Description
In this description softbank group corp. annual report 2015.
What is our approach?
SoftBank Group Corp. ANNUAL REPORT 2015 016
Financial and Operational Data The Fast Read Management Organization Financial Section Corporate Information Group Strategy
Some see the continued maturing of
Japan’s telecommunications market
as a threat to future growth.
Miyauchi Japan’s telecommunications
market certainly is maturing with the
declining birthrate and aging population,
and as such, we have entered an age where
it will be extremely difficult to differentiate
ourselves from our competitors. Between
2008 and 2011, when we had de facto
exclusivity to sell iPhone, we had a tough
job of expanding the number of units sold,
but we excelled in terms of differentiation.
Today, achieving differentiation in mobile
devices is a major challenge. On the other
hand, we have now improved our once-
inferior network to equal or better than
those of competitors. In an era where we
cannot expect to distinguish ourselves in
terms of mobile devices, networks, or even
price plans, we must use all our knowledge
and wisdom to think about how we can
appeal to customers so that they will
choose us.
That said, it would be premature to
conclude that this state of affairs means
that we have less room for growth. I
strongly sense that smart devices really are
useful to us. They allow us to enjoy “smart
lifestyles” in our personal lives as well as
“smart work styles” at work. Smartphones
only account for around 60% of the total
number of handsets in Japan, and there are
currently around 50 million conventional
mobile phones still in service. Even if the
number of subscribers does not grow sig-
nificantly, I believe there is still plenty of
potential to keep growing by promoting
upgrades from conventional mobile
phones to smartphones and by
Domestic Telecommunications Business—Dialogue
Ken Miyauchi
Director, SoftBank Group Corp.
President & CEO, SoftBank Corp.
Kazuhiko Fujihara
Executive vice president & CFO, SoftBank Corp.
expanding the so-called over-the-top
(OTT) business, which offers service
content for smartphones.
Fujihara It was partly to accelerate these
kinds of initiatives that we merged the four
domestic telecommunications companies.
Because circumstances are tough, we aim
to go beyond just creating new services and
increasing management efficiency with this
merger. Our intention is to create an
In April 2015, SoftBank BB, SoftBank Telecom, and Ymobile merged into SoftBank
Mobile, which changed its name to SoftBank Corp. in July 2015. Here, the CEO and
CFO of SoftBank Corp. discuss the prospects for the company going forward.
Aiming to Become the No. 1
Mobile Internet Core Company
Sustainable Growth Is Possible,
Even in a Mature Market
SoftBank Group Corp. ANNUAL REPORT 2015 017
Financial and Operational Data The Fast Read Management Organization Financial Section Corporate Information Group Strategy
Interview with
President and CEO of Sprint
A Group of
Innovative Entrepreneurs
Main Investments
in Fiscal 2014
Internet Companies
Investment Record
Major Subsidiaries
and Associates
Domestic Telecommunications
Business—Dialogue
opportunity for each officer and employee
to rediscover the “essence of SoftBank,”
which is a dedication to being No. 1
and creating new markets and services
based on flexible ideas. Many of the
divisions of SoftBank Mobile, SoftBank BB,
and SoftBank Telecom have been working
together on the same floors and under the
same leaders, so in a way they had already
effectively integrated management. The
merger of these four companies, including
Ymobile, and change of company name is
intended to change the awareness of
their officers and employees, and help to
concentrate the Group’s capabilities.
What kind of company does
SoftBank Corp. aspire to become?
Miyauchi SoftBank Corp. aspires to become
the No. 1 core company in mobile
Internet. By core company, I mean a com-
pany that plays a central role in chang-
ing people’s lifestyles and the world we
live in. Just as Facebook served as a cata-
lyst for revolutions in the Middle East, core
companies are inspiring major social move-
ments and rapidly changing our world. We
have two major assets: our customer base
of about 45 million people and our mobile
and fixed-line networks. We will use our
advanced network to provide these custom-
ers with a series of innovative services that
can change their lifestyles.
Fujihara In terms of operating results, the
Company achieved new record consoli-
dated EBITDA for 10 consecutive years
from fiscal 2004 through to fiscal 2014.
We plan to continue this trend at
SoftBank Corp. by realizing steady profit
growth. Our capital expenditure has also
peaked out, and we are now starting
to generate free cash flow. So we are
ready to support our future global chal-
lenges from a financial perspective.
For consolidated financial reporting, we
will consider creating a reportable segment
consisting of SoftBank Corp. and WCP to
make it easier to look at the results from the
perspective of investors.
Smartphones have been cited as
one of the drivers of SoftBank
Corp.’s growth.
Miyauchi Previously, we emphasized net
subscriber additions for the overall mobile
communications services, but now we have
switched our focus completely to a ded-
icated pursuit of net additions in the
number of smartphones. They have high
ARPU and potential for expanding data
revenue, and by steadily growing the
number of smartphone subscribers year by
year, we can certainly increase service rev-
enues and grow profits. If we invest these
profits into our network and OTT services,
they will draw more new customers in turn,
creating a virtuous cycle. And, if we
increase the number of smartphone sub-
scribers, we will also be able to take advan-
tage of peripheral business opportunities
such as wearable devices and OTT services.
Fujihara To get the entire company focused
on pursuing net additions in smartphone
subscribers, we are promoting “visualization”
A Company-wide Effort to Expand
Smartphone Net Additions
Becoming a Company that Can Change People’s Lifestyles
of all our indicators. When performance is
expressed in figures, it becomes specific, and
we can begin to discuss who will achieve
how much and by when. As long as we can
analyze this data to back our arguments
and foster healthy competition between
SoftBank Group Corp. ANNUAL REPORT 2015 018
Financial and Operational Data The Fast Read Management Organization Financial Section Corporate Information Group Strategy
Interview with
President and CEO of Sprint
A Group of
Innovative Entrepreneurs
Main Investments
in Fiscal 2014
Internet Companies
Investment Record
Major Subsidiaries
and Associates
Domestic Telecommunications
Business—Dialogue
divisions, I believe we can begin to draw
out the essence of SoftBank.
How will you promote links between
mobile communications services and
other services?
Fujihara The first example I can give is the
Smartphone & Internet Bundle Discount,
which we offer to customers who sub-
scribe to both the SoftBank Hikari optical
fiber services, based on the wholesale
fiber-optic connection of NTT East and NTT
West, and mobile communications ser-
vices. Previously, only KDDI offered these
bundle discounts, and since these benefits
have become a differentiation factor, we
also began to provide them in March
2015. SoftBank Corp. has strong expertise
in fixed-line broadband services, acquired
through providing services that incorporate
its own ISP into ADSL services and NTT
East and NTT West’s FLET’S Hikari service.
We believe we can leverage this know-
how to roll out the service in a single
stroke. We also expect the introduction of
bundle discounts to improve the churn
rate of our mobile communications ser-
vices over the medium term. Our churn
rate continues to be higher than competi-
tors, although we can also look at this as
meaning that there is plenty of room for
improvement.
Miyauchi Bundle discount services are cer-
tainly important and we will undoubtedly
be focusing our efforts in that area.
However, KDDI and NTT DOCOMO also
have offerings that are almost identical to
ours. If we go head-to-head with them in
this area, we risk igniting a second cash-
back war like the one that occurred in the
fourth quarter of fiscal 2013.
We should aim to make users feel they
are saving money and enjoying real conve-
nience by providing comprehensive services
that include not only mobile communica-
tions and optical fiber services, but also the
OTT services. So in that sense, I think that
developing OTT services and linking them
with communications services is going to
be crucial.
Our first offering in this area is the ser-
vice we announced in May 2015, linking
users’ Yahoo! JAPAN IDs with their
SoftBank smartphones. The service ensures
the safety of users while allowing them to
enjoy a smooth shopping experience on
their smartphones. I believe this new
measure could be called the “mobile
e-commerce revolution.” Looking ahead,
we will not stop at e-commerce, but
continue into other fields such as movies
and music with the aim of creating a
world where everything can be done
on a single smart device.
Fujihara I can clearly remember when we
launched the ADSL business in 2001,
Mr. Son, the current chairman of SoftBank
Corp., said, “We are like a railway com-
pany.” First, we set up the infrastructure
that corresponds to the railroad tracks.
Next, we develop portals, which are like the
railway stations where people gather, and
then we create services and content, which
are the train station facilities and commer-
cial districts. In this way, we are completing
a three-tiered business model. Japan’s
telecommunications environment must be
the best in the world among countries of a
similar scale. In the past, we followed a
so-called “time-machine management”
business strategy of introducing the latest
services from the U.S., which was a leader
in terms of the Internet. But now that we
have this advanced telecommunications
environment, I believe that we ourselves
can create the next generation of
Differentiating Ourselves through the Mobile
E-commerce Revolution
SoftBank Group Corp. ANNUAL REPORT 2015 019
Financial and Operational Data The Fast Read Management Organization Financial Section Corporate Information Group Strategy
Interview with
President and CEO of Sprint
A Group of
Innovative Entrepreneurs
Main Investments
in Fiscal 2014
Internet Companies
Investment Record
Major Subsidiaries
and Associates
Domestic Telecommunications
Business—Dialogue
services and business models and pro-
mote them throughout the world.
Miyauchi Our collaboration with Yahoo
Japan holds the potential to become one
such global service originating from Japan.
It represents an enormous business oppor-
tunity. The test will be in how big an
impact the service makes on our approxi-
mately 45 million customers, and how
great a convenience they feel it provides
them. The success or failure of this initia-
tive will be a milestone on our journey
towards becoming the No. 1 core company
in mobile Internet.
To finish, please share your thoughts
on preparing the foundations for
future growth.
Miyauchi With the integration of the four
companies, the supervisory roles of the
senior management team and executives
have changed dramatically. For example,
the three executive vice presidents who had
been responsible for sales for many years
have new roles: Yasuyuki Imai, who was
responsible for corporate sales, will take the
lead on technology, product & marketing;
Jun Shimba, who handled sales to electronics
retail stores, will take over the enterprise
business; and Shuichi Kukita, previously in
charge of dealer sales, will be responsible for
consumer sales, which will combine dealer
and electronics retail store sales.
These sudden changes in the supervisory
assignments of the management team are
intended to nip any onset of “big company
disease” in the bud. We have achieved
our current scale with net sales of over ¥3
trillion and some 18,000 employees, but I
am afraid to say that we are starting to see
the first unwelcome signs of interdivisional
barriers appearing.
Fujihara Once a company develops big
company disease, it becomes extremely
difficult to grow profits. It is no easy feat
to earn a profit of ¥10 billion in any given
domain, but once people start to see it as
simply a fraction of the whole company’s
profit of several hundred billion, they end
up trivializing that ¥10 billion and losing it.
To prevent this sort of thing from
happening, we plan to shape our organiza-
tion into one that elicits in each person and
division a sense of hard-headed tenacity
over profits and that always achieves its
overall targets.
Miyauchi To ensure that we can continue
to grow, we must be an organization that
constantly considers things from the
perspective of the customer. To entrench
this point of view in every aspect of our
organization, we must make it function by
using ICT to ensure that information and
feedback from our user contact points is
relayed quickly to the management team and
related divisions. Another very important
Customers’ Perspective and Response to Technology Changes are Crucial
aspect is to remain sensitive to changes
in technology. It is especially true of the
ICT world that even the most outstanding
business can be completely undone by the
introduction of new technology. Survival
requires repeated self-transformation in
response to the changes in technology. I
am certain that we can continue to trans-
form ourselves in this way.
SoftBank Group Corp. ANNUAL REPORT 2015 020
Financial and Operational Data The Fast Read Management Organization Financial Section Corporate Information Group Strategy
Interview with
President and CEO of Sprint
A Group of
Innovative Entrepreneurs
Main Investments
in Fiscal 2014
Internet Companies
Investment Record
Major Subsidiaries
and Associates
Domestic Telecommunications
Business—Dialogue
The SoftBank Corp. Management Team Heading the Domestic Telecommunications Business
United in Our Aim to Become the No. 1 Mobile Internet Core Company
* Junichi Miyakawa, executive vice president responsible for the technology unit, global telecom business, is overseeing the network and technology organization of Sprint as its technical chief operating officer.
* Titles are as of July 1, 2015.
Executive vice president
Jun Shimba
Enterprise business unit head
Executive vice president
Eric Gan
Business development unit
head and Ymobile business
President & CEO
Ken Miyauchi
Executive vice president & CFO
Kazuhiko Fujihara
Finance unit head
Executive vice president
Yasuyuki Imai
Product & marketing unit head
and technology unit head
Executive vice president
Shuichi Kukita
Consumer sales unit head
Executive vice president
Yoshimitsu Goto
SoftBank Group Corp. ANNUAL REPORT 2015 021
Financial and Operational Data The Fast Read Management Organization Financial Section Corporate Information Group Strategy
Interview with
President and CEO of Sprint
A Group of
Innovative Entrepreneurs
Main Investments
in Fiscal 2014
Internet Companies
Investment Record
Major Subsidiaries
and Associates
Domestic Telecommunications
Business—Dialogue
Becoming the
Easiest Carrier to
Do Business With
Marcelo Claure
President and CEO, Sprint
First Phase of Turnaround Successful
Looking back on my first year at Sprint I am very proud of the team for successfully
executing phase 1 of our turnaround strategy and stopping the decline in our overall
business. During this phase, we primarily focused on four overarching priorities:
improving our customer acquisition by revamping our offers and advertising, listening
to customers to understand why they were leaving Sprint, improving the network
experience by focusing on optimization and expanding LTE coverage, and simplifying
Interview with
President and CEO of Sprint
Marcelo Claure founded Brightstar in 1997 and grew the company into the largest
specialized wireless distributor in the world with US$10.5 billion in gross revenue
(for the year ended December 31, 2013). Throughout his career, he has received
several Entrepreneur of the Year and CEO of the Year awards. He was appointed
president and CEO of Sprint on August 11, 2014.
SoftBank Group Corp. ANNUAL REPORT 2015 022
Financial and Operational Data The Fast Read Management Organization Financial Section Corporate Information Group Strategy
Domestic Telecommunications
Business—Dialogue
A Group of
Innovative Entrepreneurs
Main Investments
in Fiscal 2014
Internet Companies
Investment Record
Major Subsidiaries
and Associates
Interview with
President and CEO of Sprint
10–12
‘13
1–3
‘14
4–6 7–9 10–12 1–3
‘15 CY
Net Subscriber Additions (Sprint platform postpaid subscribers)
+30k
+211k
Marcelo’s
appointment
the customer experience. This resulted in our highest ever retail*
1
gross additions on
the Sprint platform, and the highest ever prime mix of postpaid gross additions in the
October to December 2014 period. In addition, we saw third-party validation of our
network improvements from RootMetrics
®
and Nielsen, and our net promoter score*
2
started to show improvement.
Onward to Phase Two
From January 2015, we shifted gears to the next phase of our transformation, which is
focused on addressing the basics to augment the operational effectiveness of the
business. This included refining how we listen to our customers’ needs and making
our network more consistent and reliable. As a result, during the January to March
period we had our highest total*
3
net additions in nearly three years, postpaid churn
improved remarkably, and the network and customer experience continued to improve.
We are pleased with the progress so far, and our goal remains to have positive
postpaid phone net additions, which we expect to achieve during 2015. Churn is the
only way to truly measure customer satisfaction, and while we are pleased with the
dramatic improvement we have seen so far, we continue to consider improving churn
a top priority which will enable us to retain customers longer and reduce acquisition
costs. We have continued to make progress in our goal of providing a network that
delivers the consistent reliability, capacity, and speed that customers demand. Besides
a continuous focus on optimization, we have also expanded the breadth and depth of
our LTE network as it reached nearly 280 million people at the end of March 2015, and
the continued expansion of the 800MHz and 2.5GHz LTE overlays has greatly improved
overall network performance. This progress was recognized by RootMetrics,
®
and in
their second-half 2014 testing, Sprint’s overall network score improved to third place
with notable progress in reliability as well as call and text performance.
*
1
Total of prepaid and postpaid subscribers.
*
2
Net promoter score: metric used to measure customer loyalty.
*
3
Total of prepaid, postpaid, and wholesale & affiliate subscribers.
Strategies to Drive Further Long-term Growth
Now that our business performance has started to improve, we are spending more
time developing and implementing strategies to offer customers a differentiated
experience to drive long-term profitable growth. These strategies include the
development of simple and compelling offers to attract quality customers, continued
aggressive marketing, and adding points of distribution. Furthermore, we are
continuing to invest to unlock the true potential of our network infrastructure and
spectrum portfolio, and in May 2015, we announced our expectation for accrued
capital expenditures to be approximately US$5 billion*
4
for fiscal 2015. We continue
our drive toward having the lowest cost to serve and we are seeing the early fruits of
these efforts, which will fund our turnaround initiatives. In addition, we are already
scoping out initiatives to eliminate costs over the next few years as we continue to
reinvent how we operate and focus our spending around acquiring, retaining, and
serving customers. Ultimately, we must deliver a simplified customer experience across
all touch points and become the easiest carrier to do business with.
*
4
Excluding the impact of leased devices sold through indirect channels.
SoftBank Group Corp. ANNUAL REPORT 2015 023
Financial and Operational Data The Fast Read Management Organization Financial Section Corporate Information Group Strategy
Domestic Telecommunications
Business—Dialogue
A Group of
Innovative Entrepreneurs
Main Investments
in Fiscal 2014
Internet Companies
Investment Record
Major Subsidiaries
and Associates
Interview with
President and CEO of Sprint
A Group of Innovative Entrepreneurs
To ensure that our business keeps growing for centuries to come, we must not only
transform the businesses we operate right now, but create and expand a group of
innovative entrepreneurs, providing them with comprehensive support and growing
with them.
Here we introduce new companies that joined the Group in fiscal 2014 and our
investment track record to date.
SoftBank Group Corp. ANNUAL REPORT 2015 024
Financial and Operational Data The Fast Read Management Organization Financial Section Corporate Information Group Strategy
Domestic Telecommunications
Business—Dialogue
Interview with
President and CEO of Sprint
Main Investments
in Fiscal 2014
Internet Companies
Investment Record
Major Subsidiaries
and Associates
A Group of
Innovative Entrepreneurs
Date of Announcement Investee Location Business Overview Investment Overview*
October 3, 2014
U.S.
Ownership, production, and distribution
of content in the felds of flm, television
and digital media, and comics
Total investment of US$250 million
October 14, 2014
U.S.
Operation of an online video
distribution site
Acquisition
October 22, 2014
Indonesia
Operation of a leading online
marketplace in Indonesia
Total investment of US$100 million, primarily
from the Company, as well as Sequoia
Capital and existing shareholders such as SB
Pan Asia Fund
October 28, 2014
India
Operation of a leading taxi-booking
platform in India
Total investment of US$210 million, led by the
Company along with existing shareholders
October 28, 2014
India
Operation of a leading online
marketplace in India
Total investment of US$627 million
December 4, 2014
Singapore
Operation of a leading taxi-booking
platform in Southeast Asia
Total investment of US$250 million
December 16, 2014
India
Operation of a house-hunting platform
in India
Total investment of US$90 million, led by the
Company along with existing shareholders such
as Falcon Edge
January 15, 2015
China
Operation of a leading taxi-booking
platform in China
Total investment of US$600 million, led by the
Company along with existing shareholders such
as Alibaba and Tiger Global
* All investment overviews are as of the dates of their announcements.
Main Investments in Fiscal 2014
SoftBank Group Corp. ANNUAL REPORT 2015 025
Financial and Operational Data The Fast Read Management Organization Financial Section Corporate Information Group Strategy
Domestic Telecommunications
Business—Dialogue
Interview with
President and CEO of Sprint
A Group of
Innovative Entrepreneurs
Internet Companies
Investment Record
Major Subsidiaries
and Associates
Main Investments
in Fiscal 2014
Company Name
Accumulated
Investment
(Billions of yen)
Market Value /
Accumulated Return
(Billions of yen)
Investment Period
(Years) Date of Initial Investment Date of Valuation IRR Return (Times)
Alibaba Group Holding Limited 10.5 7,993.4 15 Feb. 2000 Mar. 2015 76% 761
Yahoo Japan Corporation 7.7 1,358.9 19 Jan. 1996 Mar. 2015 78% 176
Yahoo! Inc. 54.7 350.9 7 Sept. 1995 Nov. 2002 30% 6
GungHo Online Entertainment, Inc. 29.6 217.7 16 Oct. 1999 Mar. 2015 41% 7
Trend Micro Incorporated 8.5 136.9 3 Dec. 1996 Mar. 2000 153% 16
SBI Holdings, Inc. 6.0 136.2 7 July 1999 Aug. 2006 56% 23
SoftBank Technology Corp. 3.3 87.8 18 Apr. 1997 Mar. 2015 665% 27
UTStarcom Holdings Corp. 1.0 59.6 18 Oct. 1995 Jan. 2014 25% 60
Yahoo! group companies in Europe and South Korea 2.3 58.8 8 Oct. 1997 Nov. 2005 50% 26
Betfair Group plc 51.3 43.1 6 Apr. 2006 Mar. 2012 –3% 0.8
Renren Inc. 41.9 39.1 7 Apr. 2008 Mar. 2015 –1% 0.9
Cisco Systems K.K. 1.8 35.3 6 Oct. 1994 Jan. 2001 65% 20
SKY Perfect Communications Inc. 14.6 27.9 5 Dec. 1996 Mar. 2002 19% 2
PPLive Corporation 20.7 27.8 3 Jan. 2011 Dec. 2013 10% 1
cyber communications inc. 0.5 23.0 8 Apr. 1999 June 2007 61% 46
Broadmedia Corporation 4.5 14.0 19 Sept. 1996 Mar. 2015 24% 3
Key3Media Group, Inc. 22.8 13.0 2 Aug. 2000 Dec. 2002 –24% 0.6
Zynga Inc. 13.2 8.8 3 Apr. 2010 Aug. 2013 –12% 0.7
Scigineer Inc. 2.3 6.8 0.5 Oct. 2014 Mar. 2015 19,131% 3
CNET Networks, Inc. 51.4 5.0 2 Oct. 2000 May 2002 –69% 0.1
ITmedia Inc. 1.7 4.8 15 Dec. 1999 Mar. 2015 9% 3
Vector Inc. 1.2 4.6 16 Mar. 1999 Mar. 2015 10% 4
Asia Global Crossing Ltd. 36.5 0 2 Oct. 2000 Nov. 2002 –100% 0
Total 387.8 10,653.5 Average 9 years 45% 27
(Notes)
1. Aggregation of Internet-related company investments with accumulated investment or accumulated return of ¥10 billion or more after SoftBank Corp. (currently SoftBank Group Corp.) became a pure holding company in October 1999.
Also includes listed subsidiaries and affiliates that it is currently investing in (excludes investments of these listed subsidiaries and affiliates).
2. Names of companies from which investments have been recovered are the names as of the date when their shares were sold.
Internet Companies Investment Record
As of March 31, 2015
SoftBank Group Corp. ANNUAL REPORT 2015 026
Financial and Operational Data The Fast Read Management Organization Financial Section Corporate Information Group Strategy
Domestic Telecommunications
Business—Dialogue
Interview with
President and CEO of Sprint
A Group of
Innovative Entrepreneurs
Main Investments
in Fiscal 2014
Major Subsidiaries
and Associates
Internet Companies
Investment Record
Subsidiaries
Company Name Listed Market Fiscal Year-end
Capital
(Millions of yen) Voting Rights (%) Principal Business Activities
Mobile Communications Segment
SoftBank Mobile Corp.*
1
Mar. 177,251 100 Mobile communications services, sale of mobile devices
BB Mobile Corp. Mar. 315,155 100 Holding company
Ymobile Corporation*
1
*
2
Mar. 43,436 99.7 Mobile broadband services, development and sale of communications devices, ADSL
services, PHS-based mobile communications services
GungHo Online Entertainment, Inc.*
3
TSE JASDAQ
Standard
Dec. 5,339 40.2
[18.6]*
4
Production and distribution of online games for smartphones and other devices
Wireless City Planning Inc. Mar. 18,899 33.3 Planning and provision of mobile broadband services
SoftBank Commerce & Service Corp.*
5
Mar. 500 100 Manufacture, distribution, and sale of IT-related products, IT-related services
Brightstar Global Group Inc. Mar. US$2K 100 Holding company
Brightstar Corp. Dec. US$0K 100 Mobile device distribution, supply chain solutions, handset protection and insurance,
buy-back and trade-in, omnichannel solutions and financial services
GRAVITY Co., Ltd.*
6
NASDAQ Dec. 354 59.3 Planning, development, and operations of online games
Supercell Oy*
7
Dec. €3K 53.7 Production and distribution of mobile game applications
Sprint Segment
Sprint Corporation NYSE Mar. US$39,674K 79.5 Holding company
Sprint Communications, Inc. Mar. US$1,180,954K 100 Mobile communications services, sale of mobile devices and accessories, fixed-line
telecommunications services
Fixed-line Telecommunications Segment
SoftBank BB Corp.*
1
Mar. 100,000 100 ADSL services, IP telephony services
SoftBank Telecom Corp.*
1
Mar. 100 100 Fixed-line telephone services, data transmission and leased-line services
*
1
On April 1, 2015 SoftBank BB, SoftBank Telecom, and Ymobile, merged into SoftBank Mobile. On July 1, 2015, SoftBank Mobile changed its company name to SoftBank Corp.
*
2
eAccess merged with WILLCOM on June 1, 2014 and changed its company name to Ymobile on July 1, 2014.
*
3
As a result of the completion of a tender offer by GungHo for its shares on June 1, 2015, and other factors, GungHo became an equity method associate of SoftBank Corp. (currently SoftBank Group Corp.). Please refer to page 190 for details.
*
4
Holdings by parties in close relationships, etc., with SoftBank Corp. (currently SoftBank Group Corp.)
*
5
SoftBank BB Corp., divided its commerce and service business and newly established SoftBank C&S on April 1, 2014. All shares of SoftBank C&S held by SoftBank Corp. (currently SoftBank Group Corp.) were transferred to a wholly owned subsidiary of Brightstar.
*
6
Since GRAVITY Co., Ltd.’s parent company GungHo is an equity method associate, as noted in *
3
, as of the publication of this annual report, GRAVITY is not a subsidiary of SoftBank Corp. (currently SoftBank Group Corp.).
*
7
The Company purchased additional shares of Supercell from existing shareholders on May 29, 2015. After this transaction, the Company’s share of voting rights stands at 77.8%.
Major Subsidiaries and Associates
SoftBank Group Corp. ANNUAL REPORT 2015 027
Financial and Operational Data The Fast Read Management Organization Financial Section Corporate Information Group Strategy
Domestic Telecommunications
Business—Dialogue
Interview with
President and CEO of Sprint
A Group of
Innovative Entrepreneurs
Main Investments
in Fiscal 2014
Internet Companies
Investment Record
Major Subsidiaries
and Associates
Company Name Listed Market Fiscal Year-end
Capital
(Millions of yen) Voting Rights (%) Principal Business Activities
Internet Segment
Yahoo Japan Corporation TSE First Section Mar. 8,281 43.0 Operation of the Yahoo ! JAPAN portal, sale of Internet advertising, operation of
e-commerce sites, membership services
IDC Frontier Inc. Mar. 100 100 Data center business
ValueCommerce Co., Ltd. TSE First Section Dec. 1,728 50.6 Ad affiliate marketing service, StoreMatch online advertising distribution service
Others
Mobiletech Corporation Sept. 315,966 100 Holding company
SB Energy Corp. Mar. 746 100 Generation of electricity from renewable energy sources, supply and sale of electricity
SoftBank Payment Service Corp. Mar. 450 100 Settlement services, card services and related services
Fukuoka SoftBank HAWKS Corp. Feb. 100 100 Ownership of professional baseball team, operation of baseball games, management
and maintenance of baseball stadium and other sports facilities, distribution of video,
voice and data content via media
SoftBank Robotics Holdings Corp. Mar. 10 100 Planning, development, and sale of robots
SBBM Corporation Mar. 10 100 Holding company
ITmedia Inc. TSE Mothers Mar. 1,670 57.9 Operation of comprehensive IT information site ITmedia, etc.
SoftBank Technology Corp. TSE First Section Mar. 645 55.4 Solutions and services for online businesses
Vector Inc. TSE JASDAQ
Standard
Mar. 1,007 52.4 Operation, sales, and marketing of online games, software downloads, advertising
SFJ Capital Limited The Cayman Islands
Stock Exchange
May / Nov. 200,000 100 Procurement of funds by issuing preferred (restricted voting) securities
SB Group US, Inc. Mar. US$0K 100 Holding company
SB CHINA HOLDINGS PTE LTD Mar. US$46K 100 Holding company
SoftBank Ventures Korea Corp. Dec. KRW18,000M 100 Holding company
SoftBank Korea Corp. Dec. KRW2,200M 100 Holding company
Starburst I, Inc. Mar. US$216K 100 Holding company
SoftBank Holdings Inc. Mar. US$8K 100 Holding company
SoftBank America Inc. Mar. US$0K 100 Holding company
STARFISH I PTE. LTD. Mar. 76,994 100 Holding company
SB Pan Pacific Corporation Mar. 48,248 100 Holding company
Hayate Corporation Mar. 35,960 100 Holding company
SoftBank Group Corp. ANNUAL REPORT 2015 028
Financial and Operational Data The Fast Read Management Organization Financial Section Corporate Information Group Strategy
Domestic Telecommunications
Business—Dialogue
Interview with
President and CEO of Sprint
A Group of
Innovative Entrepreneurs
Main Investments
in Fiscal 2014
Internet Companies
Investment Record
Major Subsidiaries
and Associates
Associates
Company Name Listed Market Fiscal Year-end
Capital
(Millions of yen) Voting Rights (%) Principal Business Activities
Internet Segment
ASKUL Corporation TSE First Section May 20,941 41.9 Mail order sales of stationary, office products, services, etc.
The Japan Net Bank, Limited Mar. 37,250 41.2 Banking business
BOOKOFF CORPORATION LIMITED TSE First Section Mar. 3,652 15.0 Auction service and reuse business
Others
Scigineer Inc. TSE Mothers June 766 33.2 Provision of Internet marketing support services using the personalized engine
“deqwas” for e-commerce business operators and retailers
Bharti SoftBank Holdings Pte. Ltd. Mar. US$63,096K 50.0 Holding company
Renren Inc. NYSE Dec. US$1,025K 43.0 Investor company of company operating Renren.com SNS site in China
Alibaba Group Holding Limited NYSE Mar. CNY1,000K 31.9 Investor company of companies operating e-commerce sites Alibaba.com,
Taobao. com, and Tmall.com
InMobi Pte. Ltd. Mar. US$703K 35.2 Mobile advertising services
Main Overseas Fund Data
Fund Name Category*
8
Principal Investment Region Fund Size Commitment Ownership*
9
(%)
Subsidiaries
SoftBank Ranger Venture Investment Partnership A South Korea KRW18,366M KRW18,366M 100
SoftBank Capital Fund ’10 L.P. A U.S. US$122,449K US$120,000K 98.0
Associates
SoftBank US Ventures VI L.P. B U.S. US$626,881K US$608,333K 97.0
SoftBank Capital Technology Fund III L.P. B U.S. US$232,750K US$131,000K 56.3
*
8
A: funds managed by the Company; B: funds other than category A.
*
9
Holdings as percentage of fund size.
SoftBank Group Corp. ANNUAL REPORT 2015 029
Financial and Operational Data The Fast Read Management Organization Financial Section Corporate Information Group Strategy
Domestic Telecommunications
Business—Dialogue
Interview with
President and CEO of Sprint
A Group of
Innovative Entrepreneurs
Main Investments
in Fiscal 2014
Internet Companies
Investment Record
Major Subsidiaries
and Associates
doc_655387665.pdf
In this description softbank group corp. annual report 2015.
What is our approach?
SoftBank Group Corp. ANNUAL REPORT 2015 016
Financial and Operational Data The Fast Read Management Organization Financial Section Corporate Information Group Strategy
Some see the continued maturing of
Japan’s telecommunications market
as a threat to future growth.
Miyauchi Japan’s telecommunications
market certainly is maturing with the
declining birthrate and aging population,
and as such, we have entered an age where
it will be extremely difficult to differentiate
ourselves from our competitors. Between
2008 and 2011, when we had de facto
exclusivity to sell iPhone, we had a tough
job of expanding the number of units sold,
but we excelled in terms of differentiation.
Today, achieving differentiation in mobile
devices is a major challenge. On the other
hand, we have now improved our once-
inferior network to equal or better than
those of competitors. In an era where we
cannot expect to distinguish ourselves in
terms of mobile devices, networks, or even
price plans, we must use all our knowledge
and wisdom to think about how we can
appeal to customers so that they will
choose us.
That said, it would be premature to
conclude that this state of affairs means
that we have less room for growth. I
strongly sense that smart devices really are
useful to us. They allow us to enjoy “smart
lifestyles” in our personal lives as well as
“smart work styles” at work. Smartphones
only account for around 60% of the total
number of handsets in Japan, and there are
currently around 50 million conventional
mobile phones still in service. Even if the
number of subscribers does not grow sig-
nificantly, I believe there is still plenty of
potential to keep growing by promoting
upgrades from conventional mobile
phones to smartphones and by
Domestic Telecommunications Business—Dialogue
Ken Miyauchi
Director, SoftBank Group Corp.
President & CEO, SoftBank Corp.
Kazuhiko Fujihara
Executive vice president & CFO, SoftBank Corp.
expanding the so-called over-the-top
(OTT) business, which offers service
content for smartphones.
Fujihara It was partly to accelerate these
kinds of initiatives that we merged the four
domestic telecommunications companies.
Because circumstances are tough, we aim
to go beyond just creating new services and
increasing management efficiency with this
merger. Our intention is to create an
In April 2015, SoftBank BB, SoftBank Telecom, and Ymobile merged into SoftBank
Mobile, which changed its name to SoftBank Corp. in July 2015. Here, the CEO and
CFO of SoftBank Corp. discuss the prospects for the company going forward.
Aiming to Become the No. 1
Mobile Internet Core Company
Sustainable Growth Is Possible,
Even in a Mature Market
SoftBank Group Corp. ANNUAL REPORT 2015 017
Financial and Operational Data The Fast Read Management Organization Financial Section Corporate Information Group Strategy
Interview with
President and CEO of Sprint
A Group of
Innovative Entrepreneurs
Main Investments
in Fiscal 2014
Internet Companies
Investment Record
Major Subsidiaries
and Associates
Domestic Telecommunications
Business—Dialogue
opportunity for each officer and employee
to rediscover the “essence of SoftBank,”
which is a dedication to being No. 1
and creating new markets and services
based on flexible ideas. Many of the
divisions of SoftBank Mobile, SoftBank BB,
and SoftBank Telecom have been working
together on the same floors and under the
same leaders, so in a way they had already
effectively integrated management. The
merger of these four companies, including
Ymobile, and change of company name is
intended to change the awareness of
their officers and employees, and help to
concentrate the Group’s capabilities.
What kind of company does
SoftBank Corp. aspire to become?
Miyauchi SoftBank Corp. aspires to become
the No. 1 core company in mobile
Internet. By core company, I mean a com-
pany that plays a central role in chang-
ing people’s lifestyles and the world we
live in. Just as Facebook served as a cata-
lyst for revolutions in the Middle East, core
companies are inspiring major social move-
ments and rapidly changing our world. We
have two major assets: our customer base
of about 45 million people and our mobile
and fixed-line networks. We will use our
advanced network to provide these custom-
ers with a series of innovative services that
can change their lifestyles.
Fujihara In terms of operating results, the
Company achieved new record consoli-
dated EBITDA for 10 consecutive years
from fiscal 2004 through to fiscal 2014.
We plan to continue this trend at
SoftBank Corp. by realizing steady profit
growth. Our capital expenditure has also
peaked out, and we are now starting
to generate free cash flow. So we are
ready to support our future global chal-
lenges from a financial perspective.
For consolidated financial reporting, we
will consider creating a reportable segment
consisting of SoftBank Corp. and WCP to
make it easier to look at the results from the
perspective of investors.
Smartphones have been cited as
one of the drivers of SoftBank
Corp.’s growth.
Miyauchi Previously, we emphasized net
subscriber additions for the overall mobile
communications services, but now we have
switched our focus completely to a ded-
icated pursuit of net additions in the
number of smartphones. They have high
ARPU and potential for expanding data
revenue, and by steadily growing the
number of smartphone subscribers year by
year, we can certainly increase service rev-
enues and grow profits. If we invest these
profits into our network and OTT services,
they will draw more new customers in turn,
creating a virtuous cycle. And, if we
increase the number of smartphone sub-
scribers, we will also be able to take advan-
tage of peripheral business opportunities
such as wearable devices and OTT services.
Fujihara To get the entire company focused
on pursuing net additions in smartphone
subscribers, we are promoting “visualization”
A Company-wide Effort to Expand
Smartphone Net Additions
Becoming a Company that Can Change People’s Lifestyles
of all our indicators. When performance is
expressed in figures, it becomes specific, and
we can begin to discuss who will achieve
how much and by when. As long as we can
analyze this data to back our arguments
and foster healthy competition between
SoftBank Group Corp. ANNUAL REPORT 2015 018
Financial and Operational Data The Fast Read Management Organization Financial Section Corporate Information Group Strategy
Interview with
President and CEO of Sprint
A Group of
Innovative Entrepreneurs
Main Investments
in Fiscal 2014
Internet Companies
Investment Record
Major Subsidiaries
and Associates
Domestic Telecommunications
Business—Dialogue
divisions, I believe we can begin to draw
out the essence of SoftBank.
How will you promote links between
mobile communications services and
other services?
Fujihara The first example I can give is the
Smartphone & Internet Bundle Discount,
which we offer to customers who sub-
scribe to both the SoftBank Hikari optical
fiber services, based on the wholesale
fiber-optic connection of NTT East and NTT
West, and mobile communications ser-
vices. Previously, only KDDI offered these
bundle discounts, and since these benefits
have become a differentiation factor, we
also began to provide them in March
2015. SoftBank Corp. has strong expertise
in fixed-line broadband services, acquired
through providing services that incorporate
its own ISP into ADSL services and NTT
East and NTT West’s FLET’S Hikari service.
We believe we can leverage this know-
how to roll out the service in a single
stroke. We also expect the introduction of
bundle discounts to improve the churn
rate of our mobile communications ser-
vices over the medium term. Our churn
rate continues to be higher than competi-
tors, although we can also look at this as
meaning that there is plenty of room for
improvement.
Miyauchi Bundle discount services are cer-
tainly important and we will undoubtedly
be focusing our efforts in that area.
However, KDDI and NTT DOCOMO also
have offerings that are almost identical to
ours. If we go head-to-head with them in
this area, we risk igniting a second cash-
back war like the one that occurred in the
fourth quarter of fiscal 2013.
We should aim to make users feel they
are saving money and enjoying real conve-
nience by providing comprehensive services
that include not only mobile communica-
tions and optical fiber services, but also the
OTT services. So in that sense, I think that
developing OTT services and linking them
with communications services is going to
be crucial.
Our first offering in this area is the ser-
vice we announced in May 2015, linking
users’ Yahoo! JAPAN IDs with their
SoftBank smartphones. The service ensures
the safety of users while allowing them to
enjoy a smooth shopping experience on
their smartphones. I believe this new
measure could be called the “mobile
e-commerce revolution.” Looking ahead,
we will not stop at e-commerce, but
continue into other fields such as movies
and music with the aim of creating a
world where everything can be done
on a single smart device.
Fujihara I can clearly remember when we
launched the ADSL business in 2001,
Mr. Son, the current chairman of SoftBank
Corp., said, “We are like a railway com-
pany.” First, we set up the infrastructure
that corresponds to the railroad tracks.
Next, we develop portals, which are like the
railway stations where people gather, and
then we create services and content, which
are the train station facilities and commer-
cial districts. In this way, we are completing
a three-tiered business model. Japan’s
telecommunications environment must be
the best in the world among countries of a
similar scale. In the past, we followed a
so-called “time-machine management”
business strategy of introducing the latest
services from the U.S., which was a leader
in terms of the Internet. But now that we
have this advanced telecommunications
environment, I believe that we ourselves
can create the next generation of
Differentiating Ourselves through the Mobile
E-commerce Revolution
SoftBank Group Corp. ANNUAL REPORT 2015 019
Financial and Operational Data The Fast Read Management Organization Financial Section Corporate Information Group Strategy
Interview with
President and CEO of Sprint
A Group of
Innovative Entrepreneurs
Main Investments
in Fiscal 2014
Internet Companies
Investment Record
Major Subsidiaries
and Associates
Domestic Telecommunications
Business—Dialogue
services and business models and pro-
mote them throughout the world.
Miyauchi Our collaboration with Yahoo
Japan holds the potential to become one
such global service originating from Japan.
It represents an enormous business oppor-
tunity. The test will be in how big an
impact the service makes on our approxi-
mately 45 million customers, and how
great a convenience they feel it provides
them. The success or failure of this initia-
tive will be a milestone on our journey
towards becoming the No. 1 core company
in mobile Internet.
To finish, please share your thoughts
on preparing the foundations for
future growth.
Miyauchi With the integration of the four
companies, the supervisory roles of the
senior management team and executives
have changed dramatically. For example,
the three executive vice presidents who had
been responsible for sales for many years
have new roles: Yasuyuki Imai, who was
responsible for corporate sales, will take the
lead on technology, product & marketing;
Jun Shimba, who handled sales to electronics
retail stores, will take over the enterprise
business; and Shuichi Kukita, previously in
charge of dealer sales, will be responsible for
consumer sales, which will combine dealer
and electronics retail store sales.
These sudden changes in the supervisory
assignments of the management team are
intended to nip any onset of “big company
disease” in the bud. We have achieved
our current scale with net sales of over ¥3
trillion and some 18,000 employees, but I
am afraid to say that we are starting to see
the first unwelcome signs of interdivisional
barriers appearing.
Fujihara Once a company develops big
company disease, it becomes extremely
difficult to grow profits. It is no easy feat
to earn a profit of ¥10 billion in any given
domain, but once people start to see it as
simply a fraction of the whole company’s
profit of several hundred billion, they end
up trivializing that ¥10 billion and losing it.
To prevent this sort of thing from
happening, we plan to shape our organiza-
tion into one that elicits in each person and
division a sense of hard-headed tenacity
over profits and that always achieves its
overall targets.
Miyauchi To ensure that we can continue
to grow, we must be an organization that
constantly considers things from the
perspective of the customer. To entrench
this point of view in every aspect of our
organization, we must make it function by
using ICT to ensure that information and
feedback from our user contact points is
relayed quickly to the management team and
related divisions. Another very important
Customers’ Perspective and Response to Technology Changes are Crucial
aspect is to remain sensitive to changes
in technology. It is especially true of the
ICT world that even the most outstanding
business can be completely undone by the
introduction of new technology. Survival
requires repeated self-transformation in
response to the changes in technology. I
am certain that we can continue to trans-
form ourselves in this way.
SoftBank Group Corp. ANNUAL REPORT 2015 020
Financial and Operational Data The Fast Read Management Organization Financial Section Corporate Information Group Strategy
Interview with
President and CEO of Sprint
A Group of
Innovative Entrepreneurs
Main Investments
in Fiscal 2014
Internet Companies
Investment Record
Major Subsidiaries
and Associates
Domestic Telecommunications
Business—Dialogue
The SoftBank Corp. Management Team Heading the Domestic Telecommunications Business
United in Our Aim to Become the No. 1 Mobile Internet Core Company
* Junichi Miyakawa, executive vice president responsible for the technology unit, global telecom business, is overseeing the network and technology organization of Sprint as its technical chief operating officer.
* Titles are as of July 1, 2015.
Executive vice president
Jun Shimba
Enterprise business unit head
Executive vice president
Eric Gan
Business development unit
head and Ymobile business
President & CEO
Ken Miyauchi
Executive vice president & CFO
Kazuhiko Fujihara
Finance unit head
Executive vice president
Yasuyuki Imai
Product & marketing unit head
and technology unit head
Executive vice president
Shuichi Kukita
Consumer sales unit head
Executive vice president
Yoshimitsu Goto
SoftBank Group Corp. ANNUAL REPORT 2015 021
Financial and Operational Data The Fast Read Management Organization Financial Section Corporate Information Group Strategy
Interview with
President and CEO of Sprint
A Group of
Innovative Entrepreneurs
Main Investments
in Fiscal 2014
Internet Companies
Investment Record
Major Subsidiaries
and Associates
Domestic Telecommunications
Business—Dialogue
Becoming the
Easiest Carrier to
Do Business With
Marcelo Claure
President and CEO, Sprint
First Phase of Turnaround Successful
Looking back on my first year at Sprint I am very proud of the team for successfully
executing phase 1 of our turnaround strategy and stopping the decline in our overall
business. During this phase, we primarily focused on four overarching priorities:
improving our customer acquisition by revamping our offers and advertising, listening
to customers to understand why they were leaving Sprint, improving the network
experience by focusing on optimization and expanding LTE coverage, and simplifying
Interview with
President and CEO of Sprint
Marcelo Claure founded Brightstar in 1997 and grew the company into the largest
specialized wireless distributor in the world with US$10.5 billion in gross revenue
(for the year ended December 31, 2013). Throughout his career, he has received
several Entrepreneur of the Year and CEO of the Year awards. He was appointed
president and CEO of Sprint on August 11, 2014.
SoftBank Group Corp. ANNUAL REPORT 2015 022
Financial and Operational Data The Fast Read Management Organization Financial Section Corporate Information Group Strategy
Domestic Telecommunications
Business—Dialogue
A Group of
Innovative Entrepreneurs
Main Investments
in Fiscal 2014
Internet Companies
Investment Record
Major Subsidiaries
and Associates
Interview with
President and CEO of Sprint
10–12
‘13
1–3
‘14
4–6 7–9 10–12 1–3
‘15 CY
Net Subscriber Additions (Sprint platform postpaid subscribers)
+30k
+211k
Marcelo’s
appointment
the customer experience. This resulted in our highest ever retail*
1
gross additions on
the Sprint platform, and the highest ever prime mix of postpaid gross additions in the
October to December 2014 period. In addition, we saw third-party validation of our
network improvements from RootMetrics
®
and Nielsen, and our net promoter score*
2
started to show improvement.
Onward to Phase Two
From January 2015, we shifted gears to the next phase of our transformation, which is
focused on addressing the basics to augment the operational effectiveness of the
business. This included refining how we listen to our customers’ needs and making
our network more consistent and reliable. As a result, during the January to March
period we had our highest total*
3
net additions in nearly three years, postpaid churn
improved remarkably, and the network and customer experience continued to improve.
We are pleased with the progress so far, and our goal remains to have positive
postpaid phone net additions, which we expect to achieve during 2015. Churn is the
only way to truly measure customer satisfaction, and while we are pleased with the
dramatic improvement we have seen so far, we continue to consider improving churn
a top priority which will enable us to retain customers longer and reduce acquisition
costs. We have continued to make progress in our goal of providing a network that
delivers the consistent reliability, capacity, and speed that customers demand. Besides
a continuous focus on optimization, we have also expanded the breadth and depth of
our LTE network as it reached nearly 280 million people at the end of March 2015, and
the continued expansion of the 800MHz and 2.5GHz LTE overlays has greatly improved
overall network performance. This progress was recognized by RootMetrics,
®
and in
their second-half 2014 testing, Sprint’s overall network score improved to third place
with notable progress in reliability as well as call and text performance.
*
1
Total of prepaid and postpaid subscribers.
*
2
Net promoter score: metric used to measure customer loyalty.
*
3
Total of prepaid, postpaid, and wholesale & affiliate subscribers.
Strategies to Drive Further Long-term Growth
Now that our business performance has started to improve, we are spending more
time developing and implementing strategies to offer customers a differentiated
experience to drive long-term profitable growth. These strategies include the
development of simple and compelling offers to attract quality customers, continued
aggressive marketing, and adding points of distribution. Furthermore, we are
continuing to invest to unlock the true potential of our network infrastructure and
spectrum portfolio, and in May 2015, we announced our expectation for accrued
capital expenditures to be approximately US$5 billion*
4
for fiscal 2015. We continue
our drive toward having the lowest cost to serve and we are seeing the early fruits of
these efforts, which will fund our turnaround initiatives. In addition, we are already
scoping out initiatives to eliminate costs over the next few years as we continue to
reinvent how we operate and focus our spending around acquiring, retaining, and
serving customers. Ultimately, we must deliver a simplified customer experience across
all touch points and become the easiest carrier to do business with.
*
4
Excluding the impact of leased devices sold through indirect channels.
SoftBank Group Corp. ANNUAL REPORT 2015 023
Financial and Operational Data The Fast Read Management Organization Financial Section Corporate Information Group Strategy
Domestic Telecommunications
Business—Dialogue
A Group of
Innovative Entrepreneurs
Main Investments
in Fiscal 2014
Internet Companies
Investment Record
Major Subsidiaries
and Associates
Interview with
President and CEO of Sprint
A Group of Innovative Entrepreneurs
To ensure that our business keeps growing for centuries to come, we must not only
transform the businesses we operate right now, but create and expand a group of
innovative entrepreneurs, providing them with comprehensive support and growing
with them.
Here we introduce new companies that joined the Group in fiscal 2014 and our
investment track record to date.
SoftBank Group Corp. ANNUAL REPORT 2015 024
Financial and Operational Data The Fast Read Management Organization Financial Section Corporate Information Group Strategy
Domestic Telecommunications
Business—Dialogue
Interview with
President and CEO of Sprint
Main Investments
in Fiscal 2014
Internet Companies
Investment Record
Major Subsidiaries
and Associates
A Group of
Innovative Entrepreneurs
Date of Announcement Investee Location Business Overview Investment Overview*
October 3, 2014
U.S.
Ownership, production, and distribution
of content in the felds of flm, television
and digital media, and comics
Total investment of US$250 million
October 14, 2014
U.S.
Operation of an online video
distribution site
Acquisition
October 22, 2014
Indonesia
Operation of a leading online
marketplace in Indonesia
Total investment of US$100 million, primarily
from the Company, as well as Sequoia
Capital and existing shareholders such as SB
Pan Asia Fund
October 28, 2014
India
Operation of a leading taxi-booking
platform in India
Total investment of US$210 million, led by the
Company along with existing shareholders
October 28, 2014
India
Operation of a leading online
marketplace in India
Total investment of US$627 million
December 4, 2014
Singapore
Operation of a leading taxi-booking
platform in Southeast Asia
Total investment of US$250 million
December 16, 2014
India
Operation of a house-hunting platform
in India
Total investment of US$90 million, led by the
Company along with existing shareholders such
as Falcon Edge
January 15, 2015
China
Operation of a leading taxi-booking
platform in China
Total investment of US$600 million, led by the
Company along with existing shareholders such
as Alibaba and Tiger Global
* All investment overviews are as of the dates of their announcements.
Main Investments in Fiscal 2014
SoftBank Group Corp. ANNUAL REPORT 2015 025
Financial and Operational Data The Fast Read Management Organization Financial Section Corporate Information Group Strategy
Domestic Telecommunications
Business—Dialogue
Interview with
President and CEO of Sprint
A Group of
Innovative Entrepreneurs
Internet Companies
Investment Record
Major Subsidiaries
and Associates
Main Investments
in Fiscal 2014
Company Name
Accumulated
Investment
(Billions of yen)
Market Value /
Accumulated Return
(Billions of yen)
Investment Period
(Years) Date of Initial Investment Date of Valuation IRR Return (Times)
Alibaba Group Holding Limited 10.5 7,993.4 15 Feb. 2000 Mar. 2015 76% 761
Yahoo Japan Corporation 7.7 1,358.9 19 Jan. 1996 Mar. 2015 78% 176
Yahoo! Inc. 54.7 350.9 7 Sept. 1995 Nov. 2002 30% 6
GungHo Online Entertainment, Inc. 29.6 217.7 16 Oct. 1999 Mar. 2015 41% 7
Trend Micro Incorporated 8.5 136.9 3 Dec. 1996 Mar. 2000 153% 16
SBI Holdings, Inc. 6.0 136.2 7 July 1999 Aug. 2006 56% 23
SoftBank Technology Corp. 3.3 87.8 18 Apr. 1997 Mar. 2015 665% 27
UTStarcom Holdings Corp. 1.0 59.6 18 Oct. 1995 Jan. 2014 25% 60
Yahoo! group companies in Europe and South Korea 2.3 58.8 8 Oct. 1997 Nov. 2005 50% 26
Betfair Group plc 51.3 43.1 6 Apr. 2006 Mar. 2012 –3% 0.8
Renren Inc. 41.9 39.1 7 Apr. 2008 Mar. 2015 –1% 0.9
Cisco Systems K.K. 1.8 35.3 6 Oct. 1994 Jan. 2001 65% 20
SKY Perfect Communications Inc. 14.6 27.9 5 Dec. 1996 Mar. 2002 19% 2
PPLive Corporation 20.7 27.8 3 Jan. 2011 Dec. 2013 10% 1
cyber communications inc. 0.5 23.0 8 Apr. 1999 June 2007 61% 46
Broadmedia Corporation 4.5 14.0 19 Sept. 1996 Mar. 2015 24% 3
Key3Media Group, Inc. 22.8 13.0 2 Aug. 2000 Dec. 2002 –24% 0.6
Zynga Inc. 13.2 8.8 3 Apr. 2010 Aug. 2013 –12% 0.7
Scigineer Inc. 2.3 6.8 0.5 Oct. 2014 Mar. 2015 19,131% 3
CNET Networks, Inc. 51.4 5.0 2 Oct. 2000 May 2002 –69% 0.1
ITmedia Inc. 1.7 4.8 15 Dec. 1999 Mar. 2015 9% 3
Vector Inc. 1.2 4.6 16 Mar. 1999 Mar. 2015 10% 4
Asia Global Crossing Ltd. 36.5 0 2 Oct. 2000 Nov. 2002 –100% 0
Total 387.8 10,653.5 Average 9 years 45% 27
(Notes)
1. Aggregation of Internet-related company investments with accumulated investment or accumulated return of ¥10 billion or more after SoftBank Corp. (currently SoftBank Group Corp.) became a pure holding company in October 1999.
Also includes listed subsidiaries and affiliates that it is currently investing in (excludes investments of these listed subsidiaries and affiliates).
2. Names of companies from which investments have been recovered are the names as of the date when their shares were sold.
Internet Companies Investment Record
As of March 31, 2015
SoftBank Group Corp. ANNUAL REPORT 2015 026
Financial and Operational Data The Fast Read Management Organization Financial Section Corporate Information Group Strategy
Domestic Telecommunications
Business—Dialogue
Interview with
President and CEO of Sprint
A Group of
Innovative Entrepreneurs
Main Investments
in Fiscal 2014
Major Subsidiaries
and Associates
Internet Companies
Investment Record
Subsidiaries
Company Name Listed Market Fiscal Year-end
Capital
(Millions of yen) Voting Rights (%) Principal Business Activities
Mobile Communications Segment
SoftBank Mobile Corp.*
1
Mar. 177,251 100 Mobile communications services, sale of mobile devices
BB Mobile Corp. Mar. 315,155 100 Holding company
Ymobile Corporation*
1
*
2
Mar. 43,436 99.7 Mobile broadband services, development and sale of communications devices, ADSL
services, PHS-based mobile communications services
GungHo Online Entertainment, Inc.*
3
TSE JASDAQ
Standard
Dec. 5,339 40.2
[18.6]*
4
Production and distribution of online games for smartphones and other devices
Wireless City Planning Inc. Mar. 18,899 33.3 Planning and provision of mobile broadband services
SoftBank Commerce & Service Corp.*
5
Mar. 500 100 Manufacture, distribution, and sale of IT-related products, IT-related services
Brightstar Global Group Inc. Mar. US$2K 100 Holding company
Brightstar Corp. Dec. US$0K 100 Mobile device distribution, supply chain solutions, handset protection and insurance,
buy-back and trade-in, omnichannel solutions and financial services
GRAVITY Co., Ltd.*
6
NASDAQ Dec. 354 59.3 Planning, development, and operations of online games
Supercell Oy*
7
Dec. €3K 53.7 Production and distribution of mobile game applications
Sprint Segment
Sprint Corporation NYSE Mar. US$39,674K 79.5 Holding company
Sprint Communications, Inc. Mar. US$1,180,954K 100 Mobile communications services, sale of mobile devices and accessories, fixed-line
telecommunications services
Fixed-line Telecommunications Segment
SoftBank BB Corp.*
1
Mar. 100,000 100 ADSL services, IP telephony services
SoftBank Telecom Corp.*
1
Mar. 100 100 Fixed-line telephone services, data transmission and leased-line services
*
1
On April 1, 2015 SoftBank BB, SoftBank Telecom, and Ymobile, merged into SoftBank Mobile. On July 1, 2015, SoftBank Mobile changed its company name to SoftBank Corp.
*
2
eAccess merged with WILLCOM on June 1, 2014 and changed its company name to Ymobile on July 1, 2014.
*
3
As a result of the completion of a tender offer by GungHo for its shares on June 1, 2015, and other factors, GungHo became an equity method associate of SoftBank Corp. (currently SoftBank Group Corp.). Please refer to page 190 for details.
*
4
Holdings by parties in close relationships, etc., with SoftBank Corp. (currently SoftBank Group Corp.)
*
5
SoftBank BB Corp., divided its commerce and service business and newly established SoftBank C&S on April 1, 2014. All shares of SoftBank C&S held by SoftBank Corp. (currently SoftBank Group Corp.) were transferred to a wholly owned subsidiary of Brightstar.
*
6
Since GRAVITY Co., Ltd.’s parent company GungHo is an equity method associate, as noted in *
3
, as of the publication of this annual report, GRAVITY is not a subsidiary of SoftBank Corp. (currently SoftBank Group Corp.).
*
7
The Company purchased additional shares of Supercell from existing shareholders on May 29, 2015. After this transaction, the Company’s share of voting rights stands at 77.8%.
Major Subsidiaries and Associates
SoftBank Group Corp. ANNUAL REPORT 2015 027
Financial and Operational Data The Fast Read Management Organization Financial Section Corporate Information Group Strategy
Domestic Telecommunications
Business—Dialogue
Interview with
President and CEO of Sprint
A Group of
Innovative Entrepreneurs
Main Investments
in Fiscal 2014
Internet Companies
Investment Record
Major Subsidiaries
and Associates
Company Name Listed Market Fiscal Year-end
Capital
(Millions of yen) Voting Rights (%) Principal Business Activities
Internet Segment
Yahoo Japan Corporation TSE First Section Mar. 8,281 43.0 Operation of the Yahoo ! JAPAN portal, sale of Internet advertising, operation of
e-commerce sites, membership services
IDC Frontier Inc. Mar. 100 100 Data center business
ValueCommerce Co., Ltd. TSE First Section Dec. 1,728 50.6 Ad affiliate marketing service, StoreMatch online advertising distribution service
Others
Mobiletech Corporation Sept. 315,966 100 Holding company
SB Energy Corp. Mar. 746 100 Generation of electricity from renewable energy sources, supply and sale of electricity
SoftBank Payment Service Corp. Mar. 450 100 Settlement services, card services and related services
Fukuoka SoftBank HAWKS Corp. Feb. 100 100 Ownership of professional baseball team, operation of baseball games, management
and maintenance of baseball stadium and other sports facilities, distribution of video,
voice and data content via media
SoftBank Robotics Holdings Corp. Mar. 10 100 Planning, development, and sale of robots
SBBM Corporation Mar. 10 100 Holding company
ITmedia Inc. TSE Mothers Mar. 1,670 57.9 Operation of comprehensive IT information site ITmedia, etc.
SoftBank Technology Corp. TSE First Section Mar. 645 55.4 Solutions and services for online businesses
Vector Inc. TSE JASDAQ
Standard
Mar. 1,007 52.4 Operation, sales, and marketing of online games, software downloads, advertising
SFJ Capital Limited The Cayman Islands
Stock Exchange
May / Nov. 200,000 100 Procurement of funds by issuing preferred (restricted voting) securities
SB Group US, Inc. Mar. US$0K 100 Holding company
SB CHINA HOLDINGS PTE LTD Mar. US$46K 100 Holding company
SoftBank Ventures Korea Corp. Dec. KRW18,000M 100 Holding company
SoftBank Korea Corp. Dec. KRW2,200M 100 Holding company
Starburst I, Inc. Mar. US$216K 100 Holding company
SoftBank Holdings Inc. Mar. US$8K 100 Holding company
SoftBank America Inc. Mar. US$0K 100 Holding company
STARFISH I PTE. LTD. Mar. 76,994 100 Holding company
SB Pan Pacific Corporation Mar. 48,248 100 Holding company
Hayate Corporation Mar. 35,960 100 Holding company
SoftBank Group Corp. ANNUAL REPORT 2015 028
Financial and Operational Data The Fast Read Management Organization Financial Section Corporate Information Group Strategy
Domestic Telecommunications
Business—Dialogue
Interview with
President and CEO of Sprint
A Group of
Innovative Entrepreneurs
Main Investments
in Fiscal 2014
Internet Companies
Investment Record
Major Subsidiaries
and Associates
Associates
Company Name Listed Market Fiscal Year-end
Capital
(Millions of yen) Voting Rights (%) Principal Business Activities
Internet Segment
ASKUL Corporation TSE First Section May 20,941 41.9 Mail order sales of stationary, office products, services, etc.
The Japan Net Bank, Limited Mar. 37,250 41.2 Banking business
BOOKOFF CORPORATION LIMITED TSE First Section Mar. 3,652 15.0 Auction service and reuse business
Others
Scigineer Inc. TSE Mothers June 766 33.2 Provision of Internet marketing support services using the personalized engine
“deqwas” for e-commerce business operators and retailers
Bharti SoftBank Holdings Pte. Ltd. Mar. US$63,096K 50.0 Holding company
Renren Inc. NYSE Dec. US$1,025K 43.0 Investor company of company operating Renren.com SNS site in China
Alibaba Group Holding Limited NYSE Mar. CNY1,000K 31.9 Investor company of companies operating e-commerce sites Alibaba.com,
Taobao. com, and Tmall.com
InMobi Pte. Ltd. Mar. US$703K 35.2 Mobile advertising services
Main Overseas Fund Data
Fund Name Category*
8
Principal Investment Region Fund Size Commitment Ownership*
9
(%)
Subsidiaries
SoftBank Ranger Venture Investment Partnership A South Korea KRW18,366M KRW18,366M 100
SoftBank Capital Fund ’10 L.P. A U.S. US$122,449K US$120,000K 98.0
Associates
SoftBank US Ventures VI L.P. B U.S. US$626,881K US$608,333K 97.0
SoftBank Capital Technology Fund III L.P. B U.S. US$232,750K US$131,000K 56.3
*
8
A: funds managed by the Company; B: funds other than category A.
*
9
Holdings as percentage of fund size.
SoftBank Group Corp. ANNUAL REPORT 2015 029
Financial and Operational Data The Fast Read Management Organization Financial Section Corporate Information Group Strategy
Domestic Telecommunications
Business—Dialogue
Interview with
President and CEO of Sprint
A Group of
Innovative Entrepreneurs
Main Investments
in Fiscal 2014
Internet Companies
Investment Record
Major Subsidiaries
and Associates
doc_655387665.pdf