BT and AT&T buy into Japanese market

BT and AT&T are to spend £1.2bn on a 30 per cent stake in Japan Telecom - the third largest player in a the world's second largest telecoms market.

The deal was widely publicised at the end of last week, but in the past 24 hours it has emerged Japan Telecom will become the Japanese arm of BT and AT&T's international joint venture. AT&T Jens, BT Communication Services and BT.NIS - the companies' existing forays into the Japanese market - will become part of Japan Telecom.

Until last week analysts still believed the BT-AT&T pairing could strike some kind of deal with NTT, Japan's dominant telco. However, NTT - which this year will be split up into smaller companies - remains reluctant to throw its hat in with other operators.

The British and US telcos now plan to challenge both NTT's fixed-line business and NTT DoCoMo, its cellular subsidiary. The lines of Japan Railway - which has a 15.1 per cent stake in the Japan Telecom - are likely to be used to build the high-speed networks links between cities.

Elsewhere in Asia, BT has invested in Binariang of Malaysia, the StarHub consortium in Singapore, South Korea's LG Telecom and Hong Kong's SmarTone.

Meanwhile, Cable & Wireless is currently in the midst of trying to acquire Japanese telco IDC, but IDC has been criticised by the UK telco and the government for considering accepting a lower bid from NTT.