Presentation Materials
Analyst Meeting Q&A (Earnings Release For the Three Months Ended June 30, 2018)
Announced on August 2, 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 mobile ARPU less discount applied, it has continued its decreasing trend, and the initial guidance is projecting a decrease of 40 yen annually. However, the actual record is the same level at 5,300 yen. First, please comment on this current situation.
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Q2 Regarding the discounts applied, full-year projection is 930 yen, but the actual performance is 910 yen. Looking at the past quarterly trend, it indicates that you are able to control it. I would like to know your views on here.
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Q3 In operating expenses, depreciation shows a decrease year-on-year.Telecommunications equipment usage fee is also reduced despite the cost increase in docomo Hikari. I view this as cost efficiency measures are proceeding in network related depreciation and telecom equipment usage fee. Is this correct?
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Q4 The revenue from fiber broadband service is increasing. While I don't know the cost of fiber broadband service, I believe it is contributing toward the increase of revenue for the whole company. Is the profit from fiber broadband service the same as in the past, or are you starting to benefit from the economy of scale?
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Questioner No. 2
Q1 Tell us about the impact of Radish Boya on P/L, as compared with Q1 of last year.
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Q2 Virtually 500 million yen sales is gone, and yet there is 500 million yen sales in other businesses, and all in all it has turned in 270 million yen profit - did I understand this correctly?
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Q3 Please give us details about what's contributing toward the increase in income.
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Q4 Anshin Pack and enterprise solutions are part of Other businesses - is this a correct understanding?
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Q5 Can you give us the breakdown of the operating income in the smart life domain?
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Q6 Regarding the newly disclosed d POINT usage, my understanding is that by increasing use, customer satisfaction increases as well. Enlighten us on how I should view the figure of actual point usage.
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Q7 Softbank also announced they have agreements with local governments, but presently what kind of battle is going on at the frontline? Signing an agreement with localities means exclusivity against other carriers, is that why this type of musical chairs game is important?
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Questioner No. 3
Q1 How is operating income for Q1 in the context of full-year projection? Guidance for operating profit for the full year is flat, but since Q1 shows an increase, it is hard to see it will be in line with the full year guidance.
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Q2 You will do what you can implement in order to curb the cost to improve customer satisfaction level in the latter half of this fiscal year, and also to reduce the financial load for later years. Is this correct?
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Q3 I hear that hikari service revenue has increased, but corresponding network-related expenses should increase as well; therefore I don't think the marginal profit is high, judging from the mechanism of wholesale of broadband services. Is this correct? Or were there parts other than fiber that caused the expenses to go down?
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Q4 I would like to confirm on the roaming agreement with Rakuten. If there is an agreement with them, would that be announced as in the past? Also, I would like to know its progress, as far as you can disclose at this point.
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Questioner No. 4
Q1 Reduction of financial load in later years - how much less was this in Q1 as compared with last year?
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Q2 Cost reduction seems to be going smoothly - is there a possibility it is going to be more than anticipated on a full-year basis? If that happens would that be an increase in profit, or are you going to use it as an additional promotion cost, in view of Rakuten entering the market?
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Q3 I'm sure you are working out the details on CAPEX toward the introduction of 5G, but I would like to know the coverage area and timeline at the time of introduction in 2020, and the basic approach to CAPEX at this point in time.
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Questioner No. 5
Q1 I would like to ask about ARPU. In full-year projection, the guidance was that ARPU will go down and mobile service revenue would decrease, but Q1 seems to show different results from that trend. I think ARPU reduction was supposed to be due to mainly the effect of customer returns. I would like to know if the part of customer returns is going well in Q1. In addition, regarding the amount of discounts applied I'd like to know if docomo with and the like are spreading at the same pace as before.
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Q2 The number of subscribers of i-mode and sp mode increased in Q4 of last fiscal, but Q1 shows a slight decrease. Net additions and churn rate are getting fairly stable, which I think is a good trend, but could you tell us about the trend of subscribers and net additions once again?
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Questioner No. 6
Q1 This time there was a disclosure on the usage of d POINT, but please tell us the percentage of points issued by partners.
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Q2 Is the profit from each fields of smart life domain increasing at the same rate? I would like to know, including what field you have the most expectations for.
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Q3 I have a question about CAPEX in 5G. Is there some new information, such as coverage area envisaged in 5 years after the service launch?
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Q4 Y Mobile is launching a smartphone tailored to seniors for feature phone users, and offering enhanced rate plans for low usage users. Is DOCOMO responding in any way?
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Questioner No. 7
Q1 Revenue is strong, and cost efficiency is going well. Both revenue and cost side are working out positively. In that kind of situation, earlier you mentioned 'sowing the seeds for next growth,' but there is this particular phenomenon to companies with a large customer base, that when revenue is strong, there is a possibility the profit generated goes beyond its own capacity for investment. So let's say if there is a positive phenomenon in the income, I'd like to know if DOCOMO actually has the staff resources that can execute investments for 'sowing the seeds' if you will, and sufficient resources to load the new projects.
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Q2 Today KDDI has announced a capital alliance of a certain level. I feel like lately there has been no announcement of large-scale capital alliance or acquisition from DOCOMO. Going forward, KDDI will continue to run off with a several hundred-billion-yen budget for M&A. So I want to double check with you - what specifically does your 'sowing the seeds for new growth' entail?
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