Japanese

Presentation Materials

Comments from the CEO (Results for the 2Q FY2017, announced on October 26, 2017)

FY2017/1H Results Highlights

For the first six months of the fiscal year ending March 31, 2018 (FY2017/1H), we recorded an increase in operating revenues but a decrease in operating income, which were 2,300.1 billion yen (up 0.5% year-on-year) and 548.8 billion yen (down 6.3% year-on-year), respectively. Operating free cash flow, one of the managerial targets stated in our Medium Term Strategy 2020 "Declaration beyond", decreased by 6.4% year-on-year to 538.3 billion yen. These results were in line with our expectations and we believe we are making a steadfast progress vis-à-vis our full-year guidance.

In telecommunications business, we achieved a steady increase in ARPU as a result of reduced impact from the "Monthly Support" discount package, expansion in "docomo Hikari" optical-fiber broadband subscriptions and other factors. For the LTE network, we started offering Japan's fastest transmission speed of up to 788Mbps under our PREMIUM 4G service from September 2017 and broadened its coverage to 195 cities across Japan. Going forward, we will continue to employ various network speed enhancement techniques to prepare for the coming "age of 5G". Meanwhile, we achieved cost efficiency improvements totaling 33 billion yen in FY2017/1H, making progress as planned toward the delivery of our full year target of 90 billion yen.

Operating income from smart life and other businesses combined reached 74.4 billion yen, showing a favorable progress toward our full-year guidance, and the number of "+d" partners increased steadily to 321.

Shareholder returns has always been an important issue on our corporate agenda, and as we committed in "Declaration beyond" that we will aim to strengthen our shareholder returns, we have announced the execution of a share repurchase program of up to 300 billion yen.

Also, we have implemented concrete measures one after another to realize "Declaration beyond":

[Declaration 1] Market Leader

We announced the launch of "Zutto DOCOMO Discount Plus" and the expansion of handset models eligible for "docomo with" program. With the introduction of "Zutto DOCOMO Discount Plus," we will renew our discount scheme so that both long-term as well as heavy-usage customers can receive tangible benefits. Our "docomo with" package, which provides purchasers of an eligible handset with a discount of 1,500 yen/month so long as they use the same handset, has been well-received with the total number of handsets sold under this scheme topping 700,000 units. With the addition of new models eligible for the program, we believe more users can take advantage of its convenience and benefits.

[Declaration 3] Peace of Mind and Comfort Support

We will reinforce all customer touchpoints by expanding and enriching the "Smartphone Class" program offered at docomo Shops, and by introducing AI-based inquiry response at our information centers and chat-based support on our online contract processing site, etc.

[Declaration 2] Style Innovation, [Declaration 4] Industry Creation

We conducted trial events in which customers can experience new ways of enjoying live music or viewing sports in the age of 5G. We also announced the launch of new services, e.g., an "AI-agent service" which makes recommendations predicting user needs, and "d car share" service that brings innovation to the style of car-sharing.

[Declaration 5] Solution Co-Creation

We launched LPWA services that can meet diverse IoT requirements such as low-capacity transmission and low-power consumption.

[Declaration 6] Partner Business Expansion

We announced the launch of new marketing initiatives jointly with Matsumotokiyoshi Holdings Co., Ltd. By integrating the market data of our two companies, we will provide new solutions to our partners companies to help accelerate their business expansion.

Finally, DOCOMO was selected in the world's leading DJSI World Index for the first time in 2017, while being selected as a constituent of other global and domestic ESG indices for many years. Going forward, through the execution of "Declaration beyond," we will make all-out efforts to deliver "improved customer services" while achieving "sustained growth as an enterprise", and strive to increase operating free cash flow together with strengthening our shareholder returns.

As always, we look forward to enjoying the continued support and understanding of our valued shareholders and investors.

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