Japanese mobile messaging company Line has given a major hint as to how it plans to make its messaging app a one-stop shop for just about any digital transaction.
First up, Line has offloaded a majority stake in its mobile virtual network operator (MVNO) subsidiary to SoftBank. The deal will see SoftBank procure 51 percent of Line Mobile, with Line retaining the remaining 49 percent.
A subsidiary of South Korea’s biggest web operator, Naver Corp, Line’s WhatsApp-style messaging app now claims 220 million users, the majority of which are based in just a handful of Asian markets — including Japan. The company has also branched into numerous other verticals, including games, apps, mobile payments, carpooling, smart speakers, and, indeed, mobile networks.
Line, which embarked on a dual IPO in Tokyo and New York nearly two years back, first revealed plans to become an MVNO in early 2016, before launching it to the public later that year via a licensing partnership with NTT DoCoMo.
Fast forward 16 months, and it’s clear that Line needs a closer strategic alliance with one of the big three mobile network operators in Japan, one of which is SoftBank. Full details of the partnership are still to be decided through “mutual consultations,” but it should of course mean that Line will switch from NTT DoCoMo to SoftBank’s network. Additionally, they plan to pool their collective strengths to become a “one-stop location” for everything. So in effect, SoftBank will leverage Line’s scale and reach as a messaging company, while Line can access SoftBank’s promotional and financial might to push its products and services to millions more across the region.
This is what Line refers to as its “smart portal strategy,” which it said it hopes will transform the Line messaging app into a conduit that “seamlessly connects people to information and services, as well as to companies and brands,” according to a statement.
“I am fully confident that Line Mobile will become one of the major mobile telecommunication services demanded by users in the future through its three proposed values of ‘simple,’ ‘free,’ and ‘value’,” said Ayano Kado, president of Line Mobile. “Through this partnership between Line — which brought to light a new form of communication in the smartphone generation — and SoftBank –the first carrier in Japan to carry the iPhone and drove the smartphone market — we will bring together our mutual strengths and strive to further improve users’ experiences with Line Mobile.”
Money talks
Elsewhere in Line land, the company also announced a new subsidiary called Line Financial Corporation, which will serve as a complementary business to its existing mobile payments company, Line Pay, which launched in 2014. Line said that its Line Pay service, which works through the Line messaging app, processed ¥450 billion ($ 4.1 billion) last year, with 40 million registered users.
The new Line Financial business unit was established on January 10 this year with around ¥5 billion ($ 46 million) in capital. It will essentially help to create a new avenue for transacting all manner of financial products, including loans and insurance through the Line messaging app. But more interestingly, Line said that it plans to serve as a cryptocurrency exchange too. The company said that it has started the process for registering as a virtual currency exchange with the Financial Services Agency, but gave no indication as to when this will likely bear fruit.
This all feeds into the broader societal push towards a cashless and — increasingly — a walletless society. Line wants your phone to be the only item you need to buy anything you want.
