Companies reportedly expect to sign a deal in March

Sky Perfect Communications, Japan’s largest digital satellite broadcaster, and JSat, the satellite operator that beams Sky Perfect programming to subscribers, are holding merger talks, according to published reports here Wednesday.

In a statement, Sky Perfect said it is “looking into strengthening its relationship with JSat Corp., including the potential for integration, but nothing definite has been decided at this stage.”

The two companies reportedly expect to sign a deal in March. In addition to a merger, they are looking into possibly setting up a joint stockholding company.

A merger of the two companies, which recorded total sales of ¥125 billion ($1.068 billion) in 2005, would create by far the largest player in the Japanese satellite market.

Sky Perfect and JSat are already jointly testing the retransmission of terrestrial signals via satellite to mountainous and other remote areas. A merger would make possible greater business efficiencies and open the door to new marketing and promotional strategies.

Founded in November 1994, Sky Perfect had 4.1 million total and 3.5 million individual subscribers at the end of January. Major shareholders include Sony Broadcast Media (12.48%), Fuji Television Network (12.48%), Itochu (12.48%) and JSat (6.915%).

Its core business is digital satellite broadcasting, including 14 movie and 31 pay-per-view channels; Sky Perfect also offers broadband as well as mobile phone and FTTH (fiber to the premises) content distribution services.

Launched in February 1985, JSat was Japan’s first private-sector satellite communications operator. It runs a fleet of nine satellites in eight orbital positions.

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