Softbank to buy rival eAccess for $2.3B

Summary:Japanese mobile operator Softbank plans to use eAccess' bandwidth to expand its broadband services, particularly LTE, as it prepares for the launch of Apple's iPhone 5.

Japanese mobile operator Softbank will acquire its smaller rival eAccess in a deal worth 180 billion yen (US$2.3 billion) as it moves to boost its available bandwidth and LTE (long-term evolution) services to compete with other domestic players NTT Docomo and KDDI.

Bloomberg reported Monday that in a stock swap, 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)

Softbank President Masayoshi Son said his company was not overpaying for eAccess. "With this agreement, we'll be able to offer the best broadband services," he said.

He added last month's release of Apple's iPhone 5 , which works with the faster LTE standard, was one motivating factor 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, Bloomberg reported.

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, said another report by The Wall Street Journal.

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.

Topics: Telcos, Mobility, Smartphones, Tech Industry

About

Jamie Yap covers the compelling and sometimes convoluted cross-section of IT and homo sapiens, which really refers to technology careers, startups, Internet, social media, mobile tech, and privacy stickles. She has interviewed suit-wearing C-level executives from major corporations as well as jeans-wearing entrepreneurs of startups. Prior... Full Bio

zdnet_core.socialButton.googleLabel Contact Disclosure

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Related Stories

The best of ZDNet, delivered

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
Subscription failed.