UPDATE 1-AT&T to sell part of Japan ops for $101 mln

* AT&T to sell Japan network outsourcing ops for $101 mln

* IIJ to acquire new subsidiary set up by AT&T on Sept 1

* IIJ hikes 10/11 op profit f’cast by 12 pct, sales by 19 pct

* IIJ shares close down 4.2 pct vs Nikkei’s 0.6 pct fall
(Adds details, background)

TOKYO, June 1 (BestGrowthStock) – AT&T Inc (T.N: ), the biggest U.S.
phone company by revenue, will sell part of its Japanese
operations to Internet Initiative Japan (3774.T: ) for $101
million, the Internet access service provider said on Tuesday.

The deal is the latest overseas asset sale by AT&T, which is
looking to reduce its footprint in international markets where it
faces competition with well-established local players.

In April it sold its remaining stake in Indian IT services
firm Tech Mahindra (TEML.BO: ). [ID:nSGE63R072]

IIJ said it will acquire a new subsidiary to be set up by
AT&T to spin off its Japan network outsourcing service business,
for 9.17 billion yen ($100.7 million) in cash on Sept. 1. The
business is mainly aimed at corporate clients.

AT&T had been looking for a buyer for the business since last
year, following a series of acquisitions to bolster its U.S.
wireless operations.

IIJ, which is owned nearly a quarter by Japanese
communications giant Nippon Telegraph and Telephone Corp
(9432.T: ), raised its earnings forecasts to factor in the expected
contribution from the AT&T businesses.

IIJ lifted its operating profit forecast for the financial
year to March 2011 by 11.6 percent to 4.8 billion yen and its
sales forecast by 19 percent to 84.5 billion yen.

Before the announcement, IIJ shares closed down 4.2 percent
at 200,500 yen, against a 0.6 percent fall in the benchmark
Nikkei average (.N225: ).

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($1=91.05 Yen)
(Reporting by Sachi Izumi; Editing by Michael Watson)

UPDATE 1-AT&T to sell part of Japan ops for $101 mln