Softbank Corp, Japan's third-largest mobile phone operator, is among the bidders for struggling telecoms firm Willcom Inc, the Yomiuri newspaper reported on Friday.
Willcom, which is being sold by private equity firm Carlyle CYL.UL, has asked its creditors to reschedule its debt payments to give it some breathing room as it restructures.
Willcom provides mobile phone services using a technology called personal handyphone system.
Softbank is seen as the frontrunner among several likely bidders for Willcom, with Carlyle due to decide on a buyer for by the end of the year, the Yomiuri said.
The other bidders include investment funds, the newspaper said.
As a condition for the bid, Softbank is asking Willcom creditors to forgive part of the borrower's 93.5 billion yen ($1.1 billion) debt, the Yomiuri said, without citing sources.
Softbank is eyeing Willcom's next-generation high-speed wireless network and its subscribers, the paper said.
A Softbank spokesman declined to comment, and Carlyle officials were not immediately available.
Shares of Softbank were down 2.4 percent at 2,065 yen as of 0121 GMT. The benchmark Nikkei average .N225 fell 2 percent.
(Reporting by Taiga Uranaka)