No.2 carrier KDDI is increasing grip on cableTV, and it makes a whole lot more sense While No. 3 Softbank is buying up SprintNextel in the U.S., KDDI is increasing its control on Japanese domestic cableTV industry.
Currently, KDDI has 30.7% of No. 1 JCOM (with 39% market share) and 95.6% of No. 2 JCN (11% share). JCOM's lead investor is Sumitomo Corp., who fought with K when K tried to buy control of JCOM in 2010, ending up buying more shares than K and currently holds 40%.
Nikkei reports that this time KDDI and Sumitomo will jointly buy up 30% of JCOM shares in the open market, making it privately held with 50-50 joint venture, and then will acquire JCN to make it a subsidiary.
News reports that the new company holds 50% share of Japanese cable TV industry, although much smaller size compared to the US, and plan to become an effective competitor in fixed broadband against dominant NTT group. NTT is also entering into video distribution through Hikari TV, competing against cable TV companies.
Sumitomo Corp entanglement aside, this deal makes way more sense to me compared to Softbank-Sprint deal, looking from Japanese consumers point of view. The market has been horribly fragmented and did not have enough clout in the fight against media giants, to move video contents onto broadband. I hope it will shake the Japanese media's iron grip and finally bring it to 21st century.