With annual revenue of over $82 billion, SoftBank Group Corp. (SFTBF) is currently the 85th largest company in the world, by revenue, according to Fortune magazine. Moreover, going by the magazine’s rating, SoftBank is also the seventh largest company in Japan, a country where some of the largest automakers in the world are headquartered. In several other countries, the U.K. for instance, SoftBank would be the largest company by far.
SoftBank’s domestic telecoms unit will launch on Dec. 19 on the Tokyo Stock Exchange with an IPO valued at 2.4 trillion yen (approximately $21.04 billion), one of the largest to date. The company behind that record-breaking public launch does business under several major segments including domestic telecommunications, Sprint, Yahoo Japan, distribution and ARM segments.
Here’s a closer look at what SoftBank does, by segment, which makes it so large.
With net sales of $24.85 billion in fiscal year 2017, Sprint is SoftBank’s largest operating segment. As the name may suggest, this segment is the result of SoftBank’s stake in Sprint Corporation (S). SoftBank acquired a majority stake in Sprint in July 2013 and currently controls 80% of the company’s voting rights. Sprint provides mobile communications and fixed-line telecommunications services, as well as the sale and lease of mobile devices in the U.S. Although the company is trying to expand its telecommunications presence in the U.S., SoftBank decided to call off a proposed merger between Sprint and T-Mobile (TMUS) in October 2017 due to disagreements over the leadership and business structure in the latter company.
Domestic telecommunications is SoftBank’s second-largest reporting segment. Under this segment, SoftBank sells mobile devices and provides mobile communications and broadband services to customers in Japan. The company also provides telecom services – data communications and fixed-line telephone offerings, for instance – to enterprise customers in Japan.
SoftBank’s domestic telecommunication segment is a result of an April 2015 merger of SoftBank’s four domestic telecommunications subsidiaries – SoftBank Mobile Corp., SoftBank BB Corp., SoftBank Telecom Corp., Ymobile Corporation – into SoftBank Corp. Since the merger, the domestic telecommunications segment has had two core companies including SoftBank Corp. and Wireless City Planning Inc., which offers wireless broadband access services.
SoftBank classifies the services rendered in the domestic telecommunications segment into two categories. They include communication services and mobile commerce services. Under the communications services, SoftBank offers mobile communications services to consumers through the SoftBank and Y! Mobile brands. In addition, the company offers data and fixed-line communication services to both consumers and businesses through the “SoftBank Hikari” and “Yahoo! BB” broadband services, as well as Wireless City Planning’s Broadband Wireless Access systems.
Under the mobile commerce services, SoftBank, in conjunction with Yahoo Japan offers online shopping services. The domestic telecommunications segment reported net sales of $21.97 billion in fiscal 2017.
The Yahoo Japan segment reports the results from SoftBank’s stake in Yahoo Japan Corporation. Yahoo Japan was formed as a joint venture between SoftBank and U.S. internet company Yahoo Inc., which recently changed its name to Altaba Inc. (AABA). As of December 2018, SoftBank is the largest shareholder of Yahoo Japan with a 48% stake in the company.
Overall, Yahoo Japan makes money from online advertising, e-commerce and membership services. The core companies driving SoftBank’s Yahoo Japan segment include Yahoo Japan Corp. and Askul Corp, both offering services through platforms like Yahoo News, auction site Yahuoku, and B2C e-commerce site Lohaco. This segment reported net sales of $5.94 billion in fiscal 2017, making it the fourth largest segment for SoftBank.
The distribution segment features two core companies including the American mobile device distribution company Brightstar Corp. and SoftBank Commerce & Service Corp. SoftBank had initially purchased a 57% stake in Brightstar in October 2013 but bought the company outright in 2014. According to SoftBank, Brightstar offers manufacturers and operators “mobile device and accessory wholesaling, supply chain management solutions for mobile device distribution and inventory management, mobile device insurance and buyback, retail solutions, and financial services.”
SoftBank Commerce & Service Corp. offers software and hardware items, along with network infrastructure and consulting services to both consumer and corporate customers in Japan. In fiscal 2017, the distribution segment combined with “uncategorized services” reported net sales of $9.35 billion.
The ARM segment was only added to the SoftBank Group in September 2016 after SoftBank acquired ARM Holdings Plc, a British semiconductor and software design company. The acquisition of ARM was based on the anticipation that ARM would be at the forefront of the paradigm shift to the internet of things. Given that ARM was only incorporated into SoftBank in September 2016, the segment reported net sales of just $1.4 billion for fiscal 2017.
Softbank made headlines in June of 2017 when it announced the purchase of Boston Dynamics for an undisclosed sum. The Boston based robotics firm is known for their four-legged robo-dogs and bipedal human-like robots. One of their recent inventions, Atlas, stunned the wold when Boston Dynamics released a video of the humanoid doing a backflip. Boston Dynamics is also responsible for Pepper, a Japanese speaking robot that is meant to be used for conversation and as a personal assistant (think: Alexa meets the Jetsons’ Maid).
In May 2017, SoftBank announced that it would be starting a $100 billion fund to invest in various technology companies. Other investors have since backed this fund including the Saudi Arabian Government, Foxconn Technology, Apple Inc. (AAPL), Qualcomm (QCOM), and Sharp Corporation. Three months later in August, SoftBank announced that it had made a $4.4 billion investment in shared workspace company WeWork. The company’s investment portfolio also includes private companies Uber, Didi Chuxing, and Slack.