Softbank Group said Monday that it plans to split the domestic mobile and telecommunication business in Japan and its overseas operations into two wholly-owned subsidiaries. The Tokyo-based telecommunications company mapped the reorganisation efforts that will be carried throughout the year.
Softbank appointed new leaders to supervise the domestic and overseas businesses separately. The company's president and COO Nikesh Arora, who previously worked at Google, will take charge of the overseas management of the company, while Ken Miyauchi, Softbank's head of mobile operations in Japan, will oversee all the domestic businesses.
"[Softbank] has decided to materialise its previously announced strategic direction, which is to position its two core businesses (domestic operations and global operations) as future growth drivers," the company said announcing the move Monday.
The reorganisation is unlikely to have a major impact on Softbank's consolidated financial results in fiscal year ending March 2016 and fiscal year ending March 2017. The unconsolidated financial results would be shared at a later time.
The domestic subsidiary of Softbank, including holdings and stakes in Yahoo Japan and Gungho Online Entertainment Inc., was worth close to 1.2 trillion yen as of March 7, Bloomberg reported. The company's international investments are spread across a wide range of technology and Internet firms, including Alibaba and Sprint, and were valued at about 8 trillion yen as of last Friday.
The move awaits shareholders' approval, which is planned for June in Softbank's general meeting of shareholders. But splitting the domestic operations from its overseas investments, which includes the ailing US telecom Sprint business, would rest some investors' worries about the domestic earnings being used on turning around Sprint's losses, Hitoshi Sato, senior analyst at InfoCom Research, told the Wall Street Journal.
Softbank also invested in China's ride-sharing company Didi Kuaidi Joint, India's e-commerce company Snapdeal and an online retail company Coupang in South Korea, all of which will remain under the branched-out overseas division.