Masayoshi Son sees an opening as Japan rethinks nuclear, and dreams of the chance to break the hold of its utility giants just as he did the telecom monopoly
Billionaire Masayoshi Son made a fortune taking on Japan's phone monopoly. Now he aims to shake up its power utilities after the worst nuclear crisis in 25 years. The 53-year-old chief executive officer of Softbank says he will build solar farms to generate electricity, with support from at least 33 of Japan's 47 prefectures. He's asking for access to transmission networks owned by the 10 regional utilities and an agreement that they buy his electricity. No other company has secured unlimited access to the those transmission networks. The utilities would not comment. Japan's main business organization, the Keidanren, called for "careful analysis" before any drastic change in the power system took place.
If Japan ever felt ready to back Son's ambitious plan, this is the moment. Radiation has spread across at least 600 square kilometers (230 square miles) in the northeast since the Mar. 11 earthquake and tsunami led to meltdowns at the Fukushima Dai-Ichi nuclear plant. Outgoing Prime Minister Naoto Kan said in May he will rethink a plan to increase atomic power to 50 percent of the nation's energy output from 30 percent. Renewable energy already accounts for 10 percent, according to Japan's Agency for Natural Resources and Energy. Son wants to see that tripled by 2020. "The question is how this nation is going to survive after cutting nuclear power," he said at a government panel meeting on June 12.
While attending the University of California at Berkeley, Son invented a voice-operated multilingual translator that he sold to Sharp for 100 million yen in 1979, about $1.2 million today. He imported Space Invaders video-game machines and leased them to cafeterias. In the late 1980s he marketed a system that enabled fixed-line phone users in Japan to choose operators that offered the cheapest rates. Son's product threatened the dominance of Nippon Telegraph & Telephone (NTT), which had been privatized in 1985. When Son introduced Softbank's broadband service in 2001, he offered rates that undercut NTT's by as much as half.
By 2006, Son had transformed his venture capital company, an early investor in Web portal Yahoo! (YHOO), into a full-fledged phone service. "Son broke through the telecom industry and has the financial power and connections to make things happen," says Satoshi Nagata, a former president of Mitsui High-Tec who now runs VPEC, a consultant to the power industry.
One of the scenarios Son is considering is to build 10 solar farms, each with about 20 megawatts of capacity, says Softbank spokeswoman Makiko Ariyama. That's 10 times the solar power now generated by the regional utilities. Japan aims to cut the cost of solar power generation to one-third of current levels by 2020, Prime Minister Kan says.
For Son to succeed, regulators have to agree to make 540,000 hectares (1.3 million acres) of unused farmland available for solar-power stations. If Son can devote 20 percent of the unused farmland to solar plants, he says, he can generate the same amount of electricity as Tokyo Electric Power, the giant utility that accounts for a third of Japan's electricity sales.
With backing from the prefecture governments, Son can introduce some competition into the utility industry. Japan's 10 regional utilities generate their own electric power, handle transmission themselves, and sell the electricity to customers. Although the power business was partially liberalized in the late 1990s, few new companies entered the market, partly because of difficulties in competing against the entrenched utilities, VPEC's Nagata says. That doesn't seem to bother Softbank's founder. "Mr. Son has made quite a stir," Governor Yukiko Kada of Shiga Prefecture says. "We expect the government to make a change."
The bottom line: Masayoshi Son wants to ramp up solar energy capacity in Japan and take on the established utilities at the same time.