Presentation Materials

In the six months ended September 30, 2014, operating revenue was 2,173 billion yen, a year-on-year decrease of 26 billion yen, and operating income was 399.6 billion yen, a year-on-year decrease of 73.6 billion yen.

Customers have been responding favorably to our new billing plan since we launched in June, and the number of subscribers reached 9.43 million as of September 30. This led to a continued improving trend in figures for operations, resulting in an approximate five-fold net increase in subscribers compared with the level of growth from last year. The release of new models of devices also had a positive effect, with the number of smartphone subscribers increasing approximately 1.2-fold from the previous year's level to 26.4 million.

Installation of base stations in the LTE network infrastructure is proceeding according to our plan. We intend to continue our efforts in LTE-Advanced, which will provide extra-high-speed data download speeds of up to 225 Mbps this fiscal year.

Total transactions on "dmarket" have been steadily increasing, mainly in "d magazine", "d video", and "d hits", and grew approximately 30% year-on-year to 34.6 billion yen. We also intend to further step up sales in the second half of the year.

Meanwhile, due to a faster-than-expected increase in the number of subscribers to the new billing plan, the negative impact on our operating revenues has been greater than initially expected. Consequently, we determined that a revision in our performance forecast for FY2014 was necessary. Therefore, we are revising operating income downward by 120 billion yen to 630 billion yen. Please accept our sincere apologies for this revision in the income target presented at the beginning of the fiscal year.

In our future management efforts, we intend not only to achieve the revised income guidance, but also to bottom out in this fiscal year and successfully turn business around from next fiscal year onwards.

We plan to commence our "docomo Hikari" service in February 2015. This involves DOCOMO leasing wholesale optical lines from NTT East/West, and integrally providing mobile and optical lines for the benefit of our customers utilizing the new billing plan. We hope this service will further enhance the convenience of our long-term users and family users.

We are also strengthening measures to reduce costs. We have added 50 billion yen to the cost reduction target established at the beginning of the fiscal year, and will reduce costs by 105 billion yen over the year.

Furthermore, we will also work to enhance shareholder returns. Of the 500 billion yen limit on the share repurchase established at the start of the fiscal year, approximately 190 billion yen that has not yet been utilized will be used to purchase stocks from the market from November onwards. Moreover, we have revised the forecast year-end dividend upward by five yen, resulting in an annual dividend of 65 yen.

Today, we also announced our medium-term targets for income recovery. In addition to swiftly restoring our mobile communications business by leveraging the new billing plan and "docomo Hikari", we will work to increase earnings in new business while proceeding to make bold cost reductions.

We will also strive to expand free cash flow through various measures including the control of capital expenditure, and we will work to enhance shareholder returns through increases in dividends and share repurchase.

We recognize that we are now standing middle of the steep path where our true value is tested. We herein promise that we will strive toward achieving the management target against this challenging situation. As always, we ask for the continued goodwill and support of our shareholders and investors.