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Softbank's impending purchase of Willcom is something that has been talked about for about one year now. WillCom has provided PHS services and has been building its XG-PHS network, which some people refer to as a 4G network since it uses OFDMA. Why would Softbank buy Willcom?

Softbank wants Willcom's spectrum. In Japan, 2 companies won the beauty contest for valuable 2.5 GHz spectrum. One is UQ Communications, of which KDDI had to reduce its ownership to less than a third. UQC chose to deploy WiMAX. After some setbacks and delays, UQC's network achieve very fast speeds, its coverage is expanding, and its subscribers are growing. The other company that received 2.5 GHz spectrum was Willcom. Willcom chose to deploy XG-PHS, a next generation PHS network. Since then, it has run into financial trouble, and Softbank has long been rumored to be interested in buying it.

Now it looks like Softbank will be buying Willcom. Softbank intends to deploy LTE, but they must keep up the XG-PHS network as well to adhere to the requirements for winning the spectrum. It will require devices that use chipsets that support both LTE and XG-PHS. This provides Softbank with the backdoor it needs to use this spectrum for LTE. It's very analogous to how LightSquared is using satellite spectrum for LTE by ensuring that devices have chipsets that also support the satellite connectivity (essentially all of the Qualcomm chipsets - see ABI Research's upcoming Insight for more on that).

If you want to know more about the 4G chipset vendors who are supporting XG-PHS, and thus will have an opportunity to work with device vendors selling devices for Softbank's upcoming LTE network, you can read more about that in our report on the 4G semiconductor market.