Japanese Cable TV Giant Buys Power Supply Company
J:COM, Japan's biggest cable operator, is acquiring IP Power Systems Corp in a $102 million deal, after entering the power supply business last year.
TOKYO – Jupiter Telecommunications (J:COM) is expanding its power supply operations with the acquisition of IP Power Systems Corp, which supplies power to apartment blocks, and plans to create synergies with its cable, Internet and telephone businesses.
J:COM, which has almost 3.8 million subscribers to some combination of its services, will try and leverage the power supply business to sign up more customers to its other offerings, and give discounts to those who contract for bundles including power. It plans to offer 8 percent discounts on electricity to its subscribers, and offer electricity at 5 percent below the prices charge by the major utility companies. It is targeting 150,000 sign-ups by 2017 for its electricity/telecommunication/entertainment bundles.
IP Power Systems currently has 50,000 customers, making it the second-biggest company selling electricity at below the rates of the giant utilities to apartment block residents. The government has pledged to further deregulate the power market after the nuclear disaster at the Fukushima Dai-Ichi plant operated by Tokyo Electric Power Corp.
J:COM began supplying electricity in the second half of 2012, but has so far only signed up about 3,000 customers, all in the Tokyo metropolitan area.
With cable television subscriber growth slowing, J:COM, which has a more than 50 percent share of the market, has been pushing its Internet and cable services, as well as tie-ups with telecom giant KDDI, which runs the au mobile network. KDDI owns a 30 percent stake in J:COM, which it bought from Liberty Media for $4 billion in 2010.