Softbank Q1 profits soar on subscriber gains

8 Aug 2007

Japan’s third largest mobile operator by subscribers, Softbank Mobile, has recorded a massive 18-fold increase in first-quarter profit after adding twice as many users as market leader NTT DoCoMo. Net income soared to JPY25.1 billion (USD211 million) in the three months to 30 June, compared with JPY1.42 billion a year ago, including a JPY4.6 billion gain from share sales. Operating profit rose 45% to JPY78.7 billion, to eclipse Credit Suisse Group’s top-line estimate of JPY76 billion. The performance was bolstered as Softbank accounted for only two months of earnings at the mobile unit in the year-earlier period; the fixed line and internet provider acquired the unit (then known as Vodafone KK) from Vodafone Group in April 2006. Softbank’s mobile division reported a 59% rise in operating profit to JPY43.5 billion, accounting for 55% of the group total, as revenues climbed 68% to JPY391.7 billion. Group sales were up 34% year-on-year at JPY663.1 billion.

Softbank Mobile reported a net gain of 532,000 mobile phone subscribers in the three-month period under review, outperforming KDDI’s 521,100 and DoCoMo’s 224,600, according to figures compiled by Japan’s Telecommunications Carriers Association. Softbank’s monthly average revenue per user (ARPU) was down to JPY5,000, from JPY5,210 a quarter earlier. Data revenue rose to JPY1,410 from JPY1,380 quarter-on-quarter, while voice service sales dropped to JPY3,590 from JPY3,830. The company had installed 46,000 base stations as of 1 August and plans to up this to ‘certainly’ exceed 50,000. It did not provide a timeframe. DoCoMo had 48,600 base stations at the end of June and plans to increase the number by 17% to 56,700 this year.

At the end of July, Softbank Mobile’s total subscriber base reached 16.665 million, with NTT DoCoMo at 52.927 million and KDDI at 28.901 million.