its business by absorbing BIGLOBE’s customer base, while simultaneously looking to further diversify its portfolio by moving into the retail electricity and e-commerce sectors.

The operator currently has around 1.27 million fibre broadband subscribers, and the addition of BIGLOBE will bolster this to more than 3.70 million (or nearly 13% of the market), and enable it to leapfrog rivals to claim second spot in that segment, behind market leader NTT Corp.

According to TeleGeography’s GlobalComms Database, in October 2013 NEC Corporation initiated a sale process for its 78% stake in the then NEC BIGLOBE, and in January 2014 it signed an agreement with Japan Industrial Partners to transfer all NEC BIGLOBE shares to a holding company, Jay Bee Holdings, owned by Japan Industrial Partners IV Investment and others, for JPY70 billion. The other major shareholders in the ISP are Sumitomo Corporation (7.0%), Daiwa Securities Group (5.0%), Sumitomo Mitsui Banking Corporation (5.0%), Dentsu (2.5%) and Hakuhodo (2.5%). The aforementioned minority shareholders paid a total of JPY12.7 billion for new share capital in July 2006.

Japan, BIGLOBE, KDDI (au), NEC, Nifty Corp (NifMo) (MVNO)