Streaksai Regulatory News (STK)

1 Mar 2006 08:28

Softbank Corp01 March 2006 February 10, 2006 Announcement of loss on contract revision relating to sales operation change dueto strategic changes in sales agency policies on Otoku Line SOFTBANK CORP. (hereafter "the Company") announces that JAPAN TELECOM CO., LTD.(Head Office: Minato-ku, Tokyo; President & CEO Hideki Kurashige; hereafter"JAPAN TELECOM"), the Companyfs wholly-owned subsidiary, recorded loss oncontract revision relating to sales operation change as special loss, as aresult of strategic changes in sales agency policies on Otoku Line, a directconnection voice service which was launched in December 2004. 1. Outline Since the beginning of this fiscal year JAPAN TELECOM has taken severalfundamental measures to improve operating profit of the Otoku Line business,while the most of its customer acquiring activities had been previously focusedon outbound sales through call center (soliciting potential customers throughtelephone calls) and on sales agencies, at the initiation stage of the OtokuLine business started from December 2004. In concrete terms, JAPAN TELECOMfocuses on its direct sales for large-sized enterprises, and transferred agencymanagement and other responsibilities to JAPAN TELECOM INOVOICE Co., Ltd. (HeadOffice: Minato-ku, Tokyo; Representative: Ikuo Kimura) in October 2005, whichwas established as a joint venture with INVOICE INC. (Head Office: Minato-ku,Tokyo; Representative: Ikuo Kimura). Following such changes in the Otoku Line business strategy, JAPAN TELECOM hadreviewed the future usability of its assets relating to the sales agency used inthe customer acquiring activities for small and medium sized enterprises andresidential customers. As a result of this review, JAPAN TELECOM accrued lossfor assets of low utilization and limited reusability in the future and therebyrecorded loss on contract revision relating to sales operation change. 2. Impacts on consolidated financial results The Company recorded approximately /18.8 billion loss on contract revisionrelating to sales operation change as special loss in the 3rd quarter for thefiscal year ending March 31, 2006. This information is provided by RNS The company news service from the London Stock Exchange