Introduction and Credentials:

Masayoshi Son, the founder, CEO, and chairman of SoftBank Corporation, was introduced as the richest man in Japan with a net worth of $18.4 billion. SoftBank is one of Japan’s largest mobile carriers and a leading global tech company with investments in over 1,000 companies, including Alibaba and Yahoo Japan. In 2013, SoftBank acquired Sprint for almost $22 billion.

Importance of Mobile Internet:

Masayoshi Son emphasized that the mobile internet, or “the internet highway,” is the most important infrastructure of the 21st century. He believes that it surpasses any other form of infrastructure in significance for this century.

U.S. Lagging in Internet Speed:

He pointed out that the U.S. ranks 15th in the world in terms of LTE speed, only ahead of the Philippines. Son expressed concern over the U.S. lagging behind other countries, especially since it had been a leader in infrastructure throughout the 20th century.

Market Dominance of Verizon and AT&T:

He attributed the slow progress in U.S. internet speed to the market dominance of Verizon and AT&T. These carriers control over 75% of the postpaid market and 80% of the corporate market, leading to limited competition and innovation.

Potential Acquisition of T-Mobile:

Son mentioned that SoftBank, which already owns Sprint, is interested in acquiring T-Mobile. While no formal agreement has been reached, the acquisition could potentially make SoftBank a major player in the U.S. market.

Regulatory Hurdles:

Tom Wheeler, the chairman of the FCC, has signaled a desire to maintain a competitive market. This implies regulatory resistance to a potential merger between Sprint and T-Mobile, which could give SoftBank significant market share.

Summary:

Masayoshi Son’s insights indicate concerns over the state of mobile internet infrastructure in the U.S. and propose greater competition as a solution. His intent to potentially acquire T-Mobile suggests that SoftBank aims to be a disruptive force in the U.S. telecom market.

Industry Duopoly and Competition:

Masayoshi Son discusses the overwhelming presence of duopolies in specific industries, controlling over 100% of free cash flow and 90% of the industry’s profit. He suggests that smaller players can’t compete due to a lack of scale and advocates for a change in this situation.

Strategy for U.S. Telecommunication Market:

When asked about what he would do if he had Sprint and T-Mobile, Masayoshi talks about the need for “scale” to compete fairly. He mentions a plan to go into a “massive price war” and a “network competition” to build the world’s best network.

Entrepreneurial Journey:

Masayoshi shares his early entrepreneurial experiences, including creating an electronic dictionary and a computer game project, making him over $3 million at 19. He didn’t rely on venture capital, choosing to fund his own ventures.

Challenges in Japan:

Masayoshi talks about the difficulties of growing up as an outsider in a homogeneous society like Japan. He mentions that his background made things challenging for him but he has since risen above it.

Investment and Corporate Strategy:

Masayoshi highlights that he never raised external capital and stresses the importance of making intelligent investments, noting his stakes in companies like Yahoo Japan and Alibaba.

Role Models and Influences:

He cites Honda and Morita, founders of Honda and Sony, as his heroes because they were visionaries who fought incumbents without government help. He also admires Steve Jobs and Bill Gates for their innovative capabilities.

Exclusive Deals and Bold Moves:

Masayoshi recounts how he secured an exclusive deal to be the iPhone’s carrier in Japan even before he had a mobile carrier business, displaying his audacity and forward-thinking nature.

Technology Perspective:

He distinguishes the iPhone as not just a mobile phone but an “internet machine,” which exemplifies the future direction of the industry, reiterating his ability to perceive industry trends.

Opinion on Bill Gates and Steve Jobs:

He praises Gates for his success but mentions his inability to “cannibalize” due to having something valuable to protect. He admires Jobs for his ‘beginner’s eye,’ innovating without being constrained by past norms or ideas.

The transcript encapsulates Masayoshi Son’s views on a variety of subjects, ranging from industry dynamics to personal inspirations, shedding light on his mindset as both an entrepreneur and an industry leader.

Intersecting Finance and Technology:

Masayoshi Son contrasts himself with Steve Jobs, describing Jobs as the intersection of art and technology. Son identifies himself as the blend of finance and technology. While he appreciates art, his focus lies in utilizing finance to advance technology.

Focus on Information Revolution:

Son articulates that his primary concern is the information revolution, aiming to create a new lifestyle for mankind. He believes that while he doesn’t have to do everything himself, he can facilitate the revolution by leveraging other people’s talents and providing the necessary infrastructure.

The Metaphor of Highways and Toll Gates:

He likens his role to creating highways for “beautiful automobiles,” instead of manufacturing the cars themselves. His aim is to establish a complete ecosystem for the advancement of the information revolution, which he refers to as creating the “highway” and “toll gate.”

Infrastructure Challenges:

Addressing a significant issue, Son states that existing infrastructure is inadequate for internet devices, which prompted his challenge to NTT in Japan. NTT held a 99% market share in Japan’s information highways, leading Son to push for deregulation.

Capital Requirements:

Son concludes by stressing the need for substantial financial investment to bring about the information revolution. While he doesn’t see money as the end goal, he acknowledges the need for “tens of billions of dollars in CapEx” to create a viable information highway.

Global Ambitions and Competitive Landscape:

Masayoshi Son states that he aims for his company to be the biggest in the world. The conversation recognizes that there are also other big players like Google and Comcast, who are investing heavily in fiber and infrastructure, setting the stage for a competitive landscape.

Capital-Intensive Industry & Technological Requirements:

Son elaborates that the industry is extremely capital-intensive and that devices can connect via wireline broadband or wireless. What matters most to users is performance, which is becoming more achievable via wireless technologies, thus introducing another viable alternative to fixed-line broadband.

Issues with Current Carriers and Need for Scale:

Son criticizes existing networks in the United States for being slow and unreliable. To address this, he stresses the need for scale at a company, subscriber, and network level. He argues that becoming a heavyweight is essential to compete effectively and trigger innovation among competitors.

The Importance of Competition:

Son is keen to introduce competition in the market to make all parties more efficient and competitive, which he says is good for the United States. He notes that he has technology that can deliver speeds up to 200 megabits per second, faster than most fixed-line broadband, demonstrating a strong competitive edge.

Comparison of Operating Systems and Samsung’s Strength:

When asked about Android and Apple operating systems, Son compares Apple to a Ferrari, excellent for high-end users, while Android offers more variety for different market segments. He acknowledges Samsung as a great company, attributing its success to its breadth and depth in technology and an unwavering passion for success.

Dot-Com Bubble and Crash:

Masayoshi Son recounts his experience during the dot-com bubble, where his company’s market capitalization reached $200 billion, making him technically richer than Bill Gates for three days. However, the bubble burst, causing the company’s value to plummet to $2 billion—a 99% drop in one year. Son’s net worth similarly fell from $70 billion to $600 million.

Optimistic Outlook:

Despite the drastic financial downturn, Son remained confident. He believed the market had both overreacted upwards and downwards and that things would stabilize. His confidence was bolstered by the continued growth in user numbers and profits. He believed that as long as the internet and traffic continued to grow, the company would recover.

Changing Technology Giants:

Son talks about the ever-changing landscape of dominant technology companies. He acknowledges Google’s current strong position but also emphasizes that no technology stays dominant forever. He shows respect for other technology giants like Apple, Amazon, and Facebook, citing them as well-managed companies with a long-term vision.

Acquisition Philosophy:

On the topic of acquisitions, particularly Facebook’s acquisition of WhatsApp for $16 billion, Son wholeheartedly approves. His acquisition philosophy is future-focused. If he sees long-term potential in an asset, he believes in acquiring it, even at a premium.

Infrastructure and Content:

Son aims to build a foundational platform through his company, on top of which various applications, content, and services can flourish. His vision is comparable to the business model of John Malone’s cable company with Liberty Media.

Interest in Renewable Energy:

Son’s interest in renewable energy sources like solar and wind emerged following Japan’s earthquake crisis. He does not see nuclear energy as a sustainable solution and aims to provide alternative solutions.

Political Stance:

Son remains somewhat reserved when asked about Japan’s Prime Minister, stating that while he doesn’t agree with everything the PM does, he considers him to be smart. Son suggests that a more balanced approach would be beneficial.

The segment offers a deep dive into Masayoshi Son’s philosophies on market fluctuations, business strategy, technology’s evolving landscape, and even socio-political issues affecting his business choices.

Global Connectivity:

Masayoshi Son, the primary speaker, emphasizes the borderless nature of the digital world. He believes that the Internet connects people instantaneously, reducing barriers and promoting peace. The Internet is presented as a space that transcends political divisions between countries.

Focus on Information Revolution:

Son is entirely committed to the digital revolution, stating it’s the third significant revolution following the agricultural and industrial revolutions. He believes this era will last 300 years and is the focal point of SoftBank’s long-term vision.

Partnership Over Solo Ventures:

Contrary to many American companies that aim to dominate the global market with a single brand, Son values partnerships and joint ventures. His approach is to invest in entrepreneurs and help them grow, welcoming innovation into SoftBank’s ecosystem without the necessity of it originating within the company.

Competition in the Telecom Industry:

Son criticizes the U.S. market for lagging in mobile internet infrastructure. He points out that two major carriers hold a majority of the market share, stifling innovation and leading to an imbalance in the industry. Son advocates for real competition and is interested in potentially acquiring T-Mobile to challenge the existing duopoly.

Importance of Mobile Infrastructure:

He considers mobile Internet as the most crucial infrastructure of the 21st century. Son notes that the U.S. ranks poorly in mobile internet speed, a situation he finds unacceptable for a country that led in many infrastructural areas in the 20th century.

Regulatory Obstacles:

Son does not disclose much about the specifics of a potential deal with T-Mobile but hints at challenges, likely regulatory, that need to be addressed to make such an acquisition possible.

Personal Background:

Growing up in Japan with Korean and Chinese ancestors was challenging for Son due to Japan’s homogeneous society. His experiences may have influenced his global perspective and emphasis on connectivity and partnership.

Company Overview:

SoftBank is one of Japan’s largest mobile carriers and a significant global tech company, with stakes in over 1,000 other companies. In 2013, it acquired Sprint for almost $22 billion.

These points collectively offer a comprehensive view of Masayoshi Son’s perspectives on technology, his long-term vision for SoftBank, and the current state of the telecommunications market.