Yahoo Japan to Buy Mobile Provider eAccess

TOKYO--Search engine Yahoo Japan Corp. said it will buy mobile provider eAccess Ltd. from parent SoftBank Corp. to become a carrier in its own right, as its dominance in Japan comes under siege from rivals such as Amazon.com Inc. and Rakuten Inc.

The Yen324 billion ($3.2 billion) deal by Japan's biggest Internet portal also represents a realignment of assets within SoftBank's Internet and telecom empire, which spans wireless carrier Sprint Corp. and Chinese giant Alibaba Group Holding Inc. SoftBank, which is now eyeing T-Mobile US Inc., owns 42% of Yahoo Japan. SoftBank also owns Willcom Inc., which sells flat-rate wireless connections and voice calls and which is slated to merge with eAccess in June.

Yahoo Japan said it expected the deal will help it take advantage of growing demand for mobile devices--in six years, consumers in Japan will have on average, six mobile devices each, including wearables and mobile devices in cars, its president said.

"None of these new devices will mean anything without connectivity," President Manabu Miyasaka told a news conference. "The telecom industry is extremely attractive to us."

But the company, which will then compete against far bigger telecom firms NTT DoCoMo Inc. and KDDI Corp., as well as its own parent SoftBank, will need to be creative to carve out a space for itself in Japan's ultracompetitive telecom market. Mr. Miyasaka declined to comment on whether he will need to slash prices to win market share.

"If we do the same kind of things, we will get stabbed," he said. "We have to do something different."

Mr. Miyasaka said he proposed the deal to SoftBank Chief Executive Masayoshi Son, leading to three months of discussion before they reached an agreement. SoftBank bought eAccess for Yen180 billion in 2012 to meet ever-rising demand for bandwidth as smartphone users surf the Web, watch videos and play games, and which is forcing the country's carriers to prepare the launch of faster networks in 2016.

Yahoo Japan said it will start a new service to be called "Y!mobile" that shares phone networks with SoftBank, once eAccess acquires Willcom in June. The company hopes the deal will win it new users who will turn more frequently to Yahoo Japan's marketplace and auction sites, boosting its e-commerce and online advertising businesses.

On a parent-only basis, the deal allows SoftBank to book a special gain of Yen55.7 billion for the fiscal year ending March 2015. As a group, the deal has no financial impact, SoftBank said.

Write to Mayumi Negishi at [e-mail]

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