Softbank Corp. said Tuesday that group sales surged 91.1 percent year on year to 494.2 billion yen in the first quarter of 2006, with nearly half its revenue coming from new mobile phone subsidiary Vodafone K.K.
The Internet investment firm logged an operating profit of 54.4 billion yen in the three-month period, reversing an operating loss of 3.2 billion yen the previous year. More than half of that came from its mobile phone business, it said.
"We were able to see our sales and profits dramatically improve from the previous year," Softbank President Masayoshi Son told reporters in Tokyo. "With Vodafone under our wing, our sales might add up to as much as 2 trillion yen for the full fiscal year."
Vodafone K.K., previously the Japanese unit of Britain's Vodafone Group PLC, was acquired by Softbank in April for 1.75 trillion yen.
Softbank's net profit came to 1.4 billion yen for the quarter, bringing it back from a net loss of 11.2 billion yen during the same period a year ago.
Son said he was confident the company is well on track for continuous profits, because its broadband and fixed-line telecommunications businesses are now profitable.
To catch up with rival NTT DoCoMo Inc. and KDDI Corp., Softbank will invest nearly 500 billion yen by the end of the year into improving cell phone reception by building networking systems and doubling the number of mobile communications base stations to 46,000 nationwide.
It is also enhancing services to gear up for two critical changes: a new brand name for its cell phone service and the introduction of number portability.
Vodafone K.K. will change its name to Softbank Mobile Corp. on Oct. 1.
Number portability, which will allow customers to switch carriers without changing their phone numbers, begins Nov. 1.