* CEO dissatisfied with No. 3 ranking in the U.S. with
* CEO says he wants to increase competition in U.S. market
* Oct-Dec net profit falls 13.4 pct to 97.25 bln yen on
(Adds executive comments on U.S. market, acquisition details)
By Sophie Knight
TOKYO, Feb 12 SoftBank Corp's
billionaire chief executive said he was not happy as just No. 3
in the U.S. mobile market and that consolidation was necessary
there, as regulators indicate resistance to an acquisition of
No. 4 carrier T-Mobile US Inc.
Masayoshi Son, who has repeatedly expressed his desire to
make SoftBank the biggest mobile-related corporation in the
world, said Sprint Corp becoming the U.S. No.1 is
"literally just a dream" without an industry shake-up.
SoftBank bought Sprint in the summer and has since been in
talks to buy T-Mobile, according to sources familiar with the
matter. Regulators prevented AT&T Inc pulling off a
similar feat in 2011 citing concerns of an industry shrinking to
three carriers from four.
"I am unable to make a comment regarding various rumours
right now as anything I say would have consequences," Son told a
briefing of analysts and reporters in Tokyo on Wednesday after
SoftBank reported a 13.4 percent decline in October-December net
"However what I can say is that the United States' mobile
industry is not competitive compared with other countries and
its network is not good."
SoftBank, whose mobile carrier unit remains Japan's
third-largest carrier in terms of subscribers, said its
October-December net profit fell as its purchase of Sprint and a
string of other acquisitions saddled it steep integration costs.
Net profit was 97.25 billion yen ($949.89 million) in the
third quarter from 112.28 billion yen a year earlier, though
that still beat analyst estimates of 38.99 bln yen according to
Thomson Reuters I/B/E/S.
Revenue grew 133 percent to 1.96 trillion yen, and operating
profit increased by 3.3 percent to 209.16 billion yen.
Shares of SoftBank closed 0.2 percent lower ahead of the
earnings release compared with a 0.6 percent rise in the
benchmark stock index. The shares fell sharply in late
January as sources said regulators would likely oppose further
consolidation in the U.S. mobile market.
Sprint's shares rose 2.7 percent on Tuesday after it
reported a narrower loss for October-December than analysts
Son, who founded SoftBank in 1981, continued the company's
relentless expansion this year to bring the number of mobile and
internet-related companies it owns stakes in to over 1,300.
His most recent purchases this business year include U.S.
handset distributor Brightstar, Japanese app developer Gungho
Online Entertainment Inc and Finnish mobile app
SoftBank's negative cash flow from investments in the first
three quarters reached 2.37 trillion yen, against 767.64 billion
yen in the previous year.
Soon after paying $21.6 billion for 80 percent of Sprint
last summer in the most expensive overseas acquisition ever for
a Japanese company, SoftBank reportedly began negotiations to
buy T-Mobile from its majority owner Deutsche Telekom AG
, sources say.
But the deal could be scuppered by opposition from the
Federal Communications Commission, with Chairman Tom Wheeler
expressing scepticism in a meeting with Son in early February,
according to an FCC official briefed on the matter.
An official at the U.S. Justice Department's antitrust
division, William J. Baer, also told the New York Times it would
be difficult to approve a merger among the top four carriers
because it would reduce competition.
Son said greater scale for Sprint would improve the
competitive environment and allow Sprint to launch an aggressive
pricing battle against dominant carriers AT&T and Verizon
"I'm not the type to think that being No. 3 is good," Son
said. "But I think there is a very big gap between the two
strong companies and the two weak ones," he said, referring
latterly to Sprint and T-Mobile.
SoftBank also owns stakes in companies such as Yahoo Japan
Corp and online retailer Alibaba Group Holding Ltd
which is preparing to list this year.
A rare sale of a stake in Alibaba announced on Tuesday
valued China's dominant e-commerce company at around $128
billion, Reuters calculations show, which would make SoftBank's
37 percent holding worth $47.36 billion.
($1 = 102.3800 Japanese yen)
(Reporting by Sophie Knight; Editing by Christopher Cushing)