Fri, Nov 08, 2013 - Page 15 News List

Japan’s Softbank eyes games, video, music acquisitions

Bloomberg

Softbank Corp, the Japanese wireless carrier involved in more than a dozen deals in the past year, wants to acquire makers of games, music and videos as it tries to generate more revenue from smartphone users.

Softbank plans to offer exclusive and prioritized content to differentiate itself from rivals selling Apple Inc’s iPhone and other high-end handsets, Yoshimitsu Goto, general manager for finance, said in an interview on Wednesday.

NTT Docomo Inc, Japan’s largest mobile carrier, began offering the iPhone in September to keep pace with Softbank and KDDI Corp.

“Strong content helps to increase subscribers,” said Tomoaki Kawasaki, an analyst at Iwai Cosmo Holdings Inc in Tokyo. “Smartphones and tablets are replacing specialized game machines, so some gamers may use Softbank mobiles if it has strong content. It’s the same for music and videos.”

Softbank said last month that its sales would reach more than ¥6 trillion (US$61 billion) in the year ending in March and it reiterated an earlier projection for annual operating income of at least ¥1 trillion. That revenue is helping Softbank underwrite acquisitions.

“We have to consider boosting content offerings,” Goto said. “Acquisitions are among the most important strategies for us.”

The company is not negotiating a deal currently, he said.

Softbank shares fell 0.9 percent to close at ¥7,480 in Tokyo trading.

The company founded by billionaire Masayoshi Son paid US$21.6 billion for Sprint Corp in July, before adding agreements for majority stakes in game maker Supercell Oy and US mobile phone distributor Brightstar Corp last month.

Softbank plans to spend US$16 billion during the next two years for faster US services as it tries to catch AT&T Inc and Verizon Wireless.

Softbank also plans to keep its stake in Alibaba Group Holding Ltd (阿里巴巴) if China’s largest e-commerce company proceeds with what may be the biggest initial public offering (IPO) since Facebook Inc.

The Tokyo-based wireless carrier holds about 37 percent of Alibaba and has not told the Chinese company when to hold an IPO or where to hold it, Goto said.

Hangzhou-based Alibaba is worth as much as US$190 billion, analysts at Sanford Bernstein said last month. That potentially values Softbank’s stake at US$70 billion.

“Alibaba is among the most important companies in our group, so our plan is to hold the stake for a long period of time,” Goto said. “What’s important for us as a shareholder in Alibaba is that the company continues increasing its enterprise value. An IPO is just a passing point to do that.”

Earlier this year, Softbank made an US$8.5 billion bid for Vivendi SA’s Universal Music Group that was rejected by the French media company, according to people with knowledge of the proposal. The company also purchased local competitor eAccess Ltd to meet bandwidth demand for smartphones.

Softbank led a US$1.53 billion agreement for a 51 percent stake in Supercell last month that values the firm at US$3 billion.

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