iPhone News Updated

Softbank up on brisk Q1 earnings, iPhone fee cut

TOKYO (Reuters) - Shares in Softbank Corp gained as much as 4.3 percent on Wednesday after Japan’s No. 3 mobile phone operator reported solid quarterly earnings and said it would slash monthly fees for users of Apple Inc’s iPhone.

Softbank’s announcement that it would chop its lowest monthly charges for iPhone users by up to about 60 percent came less than a month after its July 11 launch of the phones, suggesting sales of the device may be losing steam after hard-core fans snapped them up in the first few weeks.

Analysts took Softbank’s move to expand its iPhone customer base to entry-level users as a positive sign because the high monthly fees — about twice the average for mobile phones — were seen as one of the main hurdles for many would-be iPhone owners.

“It’s Softbank making preparations for the future,” said Mitsubishi UFJ Securities analyst Shinji Moriyuki. “They are trying to open the gate wider before sales really slow down.”

“This will broaden the customer base to those who are willing to jump in if the monthly charges are just a little bit more than usual,” he said.

Softbank cut monthly fees for iPhone subscribers to as low as 2,990 yen from 7,280 yen.

It had originally set a fixed rate for data usage, but after the change, data transaction fees will fall to between 1,695 yen and 5,985 yen a month depending on the volume of usage.

Analysts say most users will end up paying at the high end of the fee bracket as they browse the Internet on their iPhones, and that would bode well for the company’s earnings, which are already showing improvement in per-user income on data transmission.

Softbank’s April-June profit was helped by its reduced subsidy payments on handsets after fewer cellphones were sold as more people signed up for installment payment plans that lock them into paying for one handset over one to two years.

JPMorgan Securities analyst Hironobu Sawake said the iPhone fee cut would also help reduce data traffic on Softbank’s networks because many subscribers would try to use as much free Wi-Fi access as possible to lower their data charges.

The stock gained 3.6 percent to 2,005 yen as of 12:47 a.m. EDT after rising as high as 2,020 yen. The Tokyo Stock Exchange’s information and communications subindex was up 1.3 percent.

(Reporting by Sachi Izumi; Editing by Hugh Lawson)

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