Japanese operator SoftBank Corp recorded broad gains across most of its business units in its fiscal Q1 ending 30 June, but its mobile business remains challenged as newcomer Rakuten cranks up a price war.

Mobile service revenue slipped 1.4 per cent to JPY384.6 billion ($2.7 billion), impacted by a 4.9 per cent drop in ARPU to JPY3,720. Mobile product sales increased 8.5 per cent to JPY130.8 billion, which the operator said was aided by rising handset prices.

In an earnings call, president and CEO Junichi Miyakawa insisted new price plans by rival Rakuten Mobile “won’t drastically change the competitive environment”, noting it expects to reach the same level of net additions as a year ago.

“I don’t expect any impact” from the new tariffs, he stated.

SoftBank is Japan’s third-largest mobile operator and added 2.8 million mobile subs year-on-year, closing June with 52.7 million. Newcomer Rakuten trails with around 5 million.

Net profit at SoftBank Corp jumped 15.4 per cent to JPY146.7 billion, credited mainly to a one-off gain from the change in equity interest in subsidiary Z Holdings. Consolidated revenue rose 4.9 per cent to JPY1.4 trillion.

Sales from its Yahoo Japan and Line segments increased 1.9 per cent to JPY385.2 billion, and revenue from its financial segment, following the consolidation of PayPay Corp, nearly tripled to JPY52.6 billion. Paypay registered its first profitable quarter, with EBITDA of JPY1.7 billion.

Broadband revenue was flat at JPY100.5 billion, while enterprise sales grew 4.2 per cent to JPY184.1 billion. Its distribution business, covering cloud services, grew 15.7 per cent to JPY150.6 billion.

Capex in the quarter increased 6.1 per cent to JPY167.4 billion.