Kokusai Denshin Denwa Co. Ltd. and Teleway Corp. agreed to basic terms of a merger that is expected to close before the end of next year, announced Tokyo-based KDD.
The company said the combined corporation would focus on several key areas, including the growing field of mobile communications and multimedia services, although no specific wireless plans have been formulated yet.
“KDD and Teleway, through a merger on an equal basis, will converge business resources to achieve the maximum amount of synergy and establish a scale of business and level of efficiency that would make the new company competitive against domestic and foreign megacarriers in the age of global megacompetition,” said KDD.
Other areas of focus will include forming a high-quality, low-cost network infrastructure based on the global fiber cable network, providing inexpensive, seamless domestic-international services to improve customer convenience and competitiveness and developing operations abroad to further raise the international competitiveness of the Japanese telecommunications industry, said KDD.
Teleway, a long-distance services carrier, is 38.3 percent owned by Toyota Motor Corp., which has been steadily accumulating ownership interests in a number of Japanese telecommunications companies since the mid-1980s. Officials at KDD said a decision has yet to be made about how to handle Toyota’s controlling interest in Teleway.
The Japanese government in June approved legislation that allows for sweeping deregulation of the country’s telecommunications industry. Besides passing a bill that eventually will lead to the break-up of Nippon Telegraph and Telephone Corp., the government also passed a bill allowing international carriers like Teleway and KDD to begin offering domestic services as well.
