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SoftBank envisions billions in revenue from WeWork and Didi

Just-listed mobile carrier will grow new businesses, says CEO

SoftBank Corp. may take joint ventures with companies like WeWork public, boosting its value, CEO Ken Miyauchi told Nikkei.
SoftBank Corp. may take joint ventures with companies like WeWork public, boosting its value, CEO Ken Miyauchi told Nikkei.   © Photo by Shihoko Nakaoka

TOKYO -- SoftBank Corp., the newly listed mobile unit of SoftBank Group, aims to generate billions of dollars in sales from new operations outside its core telecommunications business in three to five years, President and CEO Ken Miyauchi said on Thursday.

"We'll be able to create five, or perhaps 10, companies with sales of around 100 billion yen," or nearly $1 billion, apiece, said Miyauchi in an interview with Nikkei. The executive pointed to a joint venture with U.S. office-sharing company WeWork and a service launching in Tokyo next month with Chinese ride-hailing giant Didi Chuxing.

SoftBank will consider taking such joint ventures public in Japan in hopes of raising the company's overall value, Miyauchi said.

The telecom company went public on the Tokyo Stock Exchange's first section Wednesday. Shares closed the day below the initial offering price in a blow to many retail investors, due to such concerns as falling mobile service fees. Going forward, SoftBank plans to strengthen non-telecommunications operations.

WeWork and Didi both count among the global growth enterprises targeted for investment by SoftBank Group, led by tech evangelist Masayoshi Son. The mobile arm's ability to form joint ventures with its parent's investment targets in fields that require communications networks, providing mutual benefits for its core business, gives it a leg up on rival telecoms.

On the subject of Chinese-made communications equipment, which is considered a security risk in an increasing number of countries amid building U.S.-China trade tensions, Miyauchi said, "I think it would be better if we switched to European equipment makers for core parts." SoftBank used equipment from Huawei Technologies, a company that has become a particular point of friction, in some of its base stations.

In the domestic mobile market, SoftBank faces a one-two punch next year from e-commerce company Rakuten's entry into the arena and a major price cut in April from top rival NTT Docomo. But "we're already lowering prices, and we can fight," said Miyauchi.

"We moved quickly to lower prices through Ymobile," he continued, referring to the company's budget carrier arm, "and we have strong sales capabilities through volume retailers."

Asked how the company planned to respond to its sluggish share price, Miyauchi cited SoftBank's target dividend payout ratio of 85%. "We'll continue delivering steady dividends," he said.

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