SoftBank Corp Looking for Growth From Beyond Carrier Strategy

Given its higher financial leverage and high dividend payout ratio, SoftBank is the most leveraged way for investors to invest in the Japanese telecom market. If the Japanese mobile market can return to the cozy, stable oligopoly status that it has enjoyed for much of its history, SoftBank would likely provide investors with the highest returns of the large listed telecom companies. However, we have seen several bouts of telecom price competition over 2020 and 2021 where SoftBank’s financial leverage has worked to lower its profits more quickly than the other operators. We can't rule out further pricing pressure in the core telecom market but Rakuten's financial position might make it difficult for the company to start any more price wars.