Is Softbank able to catch up with its competitors?

Softbank Corp., which owns Japan's third-largest mobile-phone company, plans to boost capital spending at least 11 percent this year to expand its network and catch up with bigger rivals NTT DoCoMo Inc. and KDDI Corp.

The Company is ready to spend generously. It will raise spending to about 432.9 billion yen ($3.5 billion) in the 12 months ending March 2008, from 389.8 billion yen a year earlier, Tokyo-based Softbank said in a financial statement submitted to the Ministry of Finance. The mobile-phone unit will increase spending at least 26 percent to about 387.9 billion yen, according to the document.

Chief Executive Officer Masayoshi Son failed to meet his network expansion plans last fiscal year. By the end of March, Softbank had 29,404 base stations, which transmit mobile-phone signals, missing the company's own target and trailing DoCoMo's number of stations by 36 percent.

“The move will help Softbank overcome its weakness and catch up with rivals,” said Mitsuru Miyazaki, an analyst at SMBC Friend Research Center Ltd. in Tokyo. “The company will get fully ready to compete with DoCoMo and KDDI.”

Softbank has said it aims to deploy 46,000 base stations by Sept. 30. DoCoMo, which plans to cut capital spending 19 percent to 750 billion yen this fiscal year, has forecast it will increase its number of stations to 56,700 by March 2008. KDDI has said it will boost investment in its wireless network by 12 percent to 370 billion yen this year.

The number three of service providers is trying to get a hold of the market. However, companies like DoCoMo are likely to retaliate. This competition will encourage the other service providers to follow suit and this may benefit the customers who will experience better network coverage and better services as the others invest more. Can Softbank overcome its competitors with this spending spree? How will the others react following this strategic move? What do you think?