The SoftBank Group is firmly committed to achieving its philosophy, “Information Revolution— Happiness for everyone.” Through the services and products we provide and the strategic synergies we are creating, mainly in the high-growth region of Asia, we aim to help contribute to people's happiness.
The Group bases its business growth on the Internet and is engaged in a range of businesses in the information industry, including mobile communications, broadband infrastructure, fixed-line telecommunications, and Internet culture.
Anticipating a shift in the geographic focus of the Internet from the U.S. to Asia, the Group has been making strategic investments in the Asia region. SoftBank's Internet-related business investees in China are growing rapidly, and have staked out key positions in each of their respective fields.
The number of mobile phone subscribers in Japan at the end of fiscal 2011 was 119.54 million, an increase of 7.36 million from the previous fiscal year-end. The penetration rate surpassed 90% of Japan's population, while the overall number of subscribers increased 6.6% year on year in fiscal 2011, 2.2 percentage points higher than the 4.4% increase in fiscal 2010. The faster growth rate was mainly attributable to a dramatic change in the structure of Japan's mobile communications market. The ratio of smartphones among mobile handsets overall has increased, and the emergence of tablets such as the iPad has boosted the number of users owning tablets.
This structural change has generated new demand in both the individual and corporate markets for mobile telecommunications services. For SoftBank Mobile, which distributes the iPhone and iPad in Japan, the change has helped to increase the number of subscribers. In fiscal 2011, the iPhone and iPad drove growth in the number of subscribers resulting in net subscriber additions of more than 3.5 million at SoftBank Mobile, far higher than any competitor. As a result, the cumulative number of subscribers at SoftBank Mobile rose from 21.88 million at the end of March 2010 to 25.41 million at the end of March 2011.
In fiscal 2011, the DSL market continued to contract due to the shift from ADSL to FTTH. The FTTH market itself continued to expand, albeit gradually.
Although the number of Yahoo! BB ADSL lines decreased in fiscal 2011, the segment focused on increasing the number of subscribers for Yahoo! BB hikari with FLET'S. Through these efforts it achieved a year-on-year increase in the total number of broadband subscribers, which includes users of both services—the first such increase in four years.
On the earnings front, the segment incurred higher customer acquisition costs for Yahoo! BB hikari with FLET'S. However, the segment supplied broadband lines to SoftBank Mobile customers who use Wi-Fi routers and small base stations (femtocell), and provided IP backbone networks to telecom operators within the SoftBank Group. As a result, the segment raised profit while capturing synergies.
Japan's fixed-line telecommunications*3 market continues to contract since peaking out at a total of roughly 63 million fixed-line telephone lines on March 31, 1998. As of March 31, 2011, the total number of telephone lines in Japan stood at 57.46 million.
This contraction has also been evident in the corporate fixed-line telecommunications market in which SoftBank Telecom operates. However, there is firm basic demand for fixed-line phones from medium and large-scale corporate customers. In the corporate data transmission market, while the trend of decline in conventional relay connection services continues, WAN services such as IP-VPN and wide-area Ethernet are growing.
In fixed-line telephone services, the segment captured a larger market share by focusing on increasing the number of corporate OTOKU Line subscriptions. In addition, the segment upgraded the lineup of White Cloud corporate cloud computing services, which commenced in February 2010. In October 2010, the White Cloud Desktop Service was introduced to offer a secure desktop environment using a cloud platform. White Cloud services were also enhanced in partnership with Google and VMware, Inc. in the U.S., and other prominent global companies.
The segment also promoted the White Work Style corporate service, which enables innovative work styles by using these cloud-based services in combination with a broad spectrum of devices such as smartphones and tablets.
Total advertising expenditures in Japan*5 for 2009 showed a substantial decline of 11.5% from the previous year, reflecting economic stagnation in the wake of the Lehman bankruptcy. The same indicator showed signs of improvement in 2010, however, with the year-on-year decline slowing to 1.3%. Under these conditions, Internet advertising expenditures rose 11.5% year on year, owing to increased mobile advertising and listing advertising.
Transaction value in Japan's consumer e-commerce market*6 in fiscal 2011 reached 7.3 trillion yen, compared with 6.4 trillion yen in fiscal 2010.
Addressing the fast-growing smartphone and tablet markets were urgent priorities for fiscal 2011. Accordingly, Yahoo Japan optimized a number of its services for iPhone and Android handsets, providing applications specially designed for those platforms. Yahoo Japan also took its first step into the game market. Through a partnership with SQUARE ENIX CO., LTD., Yahoo Japan rolled out Sengoku IXA in the rapidly growing market for online games, and partnered with DeNA Co., Ltd. to launch the Yahoo! Mobage social games platform for PC users. The goal of this initiative is to generate demand and drive growth in the PC-based social games market.
In other areas, Yahoo Japan actively executes its partnership strategy by joining forces with Culture Convenience Club Co., Ltd., START TODAY, and others to enhance the quality, breadth and user-friendliness of services.