Q&A at Earnings Results Briefing for FY2022

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Date Wednesday, May 10, 2023 4:00 pm - 5:40 pm
Speakers SoftBank Corp.:
Junichi Miyakawa (President & CEO)
Jun Shimba (Representative Director & COO)
Yasuyuki Imai (Representative Director & COO)
Kazuhiko Fujihara (Board Director, Executive Vice President & CFO)
  • How do you intend to improve ARPU (Average Revenue Per User per month) going forward?

    We are implementing a wide range of measures based on the belief that revenue, which is the product of ARPU and the number of users, and operating income are key metrics. To improve ARPU, we believe that it is crucial to strengthen the “SoftBank” brand, which has a relatively higher ARPU. The “SoftBank” brand's attractiveness will be enhanced through initiatives such as collaboration with PayPay and the roll out of video services, to ensure that customers who use 10-20 GB of data per month will choose the “SoftBank” brand. We will also seek to improve ARPU by enhancing customer satisfaction through comprehensive promotion of our offerings, such as paid customer support in stores and value-added services and content.

  • If you are able to generate adjusted free cash flow of ¥600 billion, and total amount of dividends is ¥400 billion on par with FY2022, what will you do with the difference of ¥200 billion?

    In FY2022, we generated adjusted free cash flow of ¥618.6 billion. From this amount, if we deduct approximately ¥120.0 billion in rent for base stations and similar items paid as cash flows from financing activities and subtract approximately ¥400.0 billion in total amount of dividends, we are left with the net amount of cash that we can freely use. In FY2022, we were left with cash of ¥94.9 billion. We used this cash to reduce net interest-bearing debt to improve our financial position. We believe that by properly ensuring that this difference is left over as cash, the Company will have more options for actions such as improving its financial position and making growth investments.

  • I found net income attributable to owners of SoftBank Corp. of ¥535 billion for FY2025, your medium-term management plan target, to be underwhelming. Could it be that SoftBank Corp. is unable to make growth investments out of consideration for its parent company SoftBank Group Corp.?

    It is not that we can't make the necessary growth investments because we must show deference to the parent company. Our management decisions are made independently. We would like you to view our newly announced medium-term management plan as a statement of our resolve to completely recover from the impact of mobile service price reductions in the spring of 2021.

  • The operating income target for FY2025 is ¥970 billion. With a little more effort, operating income could reach the ¥1 trillion level. Why didn't you set the target at ¥1 trillion?

    We believe that SoftBank Corp. has a culture of consistently achieving the targets that it announces to the public. We'd like you to view the ¥970 billion figure as one that we are firmly committed to achieving.

  • CAPEX is forecast at the ¥330 billion level (FY2023 – FY2025) in your newly announced medium-term management plan. Does this forecast include investments in areas such as data centers for building next-generation social infrastructure?

    Since we have already built data centers in Tokyo and Osaka, we don't expect a large amount of investment in data centers during the period of the medium-term management plan.

  • The most important target in the medium-term management plan is net income attributable to owners of SoftBank Corp. The Group has subsidiaries, such as Z Holdings Corporation and PayPay Corporation, that have minority shareholders. In terms of governance, the Group cannot directly manage those subsidiaries. What measures will you take to get the whole Group to work on improving net income attributable to owners of SoftBank Corp.?

    Generative AI such as ChatGPT has been evolving at an extremely rapid pace, leading to significant changes in the business environment. Therefore, we are aligning the whole Group's targeted direction, as we concentrate resources and deepen collaboration even further. In addition, SoftBank Corp. Chairman Ken Miyauchi is taking the lead in conducting sessions of the Group CEO meetings, which bring together the CEOs of Group companies. We are collaborating on a wide range of themes.

  • In the medium-term management plan, you stated that you will implement measures to develop the small and medium-sized enterprise (SME) market. What is your approach to these measures?

    To develop the SME market, we are considering strengthening our hand in this area, including companies such as SB C&S Corp., which is a wholly owned SoftBank Corp. subsidiary responsible for the Distribution segment. We seek to expand our share by combining the use of partnerships with large corporations which are SoftBank Corp.'s client and virtual sales activities over the Internet.

  • What is the status of SoftBank Corp.'s use of generative AI, such as ChatGPT?

    SoftBank Corp. is exceedingly positive about the use of generative AI. We have been encouraging personnel within the organization to fully utilize generative AI, while taking care to comply with laws and regulations and not enter any confidential information. We feel that generative AI signifies the start of the singularity in AI, and we have no choice but to position ourselves at the starting line to take advantage of it. We will steadily implement generative AI. In an AI-based telephone support service known as LINE AiCall, we have already been using a generative AI platform to conduct demonstration tests aimed at call center automation.
    With a strong belief that Group-wide efforts should be made to use generative AI, recent enthusiasm for generative AI has been high. We have established a preparation and planning company within the Group that will study matters related to the use of generative AI, including ChatGPT.

  • According to recent external research, SoftBank Corp.'s mobile network quality has received high ratings. What are your strengths and how do you see the future?

    We are pleased with the rising ratings of SoftBank Corp.'s mobile network quality. We divide service areas into mesh patterns and put the communications quality of each mesh on the agenda of management meetings. Every member of the management team understands the situation as we make improvements. I believe that the ratings are the result of these efforts. In the future, we will transition to 5G SA (Stand Alone). This transition will require precise work, but we are determined to see it through.

  • What do you think of the IOWN (Innovative Optical and Wireless Network) concept adopted by the NTT Group?

    We understand that one of the themes of the IOWN concept is to achieve efficient power consumption, so we evaluate it very highly. Considering that Japan does not have an abundance of electricity, we believe that collaboration and joint creation must transcend the boundaries of individual enterprises in anticipation of the future digital society.