October 12, 2006
KDDI Corporation
Tokyo Electric Power Company
KDDI Corporation (represented by President and Chairman Tadashi Onodera,
hereinafter referred to as "KDDI") and Tokyo Electric Power Company
(represented by President Tsunehisa Katsumata, hereinafter referred to as
"TEPCO") have today agreed to integrate the business activities of
TEPCO's Fiber Optic Network Company and KDDI. Under the agreement, the
companies will combine their operating resources in order to develop a
stronger telecommunications service group while providing an integrated
telecommunications and electric power service that meets wide-ranging
customer needs.
KDDI and TEPCO entered into a comprehensive agreement on Oct 13, 2005 to
provide a telecommunications business offering a high level service for
customers and to develop a strong strategy to compete against the NTT Group.
The current agreement is based on an earlier agreement, on January 1 of this
year, between KDDI and POWEREDCOM Inc..
1. Integration of TEPCO's Fiber Optic Network Company and KDDI
KDDI will acquire TEPCO's Fiber Optic Network Company on January 1, 2007. As
part of the merger, KDDI will allocate 144,569 common shares to TEPCO. On
the date of partition, a representative from TEPCO is scheduled to swear in
as the executive committee, while staff of Fiber Optic Network Company is
scheduled to be dispatched to KDDI to assist with the transition.
KDDI will absorb all contracts associated with Fiber Optic Network Company,
including contracts with customers.
'TEPCO Hikari FTTH service' customers will continue to make use of current
services through KDDI's ISP.
2. Establishing a Joint Venture to Construct, Maintain Fiber Optic Equipment
and Facilities
KDDI and TEPCO are considering the feasibility of establishing a joint
venture that would assume responsibility for the set up and maintenance of
fiber optic cables by January 1, 2007.
With this integration, KDDI and TEPCO hope to develop a stronger
telecommunications business group.
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