C and W gets 98 pc IDC stake, set to fuel competition.

TOKYO, June 16 Kyodo

Britain's Cable and Wireless PLC (C and W) said Wednesday it has clinched a 97.69% equity stake in International Digital Communications Inc. (IDC), a Japanese international telecom carrier, as a result of its five-week takeover bid.

As a business strategy based on IDC facilities, C and W immediately expressed readiness to woo mainly multinational corporate clients by offering them services covering ordinary phone communications and large-capacity data transmission fields.

C and W director Stephen Pettit told a press conference that the British telecom titan is determined to provide multinational corporations operating in Japan with highest-level telecommunications services.

Pettit suggested C and W's willingness to conduct a sizable capital outlay to augment IDC's capability to offer data transmission services, saying C and W will quadruple IDC's international telecom capacity in two years.

IDC is deemed to have weaknesses in the field of data transmission, industry analysts said.

Since other major international telecom carriers operating in Japan have similar strategies targeting corporate clients, the entry of C and W in the Japanese market is set to fuel price-cutting competition, they said.

C and W said 134 of IDC's 140 shareholders agreed to sell their shares at 110,577 yen per share, far above the par value of 50,000 yen, making it certain that C and W will become the first foreign telecom firm to put a Japanese telecom carrier under its control.

IDC will be a strategic component in C and W's international operations, Pettit said. IDC has provided Internet services and data transmission services besides conventional phone services.

IDC will be renamed Cable and Wireless IDC, he said.

C and W is now in talks with DDI Corp. and Tokyo Telecommunication Network Co. -- two of Japan's telecom carriers -- to secure a domestic telecommunications network for its services, he said.

The successful takeover bid put an end to a battle between C and W and Nippon Telegraph and Telephone Corp. (NTT) for control of IDC dating back to March.

On May 7, C and W announced that through June 5 it would buy IDC shares at 107,372 yen per share to ward off a rival bid by NTT.

After NTT offered a higher price May 31, C and W upped its ante to 110,577 yen, while extending the deadline to June 15.

Two main IDC shareholders -- Toyota Motor Corp. and Itochu Corp., each with 17.69% stakes -- said June 9 they would sell their stakes to C and W, a day after NTT virtually gave up its takeover bid, saying it would not offer any higher price.

In a related development, NTT President Junichiro Miyazu told a separate news conference Wednesday, "The price needed for the acquisition had become too high for us."

"We had thought that if we prolonged the takeover battle (with yet another higher offer), it would negatively impact our company's own efforts to reorganize its corporate structure," he said.

NTT is set to enter international telecommunications business July 1.

Since NTT plans to cash in on big corporations' needs to communicate with overseas regions by hiring a portion of telecom capacity owned by non-NTT carriers, it will end up entering a bitter competition with IDC and other international carriers with plans to woo corporate clients, the analysts said.

In 1986, Toyota, Itochu and C and W jointly founded IDC with each putting up 17.69% of the telecom carrier's capital of 31.2 billion yen.

Meanwhile, British Secretary for Trade and Industry Stephen Byers said in Tokyo that C and W's successful bid for IDC has shown that Japan's market is becoming open to foreign businesses and this could create jobs in Japan.

In a press conference in Fukuoka, western Japan, Byers said a lesson should be taken from the fact that a British company succeeded in entering Japan's market.