Liberty Media, along with Microsoft, will end up owning the resulting company stemming from the Japanese Titus/Jupiter cable op merger.
Also, the story below mentions that Sony plans on buying a 10% stake in Tokyu Cable. Sony and LMGA have worked together in the past with Telemundo and, more recently via Liberty Digital, with the Game Show Network. It would not be surprising if LMGA were to join Sony as a shareholder in Tokyu.
bloomberg.com
Jupiter Telecom to Raise as Much as 50 Billion Yen in Initial Share Sale
By Hiroshi Suzuki
Tokyo, Nov. 8 (Bloomberg) -- Jupiter Telecommunications Co., Japan's largest cable television company, plans to raise as much as 50 billion yen ($465.5 million) by selling shares to the public, bankers involved in the sale said.
The cable TV company, which is controlled by AT&T Corp., is looking to become the leading provider of high-speed Internet access services in Japan. Jupiter needs to raise money to boost the capacity of its existing cable networks, analysts said.
Japan's market for broadband Web services is set to grow as consumers and corporate users in the world's No. 2 Web market seek faster access. The share sale will help Jupiter become a larger provider of high-speed services though capacity will need to be boosted in future to compete with rivals, analysts said.
``Cable TV operators are attracting attention because they can offer round-the-clock Internet access,'' said Kota Nakako, an analyst with UBS Warburg Japan Ltd. ``But investors should not value this company in the same way as they do U.S. cable TV operators because competition in Japan is much more severe.''
Nikko Salomon Smith Barney Ltd. and Goldman Sachs Group Inc. will arrange the share sale, the bankers said. The sale will be held prior to Jupiter's listing on the U.S. Nasdaq market and the Tokyo Stock Exchange's Mothers market, which is for high-tech and venture companies, the bankers said.
Cable Internet Access
Jupiter has cable links to 804,900 homes in an area covering more than 7 million households. In September, Jupiter merged with its largest rival, Titus Communications Co. Jupiter is owned 35 percent each by Sumitomo Corp., one of Japan's largest trading houses, and AT&T's Liberty Media Group; Microsoft Corp., the world's largest software maker, holds 24 percent.
Toshiba Corp., the world's largest maker of notebook computers, and Itochu Corp., a Japanese trading house, each own a 3 percent stake in Jupiter.
According to the Ministry of Posts and Telecommunications, about 20 percent of Japanese consumers subscribe to cable TV services. As of September there were 152 companies offering cable Internet access, up from 89 six months ago. Some 463,000 subscribers access the Internet using cable, up from 216,000 six months ago.
Many Japanese cable TV operators are small in size and offer only regional services in local areas. After the merger with Titus, Jupiter now holds 28 regional cable TV operations nationwide.
Even so, the company faces increasing competition and needs to spend money to expand its cable network, analysts said. In the year ended March, Jupiter posted a parent-level net loss of 798 million yen on operating revenue of 16.1 billion yen. Out of 311 cable TV operators surveyed by the ministry, 196 operators were profitable during the same period, up from 178 a year earlier.
``Cable TV operators need to continue to invest funds to raise capacity for data transfer to ensure high-speed Internet access,'' said Takashi Ushio, an analyst with Marusan Securities Co. ``When a lot of cable TV subscribers use the Internet service all at once, the speed of access services slows.''
Japan's Web users are forecast to triple to 76.7 million by 2005.
High-Speed
At present, the maximum speed of Internet access using cable TV services is about 510 kilobits per second, compared with the 56 kilobits available with modems using copper phone lines.
Those speeds are set to be dwarfed by technologies such as digital subscriber lines and optical fiber networks, which Japan hopes will cover the nation in five years.
Jupiter is not the only major player seeking market share in Japan's growing cable TV industry. The company will be facing direct competition from Japan Cable Net Co., a joint venture to be formed by Fujitsu Ltd., Secom Co., Tokyo Electric Power Co. and Marubeni Corp.
That rival venture is planning to start high-speed Internet access service using cable TV networks in April. The joint venture aims to become the largest such group with 80 local cable TV operators under its umbrella by 2003.
In June, Sony Corp., the world's largest home video-game maker, said it will buy a 10 percent stake in Tokyu Cable Television, a Tokyo-based cable TV operator, as part of its efforts to build a high-speed data network to distribute videos and music electronically. |
