Microsoft Buys Japanese Cable TV Operator

TOKYO (04/11/2000) - In a move designed to further its broadband push in Japan, Microsoft Corp. announced today it has purchased a majority stake in Titus Communications Corp., one of Japan's two largest cable MSOs (multiple system operators).

Microsoft said it has purchased the stake from MediaOne International, although it declined to provide financial details. MediaOne owned a 60 percent stake in Titus but was looking to sell out of the venture as part of a merger deal with AT&T Corp. Microsoft's partners in Titus are Toshiba Corp. and Itochu Corp., each of which own a 20 percent stake.

Titus, which was established in 1995, operates five cable TV franchises in and around Tokyo and, through affiliates, provides service to two additional areas outside of the Japanese capital. Six of the areas currently provide cable Internet services and four offer cable telephony.

The cable Internet service was first rolled out in October 1998 and now connects 20,000 subscribers. For a basic monthly fee of 6,000 yen (US$56) subscribers get a full time Internet connection with downstream speed of 512k bits per second -- slow by cable Internet standards although eight times faster than the 64k bps ISDN (integrated services digital network) service to which most Japanese Internet users subscribe.

Titus has also been promoting the technology to other cable Internet operators in an alliance with Cisco Systems Inc. and Itochu Techno Science Corp. To date it has succeeded in selling its cable Internet platform to two Japanese operators.

Cable Internet currently offers the highest speed Internet access available to Japanese consumers although a number of competitors are approaching fast.

Dominant local telephone carrier Nippon Telegraph and Telephone Corp. launched an ADSL (asymmetric digital subscriber line) service late last year in a small area of Tokyo and Osaka and earlier today Sony Corp. announced plans to launch a WLL (wireless local loop) service in Tokyo from July. [See "Sony to Launch Japan WLL Service in July," today's wire].

Microsoft, along with partners Softbank Corp. and Tokyo Electric Power Co.

(TEPCO), also owns SpeedNet Inc. which is building a wireless Internet access service that will compete with the new Sony venture. Although the originally planned summer commercial launch is likely to be delayed, according to TEPCO, the service will provide another means by which Microsoft can deliver the Internet to Japanese consumers at higher speeds than they are used to today.

Titus Communications, in Tokyo, can be found online at http://www.titus.co.jp/.

Microsoft, in Redmond, Washington, is online at http://www.microsoft.com/.

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