Main Q&A at Earnings Results Briefing for FY2024 | About Us

Date	Thursday, May 8, 2025 4:00 pm - 5:25 pm
Speakers	SoftBank Corp.: Junichi Miyakawa (President & CEO) Jun Shimba (Representative Director & COO) Kazuhiko Fujihara (Board Director, Executive Vice President & CFO)

NTT DOCOMO, INC. (NTT DOCOMO) and KDDI Corporation (KDDI) have announced new price plans that involve price increases. What are your thoughts on this? Also, could you please share your response measures and strategies, including how you plan to add value going forward?: We view the fact that both companies announced price increases before us as an opportunity. We believe it is a necessary time to revise prices to ensure the sound growth of the telecommunications industry, and we would also like to move in the same direction. However, we will consider the optimal timing for doing so. While inflation has become a social issue, the telecommunications industry has continued to see price reductions, which we recognize as a structural problem. We have made ongoing efforts, such as cost-cutting, but we are now approaching our limits. Although we are capable of developing services comparable to those of other companies, we would first like to carefully consider services that truly satisfy our customers, refine our strategies, and then move into action. At this time, we would like to refrain from commenting on specific details regarding the added value we plan to offer.

Other companies are moving toward raising prices by adding value-added services to their main brands, while scaling back their sub-brands and low-priced plans. What do you think of this direction?: We would like to continue providing services that can address the diverse needs of users. We have acquired many users through the Y!mobile brand and are promoting conversion (upselling) to the SoftBank brand. In fact, the balance of brand conversion from Y!mobile and others to the SoftBank brand has become positive.

While the churn rate tends to rise in the fourth quarter in a typical year due to the spring sales season, it remained high in FY2024 even on a full-year basis. Is there any particular reason for this?: This is because of the presence of a certain number of users who sign up for SIM-only contracts with Y!mobile and LINEMO and then cancel them after a short period.

KDDI has earned the highest evaluation in Opensignal's Japan Mobile Network Experience report. What are your thoughts on this?: Regrettably, SoftBank Corp. did not surpass KDDI this time. However, we believe that competition contributes to industry growth, and view it positively. Next time, we are determined to make a strong comeback and become a serious competitor to KDDI President Matsuda.

What specific conditions need to be in place for you to enhance shareholder returns?: We had previously thought that maintaining our dividend in an inflationary environment was effectively close to a dividend reduction. However, at present, we expect that prioritizing upfront investment in AI will lead to increased corporate value over the medium- to long-term. While making upfront investments, if profits exceed our expectations, we also intend to consider shareholder returns as an option. In our next Medium-term Management Plan, we will also consider implementing shareholder return measures, including dividend increases and share buybacks.

For shareholder returns to be enhanced, SoftBank Corp.'s standalone profits must exceed expectations. If standalone net income surpasses expectations in FY2025, is your policy to also enhance returns for FY2025?: If standalone net income surpasses expectations, including in FY2025, we would like to consider enhancing shareholder returns, even if only slightly.

What is the purpose of listing PayPay Corporation? Also, what exactly do you mean by “preparations started for IPO (Initial Public Offering)”?: Personally, I felt it was a little early, but after hearing PayPay Corporation's desire to begin listing preparations for purposes such as securing talented human resources for the future, we ultimately agreed. SoftBank Corp. itself was able to grow as a result of going public, and we want PayPay Corporation to also seize this opportunity for growth. Additionally, we believe that going public will make its corporate value more visible. When IPO preparations commenced, we told PayPay Corporation that we expect it to pursue overseas expansion in the future.
To date, efforts such as strengthening corporate governance have been made in preparation for a listing. We would like to refrain from commenting further at this time. Please understand that concrete discussions toward the listing have now begun.

Is listing on markets including the U.S. under consideration?: While we would like to refrain from commenting on this at this time, we consider it to be a reasonable decision to include a listing in the U.S. as an option.

If PayPay Corporation goes public, SoftBank Corp. will lose control over one of its key segments, which seems like a waste. Could you please share your thinking behind your strategy going forward?: As mentioned earlier, I personally felt that the listing was a little early, and I still had a desire to keep the company within our reach. Meanwhile, given that the company has a background of being jointly funded by SoftBank Group Corp., SoftBank Corp., and LY Corporation, I had always been prepared for the possibility of it going public eventually. From a strategic perspective, we are partners who regularly discuss the digital and AI services and other initiatives we want to pursue, and I would like to continue to collaborate as members of the same Group going forward.

Could you please discuss the breakdown of the ¥100.0 billion in upfront investment? Will you incur development costs, in addition to depreciation of GPU servers?: The full breakdown of the ¥100.0 billion has not been determined in detail. Since my appointment as president, I have been saying in Board of Directors meetings that I want SoftBank Corp. to eventually become a “tech company” with research and development expenditures of around ¥100.0 billion. I see this as the moment when that goal is finally being realized. If any surplus arises, I hope it can contribute to an upside in profits. Looking ahead, I intend to manage the Company in a way that maintains a structure capable of sustaining research and development expenditures at this level.

Could you please discuss your approach to the next Medium-term Management Plan?: Although I cannot share specific figures at this time, I hope to reflect our investments such as those in AI data centers and generative AI in concrete numbers and demonstrate a clear path toward further growth.

Regarding the commercial use of “Sarashina mini,” a homegrown Japanese-language large language model (LLM) being developed in-house, are you envisioning the provision of chat-based services similar to ChatGPT? In addition, will services provided to consumers become the main focus?: We plan to offer the service to both consumers and enterprises. Initially, it will be provided as a chat-based service. In the future, we are preparing to enable features such as video generation. However, we do not plan to release all features at once.

How do you plan to generate revenue from AI agents?: We do not plan to announce any specific revenue-generation plans within this year. The commercial use of generative AI is still in its initial stages, and we expect it to develop into a core technology within society going forward.

What are your thoughts on the conversion of NTT DATA Group Corporation (NTT DATA) into a wholly owned subsidiary by Nippon Telegraph and Telephone Corporation (NTT)?: Looking back at the history, my understanding is that NTT DOCOMO and NTT DATA were separated from NTT in order to maintain fair competition. Nevertheless, there are now moves to bring them back together, which suggests there are people who strongly wish to return to a “big NTT.” I understand NTT's desire to utilize NTT DATA's platform in pursuing its overseas expansion. However, I have doubts as to whether making NTT DATA a wholly owned subsidiary is truly the optimal approach. President Sasaki of NTT DATA is one of the presidents I hold in high regard, but I am concerned that his strengths and those of NTT DATA may be diminished considerably as a result. In addition, I am once again reminded of how fortunate it is that the Act on NTT (the NTT Law) was not abolished. If infrastructure such as NTT East's and NTT West's buildings and transmission lines were to be used exclusively for the NTT Group, it would make fair competition impossible for other business operators. I hope that a competitive environment is preserved within the framework of the NTT Law.

NTT DATA has become a distributor of ChatGPT Enterprise, which is provided by OpenAI. What impact will this have?: We understand that the agreement signed by NTT DATA with OpenAI is a reseller agreement in which the standard version of ChatGPT Enterprise will be sold as is. This is completely different from “Cristal intelligence,” and there is no impact at all. We are developing a more advanced AI agent product.

What is your current thinking on the direct communication service between smartphones and satellites (Mobile Direct)?: We plan to launch Mobile Direct as our own service next year. Whether the service will be offered for a fee or free of charge is still under consideration. Although we are not disclosing the name of the specific satellite service provider we are working with, preparations are in place.

NTT will start providing HAPS next year. What is SoftBank Corp.'s situation?: We are currently in discussions with the Ministry of Land, Infrastructure, Transport and Tourism. Once discussions are concluded, we would like to launch the service as early as possible.

OpenAI has announced that it has decided not to become a for-profit company. Will this announcement have any impact on the progress of “Cristal intelligence”?: There are no issues with moving forward with “Cristal intelligence.” We fully understand the rationale behind strengthening safety measures in response to the rapid advancement of AI and will continue to monitor their future actions.

What are your thoughts on discussions by the Public-Private Advisory Council on Watt-Bit Collaboration? What impact will these discussions have on the distributed AI data center initiative that SoftBank Corp. is pursuing?: I am personally participating in the discussions. The Watt-Bit Collaboration is an initiative to jointly lay power cables and telecommunications cables, thereby promoting the integration of electricity and telecommunications infrastructure for the future society. Through this initiative, it becomes possible to monitor electricity usage by households and enterprises and achieve effective coordination with telecommunications. I believe this initiative is extremely important in advancing a society that coexists with AI, which SoftBank Corp. is aiming for.
When SoftBank Corp. searched for locations to build AI data centers, we encountered issues such as sites being suitable but lacking sufficient power, or power being available but no suitable sites being found. If these issues can be resolved through the Watt-Bit Collaboration, we believe that the process can be made significantly more efficient.

What are your thoughts on legislation and regulations concerning data centers?: Data centers tend to be concentrated in places where submarine cables from overseas make landfall, such as Inzai City in Chiba Prefecture, and Shima City in Mie Prefecture. In particular, the data centers in Inzai City have raised concerns that, as their power consumption increases, there could be a risk of causing a blackout across the entire Tokyo area. Even in regional areas, it is said that building a data center with a capacity of several tens of megawatts could lead to power outages in the surrounding area. It is essential to properly manage the supply and demand of electricity. To solve these issues at an early stage, I would like the national government to establish laws, ministerial ordinances, regulations and other rules.

What kinds of roles will SoftBank Corp. fulfill in the development of next-generation memory?: SoftBank Corp. is not aiming to become a manufacturer of next-generation memory. Rather, we envision pursuing this as an intellectual property (IP) business. If realized, this would result in memory with the capabilities needed to maximize the performance of current GPUs. Our initial plan is to act as a sponsor in the development of core component samples, with a projected investment of around ¥3.0 billion over two years. With the expected widespread adoption of services like Deep Research, which generates responses while crawling websites and gathering information, we have come to recognize that the performance of existing HBM (High Bandwidth Memory) will become a future bottleneck. This has led us to begin exploring the development of new memory technology.