SoftBank to secure majority stake in Line mobile service

The agreement is aimed at boosting growth in the budget mobile business.

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Miki Yoshihito

SoftBank has entered into an agreement with Line to secure a majority take in the firm's mobile business.

On Wednesday, the Japanese conglomerate revealed the deal, in which SoftBank will secure a 51 percent majority stake in Line's mobile unit. Line will retain the remaining 49 percent.

Line Mobile's Mobile Virtual Network Operator (MVNO) business focuses on budget services with a variety of price plans and ease of use. The MVNO service allows for unlimited data usage for Line services and social media, such as Facebook, Twitter, and Instagram.

The MVNO will come under SoftBank and Line's umbrella in the future if the preliminary deal closes, and it is hoped the agreement will boost the growth of the mobile business.

Line's mobile business has experienced a slowdown in growth in recent times, despite a surge in the MVNO industry as a whole last year after Japan relaxed regulations related to MVNOs in the mobile communications industry.

The time required to unlock SIM cards has been cut due to regulatory changes, which means more subscribers can take advantage of MVNOs which offer cheap, subsidized wireless connections through other firms' networks.

Line Mobile is still reporting a steady growth rate, but through a potential SoftBank partnership, the company may be able to expand further across Asia and increase its client base.

SoftBank and Line say they hope to become a one-stop-shop for mobile communications.

"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," Line Mobile said.

Existing customers will not experience any changes to their service.

The telecommunications firm recently expanded to Thailand through a partnership with DTAC TriNet (DTN), a subsidiary of Total Access Communication (DTAC), although this has caused potential legal issues due to a lack of MVNO licensing in the area.

See also: Softbank leads $120M investment in AI-based insurance startup Lemonade

"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," Ayano Kado, President of Line Mobile said. "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."

Line also took the opportunity to announce the formation of a new company, Line Financial Corp., which will offer insurance, loans, and cryptocurrency services.

Earlier this month, reports surfaced claiming that SoftBank is considering an IPO which will list at least a third of the firm's mobile business. If an IPO is launched, SoftBank could raise up to two million yen.

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