TOKYO — Japan’s two biggest cable companies have entered talks for a possible merger that would also unite AT&T with Microsoft in a battle to win over Japan’s Internet market.
Japan’s largest cable company, Jupiter Telecommunications, in which AT&T unit Liberty Media holds a 40% stake, and No. 2 cabler Titus Communications, in which Microsoft recently bought a 60% share, are considering a merger, Jupiter spokeswoman Keiko Morita said.
Japan is seen as one of the last great markets for Internet companies as the country lags several years behind the U.S. and some European countries in Web development. If AT&T and Microsoft merge their cable interests in Japan, both are also expected to gain an infrastructure for broadband access that will touch all parts of the second largest economy in the world.
According to Japanese financial daily Nihon Keizai Shimbun, Sumitomo and Liberty Media, which own Jupiter, have reached a basic agreement on the merger with Microsoft, Itochu and Toshiba, which have stakes in Titus. Jupiter, the only cabler that would remain after the merger, would have a capital base of 75 billion yen ($714 million).
The merged company would have 28 cable stations. It would also set up the nationwide infrastructure for digital cable TV transmissions that would also have the capacity to handle broadband traffic.