Softbank founder and chief executive Masayoshi Son is a master salesman.

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Next up, broadband: Masayoshi Son at the iPad launch in Tokyo.

He’s sold the Japanese on Apple Inc.’s iPhone when people doubted it could be done. He introduced a low-cost ADSL high-speed Internet service through Softbank subsidiary Yahoo Japan Corp., and then celebrated as Japan became one of the world’s most Web-connected countries.

But his next sales pitch may be his toughest to date. Mr. Son wants Nippon Telegraph & Telephone Corp., or NTT, to spin off its fiber-optic network into a separate company which Softbank and other NTT rivals would invest in.

Late Monday night, Mr. Son made his case at a news conference, speaking almost non-stop for two hours about why this was necessary for the long-term competitiveness of Japan. He said universal access to broadband would help to spur the Japanese economy, providing the necessary infrastructure for technological innovations like digital textbooks and digital medical records.

He noted how Japan’s global competitiveness has fallen from No. 1 in 1992 to No. 27 in 2010, while saying how Japan’s workforce productivity has ranked dead last among G7 countries for 15 consecutive years.

“It’s no longer about ‘Japan bashing’ or ‘Japan passing,’ but it’s more about ‘Japan nothing.’ The sad truth is that the people of the world are laughing at us,” said Mr. Son. “The only way to boost our labor productivity is through high technology.”

Any talk of breaking up or splitting off parts of the former government monopoly requires persuading many entrenched forces. These include the Japanese government, NTT’s top shareholder with a 34% share, and NTT’s labor union, representing some 200,000 employees who are afraid a spin-off may lead to job losses.

Japan’s ruling government is mulling whether splitting off the NTT division that installs and maintains the fiber optic network would speed up its goal to provide universal broadband access by 2015 from about 33% now. NTT has argued that spinning off the business would just slow down the spread of broadband. NTT’s rivals, including Softbank, have complained that broadband growth has been thwarted by the high access fees they have to pay NTT to lease the fiber optic.

On Monday, Mr. Son said there was a way for the government to achieve universal broadband access without any additional taxpayer money.

His plan goes like this: NTT’s regional units, NTT East and NTT West, would spin off the fiber-optic connection business into a separate company. The government would take a 40% stake in the new company with a 200 billion yen investment by selling off part of its NTT holding. Then the three major operators, NTT, KDDI Corp. and Softbank, would each chip in 100 billion yen and take 20% each. The new company would also absorb about 1 trillion yen of NTT’s debt.

The new company would take that 500 billion yen investment and build out the fiber optic network nationwide. Mr. Son said he decided Softbank needed to put its own money into the game after reading criticism on Twitter that accused Softbank of getting a “free ride” on the back of NTT’s investments.

One major hurdle to Mr. Son’s plan is that NTT has already invested a lot of money into building out the existing broadband infrastructure, making it hard for the company to hand it over to a new company. NTT shareholders may also cause a fuss about not recouping its initial investments.

For his part, Mr. Son argues that the spin-off would benefit NTT shareholders by eliminating heavy losses at the regional unit’s access connection business, which also includes continued investment for traditional copper metal phone lines.

A NTT spokesman said it has no direct response to Mr. Son’s comments from Monday, but reiterated its view that splitting off the fiber optic network would actually slow the spread of broadband. A KDDI spokesman said the company has no official comment about Softbank’s proposal. He said KDDI’s stance is that it would be better to have more than one company installing and maintaining the fiber optic network to fuel more innovation and competition.

Follow Daisuke Wakabayashi on Twitter @daiwaka
