Masayoshi Son, President of SoftBank Corp., usually delivers an impassioned speech evidently in good spirits at the company's financial results presentation. His expressions were, however, very serene throughout the presentation this time. That may have represented his confidence in the more-favorable-than-expected performance of the company's mobile phone business, into which he entered against all odds, being described as "having purchased a sinking ship (called Vodafone)."
SoftBank has announced its consolidated financial results for FY2006 (April 2006 to March 2007). As a result of acquiring Vodafone KK, sales climbed 130% year-on-year (YoY) to ¥2.5442 trillion and operating income skyrocketed 335% YoY to ¥271 billion. "Both the mass media and analysts had predicted 30% of our customers would leave us following the introduction of mobile number portability (MNP). Nevertheless, net growth was four times larger compared to last year and reached 850,000 subscriptions," Son boasted.
Displaying several indices including the four times larger YoY net increase and the highest rank it won in CM popularity ratings, Son emphasized the favorable financial state of the mobile phone business at the results presentation (refer to photos below). In fact, its mobile phone business company SoftBank Mobile Corp. logged operating income of ¥134.6 billion, approximately 1.8 times larger than Vodafone's FY2005 result.
However, attention should be paid to a fact that the reasons why operating income greatly rose in FY2006 included a special factor, namely the introduction of an installment selling system. By monthly billing handsets on an installment basis, the company succeeded in maintaining average incentive, a resource of discount for handsets, at ¥29,000 per subscription, 3/4 that achieved by other carriers. On the other hand, this could curtail income over the long term, since ARPU (average revenue per user), which makes contribution to future income, lowers when customers finish installment payments. To boost operating income, a larger portion of 3G handsets in its portfolio, a wider range of attractive optional services and other measures to boost ARPU are likely to be needed.
SoftBank disclosed two measures to enhance profit base of its mobile phone business and improve its services.
One is the employment of a standard platform aimed at lowering handset procurement costs (related story from Tech-On!). On May 22, 2007, the company plans to unveil framework of the new platform along with new models for the upcoming summer sale season.
The other is the introduction of so-called femto cell technology that sets a super compact base station (access point) per household or room. This technology enables fixed rate or even free services for voice calls from home, among other services equivalent to FMC (fixed mobile convergence) services. "We project to demonstrate the technology by the end of May 2007 and successively embark on commercial services within 2007," said Junichi Miyakawa, Executive Officer of SoftBank Mobile. The company has reportedly already prototyped femto cell base stations and test terminals.
Nikkei Electronics Asia magazine is available each month free of charge to engineers, managers and other qualified readers.
Nikkei Electronics |
Nikkei Monozukuri |
Nikkei Microdevices |
Nikkei Automotive Technology |
|---|---|---|---|
 |
 |
 |
 |
| The magazine for electronics designers and managers. | Design You Won't Regret - How to Reduce the Risk of Accidents | The most comprehensive technical journal for makers and users of LSIs and LCDs. | The comprehensive automotive technology magazine. |
Copyright © 1995-2009 Nikkei Business Publications, Inc. All rights reserved.
All editorial content and graphics on this Web site may not be reproduced in whole or in part without the express permission of the copyright owner.
November 2009
October 2009
September 2009