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Regulation

SoftBank's Son & Trump: Marriage of Expedience

Son-set
This expedient stance could ultimately work out badly. If a ban does hinder innovation and competitiveness in the technology sector, telcos seem bound to suffer, too. And a ban, once it comes into force, might eventually be extended in duration and scope to include other Muslim-majority countries like Pakistan. Having gotten his way on immigration, Trump might feel emboldened to push through other controversial measures, including trade restrictions. By driving up the cost of components used in iPhones and other telecom equipment, those could spell further misery on the commercial front.

In addition, as telcos try to become more like web players, they may come to share more of the web players' concerns about immigration controls. For a company like Sprint, whose loss of status puts it under more pressure to effect a digital transformation, this may be a critical consideration. Sprint's turnaround does appear to be going well: Thanks to cost savings, adjusted earnings (before interest, taxation, depreciation and amortization) for the first nine months of 2016 were up nearly 22%, to $7.3 billion, compared with the year-earlier period. But it still has a long journey ahead, and the strong yen meant that revenue growth turned into a sales decline when figures were converted into the Japanese currency. SoftBank's overall revenues edged down 0.3%, to around 6.6 trillion Japanese yen ($58.9 billion). And while net income doubled to JPY857.4 billion ($7.6 billion) on efficiency improvements, SoftBank's huge net debt -- at 4.3 times annual EBITDA -- is well above a target ratio of 3.5.


For all the latest news from the wireless networking and services sector, check out our dedicated mobile content channel here on Light Reading.


To some observers, Son's apparent friendliness with Trump, and silence on the immigration issue, will smack of hypocrisy. At the age of 16, the Japanese national moved to the US and later became a student at the University of California, Berkeley. Such an opportunity could be denied to millions of other teenagers if Trump's plans come to fruition. Empathy for their plight partly explains the vehement opposition to the travel ban from other technology executives who have benefited from the freedom of movement, including Google co-founder Sergey Brin, who relocated from Russia to the US when he was just six years old. Yet Son is either unmoved or happy to bite his tongue.

That is disappointing. "If I had not experienced America, then my life would have turned out completely differently," he has written about his experiences. "I saw Caucasians, Asians and African-Americans walking, talking and laughing together." The US, and its technology industry, could be a far less diverse place in future.

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

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danielcawrey 2/9/2017 | 3:36:35 PM
Re: Nailed it SoftBank wants to invest in the US, and that's the trend these days. I don't see anything wrong with that. 

As for the immigration issue, I think what we're going to see is a number of leaders still work with Trump despite some controversey. That's just the new political reality. 
PaulERainford 2/8/2017 | 9:51:00 AM
Nailed it Great piece, Iain, well argued and beautifully written. It seems, as far as telcos are concerned, pragmatism will trump transformation.
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