Tuesday, August 29, 2006
Redherring interview on SoftBanks adjustment
Helped RedHerring with an interview on the recent SoftBank accounting adjustment. The article is entitled "Softbank Falls on Lehman Cut" and appeared on the RedHerring website on August 28, 2006. Our company also recently advised a major global financial institution on related issues and risk issues.
Here a short summary of what I said
Essentially Vodafone-Japan is a company which has been going downhill in many ways for the last 4 years, they lost a lot of subscribers, and there has not been enough investment in equipment and staff, etc. For that reason and other reasons Vodafone sold the Japan operations this March to
Softbank.
Japan's mobile market is really difficult, and there is tough competition. There is much trust in the entrepreneurial skill of Softbank Chairman and founder Masayoshi Son - only through his reputation and track record could Softbank attract US$ 15 billion in bank loans to acquire Vodafone Japan KK. Personally I have a very high opinion about Masayoshi Son's abilities - and I think there is a high chance that he will succeed to turn round this company. Many people feel so, otherwise Son would not have been able to obtain the finance for the deal. Masayoshi Son has built not just one, but many successful companies, and he is maybe the strongest driving fource behind Japan's internet revolution.
I think for the turnround to be successful will take quite some time, and probably the shares of Softbank will go up and down many times before the company is turned round. I am not a share holder of Softbank, but my thought would be that this is really an investment for the longterm, unless you are playing on shortterm fluctuations which some investors also do. But then you have to understand exactly what you are doing and live with the risk.
Regarding the revaluation of the plant (mainly base stations, antennas, backhaul, computer systems etc) of the company, I am not an accountant so I cannot comment on the accounting issues and regulatory issues here.
However keep in mind that Vodafone has last year written off about US$ 50 bililon mainly for the Mannesmann acquisition. Softbank has not written off anything as far as I understand it, they converted plant into good will which as far as I know increases the period of write off from 10 to 20 years. But was I said, I am not an accountant.
Here a short summary of what I said
Essentially Vodafone-Japan is a company which has been going downhill in many ways for the last 4 years, they lost a lot of subscribers, and there has not been enough investment in equipment and staff, etc. For that reason and other reasons Vodafone sold the Japan operations this March to
Softbank.
Japan's mobile market is really difficult, and there is tough competition. There is much trust in the entrepreneurial skill of Softbank Chairman and founder Masayoshi Son - only through his reputation and track record could Softbank attract US$ 15 billion in bank loans to acquire Vodafone Japan KK. Personally I have a very high opinion about Masayoshi Son's abilities - and I think there is a high chance that he will succeed to turn round this company. Many people feel so, otherwise Son would not have been able to obtain the finance for the deal. Masayoshi Son has built not just one, but many successful companies, and he is maybe the strongest driving fource behind Japan's internet revolution.
I think for the turnround to be successful will take quite some time, and probably the shares of Softbank will go up and down many times before the company is turned round. I am not a share holder of Softbank, but my thought would be that this is really an investment for the longterm, unless you are playing on shortterm fluctuations which some investors also do. But then you have to understand exactly what you are doing and live with the risk.
Regarding the revaluation of the plant (mainly base stations, antennas, backhaul, computer systems etc) of the company, I am not an accountant so I cannot comment on the accounting issues and regulatory issues here.
However keep in mind that Vodafone has last year written off about US$ 50 bililon mainly for the Mannesmann acquisition. Softbank has not written off anything as far as I understand it, they converted plant into good will which as far as I know increases the period of write off from 10 to 20 years. But was I said, I am not an accountant.
Sunday, August 27, 2006
SoftBank opens flagship store
Today, August 26, 2006, SoftBank opened the remodeled and rebranded Roppongi flagship store. The SoftBank Roppongi store is designed in light colors using a color scheme including mainly white, silver and grey, replacing Vodafone's red. While Vodafone focussed on cost-cutting in Japan, SoftBank is now investing heavily, creating new stores and hiring store managers and assistants to revive and expand the chain of SoftBank stores.
"Flagship" stores are a concept which Vodafone introduced into Japan's mobile industry - before Vodafone's entrance to Japan, DoCoMo, J-Phone and KDDI/AU did not have specific flagship stores. Vodafone opened a flagship store in Shibuya, and shortly afterwards KDDI opened the KDDI Designing Studio in response. Because Vodafone's initial Shibuya flagship store is in the middle of Shibuya's entertainment district, the Roppongi-store, which was newly acquired by Vodafone, took a flagship role.
Vodafone recently decided to terminate business in Japan, and sold all Japan operations to SoftBank - Vodafone's investment in Japan was the largest investment ever by any European company in Japan, about 7 times larger than Renault's initial investment in Nissan...
This picture shows the flagship store in the new SoftBank dress, which opened on August 26, 2006:
This picture shows the flagship Roppongi store before (left hand picture) and after (right hand picture) the brand change from Vodafone to SoftBank. The SoftBank branded store opened on August 26, 2006:
An elegant color scheme based on silver/white/grey replaces Vodafone's red:
SoftBank's white/grey/silver color scheme replaces Vodafone's previous bright red dress - the "YAHOO-Cafe" (there is no coffee...) represents SoftBank's strong cooperation with YAHOO-Japan - SoftBank is largest shareholder of YAHOO-Japan:
SoftBank's 705SH mobile phone by SHARP includes a YAHOO-Button for direct access to YAHOO-Japan mobile content and services.
SoftBank's flagship store includes a YAHOO spot - at the moment the YAHOO-spot is an empty place holder. The YAHOO-Spot is labelled YAHOO-Cafe - but there is no coffee...
SoftBank's phones are presented on surfboards:
"Flagship" stores are a concept which Vodafone introduced into Japan's mobile industry - before Vodafone's entrance to Japan, DoCoMo, J-Phone and KDDI/AU did not have specific flagship stores. Vodafone opened a flagship store in Shibuya, and shortly afterwards KDDI opened the KDDI Designing Studio in response. Because Vodafone's initial Shibuya flagship store is in the middle of Shibuya's entertainment district, the Roppongi-store, which was newly acquired by Vodafone, took a flagship role.
Vodafone recently decided to terminate business in Japan, and sold all Japan operations to SoftBank - Vodafone's investment in Japan was the largest investment ever by any European company in Japan, about 7 times larger than Renault's initial investment in Nissan...
This picture shows the flagship store in the new SoftBank dress, which opened on August 26, 2006:
This picture shows the flagship Roppongi store before (left hand picture) and after (right hand picture) the brand change from Vodafone to SoftBank. The SoftBank branded store opened on August 26, 2006:
An elegant color scheme based on silver/white/grey replaces Vodafone's red:
SoftBank's white/grey/silver color scheme replaces Vodafone's previous bright red dress - the "YAHOO-Cafe" (there is no coffee...) represents SoftBank's strong cooperation with YAHOO-Japan - SoftBank is largest shareholder of YAHOO-Japan:
SoftBank's 705SH mobile phone by SHARP includes a YAHOO-Button for direct access to YAHOO-Japan mobile content and services.
SoftBank's flagship store includes a YAHOO spot - at the moment the YAHOO-spot is an empty place holder. The YAHOO-Spot is labelled YAHOO-Cafe - but there is no coffee...
SoftBank's phones are presented on surfboards:
Thursday, August 03, 2006
M-Commerce towards US$ 100 billion
Mobile commerce (the mobile phone equivalent of mailorder) exceeded mobile content (music, weather, news, etc) first in 2004 in Japan and is on the way to reach US$ 100 billion in the not too distant future. Read more about Japan's m-commerce sector below.
US$ 0.5 Billion killer application for m-commerce?
We estimate that m-commerce (the mobile equivalent of mail order, or instant purchase of goods and
services) has reached approximately US$ 10 billion per year in Japan, and most likely exceeds this mark already. Mobile phones are used in Japan to purchase many different types of products from music, to train tickets, air tickets, event tickets, books, and even cars. In our work for our customers we analyzed in detail a "killer application" for mobile commerce, where in Japan a single mobile website achieves about US$ 0.5 billion in annual sales.
read about mobile commerce (and the US$ 0.5 Billion/year killer m-commerce site...
US$ 0.5 Billion killer application for m-commerce?
We estimate that m-commerce (the mobile equivalent of mail order, or instant purchase of goods and
services) has reached approximately US$ 10 billion per year in Japan, and most likely exceeds this mark already. Mobile phones are used in Japan to purchase many different types of products from music, to train tickets, air tickets, event tickets, books, and even cars. In our work for our customers we analyzed in detail a "killer application" for mobile commerce, where in Japan a single mobile website achieves about US$ 0.5 billion in annual sales.
read about mobile commerce (and the US$ 0.5 Billion/year killer m-commerce site...
