(The following statement was released by the rating agency)
March 01 - Standard & Poor’s Ratings Services said today its ratings on Japan-based telecommunications provider Softbank Corp. (BBB/Stable/--) will be unaffected by the Ministry of Internal Affairs and Communications’ announcement Wednesday that it would allocate the company a 900-megahertz radio frequency band for its high-speed mobile telecommunications services. We have incorporated into our rating the possibility of Softbank’s successful acquisition of the new spectrum bandwidth as well as the expected benefits and a possible additional financial burden for the company due to a related increase in capital expenditures. We expect the bandwidth to improve Softbank’s network quality, which lags behind that of its rivals due to a lack of bandwidth capable of strong transmission with high-speed mobile services, and we believe that steady accumulation of smartphone subscriptions should enable the company to maintain steady operating performance in the next two to three years. Nevertheless, because the new bandwidth should narrow the gap in network quality between major Japanese mobile carriers, we expect competition between carriers to intensify in the next two to three years. We believe Softbank continues to generate more than JPY600 billion in funds from operations (before adjusting for working capital) a year, which should cover the significant capital expenditures it will need to make to enhance its network in the next two years or so and to gradually repay debt.
General Criteria: Principles Of Credit Ratings, Feb. 16, 2011 2008 Corporate Criteria: Analytical Methodology, April 15, 2008