A former Softbank Corp employee has been arrested in Japan on suspicion of illegally bringing 5G trade secrets to his new employer, Rakuten Mobile Inc, as it was preparing to launch its own mobile network.
The suspect, a 45-year-old male, used his personal computer to access Softbank’s cloud servers and e-mail confidential files to himself, the Tokyo Metropolitan Police Department said.
Softbank said in a statement that 4G and 5G networking plans and technology were among the information compromised, although no client data was exposed.
Rakuten Mobile confirmed that the person is an employee, but said that an internal investigation found no evidence that information from his prior employer had been used.
Rakuten Mobile parent company Rakuten Inc yesterday was down 1.4 percent in Tokyo trading, while Softbank Corp rose 1.36 percent.
The incident underscores intensifying competition in one of the world’s most lucrative telecom arenas.
Rakuten has been the big disruptor in the space, launching the fourth major network in the country last year and pushing unlimited mobile data allowances. Its breakthrough pricing has put pressure on incumbents Softbank Corp, NTT Docomo Inc and KDDI Corp.
That has added to a period of unusual upheaval, with mobile carriers urged by Japanese Prime Minister Yoshihide Suga to make their consumer contracts more flexible and affordable, while also making the transition to 5G.
The new 5G networks and devices are hotly contested ground, promising to open up new applications, business opportunities and, crucially for carriers, supercharge demand for bandwidth.
Softbank has been among the earliest adopters, although its coverage remains patchy, as it is across most of the globe.
Rakuten, whose 5G service launched several months after Softbank’s, aims to undercut the market with a single-price offering that is less than half what its rivals charge and still offers unlimited data.
Separately, Softbank Group Corp’s Vision Fund sold about US$2 billion in Uber Technologies Inc stock after a rally in the ride-hailing giant’s shares, signaling that it might cash in more gains from the sector.
An affiliate of the investment fund called SB Cayman 2 sold 38 million shares on Thursday last week at an average price of US$53.46, a filing with the US Securities and Exchange Commission showed.
Softbank Group still holds about 184.2 million shares, worth about US$10 billion, the filing showed.
Softbank founder Masayoshi Son was an aggressive investor in the ride-hailing sector, taking major stakes in Uber, China’s Didi Chuxing (滴滴出行), India’s Ola and Southeast Asia’s Grab.
Those wagers looked in jeopardy when Uber stumbled after its 2019 initial public offering (IPO) and the COVID-19 pandemic slammed demand.
However, Uber shares more than tripled from their low in March of last year, as capital markets surged.
Now Didi, the largest investment in Softbank’s portfolio, is also considering an IPO in the second half of this year, Bloomberg has reported.
“SoftBank Vision Fund may pave the way for Didi Chuxing’s IPO after selling Uber shares,” Bloomberg Intelligence analyst Anthea Lai wrote in a research note. “As it reportedly owns about 20 percent of the Chinese company, paring down exposure to Uber could help relieve concerns by Didi’s prospective investors about Softbank’s heavy influence in the ride-sharing sector and potential conflict of interest.”
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