Main Q&A at Earnings Results Briefing
for Q2 FY2023

< Back

Date Wednesday, November 8, 2023
4:00 pm - 5:25 pm
Speakers SoftBank Corp.:
Junichi Miyakawa (President & CEO)
Kazuhiko Fujihara (Board Director, Executive Vice President & CFO)
  • The progress rate for net income was high. Is there any possibility of an upward revision to your forecast moving forward?

    Nothing has been decided yet. Because our results for the first half of FY2023 were better than initially anticipated, we have a wide range of options for the second half of the fiscal year. Eyeing future growth, we might take proactive initiatives by deploying sales promotion expenses in the second half.

  • SoftBank Corp. has issued Bond-Type Class Shares. How do you evaluate this issuance?

    We believe that the issuance of the Series 1 Bond-Type Class Shares was successful. However, the issuance did not end with the listing. Rather, we must ensure that the funds we have raised are used effectively and lead to the Company's growth. In addition, we were able to increase our equity capital through the Bond-Type Class Shares, so we have added it to capital surplus and improved our balance sheet by obtaining insurance of sorts to strengthen our financial base. We intend to build a financial base that can reassure everyone, while also increasing our true strength.

  • What are your thoughts on the time frame when SoftBank Corp.'s standalone net income will surpass its dividend payment amount and your measures for accomplishing this?

    We always consider SoftBank Corp.'s standalone equity capital when we make decisions related to dividend policy. We have already implemented measures to augment SoftBank Corp.'s standalone equity capital, including utilizing the equity of subsidiaries that have surplus capital. We will strive to show the early recovery of operating profit and net profit.

  • How has “Pay-toku” been progressing?

    “Pay-toku Unlimited” has been performing well. We feel that it has strong momentum.

  • What is your ARPU outlook for the future, and how will it be impacted by the new price plans introduced in October 2023?

    We expect that the new price plans will have a positive impact on the ARPU outlook, and that ARPU will eventually stop declining and then stabilize. If net subscriber additions remain steady, we are likely to see a recovery in mobile revenue before a recovery in ARPU.

  • How is the Enterprise segment currently positioned and what is its future direction?

    The Enterprise segment is expected to serve as a unit that will promote the realization of the next-generation social infrastructure that SoftBank Corp. seeks to build. In FY2023, the Enterprise segment aims to surpass operating income of ¥150.0 billion and its results are showing steady progress. Internally, we have set an even higher target for the Enterprise segment, and we will continue making strides to achieve this target.

  • What is your position on the listing of PayPay Corporation?

    Although it is true that we are targeting a listing, nothing has been decided yet. To achieve a listing, we are working to strengthen governance. We believe that strengthening governance is highly beneficial to the financial business. The business itself is performing very well. We are not in a hurry to obtain a listing, which is an effective option for realizing PayPay Corporation's corporate value.

  • What are your thoughts on where to list PayPay Corporation?

    The decision will be made by the Board of Directors of PayPay Corporation. In general, if a company wishes to be listed, it will select the best market in which it can earn the highest corporate valuation.

  • What is your perspective on SoftBank Corp.'s winning strategy for generative AI?

    Overseas, generative AI systems comparable to GPT-4 are available, and they will evolve further in the future. SoftBank Corp. is not necessarily attempting to cut into this development race.
    Japan already has generative AI systems with “knowledge” of the type that is useful only for specific tasks. However, Japan currently lacks a generative AI system with the “wisdom” required to establish connections among diverse data sets and produce answers. For this reason, if we wish to utilize the “wisdom” of generative AI, we must rely on imports. We would like to create a framework in which we have a homegrown generative AI based on Japan's distinctive culture, history, business practices, verbal expressions, and other characteristics, without relying on imports alone. SoftBank Corp. has the opportunity, human resources, and funds needed to meet this challenge, so our position is that we would like to take on this challenge as much as possible.

  • How will you monetize your own generative AI developed in-house?

    We are exploring offering this type of generative AI to businesses as a B2B solution, rather than as a subscription model to consumers like the type offered by OpenAI of the United States and others. We would like to determine what kind of solution we should make available after we use it in our internal operations. Ultimately, we aim to monetize it through consulting operations that sell the completed service. We expect that earnings from this business will contribute to the Enterprise segment's operating income in the future.

  • Nippon Telegraph and Telephone Corporation (NTT) asserts that “Assets from NTT's time as Nippon Telegraph and Telephone Public Corporation (NTT Public Corporation) belong to shareholders including the Japanese government.” What are your views on this issue?

    We believe that this assertion is merely sophistry. As a holding company, NTT owns 100% of the shares of Nippon Telegraph and Telephone East Corporation (NTT East) and Nippon Telegraph and Telephone West Corporation (NTT West), both of which own and operate taxpayer-funded assets inherited from NTT Public Corporation. It would be extremely regrettable if NTT had only a diminished awareness of the importance of owning and operating those assets, and a subpar sense of ownership.
    The Act on Nippon Telegraph and Telephone Corporation (the NTT Law) is a law that puts certain public-interest obligations on NTT, NTT East and NTT West, such as the obligation to guarantee telecommunications services throughout Japan under the national government's supervision, in return for inheriting assets from NTT's time as NTT Public Corporation. If they are discussing abolishing the NTT Law rather than amending it to update obsolete regulations, we would prefer that they discuss this openly in the National Diet, rather than in forums such as a Liberal Democratic Party project team.
    As telecommunications carriers, SoftBank Corp. and NTT have previously cooperated with one another in the interest of advancing the telecommunication industry, even while competing with each other. It's regrettable that NTT and telecommunications carriers other than NTT, among others, have opposing views. I believe that if this matter is resolved through somebody's unilateral decision, instead of through constructive discussions, it will leave a lasting problem for the future.

  • The platinum band (700 MHz band / 3 MHz bandwidth ×2) has been allocated to Rakuten Mobile, Inc. What do you think of this allocation?

    Rakuten Mobile, Inc. has announced plans to make total capital expenditures of ¥54.4 billion over 10 years. We have the impression that this is a feeble plan. When SoftBank Corp. obtained the platinum band (900 MHz band / 15 MHz bandwidth ×2) for the first time in March 2012, we made total capital expenditures of approximately ¥2 trillion over 3 years from FY2012 to FY2014. Thereafter, we continued to undertake detailed network adjustment work, laying the groundwork for delivering customer satisfaction.
    Rakuten Mobile, Inc. has announced that platinum band services will begin in March 2026. It is our understanding that the roaming agreement reached between Rakuten Mobile, Inc. and KDDI Corporation will be valid until the end of September 2026; its duration is not indefinite. In other words, we believe that Rakuten Mobile, Inc. intends to establish a framework that can function without problems even without the roaming agreement with KDDI Corporation within six months following the start of platinum band services. We believe that Rakuten Mobile, Inc. will struggle initially, but we would like it to work tirelessly to make the most of the platinum band that it has been allocated.

  • The Ministry of Internal Affairs and Communications (MIC) has announced a plan to promote competition in the mobile market. As part of this plan, MIC revised the upper limit for discounts on mobile devices. What do you think of this plan?

    We thought that MIC might have been a little more aggressive in ensuring that customer flexibility and widespread use of 5G were not impeded. However, we believe that the new rule is appropriate in terms of limiting extreme discount sales and reselling.