Wifi Revolution

Softbank Corp. and eAccess Ltd. have reportedly entered into a partnership with Internet access service provider Nifty Corp. and five other firms to apply for a license for next-generation high-speed wireless communications services in Japan. For the license application for the next-generation services using WiMAX, eAccess has set up a company called OpenWin, under which the seven companies other than eAccess will invest in Open Wireless Network.

OpenWin’s capital will come to 20.05 billion yen after the investments, and the company will be owned 32.42 percent each by Softbank and eAccess, 22.44 pct by Goldman, 11.72 pct by Temasek, and 0.25 pct each by NEC (News - Alert) Biglobe, So-net Entertainment, Nifty and FreeBit. The capital increase is expected to be completed by Sept. 28.

The Japanese Ministry of Internal Affairs and Communications will allow only two companies licenses for the WiMAX (News - Alert)-based services. The existing mobile phone carriers can apply for the license through joint ventures where they can own a stake of up to one-third, respectively. The ministry says this step is being taken to enhance the services provided and improve competition. Consequently, Softbank and eAccess have teamed up with So-net Entertainment Corp., NEC Biglobe Ltd and FreeBit Co., all Internet access providers, as well as U.S. investment bank Goldman Sachs Group Inc. and Temasek Holdings Pte Ltd, an investment firm affiliated with the Singaporean government.

Other competitors in the ring are leading Japanese mobile phone carrier NTT DoCoMo (News - Alert) Inc., which will bid for the Wimax license in partnership with broadband service provider Acca Networks Co., and KDDI Corp., the operator of "au" brand mobile phone services in partnership with five firms, including its top shareholder Kyocera Corp. (News - Alert) and U.S. chipmaker Intel Corp.

Softbank and its partners are looking to capture the market on the basis of Internet-related service customer base of Softbank, eAccess, Nifty, NEC Biglobe, So-net Entertainment and FreeBit.

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Raju Shanbhag is a contributing editor for TMCnet. To see more of his articles, please visit his columnist page.

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