CEO Message

SoftBank will continue to challenge ourselves to drive further innovation by proactively fulfilling our customer's needs that will emerge from shifting trends

On December 19, 2018, SoftBank Corp. (TSE: 9434) listed its shares on the First Section of the Tokyo Stock Exchange. I'd like to take this opportunity to express my heartfelt gratitude for your continued support and understanding over the years.

Since its founding, the SoftBank Group has sought to promote the Information Revolution to contribute to the wellbeing of people and society. We see our corporate philosophy, “Information Revolution — Happiness for everyone,” as an unchanging principle. It embodies our strong determination to harness the boundless power of technology to deliver happiness and exciting experiences to as many people as possible around the world. By doing so, we aspire to remain an enterprise that contributes to society.

In the fiscal year ended March 31, 2019, we achieved steady growth in all business segments in addition we took many strategic steps to create new businesses that will serve as future growth engines. As a result, SoftBank Corp. delivered higher earnings and higher revenue for the fiscal year ended March 31, 2019, and plans to pay dividends of ¥37.5 per share in line with its forecasts. Revenue increased by 4.6% year on year to ¥3,746.3 billion, operating income rose by 12.8% year on year to ¥719.5 billion and net income rose by 6.0% year on year. In the telecommunications service business, by adding LINE MOBILE in April 2018, we deployed three brands: SoftBank and Y!mobile, as well as LINE MOBILE. As a result, the number of smartphone subscribers increased by 1.95 million to 22.08 million. The number of subscribers for SoftBank Hikari, fiber-optic broadband service, also increased steadily. Moreover, in new businesses, our joint ventures such as PayPay and WeWork Japan have rapidly expanded their markets and are establishing leading positions in their respective business fields.

Japan has changed the name of its imperial era to “Reiwa,” and has opened a new chapter in its history. In the telecommunications sector, Telecom industry also entered an era we should call the year of 5G (fifth generation mobile communications system) to mark the beginning of its prosperity. 5G will spark a new paradigm shift and will bring major business opportunities. 5G will offer features such as ultra-high data communication speed, large data capacity, multiple connection, low latency and high reliability. Leveraging those features, 5G will further accelerate business fields such as the Internet of Things (IoT), big data, Artificial Intelligence (AI), Virtual Reality (VR), Augmented Reality (AR) and autonomous driving. In the new era, these new technologies will surely continue to generate innovative business models and redefine all sorts of industries.

In order to anticipate the needs that will be created by these seismic shifts and achieve sustainable growth, SoftBank Corp. is putting all its efforts to implement both growth strategy and structural reform. Under the “Beyond Carrier” strategy, aiming to achieving further growth, we will continue to strengthen our telecommunications business platform and launch new business models by introducing various cutting-edge technologies and services provided by our group companies. Furthermore, as part of structural reform, we will strive to enhance management efficiency and continuously reduce costs through initiatives that leverage new technologies such as Robotic Process Automation (RPA).

Moreover, SoftBank Corp. announced in May that we have decided to make Yahoo Japan Corp. (“Yahoo Japan”), with the largest user base in Japan's internet market, as a consolidated subsidiary. By combining our strength, 5G network from SoftBank Corp. and big data from Yahoo Japan, we will provide more attractive and convenient services with the smartphones that continue to spread in everyday life. With this new move, I believe we can make great contribution to the society.

The forecasts of consolidated results for the fiscal year ending March 31, 2020 after consolidation of Yahoo Japan are expected to be revenue of ¥4,800 billion with 2.1% increase year on year, operating income of ¥890 billion with 3.5% increase year on year and net income attributable to owners of the parent of ¥480 billion with 3.0% increase year on year*1. The dividends per share is also planned to be 85.00 yen annually under our dividend policy - to pay stable per-share dividends with a guideline dividend payout ratio to net income of approximately 85% on a consolidated basis.

Guided by the “Beyond Carrier” strategy, besides collaborating with Yahoo Japan Corporation, SoftBank Corp. is working closely with the portfolio companies of the SoftBank Vision Fund, which share the same corporate philosophy with us. Together, we are integrating their cutting-edge technologies and business models that have succeeded in the global market and SoftBank Corp.'s telecommunications infrastructure and customer base. By doing so, SoftBank Corp. will evolve into an even more competitive enterprise. Having jointly established WeWork Japan with U.S.-based WeWork, a global provider of co-working spaces (shared offices), we continue to develop business at the fastest pace among other WeWork operations around the world. Through a joint investment between SoftBank Corp. and Yahoo Japan Corporation, we launched the PayPay smartphone payment services business. PayPay is based on the technology of Paytm, India's largest digital payment company. PayPay has rapidly expanded its market share by acquiring more than 7 million registered users in the six-month period following the commencement of service. Moreover, we established OYO Hotels Japan in April 2019 together with OYO Hotels & Homes, which has grown into the world's sixth largest hotel chain in five years since its founding. Along with providing a brand-new hotel experience to travelers in Japan, OYO Hotels Japan will provide new capabilities and value to hotel owners, such as AI-based dynamic pricing and reservation systems. These innovations will contribute to resolutions such as the elimination of personnel shortages and the adoption of optimized pricing in the hotel industry.

SoftBank Corp. continues to ambitiously develop forward-looking business fields in collaboration with various parties, including partners other than the portfolio companies of the SoftBank Vision Fund. In October 2018, we entered into a strategic alliance with Toyota Motor Corporation, and in February 2019 established MONET Technologies Corporation. This company aims to build a sophisticated MaaS*2 platform for an autonomous driving society and facilitate the creation of new mobility services. In March 2019, MONET Technologies Corporation concluded a capital and business alliance agreement with Hino Motors, Ltd. and Honda Motor Co., Ltd. This agreement marks significant progress with our efforts to form a broad-based collaborative framework to collect and share a wide range of data on vehicles, people, objects and other elements. More than 170 local governments and companies have expressed their intent to participate in the MONET Consortium. This consortium is expected to facilitate the creation of new MaaS-related services in a variety of industries and generate a large market in Japan.

In April 2019, we unveiled the High Altitude Platform Station (HAPS) business for the first time in full detail. The HAPS business is an initiative to fly unmanned aircraft in the stratosphere to deliver telecommunications network connectivity across the world. Concurrently, we formed a strategic relationship, including capital ties, with Loon LLC2, a subsidiary of Alphabet Inc. of the U.S. We will also work closely with U.S.-based Facebook, Inc. in this business. No undertaking can be more ambitious and challenging for a telecommunications carrier than to create an environment that provides Internet connectivity anywhere in the world. This business is thus positioned to make a huge positive contribution to society. We will seek to build an ultra-high-altitude telecommunications network in the stratosphere – a hitherto unknown realm. This endeavor means that we will build the vital infrastructure that will connect IoT-related devices, which have continued to increase exponentially around the world. Working closely with innovative partner companies who share the same ambitions, we expect to make significant strides in new businesses in areas such as IoT, big data, and AI.

In these ways, SoftBank Corp. is taking a broad view of the future, simultaneously encompassing the near term to the distant future. We are constantly analyzing global trends and the business environment to ensure that we take full advantage of the evolution of technology and maximize the business opportunities created by this evolution. Based on this analysis, we continue to take strategic steps to drive business growth. In every age, SoftBank Corp. has been a challenger, and has continuously achieved growth by eagerly bringing new technologies onboard. We firmly believe that the best way to survive through these times of paradigm shift is to always remain a challenger.

In closing, I kindly ask our shareholders and other investors for your continued support and understanding of SoftBank Corp. as we endeavor to reach our goals.

May 2019
President & CEO
SoftBank Corp.
Ken Miyauchi

[Notes]
  1. *1
    The completion of making Yahoo Japan a consolidated subsidiary is scheduled in June 2019. The forecasts for fiscal year ended March 31, 2020 are under assumption that the accounting is performed with Yahoo Japan's results consolidated retrospectively to April 1, 2019.
  2. *2
    MaaS stands for Mobility as a Service. By optimizing mobility-related supply and demand through the effective use of data on the movement of vehicles and people, this service seeks to solve social issues concerning mobility.