SoftBank Splitting Off Domestic Mobile Business

Japan’s SoftBank Group Corp. said on Monday (March 7) that it will split its mobile business from its overseas operations, which includes a significant stake in U.S.-based firm Sprint, The Wall Street Journal reported.

Through the recasting of its structure, SoftBank said its executive leadership will entail former Google executive and current SoftBank President Nikesh Arora heading the overseas operations, with the continued holding of the 32 percent stake of Chinese eCommerce giant Alibaba Group and other tech-focused holdings.

Separately, the Japanese telecom business and stakes in domestic tech firms, such as Yahoo Japan, will be led by the man who currently leads SoftBank’s Japanese mobile unit, Ken Miyauchi. Despite the separate operations, SoftBank will retain its ownership of both separate entities.

In mulling over what the split might mean strategically, analysts told WSJ that there could be an IPO in the future for the overseas investment company. In essence, the slower growth business is being decoupled from faster moving parts. WSJ noted that the separation may “ease concerns” that money that comes from Japan would be used to help the still-unprofitable Sprint, which still has a debt load of as much as $32 billion.

The latest news comes after SoftBank decided not to establish a London-based company to run the investment arm, as well as bypassing a management buyout. WSJ stated that the newest bid to reorganize the company is a move, yet again, toward evolution for a firm that began as a software distributor but now has footholds across telecom, media and tech. Other technology holdings include Chinese ride-hailing outfit Didi Kuaidi and Indian eCommerce firm Snapdeal, among other listings in a broad portfolio of properties.