[Japan] LINE's Subsidiary, LINE MOBILE, Enters Into Memorandum of Understanding With SoftBank for a Strategic Alliance

2018.01.31 Corporate Announcement

LINE MOBILE Corporation ("LINE MOBILE"), a wholly-owned subsidiary of LINE Corporation ("LINE") , has entered into a memorandum of understanding with SoftBank Corp. ("SoftBank") to proceed with a strategic alliance for the purpose of further growing the "LINE MOBILE" MVNO (mobile virtual network operator) business operated by LINE MOBILE.

 

This strategic alliance will consist of a capital alliance wherein SoftBank takes on a third party allocation of new shares to be conducted by LINE MOBILE, as well as a partnership to promote the MVNO business, though the details will be decided through future mutual consultations between the companies. As a result of this, LINE MOBILE will be a business operated under LINE and SoftBank (the investment ratio after the conclusion of this transaction is planned to be: LINE, 49%; SoftBank, 51%), and the transaction is planned to be completed around March 2018. Through this strategic alliance, LINE MOBILE aims to operate its business by making use of the partnership with SoftBank and its experience as a comprehensive telecommunications business operator to achieve further growth. Ayano Kado will continue to serve as Representative Director and President.

 

LINE MOBILE, which aims to make an even better and more comfortable relationship between users and their mobile experience, started full operation of its service in September 2016. Proposing three values of "Simple," "Free," and "Value," LINE MOBILE provides a service where users can use as much data as they want, without counting toward their data limit, for major social networks such as LINE, Twitter, Facebook, and Instagram, as well as the LINE MUSIC music service, and is unique in introducing plans that are easy to understand and match the use behavior and needs of individual users. As a result, the service has been praised since its launch for the simplicity of its price plans, its impressive cost performance, superior customer service, among others, and boasts 91% user satisfaction and 82% customer recommendation rate.*1

 

While the growth-rate of the MVNO market as a whole is slowing, LINE MOBILE continues to grow steadily, with a nearly 2.3x year-on-year increase in applications during the period of October to December 2017, achieving a nearly 1.3x year-on-year increase in monthly ARPU (average revenue per user) in December 2017, and having a 0.92% average monthly cancellation rate since the launch of the service.*2 Through these results, it's clear that users have a strong demand for the service's three values of "Simple," "Free," and "Value."

 

As the world enters an age in which everyone owns a smartphone, users' needs become more diverse, and it will be necessary to develop services that match all manners of needs. LINE MOBILE has entered into this partnership with SoftBank in order to further expand the provision of its mobile telecommunication service that aligns with the lifestyles of all manners of users, all while maintaining its current values.

 

Through this partnership, the companies aim to bring together their mutual strengths and further grow and expand the service. Further, the companies will aim to become what mobile telecommunications should be: one which acts as a one-stop location, over LINE and online, for all processes and services, and to become an even more comfortable communication environment achieved through the use of smartphones.

 

Existing LINE MOBILE customers will be able to continue using the service without any changes.

 

By growing and expanding LINE MOBILE through this partnership, LINE's services and businesses will expand. This will promote its smart portal strategy, which aims to make the LINE messaging app into a gateway that seamlessly connects people to information and services, as well as to companies and brands.

 

Comment from Ayano Kado (Representative Director and President of LINE MOBILE Corporation):

I'm greatly honored at the opportunity to work together with SoftBank through this memorandum of understanding to grow and expand the LINE MOBILE business. I am fully confident that LINE MOBILE will become one of the major mobile telecommunication services demanded by users in the future through its three proposed values of "Simple," "Free," and "Value." Through this partnership between LINE – which brought to light a new form of communication in the smartphone generation – and SoftBank – the first carrier in Japan to carry the iPhone and drove the smartphone market – we will bring together our mutual strengths and strive to further improve users' experiences with LINE MOBILE and continue to provide an appealing service that builds value in response to users' diverse needs.

 

*1: Average value from surveys for LINE MOBILE users conducted from the LINE MOBILE official account in February, May, August, and November 2017

*2: Average monthly voluntary cancellation rate. The total value of: voluntary cancellations ÷ monthly active subscribers for the period ((number of contracts at the beginning of the month + number of contracts at the end of the month) ÷ 2)

 

LINE MOBILE Corporation Overview 

Company name: LINE MOBILE Corporation

Established: February 26, 2016

Total capitalization: JPY 1,710,000,000

Representative: Ayano Kado, Representative Director and President

Primary business: Provision of internet connection services,

electronic telecommunication business, internet phone-calling and other telecommunication-related services