Microsoft Buys Japanese Broadband Stake From MediaOne

Microsoft Corp. Tuesday bought a
majority stake in a major Japanese cable broadband player Titus
Communications from MediaOne International, harkening its entry as an
Internet access player in Japan.

The agreement supports Microsoft’s (MSFT)
blueprint for broadband deployment and will also support its wireless plans,
the company said.

With the cost of Internet access in Japan still high through the state telco
NTT, the 60 percent majority stake in Titus could prove important to
Microsoft’s ISP service. While recent moves towards fee cuts have encouraged
higher use, most users have taken to wireless services as means to bypass
the complications of wired access. There are more mobile phones than fixed
line subscribers in Japan, according to reports, so Microsoft’s wireless
plans are a necessary part of the action.

The decision pitches the U.S. industry leader against NTT and mobile
operator NTT Docomo, whose i-mode mobile Net service is often credited for
the proclivity for wireless.

Local partners Itochu and Toshiba, which each control 20 percent of the
cable firm, will remain part of Titus. The current management team will not
be altered. Financial terms of the deal were not disclosed.

“I’m delighted we have sold our stake in TITUS to Microsoft,” said Gary
Ames, president and CEO of MediaOne International. “The sale is in line with
our strategy of selling a significant portion of our international portfolio
in preparation for the merger into AT&T.”

Titus operates cable TV, IP telephony, and high-speed Internet access
services through its seven franchises.