Presentation Materials
Analyst Meeting Q&A (Earnings Release For the Six Months Ended September 30, 2012)
Announced on October 26, 2012
Please be advised that the following text has been edited/modified from the original Q&A conversations for the sake of clarity.
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Questioner No. 1
Q1 You mentioned that an 80 billion yen increase in expenses was factored into the revised full-year operating income forecast for FY2012. Please give us a breakdown of the additional expenses.
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Q2 You raised a goal to generate 1 trillion yen in revenues from new businesses in FY2015. As you will have to compete against Internet companies in these high-layer businesses, don't you think you need to speed up your actions? Yahoo! Inc., for example, is releasing one or two new services on a monthly basis. For you to react properly to such environment, do you foresee any need to introduce new human resource management policies, such as appointing young staff at DOCOMO in their 30s or 40s to the executive team?
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Q3 You mentioned that you plan to reduce your annual capital expenditures to below 700 billion yen over the medium term. I am concerned, however, about your recent network performance. In addition to the series of service disruptions, it seems that there have been frequent delays in mail delivery when your network is operating normally. This indicates that you have not been able to find a fundamental solution for the growth in traffic. Please explain your future network strategies in light of the rapid proliferation of smartphones.
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Questioner No. 2
Q1 You mentioned that your cellular services revenues for FY2012/2Q dropped significantly compared to FY2012/1Q and that you are projecting a 130 billion yen year-on-year decrease for the full year. It seems to me that the capital you employed for the Monthly Support discounts and other measures have rather negatively affected your revenues and resulted in diminishing shareholder interest. Now that the first half of the fiscal year is over, I believe you are still in the process of reviewing the initiatives undertaken. What do you think, however, about the current situation, and what are you going to do going forward? Also, if the current trend continues, it may be difficult for you to achieve your full-year net additions target of 2.01 million subscribers. Do you foresee any possibility of making further downward revisions to your operating income guidance if you fail to achieve the net-additions target?
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Q2 Can you explain the reasons why you are expecting an increase in equipment sales revenues in your revised forecast? Please also explain the projected number of handsets to be sold, and the factors contributing to the increase in other revenues.
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Q3 If the wholesale price per unit increases and the impact of the Monthly Support discount becomes larger, it will become increasingly difficult for you to grow your cellular services revenues next fiscal year compared to this fiscal year. Under such circumstances, do you think you can record a growth in income for the next fiscal year?
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Questioner No. 3
Q1 You disclosed the revenues from new businesses for FY2012/1H, but can you also comment on current P/L status and future outlook?
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Q2 You issued a press release announcing the establishment of a venture fund. How does this relate to DOCOMO.COM, INC., a company that has fulfilled a similar role so far?
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Q3 Although you offer high-quality tablet devices, they are seldom covered by the media, which gives me the impression that your marketing efforts are not functioning properly. Don't you think you need to review your marketing strategy?
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Questioner No. 4
Q1 I want to hear a more detailed explanation as to why you needed to revise your operating income forecast downward by 80 billion yen, and what kind of change can the additional 80 billion yen expenses can bring about to the structure problem of declining cellular services revenues caused by the sluggish growth in packet revenues.
Furthermore, you have not presented any guidance on the profit margin for the projected 1 trillion yen revenues from new businesses in FY 2015. You will need to achieve a high growth rate to expand revenues to that level; but, it is not clear who is responsible for the new businesses. I must say that your understanding of the present situation is overoptimistic.
You are going to spend the entire 80 billion yen for sales promotion—i.e., for consumers, not the investors. It is hard to figure out what you have in mind for investor returns. The stock price of the Company with such a large market capitalization remains lackluster, and you are continuing to lose subscribers to the competition. I would like to hear the views of the management on these very important issues.Open
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Questioner No. 5
Q1 If you fail to deliver the intended results after implementing the competitive countermeasures in FY2012/2H, will you attach priority to profits? Or, will you prioritize subscriber expansion spending more expenses?
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Q2 I assume it will be difficult to acquire 2 million net additional subscriptions unless you are able to lower the churn rate? How do you plan to improve your churn rate if there are no changes in the competitive landscape?
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