Presentation Materials
Analyst Meeting Q&A (Earnings Release for the Fiscal Year Ended March 31, 2018)
Announced on April 27, 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 You plan to achieve cost efficiency improvement totaling 120 billion yen for the fiscal year ending March 31, 2019 (FY2018), which is larger than the 98 billion-yen track record for the fiscal year ended March 31, 2018 (FY2017). Which area made the greatest contribution for cost efficiency improvement in FY2017, and what are the prospects for FY2018?
Open
Q2 Can you give us a breakdown on the actual amount of cost efficiency improvement achieved in FY2017 and the projections for FY2018 by component (network, marketing and R&D)?
Open
Q3 Regarding the balance among customer returns, operating income and cost efficiency improvement, in FY2018 you are projecting a decline in income from telecommunications business while targeting cost efficiency improvement totaling 120 billion yen.
What is your philosophy behind this? Do you think this is acceptable because you are expecting an overall increase in operating income? Or, do you think this is unavoidable in light of the required customer return measures as you pursue the transition to a member-centric concept in an effort to strengthen your business foundation?
Also, will it be correct to assume that in the next fiscal year and beyond your income growth will be driven primarily by the Smart-life business and the downtrend in telecommunications income will continue?Open
Q4 You mentioned that FY2018 is positioned as the year of sowing the seeds for future growth. Will these undertakings complete within FY2018?
Open
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Questioner No. 2
Q1 The number of net additions acquired in FY2017 came in higher than planned, and you are projecting a year-on-year growth in net adds in FY2018. As I understand the competitive environment remained challenging through the third quarter of FY2017, what changed in the fourth quarter? Please also elaborate on the factors behind the projected year-on-year increase in net additions in FY2018.
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Q2 Is it correct to understand that you countered the competition by increasing your marketing spend for consumers in FY2017/4Q? Can you also comment on the trends of MVNO net additions?
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Q3 You explained that the operating income from Smart-life and Other businesses is projected to remain flat in FY2018 in light of the planned growth investments. Can you explain the rationale behind the flat-growth forecast on the revenue side?
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Q4 How do you estimate the size of impact of such growth investments?
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Q5 Can you share with us the actual amount for FY2017 and the forecast for FY2018 of the impact from the change of depreciation method?
Open
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Questioner No. 3
Q1 With respect to the "Basic Pack" that you unveiled today, can this billing plan be combined with any voice package, such as "Kake-hodai?"
I believe the expansion of the uptake of "docomo with" will hold an important key for your future business. How much further do you plan to increase the subscriber base of "docomo with" program in FY2018?Open
Q2 Are you projecting a decline in packet communications revenues for FY2018 because of the anticipated increase in the number of "docomo with" subscriptions?
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Q3 You cited "transition from quantitative expansion to qualitative enhancement" as one of your key initiatives in the area of Smart-life and Other businesses in FY2018. Can you provide us with some concrete examples of the initiatives you plan to undertake?
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Questioner No. 4
Q1 In relation to the accounting treatment change associated with the adoption of IFRS, please explain the following:
(1) The reason why FY2017 operating income increases by 13.7 billion yen compared to the US GAAP figure;
(2) The reason why FY2017 income before income taxes increases by 57.3 billion yen compared to the US GAAP figure;
(3) The reason why FY2018 free cash flow is projected to record a year-on-year decrease;
(4) The impact on loyalty points on FY2018 ARPUOpen
Q2 Regarding the new "Basic Pack", as this can be combined with "docomo with" and starts from 1,980 yen per month, is it correct to assume that this is your countermeasure against the second brands of other mobile carriers, or to capture the users requesting rates comparable to those suggested by the new entrant, Rakuten?
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Q3 You mentioned that although you expect a decline in mobile communications services revenues, you will secure operating income through the launch of new services while making investments for the next phase of growth. However, in telecommunications business, a new round of competition will begin with the entry by a new player. Can you share with us your current views concerning the provision of roaming access to the new entrant and its concurrent offering of MNO and MVNO services?
Open