Riding an iPhone wave, Japan’s Softbank buys competitor eAccess

Kevin Fitchard — Mon, 01 Oct 2012 20:16:25 +0000

Japan’s No. 3 wireless operator Softbank Mobile is about to get a whole lot bigger. Several news agencies are reporting that Softbank is acquiring Japan’s fourth largest operator eAccess, though the reports differ on selling price (The New York Times says $2.3 billion while Reuters says $1.8 billion).

Everyone seems to agree, however, that Softbank is paying a hefty premium in an effort to consolidate both its spectrum and competitive positions in Japan’s highly oversubscribed mobile market.

The deal would boost Softbank’s mobile customer base to 39 million, propelling it past KDDI into the No. 2 slot behind Asian giant NTT DoCoMo. But Softbank doesn’t just get customers. It would get eAccess’s LTE network and considerable spectrum, which would go a long way to ensuring Softbank has the proper ammunition in the upcoming mobile broadband wars. eAccess is launching an LTE network over 40 MHz of 1800 MHz spectrum (that’s twice the bandwidth of Verizon and AT&Ts’ 4G networks), a configuration that could theoretically support speeds as high 300 Mbps.

Formerly Vodafone’s Japanese arm, Softbank struggled through most of the last decade. Then it became the first Japanese operator to get the iPhone. Because of the iPhone’s incompatibility with DoCoMo and KDDIs’ network technologies, Softbank had exclusive rights to the device in Japan for several years, until KDDI landed the CDMA version of the 4S. Consequently activations on Softbank’s network exploded, closing the gaping distance between itself and KDDI.

Those iPhone subscribers, however, consume a lot of data. To offload traffic from its data networks, Softbank has started to lean heavily on Wi-Fi, partnering with FON to access its extensive network of Japanese access points. With the launch of the iPhone 5 that traffic will only increase.

Softbank recently launched an LTE network, but it uses a different standard, called time-division LTE, unsupported on any of the iPhone 5’s three variants. Softbank has said it will deploy a new LTE network this year in the iPhone-friendly 2100 MHz band, but the addition of eAccess’s high-powered 4G systems would go far to relieve any capacity crunch the new device would produce.

LTE image courtesy of Shutterstock user Inq

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Riding an iPhone wave, Japan’s Softbank buys competitor eAccess