Microsoft, which has made a number of high-profile forays into Japan recently, has been accelerating its investment in cable television both inside and outside the United States as a way of delivering Internet access to individual homes. A source close to the deal said on Thursday that Microsoft was discussing the possible purchase of US cable operator MediaOne Group Inc's 60 percent stake in Titus. The Colorado-based company recently agreed to sell its 29.7 per cent stake in British cable operator Telewest Communications Plc to Microsoft for nearly $3 billion in stock.

"We heard from MediaOne that it is in talks with Microsoft on Titus," a spokesman at Itochu Corp confirmed. Itochu, a trading house, and Japanese electronics maker Toshiba Corp each owns 20 per cent of Titus. The Japanesebusiness daily Nihon Keizai Shimbun reported on Thursday that Microsoft was close to buying MediaOne's stake in Titus for $952 million or 100 billion yen. It said a deal could be reached by the end of this month and that Microsoft was also considering buying Itochu's and Toshiba's stakes.

"Senior Microsoft executives have asked to see our officials early next month to talk about Titus," the Itochu spokesman said. A Toshiba spokeswoman declined to comment, as did Microsoft and MediaOne. Microsoft to attack Japanese market Kota Nakako, an analyst at Warburg Dillon Read, said only 17 per cent of Japanese households have cable television, compared with 70 per cent in the U S.

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