Softbank Corp. said Thursday its group will take over Tokyo Metallic Communications Corp. this month by acquiring a more than two-thirds stake in the high-speed Internet service provider.
The Softbank group is expected to spend more than the amount of outstanding debts of Tokyo Metallic, estimated at 4 billion yen, for the purchase to help bail out the struggling company.
The move comes two days after Softbank announced that Yahoo Japan Corp., a Softbank subsidiary, will launch an ADSL (asymmetrical digital subscriber line) high-speed Internet access service in August.
Tokyo Metallic, set up in July 1999, pioneered the ADSL service in Japan and invested heavily in anticipation of a rush in demand. It has 25,000 subscribers, mainly in Tokyo, but has been suffering poor earnings since Nippon Telegraph and Telephone Corp. joined the ADSL field.
Softbank is expected to have Tokyo Metallic join forces with Yahoo Japan in a bid to expand the ADSL service for individual and corporate customers, industry officials said.
Yahoo Japan started taking preliminary orders for its ADSL service Wednesday and was swamped with more than 150,000 applications on the first day, the industry officials said.
ADSL provides high-speed data transmission through fixed telephone lines and enables computer users to browse the Internet at speeds dozens of times faster than other systems.
Tokyo Metallic sought help from major Japanese trading companies and telecom firms, but outside support dried up after Mitsui & Co. decided to pull out.