The JV brings a new element to the alliance the two companies established in 2004 when KDDI sold its stake in the Infonet business acquired by BT.
The 50-50 venture vehicle will pool together around 100 employees and offer managed voice and data network services to KDDI’s Japanese clients that want global network support from a single supplier.
The JV will be launched in August and aims to generate revenue of $1bn in three to five years. BT said the majority of its existing Japanese business, including the local operation of the Infonet business it acquired last year, will transfer to the JV.
A BT spokesperson told Computer Business Review that the main benefit of the deal is that it will gain access to KDDI’s client list, which includes 7.2 million fixed-line subscribers and 25 million mobile phone customers. KDDI does not operate its own network backbone, and instead resells BT Infonet’s services.
KDDI worked with Infonet on a deal it won with Toyota Motor Corp in February 2004 to connect all the company’s data networks in Europe through an IP virtual private network upgrade.
BT Global Services’ chief executive Andy Green cited market research figures claiming that the deal would give the company access to the $90bn Japanese outsourcing market. Apart from the Infonet operation, BT has had a minimal presence in the country since selling its minority stake in Japan Telecom to Vodafone in 2001.
BT Global Services has enjoyed a strong run of international network management contract wins with major corporations such as Unilever, Honeywell, and Fiat, although its network coverage is stronger in Europe than it is in Asia Pacific.
