Softbank is one such subsidiary. The firm is 25 percent owned by Prokom, and yet its own subsidiary, Softbank Service, competes with Incenti (in outsourcing) and Koma (in IT service) - both 100 percent owned by Prokom. Indeed, while Softbank's core market is the banking sector, both Prokom and Comp Rzeszów (of which Softbank owns 17.5 percent) provide their own banking solutions.
"We in many cases compete between [companies in the group] and Prokom as well. What was the result? We decreased margins," said Krzysztof Korba, president of Softbank.
Now the two companies have engineered a change that while perhaps not making the group any slimmer, will at least make it more coherent. According to the plan, Prokom would swap 100 percent of its shares in Incenti and Koma for 3.1 million Softbank shares, bringing Prokom's stake in the firm up to 29 percent. Softbank would then incorporate the two companies into its own activities. The deal is valued at zł.87 million.
In another move to further increase its competencies, Softbank wants to issue another 3.5 million T-series shares to investors, which it hopes to sell for between zł.25 and zł.30 per share. That should give it the zł.90.7 million it deems necessary to buy at least a controlling stake in an as-yet unnamed IT consulting firm and the 2.5 percent more of Comp Rzeszów it's been eyeing up of late.
"Today we have 17.5, and we would like to have a minimum of 20 [percent]. That allows us to consolidate the bottom line," said Korba.
This expansion outside its core has fueled speculation that Softbank may be relinquishing the banking market in the face of stiff competition. Beyond PKO BP - a client that represents 60 percent of Softbank's revenues - the company has a minor presence in the banking market.
"We're not giving up - [the banking sector is] going to be a core business for Softbank. But if you have companies like Koma, like Incenti, they have other activities. I would like to use these activities," says Korba. Andrew Kureth
It is widely agreed that Prokom Group, the top IT software and services provider in the Polish public sector, is in need of reorganization. Its net profit dropped over 75 percent from 2003-2004, and strong competition has already forced it to announce a cost-cutting plan designed to save zł.80 million and slash 300 from its workforce.
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