What is the impact of PayPay fee charging? "What do you think of DoCoMo's gigantic growth?" Comment from President Miyagawa on SoftBank's financial results

On November 4, SoftBank announced its financial results for the second quarter of the fiscal year ending March 2022. Sales were the highest ever on a six-month basis, according to the report. Mr. Junichi Miyagawa, who took the podium, summed it up by saying, "I think we were able to make a reasonable interim report" toward the full-year target.

In the question-and-answer session, he commented on "the impact of price cuts," "NTT Docomo's communication failure," "NTT DoCoMo's gigantic growth," and "SoftBank's future vision."

Achievement of the full-year target is “finished”

The consolidated results for the first half of fiscal 2021 are for net sales of 2,724.2 billion yen (up 295.8 billion yen year-on-year) and operating income of 2,724.2 billion yen. 570.8 billion yen (down 18.8 billion yen), and net income was 307.3 billion yen (down 7.8 billion yen).

President Miyagawa said, "Sales increased by 12%, the highest ever on a half-year basis." This is due to the acquisition of LINE as a subsidiary and the recovery in sales of mobile devices.

Operating profit decreased 3%. After explaining, "The sales of the consumer business were reduced by 40 billion yen. There is a 26 billion yen reduction in communication charges in the first half," he said. We are confident that we will be able to achieve our full-year targets.

Full-year target for net income is 500 billion yen. Looking back on this as well, he said, "We're already at 60%, and we're within reach.

The number of smartphone subscriptions increased by 6%, and the cumulative number of subscriptions reached 26.5 million. In particular, Ymobile is growing steadily. And the cumulative number of contracts for 5G plans exceeds 10 million. “More than one-third of the total number of smartphone contracts are now covered by this 5G plan,” he explains.

The number of users of PayPay, a smartphone payment service, has exceeded 43 million. The number of settlements (half year) was 1.66 billion (up 81% year-on-year).

President Miyagawa says, "The most important KPI for becoming a super app is the number of payments. In October, the number of payments exceeded 300 million. This shows that the app still has room for growth."

By the way, from October 2021, PayPay has charged small and medium-sized stores for payment fees, but reported that the impact was minor. "Out of 3.44 million affiliated stores, only 0.2% were canceled. The monthly GMV (gross value of distribution transactions) is 400 billion yen, and the GMV of canceled stores is about 400 million yen." .

Will price cuts affect 5G base station development?

After the report, President Miyagawa responded to questions from the media.

Regarding future services and pricing, he said, "There are price plans in the world where you can start from 0 yen. requires a system 24 hours a day, 365 days a year.Today, there is an employee who comes to work late at night and monitors the network.The machine is bound to break.When it breaks, we wait for automatic restoration, but if that doesn't fix it, we go to the site. We have no intention of stepping into the price plan (in the direction of price reduction) to the point where we can no longer cover these operating costs.We ask subscribers to bear the cost of maintaining the network to some extent, and after that, the price varies according to the amount of usage. This is the best, and we are currently analyzing traffic to find that balance."

When asked about the impact of semiconductor shortages on the development of 5G base stations, he said, "There has been no critical impact yet. The shadows are starting to appear little by little. It's taking time to get around the chips. Now, the actual harm caused by the semiconductor shortage is that 'the iPad won't fit.'"

What do you think about NTT DoCoMo's communication failures and growth?

In regards to the communication failure that NTT Docomo caused on October 14th, when asked if there is a way to avoid communication failures by having other carriers provide roaming in the future, he answered, "Look at it. IoT devices were the main obstacles.For example, in order for other carriers to roam IoT devices, it is necessary to create a device that can read the signal of any carrier.Realistically, It will be difficult because the cost will increase.It is difficult to have the same mirror when a failure occurs on the core side of the network.Therefore, it is also necessary for carriers to exchange information about ``this kind of control program is used.'' I wonder if it is," he said.

From a global perspective, to the question of whether Japan's mobile phone usage charges have come down considerably, he answered, "According to the announcement by the Ministry of Internal Affairs and Communications, it has become the second cheapest in the world. , Considering the quality of communication, I think that I have come to the cheapest place in the world.If aiming for cheapness is the direction of Japan, I will follow it, but foreign countries that are pulling the communication industry is not aiming for that direction.There is a concern that Japan will fall behind in the competition for telecommunications development.It is Japan's traditional pursuit of being a carrier, including devices. It's sad to lose that part, so I'll do my best," said President Miyagawa. Regarding the maintenance of base stations, "4G and 5G are completely different in terms of number and power. They consume a considerable amount of energy, so I'm worried about whether we can maintain 5G at a cheaper rate than 4G. We are working on it. I would like to come,” he said enthusiastically.

Also, regarding NTT DoCoMo's announcement of making NTT Communications and NTT Comware its subsidiaries, he said, "It's amazing. It was originally too big and split up, but before we knew it, it came together and returned to the same shape. You said, 'It can't be helped because the times have changed,' but I think it's good to have some kind of discussion within competition policy."

However, even though it has already started, ``The digitalization of corporations is spreading with great momentum. Japanese corporations have also begun digitization.Softbank is also supporting this And NTT DoCoMo and Com are also companies that are good at it.Welcome here because it will be a healthy competition.After that, we will rush into DX for Japan to grow.Wisdom in creating a new structure Not only SoftBank, but also NTT and others will work hard, and new business models will be born through friendly rivalry.I believe that such an environment is desirable and ideal." .

Among them, when asked about SoftBank's strengths, he said, "We have the knowledge that we have been focusing on corporate DX earlier than other companies. And SVF (SoftBank Vision Fund) has a cutting-edge DX company, We can continue to fuse with such a business model.

SoftBank's vision for the future is to become a comprehensive digital platformer

When asked about the number of LINEMO subscribers, which was less than 500,000 in the previous announcement, he said that he did not disclose the number of non-consolidated figures, but said, " LINE MOBILE and LINEMO together have exceeded 1 million users.Since launching a 900-yen monthly brand, LINEMO has been gaining momentum every month.” Regarding how to develop it, he said, "We also have Y!mobile. Right now, Y!mobile is more popular with customers. We will make Y!mobile the mainstay and do LINEMO online. Y!mobile is far more popular. Since it is the top, I would like to further strengthen it."

Regarding SoftBank's future vision, "Until now, we have lived as a 'telecommunications shop.' This will be a 'comprehensive digital platformer.' As the bottom layer, we have a platform layer and a service layer on top of that.Each work is completely different, but we want to be a company that has all these layers in total.In Japan Now that I have a firm contact point with the customer, I will be on the side of creating services."

And, as a plan for 30 to 50 years from now, "Changes in the environment, such as global warming, are beginning to occur sooner than expected. How can SoftBank contribute to environmental protection? Telecommunications companies are in a position to consume a large amount of electricity and convert it to communication.Electricity will be carbon neutral in the future, and we will seriously work on the development of technology that reduces electricity consumption. We want to create our role in the world.While extending the current business, there are also businesses that need to be calculated backwards.We will assemble this and show the shape of SoftBank's future." said.

Regarding when PayPay will become profitable, he said, "I can't say when it will be, but I believe we are in an environment where we can be profitable within a few years. From there, the rest will be commensurate with the acquisition cost.We've reached a point where we can control it (nearly).We want to expand a little more, and then move to the recovery period.I still want to go on the offensive.Numbers. I want to be profitable in the next year. I will explain the timing as soon as it is decided.”

When asked if payment fees will be the main source of PayPay's revenue, he said, "I think it will be the main source to some extent." In the store, we can expect profits from campaigns and sales promotions from the perspective of digitizing the store.

When asked about measures to raise ARPU in the consumer business, he said with a wry smile, "Honestly, it's quite difficult to raise rates once they've been lowered." However, as the number of users who use rich content on 5G has increased, the number of people who are switching from Ymobile and others to Softbank seems to be increasing. The market will expand by putting out content properly.First, create a 5G network.For each carrier, this will be the main battlefield.All carriers will launch 5G SA (standalone) in 2021. With the core facilities in place, new services such as network slicing will be born.I imagine that the fee structure will be completely different in the next two to three years.We would like to lead the industry without being late at that time. I'm looking forward to it," he said.

Born in 1977, graduated from Waseda University. After working for a publishing company, he became independent as a freelancer. He is active mainly in the telecommunications and digital industries, and recently he has also appeared in the sports and healthcare fields. I also love covering various parts of Japan and distant places. His hobbies include photography, traveling, and playing musical instruments. Shooting and editing videos just got easier.