SoftBank Group said its telecom business in Japan has increased its Capex (capital spending) by 15.5 percent to 370,387 million yen or $3.37 billion in Q1 2018 — due to the expansion of service areas and improvement in quality for LTE network.

SoftBank said the network related Capex for Sprint, the company’s telecom business in the U.S., was $3.319 billion (+70 percent) in the first quarter of 2018. Sprint, which announced its $26 billion merger with T-Mobile US, will be increasing Capex and will be aiming to cut operations cost.

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The Japan telecom unit of SoftBank reported revenue of 3,229,845 million yen or $29.45 billion (+1.1 percent) with adjusted EBITDA of 1,178,140 million yen (–2.6 percent) in the first quarter.

The number of smartphone and SoftBank Hikari subscribers increased 1.69 million and 1.38 million, respectively. SoftBank expects to increase telecom service revenue in the fiscal year ending March 2019 by leveraging the growing customer base.

SoftBank said its telecom service revenue fell 0.7 percent to 2,406,613 million yen, while product and other sales rose 6.8 percent to 823,232 million yen. The decrease of telecom service revenue is mainly due to 4 percent drop in mobile communications.

Revenue from mobile communications fell due to the impact of discounts offered through the promotions such as Home Bundle Discount Hikari Set, high-volume flat-rate data plans, and Half Price Support.

SoftBank has 33.175 million subscribers in Japan. SoftBank’s subscribers increased from the previous fiscal year-end due to smartphone additions of 1,691,000. The number of Y!mobile subscribers and SoftBank subscribers grew due to promotion campaigns asking feature phone users to switch to smartphones.

SoftBank has lost some mobile data communications subscribers due to the termination of 3G service on 1.7 GHz as well as a decline in demand from customers with both smartphone and data device subscription due to the introduction of Giga Monster for smartphones.

SoftBank ARPU fell by 150 yen to 4,350 yen in Q1 due to the dilutive impact of an increased proportion of Y!mobile smartphones, which have a lower service charge. The increase of applications for Home Bundle Discount Hikari Set within the cumulative subscriber base also lowered total ARPU by increasing the discount amount in telecom ARPU.

Baburajan K