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SoftBank

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SoftBank is an internet and telecommunications group led by the charismatic Masayoshi Son. As an investment company, SoftBank achieved a 9-times return on invested capital. SoftBank succeeded to turn around the Japan's third largest mobile operator, acquired in 2006 from Vodafone, and recently acquired SPRINT. SoftBank aims to be Number 1 on global telecommunications with a 30 year plan.
This market research analyses the SoftBank Group, corporate strategy, investments, acquisitions, financial results and market share data.

Published in: Business, News & Politics
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SoftBank

  1. 1. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 20141 20th Edition, May 8, 2014 ! by Gerhard Fasol, PhD, Eurotechnology Japan KK http://www.eurotechnology.com/ fasol@eurotechnology.com ! This is a free selection of pages from our report on SoftBank. Download the latest version of the full report here: http://www.eurotechnology.com/store/softbank/ SOFTBANK
  2. 2. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 EXECUTIVE SUMMARY- SOFTBANK 2 • SoftBank aims to be the No. 1 largest company globally, has a 30 year plan and a 300 year plan. • SoftBank is led by Masayoshi Son, and he recently founded the SoftBank Academy to educate potential successors. • SoftBank is primarily an internet and telecommunications investment company, following a “Time-Machine” principle: SoftBank invested in US internet companies (especiallyYAHOO) in the 1990s, subsequently in Japanese internet companies in the 2000s, and currently in Chinese internet companies - in particular Alibaba, thus aiming to profit from the time lag in internet development between US, Japan and China. • SoftBank entered the telecommunications field as an ADSL broadband operator following the acquisition of bankruptTokyo Metallic, entered the mobile communications field by acquiring Vodafone KK, and more recently eMobile/eAccess and Willcom (to be sold toYahoo KK within the SoftBank group), founding Wireless City Planning and acquiring Sprint. • With recent acquisitions, SoftBank has overtaken competitors NTT-Docomo and KDDI in terms of revenues, operating income, net income and market capitalization. • This report gives an overview of the SoftBank group, shows graphical presentations and analysis of many company data in comparison with competitors.
  3. 3. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 SOFTBANK REPORT -VERSION HISTORY (1) 3 Subscribe to this report, and we will regularly send you the latest versions. ! subscription, monthly payment, you can end the subscription any time (no refunds): http://store.eSellerate.net/s.asp?s=STR0576176470&Cmd=BUY&SKURefnum=SKU95143119118 Version Date comments 1 October 8, 2006 2 February 15, 2007 3 November 17, 2007 4 July 15, 2008 5 January 16, 2009 6 January 19, 2009 7 June 1, 2009 8 June 2, 2009 9 July 21, 2009 10 May 12, 2010 11 December 13, 2010 12 December 15, 2010 13 January 6, 2011 14 October 16, 2012 15 January 26, 2013 complete revision and updates
  4. 4. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 SOFTBANK REPORT -VERSION HISTORY (2) 4 Subscribe to this report, and we will regularly send you the latest versions. ! subscription, monthly payment, you can end the subscription any time (no refunds): http://store.eSellerate.net/s.asp?s=STR0576176470&Cmd=BUY&SKURefnum=SKU95143119118 Version Date comments 16 May 8, 2013 FY 2012 financial and subscription data add 17 May 12, 2013 18 Nov 3, 2014 19 March 19, 2014 subscriber data, M&A 20 May 7, 2014 FY2014 financial data
  5. 5. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 LICENSE 5 Thank you for purchasing licenses to our reports, and for your cooperation with our licensing conditions. Only through your purchases can we continue to produce high-quality market reports from Japan ! INTHE CASE OF SINGLE LICENSE: If you have purchased a single copy license of this report, you are not permitted to copy this report except for a single back-up copy ! INTHE CASE OF CORPORATE LICENSE: in the case that your company has purchased a corporate license, you may distribute this report inside your company including protected corporate information servers locked to the outside, but you cannot distribute this report outside your company ! ANNUAL SUBSCRIPTION: we offer annual subscriptions for a particular report, and also for all our reports in one single transaction at a great discount - please contact us for details. Corporations subscribing will receive all updates at the time of publication, so that you can be sure to have the latest up-to-date information ! This research report comes without any warranty of any kind.The authors and Eurotechnology Japan K. K. do not warrant that the information in this report is without error, nor that the information serves any particular purpose. For legal advice please consult properly licensed legal professionals, for investment advice please consult properly licensed financial advisors.Trademarks mentioned are the property of their owners.
 Eurotechnology is a trademark or registered trademark in Japan and other countries.
  6. 6. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 SOFTBANK- “SETTING JAPAN’STELECOM SECTOR ON FIRE”… 6 There was a time not long ago, when SoftBank’s charismatic founder Masayoshi Son’s ambitions to build a telecom operator in Japan were rejected by the Postal andTelecommunications Ministry (now merged with other Ministries to form the General Affairs Ministry = Soumusho), which would not award Son’s company a telecommunications operator’s license. For a long time I knew about rumors, that Masayoshi Son once threatened inside the Ministry to set himself on fire here and now (inside the Ministry for Post andTelecommunications of Japan), unless he is given the operating license he had applied for on behalf of his company. Some years later, the Chief-Editor of BusinessWeek phoned me around noon, and asked me:“if you meet Masayoshi Son now, what would you ask him?” Of course he was on his way to interview Masayoshi Son about an hour later. So I though for a moment and proposed three questions, the first question was if it was true that Masayoshi Son threatened to set himself on fire. The Chief-Editor of BusinessWeek soon after phoned me with Masayoshi Son’s answer:“Yes, I threatened to set myself on fire – but I did not bring any petrol along to carry out my threat”. The lead article about this interview with Masayoshi Son – which was based on my suggested question – is entitled “Setting FireToThe Cell-Phone Market”, and can be found online here: http://www.businessweek.com/magazine/content/04_44/b3906073.htm
  7. 7. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 AGENDA - LIST OF CONTENTS 7 • Executive Summary • SoftBank “setting Japan’s telecom sector on fire” • SoftBank overview • Masayoshi Son • Softbank - 30 year vision and DNA for growth during the next 300 years • 30 year vision • Values • The time-machine company, investments • overview of major investments, and investment results, ROI • Group structure, business segments • Acquisitions • eAccess/eMobile • Willcom (bankruptcy administration) • Wireless City Planning • Financials: annual and quarterly sales, operational and net profits, investments,ARPU • SoftBank Mobile • Spectrum licenses • base station, deployment for different spectrum bands, repeaters and boosters • Market position:ARPU, market share, market share growth, the number portability battle • Prepaid market • Positioning the new consumer brand • Softbank,Yahoo BB and the DSL market • Telegram market • Summary
  8. 8. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 SOFTBANK-
 OVERVIEW 8
  9. 9. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 20149 Softbank Founded September 3, 1981 Founder Masayoshi Son Headquarters Tokyo, Shiodome Stock Exchange TokyoTSE 9984 (IPO: July 22, 1994) Consolidated sales YEN 3378.3 Billion (US$ 33 Billion) (FY2013, ended March 31, 2014) Number of employees 24,598, consolidated (March 2014), (150 subsidiary companies) Major share holders Masayoshi Son (20.92%) Major business areas fixed and mobile/wireless communications and data services, IT and internet investments, content, games
  10. 10. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 MASAYOSHI SON 10 • Similar to Bill Gates’ role as Founder and long-time leader of Microsoft, Masayoshi Son is the founder and leader of the SoftBank Group of companies. • Masayoshi Son was born on August 11, 1957 inTosu (Saga-Prefecture Japan) with Korean nationality and of Korean origin. Son became a naturalized Japanese citizen later in life. • According to FORBES Magazine, Masayoshi Son is worth about US$ 7 Billion, and it is largely Masayoshi Son’s reputation and track record, which was essential to obtain the US$ 15 billion finance for SoftBank to acquireVodafone KK in March 2006. • Short personal history • August 11, 1957, Born inTosu (Saga Prefecture, Japan) with Korean nationality • Around 1972: Met with McDonald’s Japan Founder and CEO, Den Fujita, who recommended Son to learn English and to study in the USA • 1973, at age 16 moved to San Francisco, went to high-school in San Francisco • Enrolled at University of California in Berkeley in Economics • Invented and patented translation device, and sold patent rights to SHARP Electronics for US$ 1 million (later used by SHARP for the Wizard series of SHARP PDAs) • Imported Space Invaders arcade game machines from Japan to the UC Berkeley Campus. • 1980 Graduated with BA in Economics from Berkeley • Founded Unison in Oakland, CA (acquired by Kyocera) • 1981 returned to Japan, and founded SoftBank Capital • 1995 acquired 37% ofYAHOO, buildsYAHOO-Japan, and acquires controlling interest in e-Trade • 1996 acquired COMDEX and KingstonTechnology • 2001 based on acquisition ofTokyo-Metallic, foundsYAHOO-BB, which becomes Japan’s leading ADSL broadband internet provider • Campaigns for several years to obtain mobile operator license in Japan, which he is granted in December 2005 • March 17, 2006: agrees withVodafone plc to acquireVodafone KK • October 1, 2006:Vodafone KK renamed SoftBank Mobile KK and trading under the brand “SoftBank”. • October 2012: acquired eAccess/eMobile and SPRINT for Softbank
  11. 11. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 SOFTBANK-
 30YEARVISION AND DNA FOR GROWTH DURINGTHE NEXT 300 YEARS 11
  12. 12. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 SOFTBANK-
 THETIME-MACHINE COMPANY 15
  13. 13. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 SOFTBANK GROUP STRUCTURE AND CHARACTERISTICS 21
  14. 14. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 BUSINESS SEGMENTS 24 with the acquisition of Vodafone-Japan in 2006, mobile communications has become the largest business segment of Softbank (years are Japanese FinancialYears, ending March 31 - ie.“2012” stands for the financial year from April 1, 2011 - March 31, 2012) 2006 2007 2008 2009 2010 2011 2012 2013 0 1000 2000 3000 4000 revenuesBillionYEN SoftBank sector revenues Billion YEN years are Financial Years ending March 31 broadband ADSL, FTTH fixed line internet culture YAHOO Japan e Commerce, other mobile communications elminations, corporate c2013EurotechnologyJapanKK www.eurotechnology.com
  15. 15. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 SOFTBANK-
 ACQUISITIONS 25
  16. 16. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 EACCESS/EMOBILE ACQUISITION 31 For more detail about eAccess/eMobile - see: http://www.eurotechnology.com/store/emobile/ 

  17. 17. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 WILLCOM 33
  18. 18. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 201434 Willcom Founded Oct. 1, 1990: founded as DDI-Pocket (80.93% KDDI, 13.25% Kyocera) 2004 spun out of KDDI, and renamed Willcom Founder Headquarters Tokyo Stock Exchange - Consolidated sales YEN 254.6 Billion (US$ 2.9 Billion) (March 2008, rehabilitation application) Number of employees 1038 (March 31, 2008) Major share holders under corporate rehabilitation under Softbank sponsorship Major business areas mobile communications based on PHS network
  19. 19. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 WIRELESS CITY PLANNING 39
  20. 20. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 FINANCIALS 43
  21. 21. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 NET INCOME 47 • SoftBank has now overtaken NTT-Docomo in terms of net income.
 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 200 0 200 400 600 800 annualnet incomeyearYENBillion Annual net income of Japan's mobile operators in YEN Billion DoCoMo KDDI SoftBankVodafone Japan US$ 2 Bill US$ 4 Bill US$ 6 Bill US$ 8 Bill iPhone SoftBank July 11, 2008 iPhone 4S KDDI Oct 14, 2011 i Mode Feb 22, 1999 iPhone 5 Softbank KDDI Sept 21, 2012SoftBank acquires Vodafone KK March 17, 2006 c2014EurotechnologyJapanKK www.eurotechnology.com
  22. 22. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 QUARTERLY FINANCIAL RESULTS 50
  23. 23. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 NET INCOME 53 • SoftBank’s net income (after tax) is positive since the July-September 2005 quarter. SoftBank’s net income was held back by servicing the substantial debt from theVodafone-Japan acquisition.With the introduction of iPhone on July 11, 2008, and with the pay-down of the debt from theVodafone-Japan acquisition, Softbank’s net income is increasing steadily, and expected to overtake NTT-docomo’s. • Back in 2005-2007 NTT-docomo’s net income was continuously falling, and NTT-docomo o risked to fall into losses. NTT-docomo succeeded to stabilize the net-income situation via cost-cuts (including equipment costs), as well as increasing profitability via additional services.
 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 100 0 100 200 300 netincomequarterYENBillion iPhone SoftBank July 11, 2008 iPhone 4S KDDI Oct 14, 2011 Quarterly net income loss of Japan's mobile operators DoCoMo KDDI SoftBank Vodafone Japan US$ 1 Billion US$ 2 Billionc2014EurotechnologyJapanKK www.eurotechnology.com iPhone 5 Softbank KDDI Sept 21, 2012 SoftBank acquires Vodafone KK March 17, 2006
  24. 24. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 SOFTBANK MOBILE 58
  25. 25. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 SPECTRUM LICENSES AND BASE STATIONS 61
  26. 26. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 NOTE 63 This section is on the status of 2010. Softbank in the meantime has obtained additional “Platinum Band” spectrum in the 800-900 MHz range, which due to physics can penetrate openings in buildings better than higher 1.5-2 GHz radio waves, and therefore is more attractive for mobile communications. ! We are currently working on updating the spectrum allocation and base station data, and will update this section shortly. ! Subscribe to this report, to obtain the latest versions while your subscription is current: http://store.eSellerate.net/s.asp?s=STR0576176470&Cmd=BUY&SKURefnum=SKU95143119118
  27. 27. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 HOW MANY REPEATERS AND BOOSTERS DOES SOFTBANK USE? 68 •End 2006, SoftBank started to roll-out about 120,000 boosters and repeaters to improve coverage. •With the ramp-up of true base stations, SoftBank is rolling back the number of repeaters and boosters Jul 2006 Jan 2007 Jul 2007 Jan 2008 Jul 2008 Jan 2009 Jul 2009 Jan 2010 Jul 2010 0 20000 40000 60000 80000 100000 120000 boosters,repeaters Cellular boosters, repeaters, IMCSs in Japan c2010EurotechnologyJapanKK www.eurotechnology.com DoCoMo KDDI AU SoftBank 3G eMobile
  28. 28. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 LOW POWER REPEATERS 69 •SoftBank uses about 400,000 low power cell phone repeaters for the 2GHz band Jan 2008 Jul 2008 Jan 2009 Jul 2009 Jan 2010 Jul 2010 0 100000 200000 300000 400000 500000 600000 700000 Lowpowercellphonerepeaters Low power cellphone repeaters in Japan c2010EurotechnologyJapanKK www.eurotechnology.com DoCoMo 2GHz wCDMA DoCoMo 800kHz wCDMA KDDI AU 800MHz & 2GHz CDMA2000 SoftBank 2GHz wCDMA eMobile 1.7GHz wCDMA UQ 2.5GHz mWiMAX
  29. 29. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 MVNO BUSINESS 70
  30. 30. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 SOFTBANK MOBILE’S MARKET SHARE AND MARKET POSITION IN JAPAN 72
  31. 31. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 MOBILE MARKET SHARES IN JAPAN 76 Three groups are active in Japan’s mobile communications sector - showing that growth of marketshare for Softbank in Japan is painstaking low slow, which motivated Softbank’s acquisition of Sprint in USA, and its aim to acquireT-Mobile-USA: •DoCoMo (market share: 40.8% of subscriptions, reduced from 40.8% in February 2013) •KDDI (including UQ: market share: 28.9%, grown from 28.7% in February 2013) •Softbank (including eMobile,Willcom,Wireless City Planning: 30.3% grown from 29.3 in Feb 2013). Figure excludes SPRINT subscribers in the USA. DoCoMo 42.0 KDDI UQ 28.7 UQ SoftBank eM Willc WSP 29.3 eMobile Willc.WSP Mobile Operator group market shares April 30, 2013 DoCoMo 40.8 KDDI UQ 28.9 UQ SoftBank eM Willc WSP 30.3 eMobile Willc.WSP Mobile Operator group market shares February 28, 2014
  32. 32. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 MONTH-TO-MONTH BATTLE FOR SUBSCRIBERS 81 •SoftBank is continuously gaining market share since 2007, after successful turnaround ofVodafone KK. •The brief loss of market share around March 2010 is due to the switch-off of the 2G PDC network, since as a brief sharp negative spike in SoftBank’s otherwise steady market share growth. Jan 2004Jan 2005Jan 2006Jan 2007Jan 2008Jan 2009Jan 2010 Jan 2011 Jan 2012Jan 2013Jan 2014Jan 2015Jan 2016 0.005 0.004 0.003 0.002 0.001 0 0.001 0.002 0.003 0.004 monthly changeofmarketshare Growth fall of subscriptions market shares of Japan's mobile operators DoCoMo KDDI SoftBank eMobile Willcom UQ c2014EurotechnologyJapanKK www.eurotechnology.com Softbank acquires Vodafone KK
  33. 33. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 MONTH-TO-MONTH BATTLE FOR SUBSCRIBERS 82 •Since 2010, Softbank has been continuously gaining market share, except for a brief loss of market share around March 2010 due to the switch-off of the 2G/PDC network Jan 2010 Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015 0.004 0.003 0.002 0.001 0 0.001 0.002 0.003 monthly changeofmarketshare Growth fall of subscriptions market shares of Japan's mobile operators DoCoMo KDDI SoftBank eMobile Willcom UQ iPhone 4S SoftBank KDDI Oct 14, 2011 c2014EurotechnologyJapanKK www.eurotechnology.com
  34. 34. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 THE PREPAID MARKET 83
  35. 35. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 JAPAN’S PREPAID MOBILE PHONE MARKET 84 While in Italy about 90% of mobile phones are prepaid phones, in Japan less than 1% are prepaid mobile phones (currently there are about 1.127 million prepaid users in Japan). Prepaid phone users are predominantly “credit challenged” people DoCoMo has only 95,000 prepaid users, less than 0.2% of all subscribers, and DoCoMo has announced that it will discontinue prepaid services DuringVodafone times, Japan’s government coalition has announced that it is working on a law which will forbid prepaid phones.This plan was then softened down, and more strict identity checks for people registering prepaid mobile phones were introduced. It was made illegal to pass registered phones to others. Prepaid phones are said in Japan to be much used for crimes such as the “ore-ore” crime, where someone phones pretending to be a relative in dire need with severe consequences, unless an amount of money is paid into a certain bank account (usually an account where the account holder cannot be identified easily)

  36. 36. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 JAPAN’S PREPAID MOBILE PHONE MARKET 85 Japan’s prepay market is very small, less than 1% of the total mobile phone market, and shrinking. Currently SoftBank has the largest part of the prepay market, but places no importance on increasing the prepay market A large part of SoftBank’s prepay users had 2G phones.Therefore there is a sharp decrease of prepay users in April 2010, when Softbank switched off the 2G network. Prepay user numbers have slowly recovered since April 2010.The slow recovery shows that those prepay users who’s 2G phones became useless from April 2010, did not miss these phones very much, otherwise there would be a much faster recovery of prepay phones
 Jan 2007 Jan 2008 Jan 2009 Jan 2010 Jan 2011 Jan 2012 Jan 2013 Jan 2014 0 500000 1000000 1500000 2000000 2500000 3000000 prepayphones c2014EurotechnologyJapanKK www.eurotechnology.com Prepay phones in Japan eMobileSoftBank KDDI TuKa KDDI AU DoCoMo
  37. 37. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 JAPAN’S PREPAID MOBILE PHONE MARKET 86 Softbank has the largest share of the very small and shrinking prepay market in Japan.This is a legacy ofVodafone KK, which had placed great priority on growing the prepaid market in Japan (which very limited success as shown above).
 The negative spike around March 2010 for SoftBank’s prepaid customers was caused by the switch-off of the 2G/PDC network, which rendered all 2G prepaid phones unusable, and they needed to be exchanged against 3G prepaid phone handsets. Over the course of about one year, SoftBank regained the previous position of prepaid users. 2007 2008 2009 2010 2011 2012 2013 2014 2015 0 500000 1000000 1500000 2000000 subscriptions Prepaid mobile phones in Japan DoCoMo AU TuKa SoftBank eMobile c2014EurotechnologyJapanKK www.eurotechnology.com
  38. 38. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 NUMBER PORTABILITY BATTLE 87
  39. 39. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 POSITIONINGTHE NEW SOFTBANK BRAND FOR MOBILE COMMUNICATIONS 91
  40. 40. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 POSITIONINGTHE NEW BRAND 92 •SoftBank decided to use the “SoftBank” brand for the new mobile services, which are based on the acquisition ofVodafone KK. •SoftBank started to introduce the new SoftBank brand on June 14, 2006, about 3 1/2 months before the official name change of the company on October 1, 2006. •On June 14, 2006, SoftBank started to introduce and position the new brand with a “+Partner = Softbank” campaign: •+AQUOS = SoftBank •+Yahoo = SoftBank •+iPod = SoftBank •iPhone •Etc •This campaign started with the +AQUOS=SoftBank poster shown above (AQUOS is SHARP’s liquid crystal display brand, and the handset shown is SoftBank’s
  41. 41. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 POSITIONINGTHE NEW BRAND 93 •SoftBank decided to introduce the new brand by positioning SoftBank as the result of alliances with established (in Japan!) and well known (in Japan!) brands: •+ AQUOS = SoftBank (AQUOS is SHARP’s brand for liquid crystal displays) •+YAHOO! = SoftBank •+ Apple iPod = SoftBank ! •(note thatVodafone on the other hand, whenVodafone introduced it’s previously in Japan totally unknown brand, when rebranding the acquired J-Phone,Vodafone decided to introduceVodafone by association to international roaming. For Japanese users,Vodafone for a long time was associate to international telephone use and international roaming, which - while important in Europe for operator income - is only a tiny niche of the market in Japan)
  42. 42. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 SOFTBANK AND YAHOO!-JAPAN 94
  43. 43. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 SOFTBANK,YAHOO BB INTHE DSL MARKET 99
  44. 44. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 DSL WAS PROPELLED BYTHREE FACTORS 100 1.Deregulation (June 2001): unbundling and collocation •howeverTokyo Metallic entered the market in 1999 and went bankrupt.Was “too early”. •Was acquired by Softbank, and represents the entry by Softbank into telecommunications 2.Competition between ADSL operators (especially Softbank attacking NTT) 3.Technology development enabling 12-24Mbps
  45. 45. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 DSL MARKET 102 Mar 2006 Mar 2007 Mar 2008 Mar 2009 Mar 2010 Mar 2011 Mar 2012 0 10 20 30 40 50 60 70 80 90 100 DSLmarketshares DSL market shares in Japan SoftBank 38.8 eAccess 23.6 NTT East 16.9 NTT West 17.7 Other 3 c2012EurotechnologyJapanKK www.eurotechnology.com Source: http://www.eurotechnology.com/store/jcomm/
  46. 46. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 JAPAN’STELEGRAM MARKET 103
  47. 47. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 JAPAN’STELEGRAM MARKET 104 •Japan’s telegram market has been decreasing but still has a size of approximatelyYEN 52 Billion (= approx. US$ 500 Million) •Telegrams in Japan are sent mainly by businesses for congratulations, condolences, to debtors or for other urgent communications where correspondents cannot be reached by phone, and for personal congratulations at weddings etc. •Until April 2003, Japan’s telegram market was a 100% monopoly of NTT (= NipponTelegraph Telephone), and still today NTT has about 90% of the telegraph market •Currently there are about 12 companies offering competing telegraph services, among them KDDI, and Softbank (from 2009/2010). •Telegrams are often sent through the special 115 number, which is currently operated by NTT.The Ministry is considering to open 115 service to competitors of NTT, such as Softbank.
  48. 48. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 SOFTBANK ENERGY 105 for an detailed report and analysis of Japan’s renewable energy sector see: http://www.eurotechnology.com/store/j_renewable/
  49. 49. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 SOFTBANK ENERGY (SB ENERGY) 106 Softbank Energy (SB Energy) was founded by Masayoshi Son on October 6, 2011 with an initial (nominal) paid in capital of YEN 2 million.At the moment SB-Energy operates two production plants with a total capacity of 6.6 MW plus two test facilities in Hokkaido. SB-Energy announced, that 11 solar or wind power plants are in planning, with a planned total capacity of 230 MegaWatt (peak), ! Softbank Energy is remarkable, because Masayoshi Son has built Softbank into a very strong competitor of the incumbent NTT both in fixed line broad band communications and also in mobile, and because of Softbank’s strong financial power. ! We can expect that Masayoshi Son will aggressively build SB Energy, to compete and possible contribute to the liberalization of the regional electrical monopolies as he has in telecommunications. ! In fact, there are many parallels between the telecommunications and electricity industries, and Softbank can transfer know-how between both industries: •both need heavy network investments •underwater electricity cables and underwater communications cables have much in common •both industries are protected by Government licenses, requiring know-how and lobbying power and skills to obtain such licenses and permissions •both industries have long-term reliable (monthly) cash-flow from customers
  50. 50. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 JAPAN’S RENEWABLE ENERGY SECTOR 111 for an detailed report and analysis of Japan’s renewable energy sector see: http://www.eurotechnology.com/store/j_renewable/
  51. 51. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 SUMMARY 112
  52. 52. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 SUMMARY- SOFTBANK 113 • SoftBank aims to be the No. 1 largest company globally, has a 30 year plan and a 300 year plan. • SoftBank is led by Masayoshi Son, and he recently founded the SoftBank Academy to educate potential successors. • SoftBank is primarily an internet and telecommunications investment company, following a “Time-Machine” principle: SoftBank invested in US internet companies (especiallyYAHOO) in the 1990s, subsequently in Japanese internet companies in the 2000s, and currently in Chinese internet companies - in particular Alibaba, thus aiming to profit from the time lag in internet development between US, Japan and China. • SoftBank entered the telecommunications field as an ADSL broadband operator following the acquisition of bankruptTokyo Metallic, entered the mobile communications field by acquiring Vodafone KK, and more recently eMobile/eAccess and Willcom (to be sold toYahoo KK within the SoftBank group), founding Wireless City Planning and acquiring Sprint. • With recent acquisitions, SoftBank has overtaken competitors NTT-Docomo and KDDI in terms of revenues, operating income, net income and market capitalization.
  53. 53. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 EUROTECHNOLOGY JAPAN KK 114
  54. 54. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 EUROTECHNOLOGY JAPAN KK FOUNDED: FEBRUARY 1997 INTOKYO 115 Services and products - focus areas are high-technology, telecommunications, software, middle-ware, environmental technology and medical equipment: ! - Market entry to Japan for European and US high-tech companies, turn-round, reshaping, planning and building of distribution networks - European business development and strategy for Japanese companies - M&A (European and US companies acquiring Japanese companies, Japanese companies acquiring or investing in Europe) - Turn-round preparations and management of foreign business in Japan - Market research and strategy - Due diligence of high-tech companies, environmental due-diligence - Advisory services for investment fund managers and investors in technology fields ! - we publish a series of market reports for about 10 years, which are purchased world-wide, distributed direct and via distribution partners: http://www.eurotechnology.com/store/
  55. 55. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 EUROTECHNOLOGY JAPAN KK 116 - Leading high-technology business development boutique inTokyo, working globally - Founded in 1996/1997 - 14 years experience, relationships, cooperations and success record. - CEO works with Japan’s high-tech / telecom sector since 1984 - 27 years experience, resources, cooperations. - Wide network of cooperations in Governments, Embassies, trading companies, distributors, finance,VCs, traditional corporations, venture start-ups, industry associations - Experience: market-entry, restructuring, M&A, acquisitions, due-diligence ! Customers include: - More than 100 investment fund managers - Industrial customers: - NTT-Communications, SIEMENS, DeutscheTelekom, Cubic, Unaxis (now: Oerlikon), CITI Group, CLSA Asian Markets, Genscape, Google, IKEA, Isabellenhuette, Landis+Gyr, National Instruments, Swisscom,TechnoCom, - Government - NewYork Police Department, European Union,TEKES (Technology Research funding organization of the Government of Finland) ! Deep Japanese technology market knowledge - we publish a series of market reports for about 10 years, which are purchased world-wide.You can purchase our reports on Bloomberg: https://www.bmart.com/search?&nuts%5B %5D=WIRE%3AEUT, and via eSellerate: http://store.eSellerate.net/s.aspx?s=STR0576176470 and from http:// www.eurotechnology.com/store/
  56. 56. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 GERHARD FASOL PROFILE: HTTP://WWW.FASOL.COM/PROFILE/ 117 - Worked successfully with Japan’s high-tech sector since 1984 - 27 years. Came first to Japan in 1984 to help build NTT’s first international R&D cooperation on semiconductor lasers - Entrepreneur inTokyo since 1996, Eurotechnology Japan KK worked with many large corporate groups (e.g. SIEMENS, NTT, DeutscheTelekom,Asahi Glass...), more than 100 investment fund managers - Assoc. Professor of Electrical Engineering atTokyo University. Record of Fasol-Laboratory atTokyo University: http://www.fasol.com/tokyo_university/ - Elite “Sakigake” (Pioneer) R&D project on Spin-Electronics of Japanese Government Science and Technology Agency.This work was evaluated by US National Science Foundation and US Department ofTrade: http://www.wtec.org/loyola/erato/ch7_5.htm - Co-initiator of spin-electronics device research in Japan, one of the first to start work on spin- electronics in Japan in 1991 - Tenured Faculty member at Cavendish Laboratory/University of Cambridge. - Assoc. Professor of Electrical Engineering atTokyo University - PhD in Solid-State Physics (Cambridge University,Trinity College, UK) - Diplom-Physiker, Ruhr-University Bochum (Diplom-Thesis on Superconductivity) - Publication list (Books, patents and publications, several publications are specifially concerning electron-spin and spin-electronics): http://www.fasol.com/profile/publications.shtml - Languages: English, German (native), French, Japanese, and some Swedish
  57. 57. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 GERHARD FASOL WITHTETSUZO MATSUMOTO, EXECVP OF SOFTBANK MOBILE CORPORATION 118
  58. 58. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 “POST GALAPAGOS STUDY GROUP” 25 JAPANESE LEADERS + 1 FOREIGNER (GERHARD FASOL) WORKING FOR ONEYEAR ON CONCEPTSTO OVERCOME JAPAN’S “GALAPAGOS EFFECT” 119 see: http://www.eurotechnology.com/2013/10/07/galapagos/
  59. 59. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 “POST GALAPAGOS STUDY GROUP” 25 JAPANESE LEADERS + 1 FOREIGNER (GERHARD FASOL) WORKING FOR ONEYEAR ON CONCEPTSTO OVERCOME JAPAN’S “GALAPAGOS EFFECT” 120 see: http://www.eurotechnology.com/2013/10/07/galapagos/
  60. 60. (c) 2014 Eurotechnology Japan KK www.eurotechnology.com SoftBank (20th edition) May 8, 2014 CONTACT AND MORE INFORMATION 121 Contact •Gerhard Fasol PhD •Eurotechnology Japan KK,Tokyo, Japan •http://www.eurotechnology.com/ •Mobile +81-90-8594-6291 •fasol@eurotechnology.com •gfasol@gmail.com ! More information: •reports:http://www.eurotechnology.com/store/ •twitter: http://twitter.com/gfasol/ •website: http://www.eurotechnology.com/ •personal site: http://fasol.com

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