Jsat buys data firm for broadband foray

By CNN's Kristie Lu Stout and wire reports

TOKYO, Japan (CNN) -- Japan's largest communications satellite operator Jsat will acquire a controlling stake in Satellite Network in a bid to become a broadband player.

The move allows Jsat to shift its focus from leasing the data transmission infrastructure of its eight satellites to launching high-speed Net services in Japan's broadband-needy market.

A lack of infrastructure and an underdeveloped market for content have inhibited the broadband growth in Japan, a country better known for its high-speed wireless networks.

Broadband aspirations

On August 1, Jsat will buy a total of 21,400 shares of Satellite Network for about $8 million, according to the Nihon Keizai Shimbun business daily.

After the purchase, Jsat will own 67 percent of the company.

With its controlling stake in Satellite Network, Jsat can to go head to head with other firms out to deliver high-speed Net services in the Japan market.

Space Communications has plans to use satellites to deliver multimedia content to homes via the Internet.

Japan's largest digital broadcast service provider, SkyPerfect, will launch its data communication service via set-top boxes later this year.

Fixed-line operators have had a difficult time controlling the cost of delivering the "last mile" of connections due to the country's congested urban design and strict building regulations.

Providing access via satellites could be a more inexpensive and manageable means to "wire" homes and offices in Japan's inhibited broadband market.

According to a recent survey, only 30 percent of Japanese households will be wired to high-speed broadband Internet access services by 2005, a figure well below government forecasts.