Streaksai Regulatory News (STK)

7 Apr 2006 08:49

Softbank Corp07 April 2006 SOFTBANK announces modifications to the consignment agreement for call center operations March 28, 2006 SOFTBANK CORP. ("SOFTBANK") announced that its consolidated subsidiary SOFTBANKBB Corp. (Head office: Minato-ku, Tokyo; Representative: Masayoshi Son;hereinafter "SOFTBANK BB"), JAPAN TELECOM CO., LTD. (Head office: Minato-ku,Tokyo; Director and CEO: Hideki Kurashige; hereinafter "JAPAN TELECOM"), and BBCall Corp. (Head office: Shinjuku-ku, Tokyo; President and CEO: YoshihikoYokoyama; hereinafter "BB Call") agreed on modifications to the consignmentagreement for call center operations, entered into by the three parties above. 1. Outline The SOFTBANK Group ("the Group") is in a comprehensive business alliance with BBCall. Based on this alliance, SOFTBANK BB has an inbound contract for callcenter operations (total payment of 209.205 billion yen during the period from2004 to 2010, with remaining payment of 167.505 billion yen as of the end ofFebruary 2006). JAPAN TELECOM also has contracts for call center operationswith BB Call, including an inbound contract (total payment of 83.493 billion yenduring the period from 2004 to 2010, with a remaining payment of 69.802 billionyen as of the end of February 2006), an outbound contract (no agreement on thetotal payment), and a leasing contract to procure a part of the communicationsfacilities and other outbound operation facilities (total payment of 110.93billion yen during the period from 2004 to 2011, with remaining payment of19.788 billion yen as of the end of February 2006. However, BB Call has alreadytransferred the leasing contract for communication facilities to another companyin June 2005). Taking into consideration the current and future operational volume and in viewof the aim of their comprehensive business alliance, SOFTBANK BB, JAPAN TELECOM,and BB Call have recently agreed on modifications to the above-mentioned inboundcontract, invalidation of the outbound contract, and purchase of the leasingcontract to provide the outbound operation facilities. The details are asfollows. 2. Major modifications (1) Inbound contract i. Modification of the contract period (Former contract) From August 2004 to May 2010 (New contract) From March 2006 to February 2015 ii. Modification on the order/payment unit (Former contract) Per fixed number of committed booths (total payment fixed) (New contract) Per work hours of service personnel (total payment variable, but with the minimum outsourcing hours guaranteed) iii.Scope of outsourced services (Former contract) Inbound service concerning the telecommunication services provided by SOFTBANK BB and JAPAN TELECOM (New contract) All inbound, outbound, and operational services outsourced by the Group (2) Outbound contract Invalidated with the change in the scope of outsourced services in the inboundcontract. (3) Leasing contract to procure facilities for outbound services This leasing contract has been invalidated with the purchase of all leasedassets for 16.498 billion yen. Provision for losses due to impairment of thesepurchased assets has already been recorded in the third quarter for the fiscalyear ended March 2006, under loss on contract revision relating to salesoperation change. 3. Impacts on consolidated financial results With this change in outsourcing contract, the unit of outsourcing to BB Callwill change from "fixed number of committed booths" to "work hours of servicepersonnel, " resulting in a payment that reflects the actual service volume. Inaddition, expanding the scope of outsourced services to include all the servicesprovided by the Group is expected to enable the contract to apply to a widerrange of the Groups businesses, including the mobile business. This contract modification involves no payment, such as for temporary costs.Therefore, the impact on the consolidated financial results for the fiscal yearended March 2006 is expected to be minor. * Inbound operations: includes customer services through telephone, email, and other communication mediums, related to the services provided to current and potential customers by the Companys consolidated subsidiaries. * Outbound operations: includes marketing operations through telephone, email, and other communication mediums, related to expanding the sale of services currently provided or scheduled to be provided to current and potential customers in the future by the Companys consolidated subsidiaries. This information is provided by RNS The company news service from the London Stock Exchange