Press Releases 2005

Notification of Extraordinary Losses Arising from Restructuring of
"Otoku Line" sales formations

Aug. 10, 2005

SOFTBANK CORP. announces that the company is obliged to book certain losses arising out as extraordinary losses incurred by wholly-owned subsidiary, JAPAN TELECOM CO., LTD (Head office: Minato-ku, Tokyo; President and CEO :Hideki Kurashige, hereinafter “Japan Telecom”), as a result of restructuring of sales formations concerning the direct connection voice service (hereinafter “Otoku Line”).

1. Background

So far Japan Telecom has been promoting sales of “Otoku Line” mainly through its sales agency network. Sales of “Otoku Line,” which was launched in December 2004, have not been progressing as smoothly as originally planned and the number of new contracts for the “Otoku Line” are still under-running the originally expected level.

Under such circumstances, the company and Japan Telecom have jointly conducted a thorough review of "Otoku Line" sales formation, which has culminated in the recognition of extraordinary losses.

2. Effect on the Consolidated Financial Statement

During the 2nd quarter of the March 2006 Fiscal Year, the company will book an amount of approximately 7 billion yen as being the extraordinary losses.

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