Yahoo Japan delays broadband launch

TOKYO, Japan -- Japan's leading portal will delay the launch of its high-speed Internet access service by one month to September 1.

The service, called Yahoo BB, is being launched by Yahoo Japan and its parent Softbank to challenge the might of established Net providers like former state monopoly NTT.

The delay came as no surprise to analysts, many of whom had doubted Yahoo Japan could assemble the service quickly enough to meet demand after unveiling plans for it in mid-June.

Reliability test

Yahoo Japan described the delay in its asymmetric digital subscriber line (ADSL) service, which is more than 100 times faster than conventional Web connections, as an extension of its trial period to test its reliability.

The broadband service delivers Web access to homes in Japan at eight megabits per second at a price of $18.30 per month.

"We have received a large number of subscribers and under these conditions we felt that it was necessary to extend the launch date by a month to test the reliability of our services," said Yahoo Japan spokesman Toru Nagano.

"What everyone is thinking right now is that it's not going to be easy, not even for Softbank, to launch this kind of service," said Credit Suisse First Boston analyst Kentaro Kimura.

Yahoo Japan's Nagano declined to confirm a report in the Nihon Keizai Shimbun newspaper that Yahoo had been able to connect only 7,000 to 8,000 subscribers instead of the original 200,000 it planned.

Softbank backing

Masayoshi Son, Softbank's president, had vowed to put the resources of his group of companies behind the ADSL venture to reach its target of one million households by the end of December.

Son's group of companies, including Yahoo Japan, which is 50.8 percent owned by Softbank, are mainly Internet businesses and rely on users with access to the Web.

Other high-speed Net access providers, such as Tokyo Metallic, have failed to break NTT's iron grip on the high-speed Internet access market, thwarted by the steep costs of building infrastructure.

Softbank said it would take over Tokyo Metallic just two days after the Yahoo Japan ADSL venture was announced.

Still, CSFB's Kimura said that the trend towards offering cheaper and faster Internet services was a positive development in Japan's nascent broadband market.

Yahoo and Softbank shares took a beating in the stock market on Monday, with Yahoo down 1.45 percent and Softbank down 7.27 percent.

But they were regaining ground Tuesday, with Softbank at 3110 yen and Yahoo at 340,000 yen.

Reuters contributed to this report.