C & W sells Japan arm to Softbank for [pounds sterling]72.4 million

Fiber Optics Weekly Update, Oct 29, 2004

Japanese communications firm Softbank is to buy the local unit of telecoms titan Cable & Wireless for [pounds sterling]72.4 million, making it the number-two player in Japan's competitive international phone business.

C & W, Britain's second-biggest corporate telecoms provider, entered Japan in 1986, targeting corporate customers. But its local unit, Cable-Wireless IDC, has been unable to keep up in a fiercely competitive market where even leader Nippon Telegraph and Telephone (NTT) is struggling.

Announcing the disposal, C & W chief executive Francesco Caio said, "Given our strategy to focus on businesses with strong positions in their primary markets, we have concluded that IDC is not a good strategic fit with our business going forward."

The deal would give Softbank 230,000 new corporate and individual customers for its fixed-line business, adding to the 527,000 it took on when it bought major telecoms firm Japan Telecom (JT).

The transaction is expected to be completed in the fourth quarter of the current business year to March 2005. The Japanese company will take on [pounds sterling]9.5m of IDC's debt.

The acquisition is the latest in a series of moves by Softbank to increase its competitive position in the telecoms industry.