Japan Telecom Holdings Co. said Friday it has agreed to sell off part of an engineering subsidiary to Australian-based construction and real estate company Bovis Lend Lease Corp. in an effort to concentrate on its core telecommunications business.
By Nov. 1, Japan Telecom will reorganize the Japan Telecom Engineering group, now comprised of eight regional firms with sales totaling 54 billion yen, into a fixed-line business unit, and a cellular-related business unit that it will sell off.
The new entity under the Bovis Lend Lease group will mainly engage in construction of antenna bases for third-generation multimedia mobile phones, a Japan Telecom spokesman said. The price of the deal has not been disclosed.
It is rare for a foreign construction firm to acquire a Japanese construction company, according to officials in the Land, Infrastructure and Transport Ministry.
The Japan Telecom group has been struggling to reform amid a climate of fierce domestic competition in the fixed-line business and a shrinking market for conventional phones.
Telecom-related sales of Japan Telecom Co., the fixed-line business unit, were 320.27 billion yen in fiscal 2001, down from 336.5 billion yen a year earlier.
Currently, Japan Telecom Engineering group has 220 employees and engages in telecom-related maintenance and solutions as well as antenna base construction.
For fiscal 2001, about 90 percent of its sales were generated from construction projects for the J-Phone group, Japan Telecom's cellular unit.