(Kyodo News International via NewsEdge) KDDI will buy Tokyo Electric Power's fiber optics communications business, effective next January 1, in a move to take on market leader NTT.
To finance the purchase, KDDI will allocate some 145,000 shares to the utility by the end of this year, which are worth 115 billion yen ($963 million) if calculated by KDDI stock's most recent closing price.
The deal will make KDDI the fourth-largest player in the market for fiber optics communications services in Japan, trailing the two regional units of NTT and Usen.
With some 530,000 subscribers after adding TEPCO's 340,000, KDDI will seek to capture 30% of the market in the greater Tokyo area.
'We aim to create a formidable telecommunications group that can compete with NTT,' KDDI president Tadashi Onodera.
NTT commands more than 60% of the domestic market.
While KDDI, Japan's second-largest telecom firm, leases phone lines from NTT for its service, the deal will enable it to use the fiber optics network and other facilities laid by TEPCO as well.
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