April 5, 2010 / 2:25 AM / 8 years ago

UPDATE 2-Softbank shares fall as phone limits may be lifted

* Government says plans to make rules to lift SIM locks

* Move seen benefiting DoCoMo, hurting Softbank-analyst

* Softbank and DoCoMo say would consider lifting SIM locks

* Softbank down 3.6 pct, Docomo up 0.3 pct

(Adds analyst comment, background)

TOKYO, April 5 (Reuters) - Shares of Softbank Corp (9984.T) slid more than 3 percent on Monday on news Japan’s government planned to make it easier for mobile phone users to switch operators while keeping the same phone.

The move to lift restrictions blocking the use of different SIM cards in a mobile phone is expected to encourage some subscribers to switch to NTT DoCoMo (9437.T), which has the strongest coverage area, and hurt iPhone provider Softbank, whose network is not as strong.

“Many users switched to Softbank from Docomo when iPhone was launched (in Japan), but lifting the lock on SIM cards could be a good opportunity for Docomo to win back users,” said Hironobu Sawake, a telecoms analyst at J.P. Morgan.

Daisuke Iwai, an official at Japan’s communications ministry, said that the government planned to work with mobile phone operators to lift the lock on SIM cards, but that the timing of such a move and other details had yet to be decided.

The Nikkei newspaper reported over the weekend that the government would outline guidelines in the next few months and implement the change by the end of the year, aiming to boost competition and lower fees for consumers. [ID:nTOE63200G]

Currently, mobile phone handsets in Japan are developed exclusively for a particular service provider. By removing limits on SIM card use, callers will be able to switch phone operators without changing handsets.

    “Network quality would become very important if the lock on SIM cards is lifted. Softbank, which has made it a priority to make profit and loan payments, would need to invest more on its network,” J.P. Morgan’s Sawake said.

    Softbank last week lifted its capital expenditure for the 2010/11 financial year to 400 billion yen ($4.24 billion) from the around 300 billion yen previously planned. Most of the increase is likely to go to network building, said Softbank spokesman Fumihiro Ito.

    Shares of Softbank, Japan’s No. 3 mobile phone operator, which has benefited from its status as the sole provider of Apple’s (AAPL.O) iPhone in Japan, slid 3.6 percent to 2,253 yen. Industry leader DoCoMo gained 0.3 percent to 143,500 yen.

    Second-ranked KDDI (9433.T), which uses a different communication standard from Docomo and Softbank, rose 0.3 percent to 481,500 yen. The benchmark Nikkei average .N225 advanced 0.5 percent.

    Spokesmen from both Softbank and DoCoMo said they would consider lifting SIM locks if that would please customers.

    “But it should be decided by the operators themselves, not be made an obligation by the government,” said Softbank spokesman Ito. (Reporting by Nobuhiro Kubo; Editing by Chris Gallagher and Joseph Radford)

    0 : 0
    • narrow-browser-and-phone
    • medium-browser-and-portrait-tablet
    • landscape-tablet
    • medium-wide-browser
    • wide-browser-and-larger
    • medium-browser-and-landscape-tablet
    • medium-wide-browser-and-larger
    • above-phone
    • portrait-tablet-and-above
    • above-portrait-tablet
    • landscape-tablet-and-above
    • landscape-tablet-and-medium-wide-browser
    • portrait-tablet-and-below
    • landscape-tablet-and-below