SkyPerfecTV Acquires DirecTV Japan

<%=company1%> has sold its DirecTV subsidiary, DirecTV Japan, to Japanese satellite broadcaster SkyPerfecTV for $84.8 million in stock. As part of the transaction, Hughes and other shareholders of DirecTV Japan will take an equity stake in SkyPerfecTV, which has announced that it plans to have an initial public offering later this year.

SkyPerfecTV will increase its subscriber base 25%, adding DirecTV Japan's 400,000 subscribers to Sky's 1.7 million subscribers. The transaction signals an end to DirecTV Japan's troubled existence – since its launch in 1997, the service had struggled to survive in Japan -- unlike its US counterpart, DirecTV – which is the largest commercial direct satellite broadcast service in the world with over 9 million customers.

"Although subscriber growth of DirecTV Japan was improving, we do not believe it was sufficient to achieve our corporate objectives of being the market leader in each of our key businesses," says Michael T. Smith, chairman and CEO of Hughes. "This move makes SkyPerfecTV a more powerful competitor to the terrestrial and satellite television broadcasters in Japan."

The acquisition prompted the Japanese government to change its rules for granting broadcast licenses, according to a report in the Nihon Keizai Shimbun. The new rules would place more emphasis on a potential broadcaster's programming ability, financial base and technical capabilities. The Japanese Posts Ministry is expected to draft the new rules by May, which could allow for expanded services from private broadcasters.

SkyPerfecTV was established when PerfecTV, Japan's first digital communications satellite broadcaster and Japan Sky Broadcasting (JSkyB) merged in May 1998. DirecTV Japan will supply its subscribers with SkyPerfecTV receivers at no additional cost.

Edited by Tom Butts