Presentation Materials

What are the aims to introducing the "Fami-wari MAX 50" and the "Hitoridemo Discount 50" services?

We believe our existing billing plans compare favorably with those of our competitors. However, to counter the recent offensive by Softbank, we decided to launch billing plans with more impact ("Fami-wari MAX" and "Hitoridemo Discount") and made an announcement thereof. Subsequently, KDDI announced a new plan offering higher discount rates, so we decided to catch up with their rates.
With the new discount packages, users are required to enter into a two-year contract. Because the total number of net additional subscribers in the market is decreasing year by year, our ability to curb churns will be a crucial point. We expect the new billing plans to help reduce churns, as users will have to commit to a two-year service contract under these plans (and cancellation before the end of the contract term will incur cancellation charges).

Give us your analysis on the reasons why you are facing difficulty in growing net additions for each segment—corporate and residential users.

While we have not made a detailed analysis, we are not losing corporate subscribers to our competitors as far as the Mobile Number Portability (MNP) market is concerned. The number of net additional subscribers that we acquired was slightly lower than our target, but the principal reasons for the sluggish performance in the share of net additions include the following: 1) the subscriber growth in the overall market was greater than our projections, and 2) our churn rate was higher than expected while the number of new handsets sold was almost in line with our projections. Going forward, we aim to curb the churn rate by leveraging the new discount packages.

Describe the current state of your network quality, which has been considered one of the major reasons why you have been losing subscribers in the MNP market.

The coverage of our FOMA network has been expanded to a level at least comparable or even superior to that of our mova network. We have been working to improve our coverage by installing base stations in response to customers' requests. We will continue to invest in quality enhancement this fiscal year, because responding to customers' requests for coverage improvement is an endless effort.
Network-related concerns accounted for approximately 20% of the reasons for subscribers' port-out from DoCoMo to other carriers immediately after the launch of MNP. That number has recently come down to approximately 10%. Nevertheless, because as many as 10% of port-out subscribers cite dissatisfaction with our network as their reason for leaving, we are committed to continuing our quality improvement endeavors.

Give us your forecast on capital expenditures following the introduction of Super 3G.

As opposed to the roll-out of 3G, for which we needed to construct a completely separate network from 2G, Super 3G will be overlaid onto our existing 3G network. In addition, we will be able to flexibly adjust the speed of its roll-out, keeping pace with the availability of services and demand from users. We therefore do not foresee a significant increase in capital expenditures over the current level.

You announced the establishment of a Corporate Branding Division to be headed directly by the CEO. What kinds of results can we expect from this new organization?

The new team will be responsible for studying the branding and channels suitable for the new business models. We cannot resolve our current challenges simply by adding new branding onto the existing distribution structure of DoCoMo Shops/external distributors. The market environment is changing, so we must carry out our marketing and branding activities in a uniform and concentrated manner, because they will lose their appeal if conducted individually by different units in the company. The appointment of the CEO as Managing Director of the new division demonstrates our resolve in this undertaking, and the entire company is committed to working proactively on these issues.

What are your thoughts on the possibility of dividend hikes?

We are aware of our shareholders' expectations for dividends. This fiscal year, we plan to raise our dividends by 20% over the previous term to 4,800 yen per share. As this will raise our payout ratio to approximately 44%, we do not believe our dividend payout rank among the low levels.

You mentioned that the number of "2in1" subscribers has reached 100,000 — are these users newly acquired from your competition or your existing subscribers?

While I cannot comment on the details, 90% of "2in1" subscribers are users who added another subscription (circuit) to their existing cellular contract, and those who bundle multiple subscriptions into a single handset account for 10%. The service is primarily subscribed to by the younger generation.