Report: Microsoft eyeing Japanese cable operator

Microsoft is reportedly in talks to acquire a major Japanese cable TV system operator, according to the Thursday morning edition of Nihon Keizai Shimbun newspaper.

The software giant is reportedly negotiating the purchase of the 60 per cent stake in Titus Communications that is currently owned by MediaOne Group for $US961.5 million, the Japanese business daily said.

Spokespersons for both Microsoft and MediaOne declined comment on the report citing company policies of never discussing rumors or speculation.

In addition to the talks with MediaOne, which could conclude as early as late November according to the newspaper, Microsoft is also in talks with Toshiba and Itochu regarding the purchase of their shares in Titus Communications. The two companies presently each hold 20 per cent of the cable operator.

Titus Communications is a major Japanese MSO (multiple system operator) and owns cable networks in Kanagawa and Hokkaido prefectures and several areas of Tokyo. In addition to basic television and radio services, the company begun rolling out cable Internet in October 1998 and was the first to offer cable telephony in Japan when it launched a service in June 1997.

In its first year of operations, the cable Internet service succeeded in attracting 10,000 subscribers - significantly better than the cable telephony service that took an additional year to reach the same level.

Last month, Microsoft agreed to buy MediaOne's 29.9 per cent stake in British cable operator Telewest Communications PLC for almost $3 billion. It was just one of a handful of acquisitions of and investments in cable TV operators the software vendor has made this year in a bid to stay in the broadband Internet game.

In Japan, Microsoft announced earlier this year plans to form a wireless Internet service joint venture with Softbank and Tokyo Electric Power that will offer service in Tokyo in the spring of 2000.

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