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March 19, 1987


By CBR Staff Writer

Reports that the leading Japanese partners in the Cable & Wireless-C Itoh International Data Communications consortium have agreed to merge it with the rival International Telecom Japan consortium are untrue, sources close to the IDC consortium insist. According to these sources, the Japanese partners have agreed only to consider a merger – and would proceed with it only with the agreement of the foreign shareholders. Apart from Cables, the foreign partners are Pacific Telesis and Merrill Lynch & Co. The sources also say that no final decision on a merger – or anything else – can be reached until the Ministry of Posts & Telecommunications reviews the licence applications from the two consortia and the Prime Minister approves the decision. IDC and ITJ were due to have presented their feasibility studies for the licence to the Ministry at the end of January but the ministry has refused to accept them to date, and instead installed Fumio Watanabe, chairman of information technology and of Tokyo Fire and Marine Insurance as arbitrator. It is his recommendation that the two consortia should merge and that no foreign company should have more than 3% – or any management involvement – and no single Japanese company more than 5%. The consor-tia were formed to bid for the proposed licence for an alternative international telecommunications operator to Kokusai Denshin Denwa; Watanabe also called for the competitor to use KDD’s lines rather than build a separate network as Cables planned.

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