Mobile phone carrier Vodafone K.K., which Softbank Corp. acquired in April, can outperform rivals NTT DoCoMo Inc. and KDDI Corp. by funneling content from Softbank subsidiary Yahoo Japan Corp. into its mobile business, Softbank President Masayoshi Son said Friday.
At Softbank’s annual shareholders’ meeting in Tokyo, Son said mobile phones are not just tools for verbal communication, but versatile devices that allow users to watch TV and exchange information over the Internet.
“Softbank has a higher potential than other (mobile phone companies) because we have Yahoo and other Internet-related companies,” Son told the gathering. “If we can create synergy with the resources of our group, we will be able to beat them.”
Friday’s meeting was Softbank’s first since its purchase of Vodafone K.K. from Britain’s Vodafone Group PLC. A total of 2,272 out of about 440,000 Softbank shareholders attended the meeting, according to company officials.
Son noted that Japan’s 8.7 trillion yen mobile phone market is dominated by just three companies, unlike other businesses, including broadcasting and computers, where hundreds of companies vie for a slice of the pie.
“Although competition is fierce (among mobile communications companies), only three firms are in the market, so it is easier to make a profit,” he said.
Son said Softbank will focus on extending its mobile phone network, offering a wider variety of handsets, providing valuable Internet content and boosting sales before Nov. 1, when customers will be able to switch providers without changing phone numbers.
“I am fully aware that the number portability system is both an opportunity and a risk,” he said.
Many shareholders at the meeting complained that Softbank’s dividend of 2.5 yen per share was too low.
The firm reported a group net profit of 57.5 billion yen in the business year to March on sales of 1.1 trillion yen, up 32 percent, compared with a 59.9 billion yen loss in fiscal 2004.
“When a company is still in a growth phase, I believe it is better to use capital for investment rather than dividends,” Son said in response to the criticism. “After 10 or 20 years, when the market has matured, we will place more importance on dividends.”
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