Sprint losses weigh heavy on Softbank; trims profit outlook

4 Nov 2014

Japan’s third largest mobile carrier by subscribers, Softbank Corp, reported net profit of JPY483.1 billion (USD4.2 billion) for its second quarter ended 30 September 2014, compared with JPY165.8 billion in the same period of 2013, aided by an extraordinary gain from the listing of Chinese internet firm Alibaba, but said rising losses at its US subsidiary Sprint Corp weighed heavy on its bottom line. Industry watchers are keenly assessing Softbank’s restructuring of Sprint Corp after its US asset posted a quarterly loss of USD765 million yesterday, wider than the loss of USD699 million it booked in 3Q13. Softbank Corp said Q2 FY2015 revenue rose to JPY2.11 trillion from JPY1.70 trillion in the year-earlier period, but in light of recent developments at Sprint, cut its full year forecast for operating profit by 10% to JPY900 million amid concerns over a continuing deterioration in the US operator’s position. At a press conference in Tokyo on Monday, Softbank’s CEO Masayoshi Son told reporters: ‘Sprint’s battle will be long and tough, and it’s not something that can be fixed in a short time.’

Softbank Corp acquired 78% of Sprint, the number three US carrier by subscribers, for USD21.6 billion in July 2013 as part of Masayoshi Son’s overseas expansion, but its new asset has since been engaged in a painful revamping of its network that has resulted in an outflow of subscribers.

Japan, United States, SoftBank Group Corp, Sprint Corporation (now part of T-Mobile US)