Jupiter-Titus cable TV tieup to target Net

Jupiter Telecommunications Co. and Titus Communications Corp., Japan’s largest and second-largest cable TV operators, are in final talks on a merger that will create a company with nearly 30 cable TV stations serving some 1 million subscribers, company sources said Friday.

The firms expect the merger to help them build financial resources needed to expand into Internet-related services — without using the networks of Nippon Telegraph and Telephone Corp. — and strengthen their broadcasting services, the sources said.

Jupiter is likely to be the surviving entity with a capital base of 75 billion yen, the sources said.

The parent firms of the two companies have reached a basic agreement on the merger and are now discussing details of the terms, they said.

Jupiter, capitalized at 42.6 billion yen, is owned 60 percent by Japanese trading house Sumitomo Corp. and 40 percent by Liberty Media Corp., a subsidiary of AT&T Corp.

Established in 1995, Jupiter runs about 20 cable TV stations in Kyushu and the Kanto and Kansai regions. It posted net losses of 798 million yen in its business year to Dec. 31, on revenues of 16.15 billion yen.

Titus is owned by Microsoft Corp., which holds a 60 percent stake, and by trading house Itochu Corp. and Toshiba Corp., which each hold 20 percent shares.

Capitalized at 32.4 billion yen, it has seven cable TV stations in Hokkaido and Kanto. In its business year to March 31, 1999, it posted revenues of 5.1 billion yen.

Growth has been rapid in 24-hour Internet access services that do not use NTT networks, with the number of subscribers to such services estimated at 300,000.

Japan’s cable TV operators are moving toward offering various services, such as providing games and movies through the Internet via their networks, as is currently done in the United States.

At present, some 700 firms make up Japan’s cable TV industry and the Ministry of Posts and Telecommunications has been encouraging them to merge or ally with each other to strengthen their financial bases.