Japanese internet and telecoms conglomerate Softbank Corp has reported operating profits of JPY54.36 billion (USD472 million) in its first quarter to 30 June 2006, reversing a loss of JPY3.19 billion a year earlier, bolstered by the acquisition of Vodafone KK and by strong gains from its internet access operations. In reporting its fourth consecutive quarterly profit, Softbank said its operating profit had received an injection of approximately JPY26 billion from its newly created Softbank Mobile division, reflecting the input of Vodafone KK, acquired from the UK’s Vodafone Group earlier this year for USD15 billion. Softbank is also ramping up its efforts in the domestic internet access services market by offering lower prices than its larger rival Nippon Telegraph and Telephone Corp (NTT).
In the three months to end June, Softbank reported revenues of JPY494.2 billion, up 91.1% from JPY258.6 billion a year ago. Net income stood at JPY1.42 billion, compared with a loss of JPY11.15 billion for the corresponding year ago period. According to analysts polled by Reuters Estimates, the operator will probably post an operating profit of JPY152.1 billion in the year ending March 2007, more than double the JPY62.3 billion reported in fiscal 2005/06.
According to Softbank founder Masayoshi Son, the key challenge facing the group is to close the gap on larger rivals NTT and KDDI Corp by improving its mobile arm’s subscriber base and coverage area, and by introducing new services such as mobile digital TV. Son is committed to launching new handsets to achieve this, expanding the company’s high speed networks and offering internet searches, auctions and TV broadcasts to wireless users through Yahoo Japan Corp, in which Softbank owns a roughly 40% stake. Softbank offers asymmetric digital subscriber lines (ADSL) services with Yahoo Japan, Japan’s biggest internet portal, and also operates fixed line services through its Japan Telecom unit.