KDDI takes control of JCOM

Despite the fact that Japan is the world leader in fiber coverage (although not in fiber adoption, that's Korea) it's a market that is so dominated by incumbent NTT that it often seems not much happens there. Well this morning, something major happened! KDDI, the number two FTTH and broadband provider in Japan acquired a controlling stake in JCOM, the leading cable operator.

As mentioned in this article the consolidation makes a whole lot of sense for KDDI, even though it comes at a steep price. And while it reinforces KDDI's overall position in the wireline market, it still leaves them trailing behind NTT.

One of the scenarios of FTTH deployment that the European Commission desperately wants to avoid is the return of the incumbent monopoly under the guise of fiber deployment. Japan is a prime example of that and although this has been flagged as an "issue" by the Japanese regulatory officials, it doesn't seem like there are a lot of scenarios that are likely to address that issue shy of separation...

Meanwhile, in Europe, incumbents are still claiming that investment and competition cannot be combined and suggest that the japanese scenario is what regulators must accept if they want their fibre. With the exception of a limited number of markets like Sweden or France where innovating competitors have effectively made a dent in the incumbent's control of broadband infrastructure and are now in a position to invest in FTTH, it's hard to imagine how the game might play any differently than in Japan (reconstructued monopoly) or in the UK (separated monopoly.)

Which doesn't make it fine...