Category: M&A

  • Gerhard Fasol on CNBC about LENOVO 2007 3rd Quarter financial results

    Gerhard Fasol on CNBC about LENOVO 2007 3rd Quarter financial results

    On February 1, 2007, LENOVO announced excellent 3rd Quarter results. I commented live on CNBC-TV. Read comments on LENOVO’s results below.

    Watch on youtube:

    Comments on LENOVO’s 3Q results

    LENOVO (traded on the the Hong Kong stock exchange) for 3Q announced 23% higher profits compared to 3Q one year ago. Revenue increased slightly to US$ 4 billion, making LENOVO a US$ 12 billion/year company. LENOVO is very successful in it’s home market China, where it controls more than 35% of the PC market. While shipments in China rose 17% during the quarter ending Dec 31, 2007, global sales only increased 0.4%, held back mainly by performance problems and falling sales in the Americas. Globally, LENOVO is squeezed between ACER below, which grows much more rapidly (ACER’s growth was 32.4% in 3Q2006 compared to one year ago while LENOVO’s growth was only 10.1%) and Hewlett-Packard and Dell above. While Dell was struggling recently, Michael Dell came back as CEO of Dell, and I expect Dell to improve and become a much more difficult competitor for LENOVO. LENOVO’s challenge is to turn around the US operations, where it is losing ground. To do so, LENOVO will need to strengthen sales to consumer markets, maybe by learning attractive product design by watching APPLE, since competing on price will further hit profits. LENOVO risks to be overtaken globally by ACER.

    Comments on LENOVO

    LENOVO is more important than it’s size of US$ 12 billion in sales suggests for the following reasons. LENOVO is one of the first Chinese companies developing a global brand and a global business. With China’s growing economic importance on the world stage, if LENOVO manages to turn-round US operations and becomes globally successful, it’s management structure and methods may become a model for other Chinese companies to globalize. It is interesting to compare LENOVO’s relative success after the acquisition of IBM’s PC business with BENQ’s acquisition of SIEMENS-Mobile phones. If LENOVO succeeds to turn-round US operations, LENOVO may become a model case for futher take-overs of Western companies by Chinese companies. LENOVO is owned 27.3% by the Chinese Academy of Science. If LENOVO succeeds and continues to expand it’s success story, financial benefits will flow back to the Chinese Academy of Science, strengthening China’s science base and contributing to China’s further development. LENOVO is also China’s largest domestic mobile phone maker, after recently overtaking Ningbo-Bird. LENOVO sold 2.1 million mobile phone handsets in 3Q2006, a market share of 6.2%, and annual sales on the order of 8 million phones. This number is far below NOKIA’s sales on the order of 350 million phones/year globally, and recently global phone makers have been gaining ground over local makers in China. However, LENOVO does have a chance sometime in the future to become a global mobile phone player in the way SAMSUNG has succeeded.

    Copyright (c) 2013 Eurotechnology Japan KK All Rights Reserved

  • ACCESS CEO Toru Arakawa (Oct. 6, 2006)

    ACCESS CEO Toru Arakawa (Oct. 6, 2006)

    Toru Arakawa, CEO and Founder of ACCESS, gave a keynote speech at this years CEATEC show in Makuhari on October 6, 2006, outlining ACCESS strategies.

    ACCESS is the maker of NetFront browsers and other software at the core of DoCoMo’s i-mode. ACCESS acquired PalmSource and is developing the Access Linux Platform (ALP) based on the PalmSource acquisition.

    With ALP, ACCESS is planning to deliver a full software stack for mobile phones based on Linux. In his speach Toru Arakawa outlined company strategy also beyond mobile phones to multimedia home centers.

    Looks to me like ACCESS is shaping itself to compete with APPLE and Microsoft both in the mobile phone and the home entertainment markets.

    ACCESS CEO Toru Arakawa
    ACCESS CEO Toru Arakawa
    ACCESS CEO Toru Arakawa
    ACCESS CEO Toru Arakawa

    Copyright (c) 2013 Eurotechnology Japan KK All Rights Reserved

  • Outsourcing Japan market research and strategy consulting to India, Philippines?? – a recipe for business failure in Japan?

    Outsourcing Japan market research and strategy consulting to India, Philippines?? – a recipe for business failure in Japan?

    Business decisions unrelated to market realities are a prime reason for failure of foreign companies in Japan

    In a quest to reduce market research costs, Japan market research is often outsourced to India, Philippines, Indonesia etc

    With shock and surprise we recently found out that a very famous telecom and IT industry market research and strategy consulting firm with a globally famous brand apparently outsources market research of Japan’s mobile phone and telecom sector to India. The Indian employees apparently are diligently studying the Japanese language in evening classes, so that in a few years time, they will be able to read a little of the Japanese mobile market information which can be found on the internet, we assume.

    We believe that this explains why so much information about Japan’s telecom and mobile phone markets circulating outside Japan is incomplete, or in many cases even wrong. As a consequence companies like Vodafone then take management decisions in Japan, which were totally unrelated to Japan’s market realities.

    This fact also contributes we believe to the fact, that some of the most famous global companies in the telecommunications sector find it so difficult to succeed in Japan – not that Vodafone, Nokia (mobile phones and VERTU – except networks which are a great success), Cable & Wireless, Deutsche Telekom all withdrew from Japan – outsourcing market intelligence to low-cost countries such as China, India, Philippines etc. is certainly one of the contributing factors.

    Indeed similar to Vodafone’s departure from Japan, famous global telecom consultancies have also closed shop in Japan, due to the very high costs and the continuous high investments necessary to achieve and maintain leadership in understanding Japan’s telecommunication markets.

    We can assure our newsletter subscribers and our customers that our original Eurotechnology market reports and our strategy consulting is hand crafted in Tokyo/Japan. Our team members working on Japan market research and strategy consulting, all live in Japan, are mostly Japanese, and work daily with Japanese CEOs, telecom managers, and most importantly of all, daily interview and discuss with real-life Japanese mobile phones users: face-to-face here in Japan – not across one or more oceans.

    Made in Japan: the Original “Eurotechnology” Japan-market reports

    Copyright (c) 2013 Eurotechnology Japan KK All Rights Reserved

  • SoftBank accounting adjustments – a Red Herring interview

    SoftBank accounting adjustments – a Red Herring interview

    SoftBank accounting adjustments

    Vodafone Japan turn around under SoftBank – Interview for Red Herring

    Helped RedHerring with an interview on the recent SoftBank accounting adjustment. The article is entitled “Softbank Falls on Lehman Cut” and appeared on the RedHerring website on August 28, 2006. Our company also recently advised a major global financial institution on related issues and risk issues.

    Here a short summary of what I said

    Essentially Vodafone-Japan is a company which has been going downhill in many ways for the last 4 years, they lost a lot of subscribers, and there has not been enough investment in equipment and staff, etc. For that reason and other reasons Vodafone sold the Japan operations this March to Softbank (read our report on SoftBank here).

    Japan’s mobile market is really difficult, and there is tough competition. There is much trust in the entrepreneurial skill of Softbank Chairman and founder Masayoshi Son – only through his reputation and track record could Softbank attract US$ 15 billion in bank loans to acquire Vodafone Japan KK. Personally I have a very high opinion about Masayoshi Son’s abilities – and I think there is a high chance that he will succeed to turn round this company. Many people feel so, otherwise Son would not have been able to obtain the finance for the deal. Masayoshi Son has built not just one, but many successful companies, and he is maybe the strongest driving fource behind Japan’s internet revolution.

    I think for the turnround to be successful will take quite some time, and probably the shares of Softbank will go up and down many times before the company is turned round. I am not a share holder of Softbank, but my thought would be that this is really an investment for the longterm, unless you are playing on shortterm fluctuations which some investors also do. But then you have to understand exactly what you are doing and live with the risk.

    Regarding the revaluation of the plant (mainly base stations, antennas, backhaul, computer systems etc) of the company, I am not an accountant so I cannot comment on the accounting issues and regulatory issues here.

    However keep in mind that Vodafone has last year written off about US$ 50 billion mainly for the Mannesmann acquisition. Softbank has not written off anything as far as I understand it, they converted plant into good will which as far as I know increases the period of write off from 10 to 20 years. But was I said, I am not an accountant.

    Copyright (c) 2013 Eurotechnology Japan KK All Rights Reserved

  • SoftBank rebrands Roppongi store from Vodafone red to SoftBank white/silver

    SoftBank rebrands Roppongi store from Vodafone red to SoftBank white/silver

    SoftBank acquired Vodafone’s Japan operations and lost no time to rebrand the company

    Speed is one of SoftBank’s success factors

    On March 17, 2006 SoftBank announced the acquisition of Vodafone Japan with co-investment by Yahoo KK, sealing the end of Vodafone’s operations in Japan, and Vodafone’s exit from Japan.

    SoftBank did not lose a moment to start turning Vodafone KK around, within a few days Vodafone’s former headquarters were moved to SoftBank’s headquarters in Shiodome, and most Vodafone expatriates were sent back to Europe. If you are interested to know why Vodafone decided to sell Japan operations to SoftBank and quit Japan, you can read many details here.

    Yesterday (August 26, 2006) SoftBank opened the new Roppongi flagship store. SoftBank’s white/silver/grey colorscheme replaces Vodafone’s bright red:

    Rebranding Vodafone KK's former Roppongi flagship store to the SoftBank brand, after acquisition of Vodafone KK by SoftBank
    Rebranding Vodafone KK’s former Roppongi flagship store to the SoftBank brand, after acquisition of Vodafone KK by SoftBank
    Rebranding Vodafone KK's former Roppongi flagship store to the SoftBank brand, after acquisition of Vodafone KK by SoftBank
    Rebranding Vodafone KK’s former Roppongi flagship store to the SoftBank brand, after acquisition of Vodafone KK by SoftBank

    Understand Softbank: our report: “SoftBank today and 300 year vision”

    pdf file, approx 120 pages, 47 figures 18 photos, 7 tables

    Copyright 2013 Eurotechnology Japan KK All Rights Reserved

  • Vodafone Japan rebranding to SoftBank

    Vodafone Japan rebranding to SoftBank

    SoftBank replaces Vodafone brand in Japan

    Vodafone quits business in Japan having sold all operations to SoftBank

    Photographs below show the world famous Vodafone board on Tokyo-Shibuya’s Hachiko-square being replaced by the SoftBank advertisement from June 14, 2006.

    SoftBank acquired Vodafone-Japan and rebranded to SoftBank mobile on June 14, 2006
    SoftBank acquired Vodafone-Japan and rebranded to SoftBank mobile on June 14, 2006

    Cheese phones anyone?… Vodafone “cheese phone” and “car tire phone” posters replaced by SoftBank posters on Tokyo’s Yamanote Line

    Vodafone had difficulties to manage the relationships with Japanese mobile phone manufacturers, and as a consequence Vodafone’s pipeline of new mobile phone models dried up, while competitors KDDI and Docomo of course continued to introduce seasonal spring, summer, autumn and winter collections of attractive 3G phones which many special functions such as location services, GPS, color screens, autofocus cameras – functions which at that time were only available in Japan and nowhere else globally.

    Since Vodafone had few attractive phones, Vodafone switched to covering old models with cheese, mint ice cream and car tire plastic covers to give them a new outside make-up. Of course this course contributed to the exodus of subscribers from Vodafone to competing customers, which eventually led to the sale of Vodafone-Japan to SoftBank, which turned around the former Vodafone-Japan company within a few months.

    Swiss Emmentaler cheese covered phone for Japan???

    Rebranding advertisement boards along Tokyo's Yamanote ring line
    Rebranding advertisement boards along Tokyo’s Yamanote ring line. Noteworthy are the cheese, cow, car tire and ice cream bar shaped mobile phone covers, which Vodafone offered because it was short of new phone models, and which did not help to improve Vodafone’s brand in Japan – cheese phones anyone?

    Understand Softbank: our report: “SoftBank today and 300 year vision”

    pdf file, approx 120 pages, 47 figures 18 photos, 7 tables

    Copyright 2013 Eurotechnology Japan KK All Rights Reserved

  • Panel Discussion to 200 Japanese Executives at the Industrial Club of Japan

    May 30, 2006: at the Industrial Club of Japan

    Panel discussion for about 200 Japanese CEOs and high level managers about the challenges of international business management.

    The five panelists were:

    • James C Abbeglen
      Allen Miner (CEO of Sunbridge Venture Habitat, and founder of Oracle Japan)
    • Kong Jian (China – Japan Economic Federation)
    • Koshiro Kitazato (Chairman of BT Japan)
    • Gerhard Fasol (CEO Eurotechnology Japan KK)

    Industrial Club of Japan
    Industrial Club of Japan

    Copyright·©2013 ·Eurotechnology Japan KK·All Rights Reserved·

  • SoftBank rebrands Vodafone Japan

    SoftBank rebrands Vodafone Japan

    Speed of the essence: SoftBank loses no time to turn around Vodafone-Japan

    Vodafone’s withdrawal also shows, that the values of cross-cultural management skills are often underestimated

    by Gerhard Fasol

    SoftBank rebrands Vodafone Japan: Saturday June 10, 2006 was the first time we saw SoftBank replacing the Vodafone brand in Japan – bringing a formal end to Europe’s largest ever investment in Japan.

    Vodafone’s withdrawal from Japan is a turning point in more ways than one and has wider implications for Europe (read below).

    SoftBank rebrands Vodafone Japan: SoftBank’s brand strategy

    Rebranding from Vodafone to SoftBank after SoftBank acquired Vodafone Japan
    Rebranding from Vodafone to SoftBank after SoftBank acquired Vodafone Japan

    Upper image shows the world-famous Vodafone board on Shibuya’s hachiko square, which has appeared in many movies and TV shows. It will soon be replaced.

    Lower image shows one of the first SoftBank advertisements in Tokyo’s busiest commuter railstation Shinjuku showing Sharp’s mobile-TV handset.

    The photo demonstrates SoftBank’s brand strategy of partnering with world-famous brands, such as with Apple’s iPod and Sharp’s AQUOS display brand.

    Implications for Europe of Vodafone’s withdrawal from Japan

    As a European myself, I am looking at the wider implications for Europe of Vodafone’s withdrawal from Japan – and our company was recently awarded a contract by the European Union Government on exactly these issues – as well as others.

    Vodafone’s investment was by far the largest European investment in Japan. What is maybe less well known is that Vodafone was dispatching a relatively large stream of managers between several
    continents (Europe, Australia etc) and Japan. Several times when visiting the KDDI Designing Center for example I could meet young German Vodafone managers who had just arrived for a management position at Vodafone-Japan, and who were studying the mobile phone handsets in KDDI’s showroom. These expatriates all left within a few weeks of SoftBank taking control of the company.

    As a result of these interactions, Vodafone could bring J-Phone’s J-Sky mobile internet service to Europe, which was adapted for European conditions and rebranded “Vodafone Live!”. There would be no “Vodafone Live!” in Europe without Vodafone’s acquisition of J-Phone (including JSky). Vodafone also brought SHARP and Toshiba mobile handsets to Europe.

    Apart from the immediate impact on Vodafone as a Corporation, we expect also a more general longterm impact from the strong reduction of Europe-Japan technology exchanges due to Vodafone’s withdrawal from Japan.

    Vodafone’s withdrawal from Japan also shows how difficult it is for European telecom firms to succeed in Japan – and for Japanese firms in the telecom sector to succeed in Europe. Our company knows this first-hand from our work for NTT-Communications, and some other Japanese companies. – Read our presentation to Japanese industry associations here (in Japanese language).

    Underestimating the importance of cross-cultural management skills and the associated perils

    While large US corporations, including INTEL, General Motors, and Motorola have been forced by confrontation with Japan’s competition to completely reshape themselves, this has not yet happened to any large European corporation because of the larger perceived separation between EU and Japan.

    Comparing Europe and Japan in telecoms….

    Understand Softbank: our report: “SoftBank today and 300 year vision”

    pdf file, approx 120 pages, 47 figures 18 photos, 7 tables

    Copyright 1997-2013 Eurotechnology Japan KK All Rights Reserved

  • NTT Docomo acquisitions: Tower Records – No music, no life!

    NTT Docomo acquisitions: Tower Records - No music, no life!

    Docomo acquires music retail know-how and a laboratory for mobile payments at the point-of-sale

    NTT Docomo acquisitions: 32.34% of Tower Records a major share of Japan’s second largest Credit Card issuer

    Nikkei reports several NTT Docomo acquisitions: DoCoMo will use a total investment of around YEN 10 Billion (approx US$ 100 million) to acquire 32.24% of Tower Records Japan’s shares from Nikko Principal Investments Japan Ltd, and additional shares in a third party allotment taking it’s stake to around 40%. Tower Records Japan plans an IPO, and DoCoMo apparently intends to keep a 33.4% controlling stake even after the IPO.

    Tower Records Japan was founded by the US-company Tower Records in August 1979 in a pioneering entry by Tower Records into the Japanese market. At that time, almost all foreign companies entering Japan formed a joint venture with a Japanese company or licensed their brand to a Japanese company. Tower Records instead acquired an unrelated Japanese company with the same name (“Tower Records”) and built it’s business in Japan successfully alone without a Japanese joint venture partner.

    In October 2002, Tower Records Japan became independent of the US mother company through a Management Buy-out by Japanese management.

    NTT Docomo acquisitions strategy

    Repordedly, DoCoMo aims to implement many synergies including:

    • promotion of mobile FeliCa wallet phones for mobile payments
    • use of mobile FeliCa wallet phones for customer relationship management (CRM), reward points, and customer data collection for marketing purposes
    • Napster Japan: Since about 1/2 of official content sales of i-mode is from mobile music, and since Tower Records Japan is about to launch Napster-Japan in a joint venture with Napster, we expect DoCoMo to become involved in online music distribution through Napster Japan.

    NTT Docomo acquisitions: The bigger picture

    Acquisition of a controlling stake in Tower Records is the latest step in a string of investments by DoCoMo, to expand revenue into new areas independent of ever shrinking voice and data traffic related charges. Recent investments include:

    • Mitsui-Sumitomo Credit Cards (Japan’s No. 2 credit card issuer)
    • joint venture with Rakuten for mobile auctions

    With more than 100 stores the Tower Records Japan investment will give DoCoMo an excellent experimentation ground to develop many new ways of using FeliCa wallet phones in a real-life retail environment.

    More about:

    NTT Docomo acquisitions: Tower Records - No music, no life!
    NTT Docomo acquisitions: Tower Records – No music, no life!

    Copyright (c) 2005 Eurotechnology Japan KK All Rights Reserved

  • Japan media landscape restructuring

    Japan media landscape restructuring

    Japan’s broadcasting is a US$ 40 billion/year industry

    There have been many attempts over the years for Japan media landscape restructuring

    by Gerhard Fasol

    Japan’s broadcasting markets (commercial TV + NHK + CATV + satellite + AM & FM radio) have annual combined revenues on the order of US$ 40 billion. The main players in this market are five large commercial TV groups and the semi-public NHK.

    Media Group TBS attracts uninvited merger proposals

    One of these five TV and media groups – TBS – has received an uninvited merger proposal by it’s largest shareholder – the internet portal Rakuten – and in parallel also attracted the Murakami-Fund as an investor.

    TBS media group under pressure? and why?

    Earlier this year Japan’s Murakami Fund acquired about 7% of the TBS Media Group, and declared that TBS was undervalued and should sell non-core assets, such as real estate and other non-TV / non-media related properties.

    Recently, Rakuten acquired about over 20% of TBS shares, making Rakuten the largest shareholder of TBS. Rakuten announced a business plan for a merged Rakuten-TBS Group integrating Rakuten’s internet businesses with TBS’ TV and media operations. Since Rakuten’s stock market valuation is about 35% higher than TBS’ valuation (as of October 24, 2005), Rakuten’s management is expected to dominate a potentially merged group.

    TBS’ management is not delighted with the prospect of losing control in this way. In response, three things happened:

    1. TBS management announced cooperations with “stable shareholders” Dentsu, Mitsui Bussan, and Bic-Camera, and non-shareholder Amazon.co.jp, and other Japanese corporations.
    2. The Murakami Fund proposed a management buy-out, which would lead to a delisting of TBS by the Tokyo Stock Exchange, taking TBS private. This possibility was voted down by TBS management.
    3. Livedoor offered support as a (very unlikely) white knight. Given Livedoor’s record of a failed hostile take-over attempt of the Fuji-Sankei media group earlier this year (for details see our report on Japan’s Media industry), it seems to be more than unlikely for TBS to go for Livedoor as a white knight – however no one knows for sure.

    At this time the acquisition battle for the TBS Group is in full swing and the final outcome is difficult to estimate. In parallel to the take-over battle, a public discusson by Japan’s industry leaders is examining the desirability of hostile take-overs in Japan.

    Japan media analysis report:

    Copyright 1997-2013 Eurotechnology Japan KK All Rights Reserved

  • Tokyo Game Show  TGS2005: Playstation vs Microsoft XBOX vs absent Nintendo DS

    Tokyo Game Show TGS2005: Playstation vs Microsoft XBOX vs absent Nintendo DS

    Nintendo wins on mindshare despite traditional absence from TGS

    Tokyo Game Show TGS2005: Battle of the console and handheld platforms, while native mobile game applis on the path to disrupt

    by Gerhard Fasol

    Here some highlights of this year’s Tokyo Game Show TGS2005:

    SONY vs Microsoft.

    At last year’s TGS2004 Microsoft’s XBOX exhibit was pretty low-key in a secondary hall. This year, at Tokyo Game Show TGS2005, Microsoft moved with a much bigger exhibit up into the prime position of the main hall right next to (current) market leader SONY Computer Entertainment (SCE)… While in 2004 and before, SCE was the uncontested leader of the market, Microsoft is not accelerating efforts with XBOX-360. While SONY’s PSP is fantastic, it’s being outsold in Japan by Nintendo’s DS…

    XBOX at Tokyo Game Show 2005

    Japan game market report (398 pages, pdf-file):

    XBox as a broadband home entertainment machine:

    XBOX home entertainment system at Tokyo Game Show 2005
    XBOX home entertainment system at Tokyo Game Show 2005

    wLAN hotspot for PSP (SONY PlayStation Portable) for game sharing and
    download. However, with a little bit of software, PSPs could be used to hold VOIP telephone
    calls via these (or other) wLAN hotspots:

    SONY Playstation WiFi spot at Tokyo Game Show 2005
    SONY Playstation WiFi spot at Tokyo Game Show 2005

    Japan’s game industry consolidates

    This year is the first appearance of merged BandaiNamco, which used to be separate companies until recently:

    Bandai and Namco merged - at Tokyo Game Show 2005
    Bandai and Namco merged – at Tokyo Game Show 2005

    The following figure summarizes some of the recent mergers in Japan’s game software industry:

    Consolidations and mergers in Japan's game industry (Tokyo Game Show 2005)
    Consolidations and mergers in Japan’s game industry (Tokyo Game Show 2005)

    SONY staff greeting customers at the end of the first day of the show
    (while greeting customers there were facing Microsoft’s impressive Xbox360 exhibition area…):

    SONY at Tokyo Game Show 2005
    SONY at Tokyo Game Show 2005
    SONY at Tokyo Game Show 2005
    SONY at Tokyo Game Show 2005
    SONY at Tokyo Game Show 2005
    SONY at Tokyo Game Show 2005

    For a summary, see: Japan game market report (398 pages, pdf-file):

    Copyright 1997-2013 Eurotechnology Japan KK All Rights Reserved

  • Japan game software industry consolidation

    Japan game software industry consolidation

    Japan’s historically grown game companies are global superpowers

    Shrinking traditional home video game software market and paradigm shift to online games, network games and mobile games forces consolidation

    by Gerhard Fasol

    Japan’s mobile game software companies are global superpowers. They are all historically grown and linked to other industry sectors, such as characters, arcade games, pachinko (pinball parlor) machines. Japan game software industry consolidation is driven by an emerging paradigm shift from traditional home video games to a new world of online games, network games and mobile games.

    For details read our Japan game market report (398 pages, pdf-file):

    Landslide shift underway to network games, online games and mobile games

    While the market for traditional home video gamesoftware is rapidly shrinking, a landslide shift is underway to network games, online games and mobile games.

    These changes bring consolidation. Some recent mergers are:

    • Bandai acquires Namco
    • SEGA (game arcades) and Sammy (pachinko) merge
    • Takara and TOMY merge
    • Role playing game leader Square-Enix (itself a merger of Square and Enix) acquires the larger TAITO
    Consolidation of Japan's games sector
    Consolidation of Japan’s games sector

    The Square-Enix deal is particularly interesting because it underlines the Japanese preference for role playing games.

    Japan game market report (398 pages, pdf-file):

    Copyright 1997-2013 Eurotechnology Japan KK All Rights Reserved

  • KDDI may partner with Poweredcom/TEPCO

    Poweredcom has doubled investments in FTTH to YEN 44 Billion (US$ 0.4 Billion) for FY 2005/2006 from YEN 22 Billion in FY 2204/2005. (For details and analysis of Japan’s FTTH market read our report on Japan’s telecom sector).

    Partnership with KDDI‘s triple-play leverages Poweredcom’s present and future FTTH investments.

    Copyright·©1997-2013 ·Eurotechnology Japan KK·All Rights Reserved·

  • KDDI absorbs TuKa

    KDDI absorbs TuKa

    KDDI – Japan’s second largest telecom operator – streamlines the group

    KDDI’s AU with TuKa acquires 3.5 million additional subscribers

    KDDI announced to absorb the three TuKa companies into AU: with the stroke of a pen, AU will be stronger by 3.5 million subscribers.

    The three TuKa companies managed a successful turnround by focusing on the silver market. We think that KDDI will probably switch off TuKa’s 2G PDC network quite soon, as they have done with their own 2G/PDC network.

    TuKa had managed a successful turn-round recently, so it will not be a financial load on AU. KDDI will gain efficiency and economies of scale by concentrating all mobile services under the single AU brand with a single CDMA2000 network.

    Learn about KDDI and AU, Japan’s No. 2 telecom operator

    Report on “KDDI, AU and UQ Communications: pioneers of mobile music and flat data rates, analysis report” (approx 200 pages, pdf file)

    Copyright 1997-2013 Eurotechnology Japan KK All Rights Reserved

  • Livedoor and Fuji TV take over battle via Japan Radio

    Livedoor and Fuji TV take over battle via Japan Radio

    New economy player Livedoor attempts takeover of “old economy” media conglomerate Fuji Television Group

    Livedoor and Fuji TV: Takafumi Horie “Horiemon” attempts to exploit an overlooked loophole in Fuji Televisions shareholder structure to gain control of the very much larger Fuji media group

    Livedoor and Fuji TV: New economy (Livedoor) is knocking at the door of old economy (Fuji-TV) (for details see our “Japan’s Media” report):

    Fuji Television headquarters building in Odaiba
    Fuji Television headquarters building in Odaiba

    Below is an outline of the take-over battle raging right now. The complex cross-shareholding is puzzling, and the reason for it is surprising to the uninitiated: a long time ago there was no radio and no TV, only newspapers. Radio in Japan was born as babies of newspaper companies, and TV stations were born as babies of the Radio stations. So at the beginning Fuji-TV was a tiny in-company venture subsidiary of Japan-Radio (Nihon Hosou). The cross-share holding structure dates from these pioneering days of TV in Japan and has not been touched since – until Livedoor’s Takafumi Horie came along.

    Schematics of Livedoor's attempt to take control of Fuji Television Media Group via the radio station Nihon Hosou
    Schematics of Livedoor’s attempt to take control of Fuji Television Media Group via the radio station Nihon Hosou

    Takafumi Horie’s nickname in Japan is Horiemon. Why? Because many people think that Takafumi Horie looks similar to Japan’s cartoon character Doraemon.

    By the way: some media falsely report that Horie is the founder of Livedoor. This is not the case. Horie-san founded a website design company called “Livin’ On the EDGE Inc” in 1996, later renamed EDGE, and many other companies. In 2002 he acquired the free email/ISP company Livedoor.

    This battle stimulated us to release our “Japan Media” report.

    Copyright (c) 1997-2013 Eurotechnology Japan KK All Rights Reserved

  • Cable & Wireless Japan acquired by Softbank???!!

    Cable & Wireless Japan acquired by Softbank???!!

    Cable & Wireless Japan staged what it said was one of the first “hostile” takeovers in Japan, but then proved to be unable to manage the company they had acquired

    by Gerhard Fasol

    On October 26, 2004, Softbank announced the acquisition of Cable & Wireless IDC for YEN 12.3 billion (= US$ 110 million)

    Cable & Wireless Japan: Today’s top article in Nikkei is about Cable and Wireless-Japan: the article reports that Cable and Wireless is in discussion with Softbank and a private equity firm to sell their Japan operations. Apparently this news article is not confirmed, and it already mentions a purchase prize on the order of US$ 100 million. This article appeared in the top position in Nikkei – but there are several things a bit mysterious about it.

    Cable & Wireless Japan – why did they fail in Japan?

    I did not follow Cable and Wireless recently in Japan, but it seems that C&W made a loss of YEN 61.6 OKU on sales of YEN 713 OKU, i.e. almost 10% loss.
    Since we are insiders in Japan’s telecom sector, we know most of the details. To out it into short words, Cable & Wireless did not have the knowhow to manage a Japanese company. They tried but failed, and alienated a lot of people.

    Spent all morning discussing with one of the innovation managers of a big European telco. Interesting. Spent afternoon with a US bio-tech company which which is thinking of asking us to build their business in Japan, and in the evening listened to a talk by Tadashi Onodera, the CEO of KDDI. Expected him to talk mainly about mobile – but he did not. His focus was a national VOIP network they are building, attacking the fixed line income of NTT. Got hold of him after his talk and discussed with him for about 10 minutes.

    UPDATE: on October 26, 2004, Softbank announced the acquisition of Cable & Wireless IDC. Total cost of the acquistion is announced as YEN 12.3 billion (= US$ 110 million)

    SoftBank today and 300 year vision report:

    Copyright (c) 1997-2013 Eurotechnology Japan KK All Rights Reserved