Revolution. But for these internet devices, the highway its isself a itselfn infrasti it is a big problem. Charlie and we conclude with Catherine Deneuve and her new film, on my way. [ speaking french ]ni i must say that for the recent years, i have been very lucky with the people i have been working with, people have been wanting to work with me. Which is difficult for an actress to be, when youre over 30, not as muc as much in amerit to have an important part in a film. Charlie Masayoshi Son and Catherine Deneuve when we continue. Captioning sponsored by Rose Communications from our studios in new york city, this is charlie rose. Charlie Masayoshi Son is here, ma founder and c. E. O. Andi chairman of softbank corporation. Estimated his net worth at 18. 4 billion, that makes him the richest man in japan. I am pleased to have him here at this table for the first time. Welcome. Good to have you on the program. Thank you very much. Charlie youre going to speak to the u. S. Chamber of commerce this week in washington. Yes. Charlie what are you going to tell them about the wireless revolution . Well, i would say that mobile internet, the internet highway is the most important infrastructure for the 21s 21st century. To me, it is so clear than any other infrastructure thats more importantni for 21st century. However, the u. S. Is number 15 in thenr world. Outni of 16, number 15. Charlie in terms of what measurement . Speed. Charlie speed. Yes, lte speed. So the only company they beat is the philippines. Charlie they didnt beat south korea or japan . No, no. Many other countries, the u. S. Was beaten. So is it good enough situation for the 21st century, the most important infrastructure, the u. S. Is lagging behind . And the u. S. Has been number one for infrastructure almost for anything in the 20t 20th century automobile, the electricity, the Television Almost everything. Charlie and you believe that is because two carriers verizon and at t have more than 60 of the market. Yeah, more than 75 and almost 80 in the corporate market. Charlie and they are stifling innovation, in your judgment . They are happy where they are. They make a ton of money and free cash for dividends back to the shareholders, so they are very comfortable where they are, which i dont blame them. If i were in their shoes, you know, i would be happy. But because theyre in such a happy position without facing a real competition from some Strong Enough challenger, they can relax. Charlie okay. So you bought sprint. Yes. Charlie a carrier. Yes. Charlie and now you want to buy tmobile. If we could, but we have not agreed charlie you havent made an agreement with tmobile . No. Charlie what are your chances . I dont know. We have to give it a shot. Charlie is it money or is it Something Else . Well, im not here to talk about any details of that situation. Charlie why not . laughter well, look, you know, we have to charlie you have to make a deal. 1 yeah, we would like to make a deal happen, but there are steps and details that we have to work out. Charlie tom wheeler is chairman of the th f. C. C. And he suggested he wants to make surei theres competition in the market so hes not in favor of mergers between spinet and tmobile and you own sprint, so therefor, you would have a huge position in the american market. Yeah. Well, look, you know, theres two big businesses and they take more than 100 of industr theni. So here comes the two little ones who are not able to fight. So i think thats not good and something needs to be changed. Charlie if somebody could make a deal and had sprint and then tmobile, what would you be able to do as a carrier in the United States . Well, look, we need a certain scale, but once we have enough scale to have a level fight, okay its a three heavyweight fight charlie well, you like that, dont you . Yeah, i would like to have the real fight, not the pseudofight. I would like to have the real fight. If i can have a real fight, i have a price war. Charlie thats your pattern, when you get a stakehold, you undersell everybody. Yes. Charlie youre willing to postpone profits in order to gain market share . Exactly. I want to be number one, right . So if were number three and we had enough chance, i want to be number one. So i would go, you know, price competition, you know, very much aggressively and network competitione worlds best network. I told you, now, u. S. Is number 15 out of 16. Charlie yes. Im ashamed of that. Im not here to criticize the u. S. Situation, im here to say i now own a part of the responsibility and i would like to provide u. S. Citizens the worlds number one network. Charlie let me go back to japan. What was it like growing up in japan, the son of korean and chinese ancestors . Its not easy, its not easy. Japan is a homogenerous race country. Charlie yes. One culture with one race. So if you are considered an outsider, its not easy. But nowadays, i speak up enough so peoplenr know that i am, you know, just myself. Charlie and then, at 16, you sam came to san francisco. Yes is. Charlie made your way to berkeley, and then graduated. What did you want to do when you got out of berkeley . Well, i wanted to start my own company. So when i was a student at berkeley at 19 years old, i already start a Small Company and made the first electronic dictionary. Charlie yeah, a pocket dictionary first. Yeah, pocket charlie translator and dictionary. Yes. Charlie and soldt it . To schwab to 1. 7 million. For a kid, not bad. Charlie not bad. Did a game project that made me another 1. 5 million. So i got a little over 13 million when i was 19. That was good capital for myself. Charlie yes. I never used venture capital. Charlie you never raised money yourself. Thats better. The fewer partners you have, the better off you are. Well, if you can succeed. Charlie if you can get by without their capital. Yeah. Charlie when did you go back to japan . Right after i graduated, i went back to japan, because i promised my mother that as soon as i finished my college, i would be back to japan. So i kept my word. Charlie and then you began your march to where you are today. Yes. Charlie you seem to have done it by twoni things. Not only your own company, but investing in other companies. I mean, youve had a keen eye for what might be a successful investment. Yes. Charlie nr yahoo japan. Yes. Charlie ally ba ba, which will be a huge payday for you, one of the largest ipos around. Yeah, we are lucky. Charlie yeah. You need luck once in a while. Charlie yeah. Your heros werenr mr. Honda and mr. Morita. Yes. Charlie you like them because . They have a passion, they have a vision and they are founders, you know, of a huge brand because they are pioneers, you know. They pioneered the electronic industry, they pioneered the Automobile Industry in japan, fighting with incumbents, not helped by the government but helped themselves. Charlie you admire bill gates and steve jobs a lot. Steve jobs you thought was what . Leonardo da vinci. Charlie leonardo da vinci. Yes, with the art and technology combined. Charlie the design and engineering, he saw with johnny ives, understood how to do that. Yes. Charlie and 500 years later, people could compare steve jobs with da vinci, thats my view. Charlie and when he went looking for somebody a carrier in japan for his iphone, you said, me yeah. That was two years before he introduced iphone. Charlie yes. So i said, you know, if i would enter into the mobile business, the mobile carrier business, i need a weapon. Who can create the best weapon in the world . Only one guy, steve jobs. Charlie did you call him up or go see him . I called him up and went to see him, and i brought my little drawing of the ipod in a mobile capability. Charlie yes. And i gave him my drawing and steve says, masa, you dont give me this, i have my own. Charlie dont need your drawing, masa. Yeah laughter i said, well, i dont need to give you my paper, but once you have your own product, give me for japan. Charlie yes. And he said, well, masa, you are crazy, you know. Weve not talked to anybody, but you came to see me as the first guy, i give to you. Charlie is that right . Yeah. Charlie so you walked away with as the carrier in japan that would be affiliated with the iphone . Right, before i acquired it for japan. I said if you can give me exclusively for the japanese market, that will be fantastic. I said, write it down. laughter he said, no, masa, im not going to sign for you because you dont even own a mobile carrier yet laughter i said, well, steve, you give me your word, i bring a carrier for japan. Charlie and you did. And i did. I spent 20 billion. Charlie there was some concern as to whether the japanese consumer would like the iphone. They had their own. Why did you think it would . Well, its the industry, technologys direction, right . Charlie yeah. Because, before iphone, most of the handsets were just the crappy, you know, handmade software without operating system so that not so m yo manyu know, standard Application Software could come as a platform. Like a pc, you know. This is the internet device that you can carry around. So its not a mobile phone, its an internet deviolation. Intern. Thats my view. Hes the only guy that could create a device with an operating system so it would be a platform for every application for the internet. Charlie and you know bill gates and admire bill gates. Very much. Both are my heros. Charlie why do you think bill gates missed so much . He had a touch of fantastic success. Charlie with the operating system. With the operating system for the pc. Charlie right. And when you are so successful in one thing, you have something to protect. Charlie yeah. Right . So its very difficult to cannibalize. And he was retiring from the company. He no longer had the passion to go on to the next thing. Charlie he had other things he wanted to do in terms of philanthropy. Right. Charlie someone once said to me about steve that, unlike others, he saw everything with a beginners eye. He saw it with a freshness so that he would start from the beginning so, therefore, he wasnt incouplerred by the way it had been. He didnt carry anybody elses idea. He had to create himself from the, you know, pure eye of not the past, for the future. Charlie yeah. So thats what i admire the most, and he had tremendous focus. Charlie but are you more the financial guy who with understands guy who understands how to make a deal but also understands how to find the companies that you want to make a deal about rather than being a creative guy . Well, you know, if steve is technology. Charlie yes. I amphinance and technology. Charlie no art there. I love art but im not the artist for the industry. But to me, whats more important is information revolution. Thats more important, to create a new lifestyle for mankind, okay . If i can help, you know, bringing the information revolution to mankind, i dont have the do everything. You know, i can bring everybody elses talent. I can bring the infrastructure charlie you bring the roadway that they come. Yeah. I dont have to create the ferrari or the hyundai. I can create the highway for all the beautiful automobiles. I can create the toll gate and the entire ecosystem for the automobile revolution. So that is what i am trying to do. I am bringing the information revolution. But for these internet devices, the highway itself as an infrastructure is not good enough. That is a big problem. That was a big problem for japan, so i challenged ntt because ntt had 99 market share for japanese information highway. Charlie when you challenged them, did they give you some fiber lines or something . Yeah, i asked the government to deregulate, unbundle of the copper and finer against the services. Charlie right. Okay. Charlie yeah. So if you want to create an information revolution and want to create an information highway, you need a lot of capital. That requires a lot of finance. Okay. So money is not the most important thing to me, but money is required to invest tens of billions of dollars. Charlie lets talk about the landscape. My impression is you want to be the biggest in the world, period. Thats my wish. Charlie thats your wish. Okay. Fair enough. There are also people who believe you know, google is laying a lot of fiber in the United States. They want to provide the highways, too. The infrastructure, right . Yeah. Charlie they have designated markets. There is also comcast, now buying time warner. John malone wanted to be part of that. Who knows, maybe comcast will buy john malones company. Is it going to be the telecos or the Cable Companies . Thats a very good question. This is a very capitalintensive industry and emerging from the wireline broadband information highway and the wireless information highway, right charlie right. And guess what . This kind of device can get connected with a backhoe of wireland or wireless broadband. Either way, the ipad. So what people care is how the ipad or iphone can function smoothly charlie and fast. Fast, right . So, in the past, only broadband could provide highspeed internet for this kind of device, but now wireless is becoming very powerful. Charlie and thats the revolution there, what wireless is able to do without the fiber being down. Right. Charlie and, therefore, that raises the question, too, of the velocity of wireless and how good it is because, i mean, youve complained about the carriers here in terms of not only are they not innovative but you say they have faulty systems. Yes. Very, very slow network, and it gets disconnected, right, all the time, and its poor quality. Its just a poor quality. And i think there is a way to fix it. Charlie how would you fix it . Well, first, i need a scale. Charlie a scale . A scale of a company, a scale of subscriber, of a network. Charlie you have to have enough size to compete with the big boys . Right. I have i need to become a heavyweight, right . Charlie right. Its a heavyweight fight. Charlie right. I cannot be tiny. Charlie that wont work. They are squish you. And ignore us, so they can stay comfortable and be fat. So i want to make them fight back so they also become muscle instead of fat, which is good for you. Charlie thats called competition. Yes, thats good for the United States. But i will not show them our technology which we have, which is much, must hav much faster s. Up to 200 megabyte per second. Much faster. We have the technology. Charlie your wireless is faster than fixedline broadband . Yes. We already have the demonstration in tokyo. Charlie tokyo is fast. Yes. I can do that in the states, also. Charlie seoul is fast. Yes. Charlie where is it the fasters in the world, japan and south korea . Yeah. Australia to some extent, but not enough users. So, actually, with a crowd of users, japan and seoul is the top two. Charlie you also now have this battle, this giant battle between operating systems android and apple. Yes. Charlie which is better . Well, apple is like a ferrari. Charlie a ferrari. Yeah. For highend users, its beautiful. Its good. Charlie right. Actually, many users, also. Android is more general. For many other countries who can not afford a highend product, android is more variety. So most of them have good features. Charlie so one is not better than the other, depends on what they can do for particular kinds of customers . Right. Charlie because samsung is serious about this. Yes. Charlie what do you think of samsung . Well, samsung is a great company, a great company. Charlie yeah. Theyre going to succeed. Theyre going to continue to grow. Charlie how did they do it . Well, they have so many techology depths from the semiconductor to the lcd display and all these things. They have total technology, so thats and they have the passion to make success. Charlie take me back to the. Com bust. What happened to you . Well, i was surprised and one time we i was for three days richer than bill gates. Charlie three days . For three days. Technically. Charlie but you were there for three days. Yeah. Charlie did you tell everybody when you were the richest man in the world . I did. It was special laughter charlie here i am im the richest guy in the world before i said it, i was surprised. Charlie well, you got a chance to tell them before it was over. Yeah. laughter for three days we were 200 billion. Charlie for three days, 200 billion. Yeah. Charlie in market cap. And then came the crash. What were you at the bottom . 2 billion. Charlie from 200 to 2. Yeah, 99 in one year . And your net worth went to what. From 70 billion to 600 million. Charlie really . Yeah. Charlie did you have any doubt that you could come back . Well, i had a confidence, you know. Overshoot and overshoot down. So i had a confidence that some day it would normalize because our number of users kept on growing, our profit kept on growing, so its overreaction, either up or down, so it will normalize over time. That was my belief. And the internet will continue to grow. So as long as Internet Users continue to grow, the traffic continues to grow, it will come back. That was my charlie yeah. Someone said to me the other day, google is going to be the Biggest Company in the world, mark my word. Are they right . There is a good possibility for that. A good possibility for that. But, you know, when ibm started growing, people said ibm. Charlie yeah. Then when microsoft was growing charlie they said microsoft. Microsoft forever. Now google has that kind of position. Who knows, 30 years later, okay, 30 years later and 300 years later, whats going to happen . Charlie you know what they call that, as you well know disrupted technologies. They are definitely disrupted. Smart people, great engineers and great vision. So they are one of the most capable companies. Thats no question. Charlie google. Google, no question. I have high respect for them. But, you know, as i said, Technology Evolves and no one technology continues to grow 300 years. Charlie apple still has tim cook, eddie, johnny and others. They have great company, also. Charlie hasnt changed. No, a great company. Charlie they were really running it while steve was sick, too. Yeah, they have a great company. Those two companies, high respect. Of course, amazon and, you know, facebook. Charlie jeff likes to get market share like you. Right. Charlie hes willing to cut prices to get market share. Right. Very smart, very, very longtime view. Charlie what did you think of the facebook acquisition by apple . Very smart. Charlie so you would have paid 16 billion, too, if you had facebooks 1. 2 billion users . Yes, i would have no doubt for one moment. Charlie whats your negotiating philosophy about things like this . If you can figure out its worth it, then get it. If you have to pay the top price and outbid everybody es, if you can see the potential, just do it. Ye