Here's Blooomberg's version of the Softbank/Microsoft/Tepco venture:
Softbank, Tepco to Offer Free Net Access to Schools (Update1)
Softbank, Tepco to Offer Free Net Access to Schools (Update1) (Adds quotes from Masayoshi Son throughout.)
Tokyo, Aug. 11 (Bloomberg) -- Softbank Corp., Japan's biggest investor in online businesses, said the joint venture it will establish with Tokyo Electric Power Co. and Microsoft Corp. will offer 10 years of free Internet access for Japan's 40,000 schools.
The move is good news for microchip makers, which will likely see a surge in demand for chips as schools buy more PCs to take advantage of the free offer. It's also likely to stimulate youngsters' interest in the Web, giving a boost to Softbank's many online businesses.
News of the joint venture emerged on Monday when Tepco said the three companies would use wireless technology to provide Internet connectivity at a flat rate, possibly undercutting services by Nippon Telegraph and Telephone Corp., the country's former domestic telephone monopoly.
Today Softbank pledged to undercut both domestic and global counterparts to attract Japanese on line.
The cost performance of the new service will be ``several hundred times' better than NTT, said Softbank's billionnaire founder Masayoshi Son at a press conference.
He declined to specify planned rates or speeds, though individual users will pay a flat monthly fee of ``several thousand yen' for services ``in the megabytes-per-second range.'
Industry watchers blame high local telephone chargers for stunting the growth of Japan's online community and have criticized NTT for its slowness in introducing flat-rate tariffs.
NTT plans to begin a flat-rate Internet service in October, when subscribers will be charged 10,000 yen per month for 64 kilobytes-per-second connectivity over integrated services digital network lines. ``The biggest obstacles to Internet usage in Japan are high telecommunications costs and low access speed,' Son said. ``With this venture, we intend to overcome both of those obstacles.'
Price War
Analysts warn the new venture may be bloodied by a price war with NTT. It will have to shoulder the burden of setting up a wireless transmission system to provide access to Tokyo Electric's fiber-optic network, a task involving installing microwave transmitters on utility poles. ``If it's a question of price, NTT is in the best position to deal with this,' said Paul Saferstein, an analyst at Morgan Stanlety Japan Ltd. ``Their ISDN network is up and running for a number of years, it's through the investment phases, whereas this new JV has to deal with an upfront investment.'
Softbank also said today that each of the three partners will take a 31 percent stake in the venture, which will be formed in September and capitalized at 6 billion yen ($52 million). Yahoo Japan Corp. will take a 5 percent stake.
The new company will start a trial service in October and will offer full Internet access by next summer. The service will initially target the Tokyo metropolitan area, though the partners want eventually to take it nationwide.
Only about 10 percent of the population is online in Japan, compared with about 25 percent in the U.S.
Today's press conference was also attended by Tepco Chairman Hiroshi Araki and the president of Microsoft's Japan affiliate Makoto Naruke. |
