SoftBank Corp bullish on full year outlook

5G News

Japanese operator SoftBank Corp weathered a two-month nationwide state of emergency in its fiscal Q1 (calendar Q2), with revenue and profit holding steady when excluding one-off gains, though handset sales dropped.

President and CEO Ken Miyauchi said handset revenue recovered in June it and expects a rapid upswing in its next two fiscal quarters. It maintained full year guidance of a 2.5 per cent rise in net profit to JPY485 billion ($4.6 billion) and revenue flat at JPY4.9 trillion.

Fiscal Q1 net income dropped 7.7 per cent year-on-year to JPY152 billion due to a gain in the same period in 2019 from the sale of Cybereason. Excluding this, the figure was almost flat, Miyauchi said.

Consolidated revenue was also flat at JPY1.173 trillion, as a 2.7 per cent decline in mobile revenue to JPY412 billion was offset by growth in most other units.

Mobile ARPU slipped 3.4 per cent to JPY43,000 and equipment sales sank 24.1 per cent to JPY97.4 billion.

Broadband turnover increased 2.3 per cent to JPY97.2 billion; enterprise rose 5.2 per cent to JPY162.5 billion; and its Yahoo business grew 14.4 per cent to JPY273.9 billion. Distribution sales fell 5.6 per cent to JPY109.8 billion.

Mobile subscribers grew by 1.33 million to 46.1 million.

The company is targeting JPY50 billion in cost reductions in fiscal 2020 by improving productivity through digitalisation and increasing network efficiency. Miyauchi said an infrastructure sharing deal with rival KDDI is a major part of the effort.

5G targets
Miyauchi said its 5G network was deployed in a “pinpoint manner”, targeting 10,000 base stations by end-March 2021 and 50,000 sites a year later, when population coverage is expected to surpass 90 per cent.

The CEO didn’t disclose the number of 5G subscribers signed up since a launch in late March, but noted a strategy to gradually push the service limited the impact of Covid-19 (coronavirus) on uptake: it is almost on track and expects accelerated adoption after more compatible handsets are released.

Miyauchi forecasts a full-scale shift from 4G to 5G in 2021 and 2022 as handset costs fall and coverage increases.

Capex for fiscal 2020 is capped at JPY400 billion, with JPY50 billion to JPY70 billion earmarked for M&A. Miyauchi doesn’t think it will have any large targets for a while, but noted “we need to invest” to continue growing profit.

SoftBank yesterday (3 August) said a merger between its Z Holdings subsidiary and mobile app business Line will be finalised around March 2021 after the pandemic delayed its original October target.


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