iPhone powers Softbank profit surge

iPhone powers Softbank profit surge

Nicole McCormick  |   April 28, 2010
Softbank has beaten analyst expectations with a 124% rise in full-year earnings, driven by continued strong iPhone sales at Softbank Mobile.
It posted net profit of 96.72 billion yen ($1.04 billion) and 3.4% higher sales of 2.76 trillion yen.
“There were no notable surprises, but we believe the results confirmed an improvement in fundamentals on all measures, including… a year on year doubling of free cash flow to 390.8 billion yen and a decline in interest-bearing debt to 1.5 trillion yen from a peak of around 2.4 trillion yen,” comments Credit Suisse.
Softbank Mobile’s fiscal 2010 ARPU stood at 4,070 yen, the same as the previous year, but undershooting some forecasts.
“There was some weakness in voice ARPU, but confirmation of a bottoming in the year-on-year trend was positive,” says Credit Suisse.
The bank says Softbank’s results stand in contrast “to those of its rivals, which are seeing a relentless decline in ARPU because of the sharp drop in voice, despite mild growth in data ARPU.”
In the March quarter, Softbank Mobile’s data ARPU surpassed its voice ARPU, helped by the fact that it holds exclusive rights to sell Apple’s iPhone in Japan.
The company left its fiscal 2011 guidance of 500 billion yen unchanged, slightly less than consensus estimates.
Softbank’s 400 billion yen capex projection for fiscal 2011 represents a 180 billion yen year on year increase.
Nicole McCormick


Softbank's rise in revenue

Softbank's rise in revenue has nothing to do with the quality of its network or services and everything to do with the iPhone. I would have never switched from DoCoMo to Softbank if it weren't for the iPhone, but DoCoMo and Au are still thinking "Japanese" and have nothing new to offer. They should be begging Apple to cut them a deal and be willing to pay Softbank for a piece of the of iPhone action. The Google and HTC knockoffs won't cut it compared to Apple's marketing smarts. Considering Softbank has the worst network in Japan and the only thing they have to offer is strong global roaming, with an ARPU of only 4000 yen they are going to find themselves hurting over the next few years unless they really make an effort to upgrade their network. They sat on their old network for years, even knowing that Vodafone was planning on spending a ton of money on upgrading capacity and coverage before they bought them. Softbank still thinks they can run a business with such little revenue per user and cater to the poor crowd, they will find themselves always at number 3, which means last place. After the LTE networks come in, the playing field will again change, and I wouldn't be at all surprised if DoCoMo is in line for the iPhone 4G.

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