Targeting LTE spectrum, Softbank to buy rival eAccess for $2.3 billion
Telecom Lead Asia: Targeting LTE 4G spectrum, Japanese mobile service provider Softbank is set to buy eAccess for 180 billion yen (US$2.3 billion).
The Japanese telecom service provider is buying its small rival in a move to improve its available bandwidth and LTE services to compete with NTT Docomo and KDDI.
The acquisition will allow Softbank, the country’s third-largest carrier, to use eAccess’ bandwidth to expand its coverage to cope with the proliferation of data traffic as more people use smart mobile devices in the country, as well as move it closer to KDDI, the No. 2 carrier.
According to a report in Bloomberg, Softbank will pay 16.74 of its shares for every eAccess share, or 52,000 yen (US$667) each. This is nearly triple that of eAccess’ Friday closing price, and values the company at 180 billion yen (US$2.3 billion)
“With this agreement, we’ll be able to offer the best broadband services,” said Softbank President Masayoshi Son.
Last month’s release of Apple’s iPhone 5, which works with the faster LTE standard, is one of the motivating factors for the deal as the company awaits the launch of the device in Japan later in the year.
The acquisition is expected to be completed by Feb. 25, 2013, when eAccess will become a wholly-owned unit of Softbank.
Softbank was previously the only carrier in Japan that sold the iPhone until that monopoly ended last September when KDDI announced it got the rights to sell the iPhone 4S that was released a month later.
In June this year, SoftBank achieved more than 100,000 LTE 4G users. SoftBank launched commercial services earlier this year. Currently, SoftBank only offers one wireless hotspot device. In addition, in Q4 it is set to launch its first smartphone supporting TD-LTE, manufactured by Huawei, with the operator intending to move to the point where most of its smartphone range supports the connectivity.
According to Infonetics Research, NTT Docomo and Softbank Mobile in Japan will be contributing to the telecom Capex growth globally.