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So, how good is SoftBank as a giant-killer?

October 12th, 2012 at 1:02 PM

Pretty damn good. Vodafone Japan’s market share of mobile subscribers had crumbled below 17% in 2006 when SoftBank (SFTBY) swooped it up. This is what SoftBank’s share of Japan’s new mobile subscribers looked like in fiscal 2010 and 2011:

Source: SoftBank

The point here is that not only did SoftBank manage to grab a lead in signing new mobile subscribers back in 2007 — right after it had acquired the ailing Vodafone Japan — it also managed to maintain that lead years later, all the way through 2010 and 2011.

So you could argue that SoftBank’s ability to smack down bigger rivals like NTT-DoCoMo and KDDI did not hinge on the one-time surprise attack it staged in 2007. SoftBank has been able to keep its bigger rivals on the defensive through half a decade, introducing a variety of new pricing and marketing strategies.

If SoftBank does acquire Sprint (S) and/or Clearwire (CLWR), the obvious U.S. analogs to NTT-DoCoMo would be AT&T (T) and Verizon (VZ).

Japan is a hard, hard mobile market. In mid-2011, the mobile ARPU was declining at a hair-raising -5.9% pace industry-wide. Yet as NTT-DoCoMo’s ARPU fell by -4.4% in the second quarter that year, SoftBank’s ARPU rose by 1.9%. In 2011, SoftBank had $6 lower ARPU than the industry-wide average of $58 in Japan. So SoftBank is used to play the scrappy underdog — and it has demonstrated the ability to pull down the ARPU of the leading operator while delivering modest ARPU increase of its own.

Of course, AT&T’s ARPU level is now approaching $65. Its iPhone subscriber ARPU levitates around $100 after the recent moves to eliminate cheap texting and voice buckets.

One could argue that AT&T bears more than a passing resemblance to the vain and plump NTT-DoCoMo back in 2006.




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