Bloomberg News

Softbank Recommended to Receive 900-MHz Spectrum License

February 29, 2012

Softbank Corp. (9984) was chosen by a Japanese communications ministry panel to receive a new spectrum license, allowing the nation’s third-largest mobile-phone operator to expand data capacity as it tries to catch up with larger NTT DoCoMo Inc. (9437) and KDDI Corp. (9433)

Softbank, the nation’s first carrier to sell Apple Inc. (AAPL)’s iPhone, will receive the approval certificate to use the 900- megahertz spectrum tomorrow, the ministry said in a statement in Tokyo today. DoCoMo, KDDI and eAccess Ltd. also applied for the license, according to the regulators.

“It will allow Softbank to expand its service in rural areas, where it’s been weak, rapidly,” Hitoshi Hayakawa, a Tokyo-based analyst at Credit Suisse Group AG, said before the announcement. Hayakawa has an “outperform” rating on Softbank shares.

Japanese mobile-phone companies sought the new spectrum to boost network capacity as the number of smartphone users grows, increasing demand for data transmission. The 900-megahertz spectrum will become available in July after Japan introduced digital broadcasting last year, freeing up radio bands used by the previous analog system.

“Their score was the highest,” Tadaaki Maeda, chairman of the ministry panel, said of Softbank’s application today in Tokyo. “We judged various factors, including the practicability of their plans.”

The government will allocate the 700-megahertz spectrum, the other newly available band, later this year to three companies, the communications ministry said in a statement today.

Service Disruptions

The ministry has ordered DoCoMo and KDDI to improve their service after a surge in data transmissions caused service disruptions in the past year.

More than half of Japan’s wireless-service subscribers will use smartphones by March 2015, Tokyo-based MM Research Institute Ltd. forecast in July. They made up 8.8 percent of a total of 109 million accounts in March last year, the researcher said.

“In Tokyo, the amount of data transmission will surge by 100 times in the next four years,” Softbank President Masayoshi Son said in a post to his Twitter account on Feb. 12.

KDDI, which began selling iPhones in October, and Softbank plan to offer service based on the so-called Long-Term Evolution standard this year, the companies have said. LTE can let users receive data as fast as 100 megabits per second, compared with 14 megabits using previous technology, according to DoCoMo, which began offering LTE service more than a year ago.

Softbank had a 22 percent share of mobile-phone subscriptions in Japan in January, trailing DoCoMo’s 47 percent and KDDI’s 27 percent, according to data compiled by Bloomberg.

Mmbi Inc., a venture set up by a group of companies led by DoCoMo, won the only slot to offer multimedia broadcasting for mobile-phone users in 2010. Mmbi will begin the service in April, charging users 420 yen ($5.22) a month.

To contact the reporters on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net; Yuki Yamaguchi in Tokyo at yyamaguchi10@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net


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