Softbank, which was recently in the news for acquiring Sprint, seems to be on the right track as the Japanese carrier’s operating profit saw a 6.7% increase at 210.6 billion yen, approximately equal to $2.6 billion. Softbank has been working hard to place itself amongst the best and by employing strategies such as cutting on basic fees and being the first to sell the iPhone in Japan, by which it has been able to narrow the gap in subscribers between itself and major players such as NTT DoCoMo Inc. and KDDI Corp.
Softbank is also attempting to increase its user base outside Japan, and by acquiring a 70% stake in Sprint Nextel it will successfully be able to add 54.6 million subscribers, taking their user base tally to 96 million in the U.S. and Japan in comparison to its competitor NTT DoCoMo, which has a 60.8 million user base.
The Sprint acquisition is costing Softbank $8 billion in new capital and $12.1 billion to Sprint shareholders, which has surprised many industry insiders as Sprint is barely profitable and is a distant third in the United States telecom industry. This acquisition is probably a Japanese company’s biggest M&A announcement since the year 2000 and is expected to help Sprint become more competitive; analysts also expect a positive rise in share price in light of these recent events.
In other news, Apple is also considering opening its third retail store in China, Shenzhen to expand its reach internationally. As of now Apple and China seem to be quite happy with each other as the Chinese regulatory agency called State Radio Management has declared two models of the iPhone 5, the “A1429” and the “A1442” as compatible with Chinese networks. These two models have also been able to pass the 3C, which is the China Compulsory Certificate, and now all Apple needs to sell its phone is a network-access license. One of the major hurdles for Apple in China before it started manufacturing China-specific variants of the iPhone was the lack of compatibility between the radio bands in use by the iPhone and China’s TCDMA networks.
China Telecom is the largest seller of iPhones in China at the moment, whereas China Mobile has been trying quite hard for the last two years to strike a deal with Apple to carry the iPhone. Chinese users have also expressed considerable discontentment with the delayed launch of the iPhone 5 in the country, but Tim Cook has assured a December launch at the earliest.
