Japanese operator SoftBank Corp warned of a continued unstable business environment due to the Covid-19 (coronavirus) pandemic, but pointed to improvements in its enterprise unit and low-cost consumer brand in its fiscal Q1.

Reporting results for the three months to end-June, SoftBank noted although the pandemic was continuing to cause economic issues in Japan it had accelerated digital efforts across enterprises, leading to a boost in sales of cloud and security services.

In its consumer mobile operation, SoftBank noted “intensifying competition over new price plans” across the industry. It added in this environment its low-cost Y! Mobile brand performed “particularly well”.

However, it also noted revenue from its various mobile services had fallen slightly year-on-year, reflecting a decline in ARPU as users switched from the primary SoftBank brand to its lower-priced alternatives.

Elsewhere, its fiscal Q1 represented the first full quarter since the incorporation of messaging company Line into SoftBank’s Z Holdings business.

Hailing the expanded entity as “Japan’s largest internet service company” SoftBank said the move would help diversify its revenue going forward, and pointed to the opportunity to deepen collaboration between this unit and other areas of the company.

It aims to make Z Holdings the largest entertainment company in Japan and plans to press on with growing existing areas including video, music, games, e-books and fortune telling to help achieve this.

SoftBank booked revenue of JPY1.4 trillion ($12.8 billion), up 15.7 per cent year-on-year largely due to the incorporation of Line into the business and, to a lesser extent, improved enterprise sales. Net income was broadly flat at JPY169 billion.