Friday, October 12, 2012

Softbank's Son - Japan's favourite risk-taker

By Mari Saito

TOKYO (Reuters) - Softbank Corp chief Masayoshi Son told reporters last week he decided to buy a smaller rival for $1.84 billion (1.1 billion pounds) on an impulse - small change for someone who Forbes estimates lost $18 billion in the dotcom bust, but an unusual move in staid Japan.

Softbank Corp President Masayoshi Son speaks during a news conference in Tokyo May 9, 2012. REUTERS/Yuriko Nakao

Like British entrepreneur Richard Branson, whose Virgin brand has moved from music to space travel, Son's Softbank has pivoted in 30 years through selling and publishing software with its acquisition of Ziff Davis and Comdex, via financial services as part of a group that bid for the now-defunct Nippon Credit Bank, to a pioneer stake in Yahoo.

"He's similar to Branson, but Masa is razor-focused to mobile Internet. Unlike Branson, he won't enter other sectors such as a coke or airlines," said Son's younger brother Taizo, who runs the Movida Japan venture capital fund but has worked with Masayoshi for years and still advises him.

Masashi Oda, equity chief investment officer at Sumitomo Mitsui Investment Trust, also sees similarities between Son and Branson. "They fight government regulation and expand business by lowering prices," he said.

"Son is good at adapting to the new environment. He introduced the Internet to ordinary Japanese by lowering telecoms charges around 2000 and introduced smartphones by selling the iPhone in 2008," Oda added.

Son, born to Korean parents in south-western Japan, moved abroad as a teenager to study in California and sold his first patented translating device to Sharp Corp while he was at university there.

In 2006, Son, a personal friend of Bill Gates and the late Steve Jobs, threw Softbank into the mobile carrier business, buying Vodafone's Japan unit for $15.5 billion.

The telecoms group, Japan's second-largest, now has ambitions to rival the biggest in the world as it looks to break into the United States mobile market.

Softbank is in talks to take a majority stake in Sprint Nextel, America's No. 3 wireless carrier, for $12.8 billion, said a source with direct knowledge of the matter. Other sources have said Softbank is in talks with Japan's leading banks to line up a loan of as much as $23 billion to fund possible U.S. acquisitions.

IPHONE BREAK

At last week's news conference, Son, 55, said his decision to offer a tethering service for Apple Inc's new iPhone 5, allowing users to connect their smartphones and laptops, was what prompted his move to buy smaller rival eAccess.

"After we decided to offer a tethering service on the iPhone5 a week ago, right at that moment and place, I realized we needed to merge with eAccess ... to set up a network capable of offering the service," he said.

While local rivals NTT Docomo Inc and KDDI Corp were marketing clunky feature phones that were over-customized for Japanese users, Son was eyeing the iPhone prize. Softbank was first in Japan to carry the popular device and had a monopoly on it until KDDI added the iPhone last year.

If successful with its Sprint deal, Softbank would be catapulted on to the world stage in competition with AT&T and Verizon Wireless.

And Son's ambitions may not end there.

Faced with a stagnating market at home, Softbank could use Sprint as a vehicle to acquire another U.S. mobile provider MetroPCS Communications Inc in a two-step deal that could cost more than $25 billion, Japanese media reported - a record for a Japanese firm buying overseas.

"BEST ENTREPRENEUR"

Tadashi Yanai, head of Asia's largest clothing retailer Fast Retailing Co Ltd - and the only person in Japan who tops Son's estimated $7.2 billion fortune - called the Softbank chief "the best entrepreneur in Japan today". Yanai sits on the Softbank board.

Others lauded his decision making prowess.

"He's the only one who can do a big deal like this. He's incredibly speedy with his decision making and that makes him different among traditional Japanese executives. I bet he hasn't even spent a month thinking over this (deal)," said a Japanese banker who has met Son several times.

At first glance, the slim and softly-spoken Son doesn't come across as a risk-embracing entrepreneur.

Since the trauma of last year's earthquake, tsunami and nuclear disaster, Son has become an outspoken opponent of nuclear energy. At one point, he said he would quit the executive suite and concentrate on energy issues. His board persuaded him to stay, and Softbank's energy unit, SB Energy Corp, is now building Japan's biggest solar power plant.

Son personally donated 10 billion yen ($127.4 million) to the parts of Japan hit by the natural disasters and said his entire salary until his retirement would go towards supporting those orphaned in the region.

An avid user of Twitter, Son often cheers on his company-owned baseball team, the Fukuoka Softbank Hawks, and sends personal tweets to his nearly 2 million users.

"Aren't your goals too low? Aren't you too complacent with your ordinary life?" he asked in a recent tweeted message.

"That's what I ask myself."

($1 = 78.5100 Japanese yen)

(Additional reporting by Tim Kelly, Emi Emoto, James Topham and Dominic Lau; Editing by Ian Geoghegan)

News

Friday, October 12, 2012

Softbank's Son - Japan's favourite risk-taker

By Mari Saito