TOKYO-Nissan Motor Co., a major shareholder in nine Japanese cellular companies, will sell all its stakes to Japan Telecom Co. (JT) and DDI Corp. and withdraw from the second-generation cellular business.
As a result of the announcement, the Japanese cellular market has essentially been reorganized into three groups: the NTT DoCoMo group, JT group, and DDI and IDO group.
Since the government plans to give third-generation licenses to just three carriers-or three carrier groups-it was necessary for the Japanese market thus to be reorganized into three groups.
NTT DoCoMo Group is currently the only nationwide cellular service provider, and the investor relations of the rest of Japan’s cellular companies are complex and intertwined.
While the Japanese cellular market has been rapidly expanding, reaching 44 million subscribers, Nissan’s nine Tu-Ka companies have failed to expand rapidly. At the end of June, the market share of these nine companies remained at 12 percent. On the other hand, Tu-Ka group’s accumulated loss reached 700 billion yen (US$6.3 billion) as of March.
The deals should be completed by the end of March 2000.
Nissan also suggested it may withdraw from the 3G business. Recently, the firm reduced its stake in IMT-2000 Planning, a company established last December by Nissan, JT and AirTouch International for 3G business, from the original 34 percent to 8 percent. Instead, British Telecom took a 20 percent-stake in IMT-2000 Planning.
With the Nissan shares, JT plans to provide nationwide cellular services. The six cellular operators that will be part of JT once it takes over Nissan’s stake will unify their brand names.
By taking over Nissan’s stake of the remaining three Tu-Ka companies, DDI will also become a nationwide operator.
DDI has been promoting cdmaOne nationwide services in cooperation with IDO Corp. since April.
