MWC 2011: SoftBank CEO Bets on the Mobile Web
"Sometimes craziness gives a good return," the enthusiastic CEO said, noting that the purchase sent SoftBank's stock plummeting 60 percent in three days and had many critics questioning his sanity.
But Son was thinking long term -- 300 years out actually. He narrowed his 300-year plan for the company to escape what he called wireless operators' "depressing reality" down to 30 years for the purposes of his speech.
"If ARPU is going down, but revenue stays flat, but capex is growing like hell, only John Chambers will be happy," Son said, jibing the Cisco Systems Inc. (Nasdaq: CSCO) CEO who'd take the stage next. The reality is that Apple Inc. (Nasdaq: AAPL) and Google (Nasdaq: GOOG) are taking all the upside, he added, and carriers are becoming dumb pipes.
The only option for operators then is to grow their average revenue per user (ARPU), Son said, which SoftBank was to do even as voice ARPU declined. Data revenues, driven by a 30-fold increase in data traffic on its network over four years, grew to 54 percent of total revenue and increased its overall ARPU.
Softbank has also moved 100 percent of its customers from 2G to 3G, and now has plans to launch a commercial Long Term Evolution Time Division Duplex (LTE TDD) network and services by the end of the year. (See Softbank Does HSPA+ With NSN and Global TDD Initiative Launched at MWC 2011.)
That's because Son is anticipating a 1,000 percent increase in data traffic in the next 10 years, continuing the trend of the last 10. And by the time his 30-year forecast expires, there will be a one-million-times improvement in capacity, speed and connection, he said.
"Mobile Internet is the big bet I am making for the next 10, 20 years," Son said. Even with ARPU going down, data traffic is going up, he added. "Market share can also go up if you bet for the future more aggressively than your competitor."
— Sarah Reedy, Senior Reporter, Light Reading Mobile