NEC likely to team with three Internet providers


NEC is the most-active stock in Tokyo on Monday afternoon, with earnings due and profits forecast for this year

TOKYO, Japan (CNN) -- Four major Japanese techs, including NEC Corp., plan to set up a joint venture in June to offer Internet access, according to a report.

NEC Corp.'s subsidiary that offers its Biglobe Internet service proposed the idea, the Nihon Keizai Shimbun states.

Now KDDI, Japan Telecom and Matsushita Electric Industrial expect to come on board, the business daily reports.

The joint venture would serve around 10 million people, with KDDI's Dion service, JT's ODN service and Matsushita's hi-ho service also taking part.

The joint venture would help cut down purchasing costs, share content development and provide cooperation on infrastructure spending.

NTT and others free to join

The company would set up this fall, with other Internet service providers also invited to take part. They have reportedly already asked Nippon Telegraph and Telephone Corp. to join.

Their next target could be Nifty Corp., an Internet service provider owned by Fujitsu Ltd. that Sony is thought to be interested in buying.

The NEC-led partners hope to split some of the fixed costs involved in offering Internet service, with hard costs like customer service and buying Internet rights proving expensive, given returns, in Japan.

NEC Corp., a computer company and also one of Japan's "Big Five" chipmakers, is the most-active stock in Tokyo on Monday afternoon, up 3.5 percent to 1,035. The company also reports earnings this week. (Full market coverage).

But it is a healthier profit forecast that is driving most of that movement. The Nikkei also reported that NEC will forecast an operating profit of around 75 billion yen for the business year now under way, after posting a loss of 57 billion for the year ended in March.