Presentation Materials
Main Q&A (Analyst Meeting after the Results for the 3Q FY2017)
Announced on February 1, 2018
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 Regarding the "operating income" on slide 4 of financial results slide, what are the major contributing factors for "selling revenues and expenses" improving from the figure for the first half, (61.5) billion yen, to Q3 cumulative (40.6) billion yen?
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Q2 What is the outlook for "selling revenues and expenses" for Q4?
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Questioner No. 2
Q1 While the number of units sold in Q3 alone had a decrease year on year, why is the equipment sales increasing?
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Questioner No. 3
Q1 For net adds, an increase of 270 thousand excluding modules is listed. Please give us a breakdown.
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Questioner No. 4
Q1 When did the DOCOMO brand subscription, excluding modules and MVNO's, start to decrease? Was there any change in competitive landscape?
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Questioner No. 5
Q1 For the last several years the subscriber growth of MNO's seems to be stagnant. Please tell us your strategy in the coming years.
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Q2 Do you want to increase the number of subscribers from the current level?
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Questioner No. 6
Q1 How many subscribers does LINE Mobile have?
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Q2 With regards to new entry to the MNO business, what kind of support did you give to new entrants to the business in the past?
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Questioner No. 7
Q1 What are the contributing factors for the increase in "other operating expenses" on Financial Results slide 4, from 11.7 billion yen in the first half to 30.8 billion yen cumulative for Q3?
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Q2 Is it correct understanding that in the accounting for "Zutto DOCOMO Discount Plus", which will be provided from May, the d POINT you are going to give is not going to affect ARPU but increase the expenses?
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Q3 I saw an article which said sale of iPhone X is slow in the world. Is DOCOMO facing a similar situation? Is there a risk of impairment loss on inventory due to stagnant sales?
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Questioner No. 8
Q1 With regards to "d POINT", is the utilization ratio increasing with the expansion of participating stores? Also, when you introduce IFRS, are you going to allocate the net amount, rather than utilization ratio?
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Q2 If LINE Mobile, which is an MVNO, switches from DOCOMO to Softbank, would DOCOMO subscribers decrease? Same with BIGLOBE Mobile, if they switch to KDDI, would DOCOMO subscribers decrease? What is your outlook for DOCOMO's MVNO's subscribers going forward?
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Q3 Hypothetically, if Rakuten enters MNO business and DOCOMO provides roaming, is it correct to say the number of DOCOMO's subscribers will not be affected, only roaming revenue will be coming in from Rakuten?
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Q4 Is DOCOMO considering the wholesale sales of handsets to MVNO's?
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Questioner No. 9
Q1 I would like to double-check about revised mid-term plan. What is the reason for slightly lowering the forecast for revenue from mobile communication service?
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Q2 On the other hand, why has the Q3 cumulative mobile service revenue has increased by more than 60 billion yen year on year.
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Q3 As was explained in the financial results meeting on the other day, ARPU for the next fiscal will be flat year on year?
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Q4 In Q3 financial results, the profit for smart life business showed a decline year on year. What are the measures for the future improvement?
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Questioner No. 10
Q1 Hypothetically, if Rakuten newly enters MNO business, how much cost would they be able to spend against the competitors? Also, when you look at example of other countries, with entry of a fourth carrier, the revenue of the entire industry tends to go down, and there may be pressure on DOCOMO's free cash flow as well. In such a case, as a priority what would you eliminate for the use of cash?
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Questioner No. 11
Q1 DOCOMO has not come out with a second brand, but as the competition in the lower price segment is getting intense. Would you not consider a strategy of segmenting brands and targets in marketing as other companies?
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Q2 I see "docomo With" as a separate brand strategy linked to particular handsets. What do you think?
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Questioner No. 12
Q1 Regarding the forecast for the next fiscal year, if mobile service revenue is flat, and the effect of lower monthly support and the impact from change of depreciation method is positive, can we assume revenue will be increased year on year? Customer returns will be a negative factor, but the "Ultra Pack" will probably start to see the effect of upsell. Please comment on the outlook for the telecom business.
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Q2 We understand that the major reason for stagnation of packet ARPU growth is the negative impact of introduction of "Ultra Pack", but has that impact made its round already? Will upsell effect have a positive impact on the future packet ARPU?
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Q3 Can we assume more than half of customer returns is the impact from the introduction of "Ultra Pack"? If that can be reversed to be positive, Would the negative factor of customer returns be virtually eliminated?
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Q4 As a managerial target in Medium-Term Strategy 2020 "Declaration beyond", "continuous increase in dividends" is listed. Is this dividend per share, or total dividend amount?
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Questioner No. 13
Q1 The dividend ratio of DOCOMO is the highest among MNO's. For the increase in dividends or share repurchase, do you take other companies into consideration before making a decision?
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Questioner No. 14
Q1 Please tell us about the sustainability of dividend growth, with the prospect of new entrant. If the competitive environment gets worse, and the profit will not grow in the next three years, will you still increase the dividend payout ratio? Or will you reduce the size of share repurchase and give priority to dividend?
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Questioner No. 15
Q1 With regards to new entry, let's say the spectrum to be allocated to a new entrant carrier is 40MHz. If there are quantitative comments or prospects in effective network speed, number of base stations required, capital expenditure, or amount of traffic, please share them with us.
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