The moves just days after Japan's two biggest cable TV operators announced plans to merge, a move set to ally the forces of US Giants at T Corp and Microsoft Corp in the country's fledgling cable Internet business.

Analysts had said that the tie-up would herald a shake-up in Japan's promising but underdeveloped market for high-speed Internet access by prompting more consolidation, which would pose a threat to the earnings of dominant telecommunications carrier Nippon Telegraph and Telephone Corp (NTT). The latest alliance includes plans to create a broadband Internet service using Tokyu's existing cable television infrastructure and would also tie- up with other Catv operators.

To cement the alliance, Sony will buy a 10 per cent stake in Tokyu's cable television unit.

"Based on this alliance, Sony will create content for broadband Internet, design and operate e-commerce platforms and other broadband services,'' the companies said.

A developed broadband network is necessary for Sony to offer Net and e-commerce functions on its video game console playstation 2 in the future.Sony will pay 10 billion yen ( 95.10 million) for the holding in Tokyu cable television. Tokyu said it would earn 9.64 billion yen profit on the sale.

Investors in Tokyu seemed pleased by the announcement, sending its share soaring by 8.71 per cent, or 42 yen, to 524 per cent by the end of the day.

However Sony's shares closed down to1.98 per cent, or 200 yen, at 9,900 on the news.

Sony and Tokyu, along with top automaker Toyota motor, formed a venture in April to disseminate low-cost and high-speed Internet services based on existing cable networks. The venture is equally owned by the three firms.