Japanese telecom and Internet group Softbank's quarterly operating profit rose 45 percent as new low-cost plans wooed mobile phone subscribers away from bigger rivals. Softbank, which bought Vodafone's Japan unit in April 2006, has launched a price war to grab customers from much bigger rivals NTT DoCoMo and KDDI, as well as personal handy-phone operator Willcom, controlled by the Carlyle Group. (Personal handy-phones operate as cordless phones at home and mobile phones elsewhere.)
Saddled with debt of $12 billion on the Vodafone deal, Softbank has also cut salaries to reduce costs and introduced a new method of selling handsets that allows it to avoid paying commissions to retailers.
Operating profit was $663 million in the three months that ended June 30, up from $456 million in the previous year and boosted in part by an extra month of sales from its wireless unit.
The result compares with an estimate of roughly 35 percent operating profit growth from Credit Suisse and an estimate of 81 percent growth from Mizuho.
Softbank, which is also fighting declining momentum in its asymmetric digital subscriber line services, does not provide earnings estimates.
It is expected to post an operating profit of $2.8 billion for the fiscal year ending in March, up 25 percent from the previous year, according to 12 analysts.
Softbank's April-June net profit was $210.8 million, compared with $11.9 million in the same period last year.
Softbank beat both DoCoMo and KDDI in winning the most new subscribers for the third straight month in July. DoCoMo and KDDI both plan to halve their basic fees starting September.
