CEO New Year's Message

Happy New Year.

While daily life returned to normal in 2023 as the impact of COVID-19 subsided, the world saw continued instability with ongoing conflicts in Ukraine and the Gaza Strip. The world economy faced serious headwinds as prices for goods and energy soared, and abnormal climate conditions, or “global boiling” as it was called, continued. Trends like these made it increasingly difficult to forecast for the future.

2023 also saw dramatic advancements in AI. Generative AI technologies, such as ChatGPT, emerged one after another, and in a short span of time they are already deeply embedded into our daily lives. Looking ahead to a society that will coexist with AI, it is no exaggeration to say that 2023 was a critical year that heralded the dawn of this new era. As we strive to transform ourselves from a provider of telecommunications infrastructure into a provider of next-generation social infrastructure, this is especially true for our company.

Earlier we set a goal for a V-shaped recovery for our business and company-wide we have since been pushing forward to achieve it. Thanks to the support of our customers and business partners, and the efforts of all our employees, a V-shaped recovery in our financial results is now within sight. We are continuing to make steady progress toward achieving our Medium-term Management Plan, which goes to the fiscal year ending March 31, 2026 (FY2025).

At our Consumer Business Unit, our smartphone subscriptions exceeded 30 million thanks mainly to subscriber growth at our ‘Y!mobile’ service. By providing our “Pay-toku” price plan for our ‘SoftBank’ service and “Simple2” for our ‘Y!mobile’ service, we will work to further boost revenues. We are also making steady progress in turning around our mobile business sales by strengthening measures to leverage group company synergies, including collaborations with the services of LY Corporation and PayPay Corporation, to improve the smartphone subscriber churn rate.

At our Enterprise Business Unit, in addition to communication services for organizations, we saw steady growth in recurring revenue in cloud, security, and other solutions. Various measures that our Digital Transformation (DX) division, established in 2017, made to expand into new business areas are now materializing. For instance, in the healthcare field, our subsidiary Healthcare Technologies Corp. formed a capital and business alliance with Sumitomo Life Insurance Company, while in the smart city field, we established a joint venture with Nikken Sekkei Ltd to support the construction of autonomous buildings. As a result of these initiatives, we expect to register double-digit growth for our Enterprise Business in the fiscal year ending March 31, 2024 (FY2023), and we have high expectations for future segment income growth.
We also took a major step forward in executing our “Beyond Japan” strategy, which aims to achieve business growth by expanding into global markets. We announced an investment in Cubic Telecom Ltd. of Ireland, which has one of the world's largest IoT platforms for connected cars and SDVs^*, and established a strategic partnership with them. This milestone marks our full-scale entry into the global market for high-value IoT assets, which represents new territory for us, and we will work to grow this business.

Our Technology Unit, which is responsible for our communication network, received accolades from a major third-party research company for SoftBank's communication quality in a network survey report. I believe this evaluation results from the efforts of our Technology Unit team, which has been highly committed to improving network quality and worked hard to construct a highly reliable network. Although the population coverage of our 5G network has already exceeded 92%, we will continue to further improve service quality to meet the growing demand for communication services in the future.

Our Back Office support functions also made major contributions in 2023. By deploying SoftBank's own AI chat application called “SmartAI-Chat” company-wide and participating in generative AI utilization contests held by SoftBank Group Corp., we promoted the use of AI in our work processes. Our Finance division accomplished various initiatives such as the issuance and listing of Japan's first Bond-Type Class Shares to build a financial foundation that supports future business growth. On the ESG front, our various initiatives to contribute to the SDGs, spearheaded by the ESG Planning & Management Office, were rolled out company-wide and recognized by third parties. This included being selected for two consecutive years (2022 and 2023) as a constituent of the World Index of the Dow Jones Sustainability Index, and winning the Grand Prize at the 5th Nikkei SDGs Management Awards.

In the Chinese zodiac, 2024 is the Year of the Wood Dragon, which is said to be a year of major milestones, and one in which efforts bear fruit and dreams come true. The past three years have been challenging for us due to the impact of mobile phone service charge reductions. This difficult period has come to an end, and it is now time for us to go on the offensive. Just as people do, companies go through ups and downs. It is important to give it our all during good times, and even in tough times, it is crucial to sow the seeds for future successes.

To realize the Long-term Vision we announced in May 2023, we will proceed to develop next-generation social infrastructure to support a society that coexists with AI. Using our computing platform that became fully operational in the fall of 2023, various projects we have been envisioning–such as the development of homegrown large language models (LLMs) with 350 billion parameters and the construction of one of Japan's largest AI data centers in Hokkaido–will start being implemented. With the aim of being the company that is most needed by people and society, SoftBank will continue to build next-generation social infrastructure that is essential to Japan's economic growth and the development of a digital society.

[Notes]

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   Abbreviation for Software Defined Vehicles. Mainly refers to vehicles that can update their functions through software updates enabled by Internet connections.

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