Softbank Prepares Domestic Mobile Business IPO

SoftBank Group Corp. revealed plans for an initial public offering of its domestic telecom operation, signaling the evolution of its business empire and its increasing focus on investments in startups.

SoftBank said it started preparations to list shares of its core Japanese telecoms unit, SoftBank Corp. The company flagged last month that it was considering listing the business, seeking to raise a reported $18 billion.

The separation of SoftBank’s activities, essentially, into investing and telecommunications arms, will bring “greater clarity and thereby better respond to the various needs of investors,” SoftBank said in a statement.

Founder and CEO Masayoshi Son said at a news conference the telecom business will emphasize dividend payments and that he’s aiming for a listing within a year.

Son has stepped up investments in technology companies over the past year, using cash flow from his telecom operations to take stakes in startups such as Uber, China’s Didi Chuxing and India’s Flipkart Online Services Pvt. 

Yet investors have given SoftBank little credit for those deals, as the company’s market capitalization has lagged well below the value of its assets. Spinning off the mobile phone unit may help close that gap, while raising capital and relieving some of the company’s debt burden.

“With the IPO of SoftBank’s Japan operations, the various parts of the company can continue to grow independently,” Son said. “This way I can also spend more time on longer-term global corporate strategy.

SoftBank has long counted on its domestic telecoms business, which makes up a third of overall sales but two-thirds of profit, as a stable source of cash that can be diverted to its growing number of investments around the world.

Son established the more than $93 billion Vision Fund, the world's largest private-equity fund, which has channeled more than $9 billion into global startups since its start in 2016.

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