KDDI Corp. said Monday it will absorb its Tu-Ka cellular phone subsidiaries on Oct. 1 as part of efforts to prepare itself for greater competition in the wireless telephone market.
The country’s second-largest mobile phone firm, which operates the au brand, said it will maintain Tu-Ka for the foreseeable future even after the merger.
“Competition will further intensify with the introduction of number portability and new entrants,” KDDI President Tadashi Onodera told a news conference. “We hope to gain market share by actively utilizing the sales networks of au and Tu-Ka.”
The number portability system, expected to be introduced next year, will allow customers to keep the same cell phone numbers when they switch companies.
To be absorbed are the three Tu-Ka subsidiaries 100 percent owned by KDDI — Tu-Ka Cellular Tokyo Inc., Tu-Ka Cellar Tokai Inc. and Tu-Ka Phone Kansai Inc., officials said.
The Tu-Ka companies offer no-frills mobile phone services with easy-to-use handsets. The three had a total of 3.56 million subscribers as of the end of June. There were 20.12 million people subscribing to au.
Because KDDI has been focusing its resources on its mainstay au services, speculation has been running high over the fate of the Tu-Ka firms. Late last year, Softbank Corp. was reported to be in negotiations to buy them.
But Onodera explained that the company decided to keep and absorb the Tu-Ka operations after “studying every possibility.”
He said the company can expect to see synergistic effects from absorbing Tu-Ka.
Tu-Ka and au currently run separate retail networks, and the merger will allow them to be consolidated, he said.
Last year, KDDI sold its personal handy phone system unit, then known as DDI Pocket Inc., to the U.S. investment firm Carlyle Group.
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