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Broadband provider Softbank is in talks to buy Japan Telecom. The broadband group is prepared to pay a premium on top of the price US investment group Ripplewood paid for the telco in August last year. Ripplewood shelled out $2.2bn, but is concerned that profitability has fallen.

Japan Telecom has been stuck in third place in the Japanese market, behind DoCoMo and KDDI, and is suffering from falling fixed-line revenues. For the six months ended September 2003 operating profits fell 94 per cent and profits by nine per cent, according to the Financial Times. Softbank told the paper it was considering an acquisition but nothing had been decided.

Softbank, previously an Internet investor, has four million broadband customers and aims to increase this to six million by the end of the year. The deal would give it access to Japan Telecom's fibre optic network and put it in a much stronger position to go after corporate contracts. ®

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