Tokyo Electric Power Co. and mobile phone firm KDDI Corp. are in talks to tie up in the area of telecommunications, it was learned Tuesday.

The tieup would give the giant utility access to the mobile phone market while allowing KDDI to tap into a massive fiber-optic network, and pose a threat to industry leader Nippon Telegraph and Telephone Corp.

The two companies issued separate statements Tuesday after media reported on a possible alliance, saying “various ideas are being considered.”

Industry insiders say that survival in the increasingly competitive telecom market depends on whether a carrier can provide mobile telephony and broadband telecommunications technology as a set package.

Although Tepco is also seeking alliances with other firms, KDDI is at the top of its list of prospective partners, according to industry sources.

Some of the options being discussed by the two companies include KDDI’s purchasing of shares of PoweredCom Inc., a Tepco subsidiary that deals in fixed-line phones and network services for corporate clients, and a plan for Tepco and KDDI to jointly develop a broadband communications business using Tepco’s fiber-optic network, according to sources.

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