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SoftBank Group Corp.’s mobile division on Tuesday saw a profit jump in the third quarter, as its heavy data plan attracts more and more users, securing future growth on the rise of 5G services.

For its first earnings report as a public company, SoftBank Corp. stated that operating profit rose 24 percent to ¥191.6 billion ($1.74 billion) in the three months ended December, compared with the ¥155.1 billion generated in the same period in 2017.

The firm also kept its forecast for operating profit unchanged, estimating a 10 percent increase to ¥700 billion for the year through March, against analysts’ forecast of ¥691 billion.

The figures came after the Japanese mobile unit experienced a turbulent period.

Last year, SoftBank suffered a network outage, fielded ongoing government calls for lower prices, and was under suspicion for its ties with Chinese tech titan Huawei Technologies Co. Ltd., which telecoms equipment Western influences was allegedly being used for spying.

The third quarter also saw the Tokyo-based conglomerate carry out Japan’s biggest-ever initial public offering (IPO), although the stock fell 15 percent from its ¥1,500 IPO price upon its December 19 debut, leaving domestic retail investors disappointed and sentiment subdued, according to finance executives.

Critics have also said it was sold too aggressively to its overwhelmingly domestic retail investors, who purchased the majority of the offering.  

Shares of SoftBank’s mobile business closed with a 0.4 percent gain to ¥1,359.0 ahead of earnings release, ending below analysts’ average estimated price of ¥1,600. Seven analysts suggested buying the stock, while six recommended holding or selling.

Room for Growth

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As worries over a mobile market shift continues to pushed SoftBank Corp.’s shares below its record IPO price, investors are seeking guarantee that the company can keep its word of paying 85 percent of annual profit in dividends.

Others are looking for any clues of the health of its majority shareholder SoftBank Group Corp., which relies on money from Japan’s third-largest network provider to finance investments.

Furthermore, pressure on SoftBank is expected to continue this year.

Japan’s predominant mobile phone operator NTT Docomo Inc. is due to announce annual return of ¥400 billion to customers, while e-commerce group Rakuten Inc. is set to become the nation’s fourth major wireless carrier from October promising low prices.

SoftBank Corp. Chief Executive Ken Miyauchi echoed the rhetoric of founder Masayoshi Son, stating that new services and the adoption of high-speed 5G networks suggested the smartphone industry had enough room for expansion.

5G smartphones in a few years will probably take over the entire world, according to Miyauchi.  

Analyst Daisaku said SoftBank should be able to grow as market uncertainty lessens by means of catching heavy users’ interest through its industry-leading 50 gigabyte data plan while offering low-cost plans using its Y!mobile brand.

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