TOKYO Microsoft is nearing a deal to buy a major stake in No. 2 Japanese cable company Titus Communications for about 1 billion yen ($95.2 million) the largest purchase ever of a Japanese CATV company, industry sources said.
Microsoft is in talks with U.S. cable TV operator MediaOne, which has a 60% stake in Titus, sources said.
The move would mark another chapter in Microsoft’s ongoing efforts to buy into cable companies around the world.
Phone rates snag ‘Net
Internet development in Japan has been stymied by the access fees that telecom giant NTT charges — among the highest in the world. Japan’s telecom ministry said NTT’s local phone rates in Tokyo are three times higher than the rates charged by AT&T in New York.
Microsoft’s move into Japanese cable is seen by industry watchers as a way to get more Japanese consumers onto the Internet by allowing them to avoid the high local access rates for connections over telephone lines.
Microsoft could reach an agreement for the deal within weeks, and executives of the software giant are expected to come to Japan soon to see about a purchase of shares from Titus’ main stockholders in Japan: electronics company Toshiba and trading house Itochu.
The two Japanese companies each hold a 20% share in Titus. The cabler is capitalized at $259.1 million, including capital reserves.
Titus has about 1 million subscribers. It rang up a loss in the last fiscal year but posted sales of about $50 million.