Japanese personal handy-phone services (PHS) provider Willcom is to be split up, while its backers – Softbank Corp, Advantage Partners LLP and state-backed turnaround agency the Enterprise Turnaround Initiative Corp (ETIC) – are to provide financial aid to revive the company. Willcom, which filed for bankruptcy protection in February with debts of JPY206 billion (USD2.3 billion), has for years been losing out to the country’s main cellular providers NTT DoCoMo, KDDI (au) Softbank Mobile and more recently eMobile, all of which offer faster data transmission speeds and services. Under the new pact, Softbank will inject JPY3 billion (USD33 million) in a new company spun off from Willcom, Tokyo-based Willcom said in a faxed statement today. In addition, Advantage Partners will invest JPY5 billion and the ETIC will also help with financing, Bloomberg reports.
TeleGeography’s GlobalComms Database writes that at the end of 2009 Willcom had 4.3 million subscribers but has been weighed down by heavy debts and has seen a steady decline in its customer base in the wake of fierce competition from its larger rivals. The company’s current shareholders (Carlyle Group 60%, Kyocera 10%, KDDI 30%) are expected to have their stakes wiped out as the company undergoes a 100% capital reduction. The bankruptcy is believed to be the largest in Japan’s history.