Presentation Materials
Main Q&A (Analyst Meeting after the Results for the 1Q FY2018)
Announced on August 7, 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 ARPU trend before discount, some say new rate plan initiative will have an impact towards the latter half of the fiscal year. Could you tell us the overall situations at this point including the above-mentioned?
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Q2 Basic Pack is pay as you go basis, so when customers get used to using it, I think the revenue would grow. What do you think?
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Questioner No. 2
Q1 Financial results this time is strong, and if this trend continues there will be an elbow room in operating profit in the full-year guidance. What is your approach to profit if this happens? Will you leave the profit as is, or the profit over the plan will be used to bring forward the incurring cost including up-front investments? What is the management's intent?
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Questioner No. 3
Q1 In the results this time, it seems like the profitability is up because of the divestiture of Radish Boya, but please tell us if there are other group companies that are not profitable under review. For example, how about OAK LAWN MARKETING, INC. and others?
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Q2 Rather than expanding the range of products and seek stability in business, OAK LAWN MARKETING is mainly looking at a little 'edgy' products. Is that correct?
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Questioner No. 4
Q1 As to the profit proportion of each fields of Smart life business and Other businesses, basically there is no change of proportion year on year, so we can only figure out they have a 17% growth on the average. Can you tell us more detail of features of these 5 different fields? Also, please tell us if there are businesses that will incur cost towards the latter half of the fiscal.
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Q2 Advertising is included in Contents/Commerce service, and FinTech is included in Finance/Payment service. It this correct?
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Questioner No. 5
Q1 The results this time shows a smoother progress than we anticipated, and the share price reflect this positively, but we heard there is a business operator has made a decision that they should not make a profit quickly from a social viewpoint. At DOCOMO, that type of outside views have not been an issue - is this understanding correct?
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Q2 As to what Japan Fair Trade Commission pointed out, can we assume they are resolved as a management theme?
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Questioner No. 6
Q1 Regarding the strategy for Smart life business and Other businesses, can you give us specific examples of initiatives implemented in Q1? Also, what was their financial impact?
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Q2 Could we assume the drastic decrease of sales also means the subscriptions themselves shows a major decrease?
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Questioner No. 7
Q1 I heard KDDI would make the services like "Video pass" and "Uta pass" open to customers of other carriers. DOCOMO has made the services open from the beginning, but the results show you are losing to KDDI in profit and sales of smart life domain. Where can we see the achievements of services being carrier-free businesses?
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Q2 DOCOMO precedes KDDI by roughly 3 years in open service strategy, but the results show that you are losing in the sales and profit both to KDDI. Doesn't that mean all the cost in the past is wasted? How do you see the discrepancies from KDDI in sales and profit?
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Q3 Do you analyze the customers, e.g. difference in age segments?
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Q4 You are spending marketing expenses, such as the expense of issuing points at participating stores, aren't you?
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Q5 Wouldn't it have been better, if you had solidified your business with a carrier-user only business model, then after the growth had slowed down you shifted to carrier-free?
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Q6 We were hoping for some results we can get a handle on, but we don't see specific figures.
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Q7 Aside from the detail figures, is the portion significant?
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Questioner No. 8
Q1 In Nikkei, there was a report on rebuilding of FTTH business. Please tell us about its feasibility and impact on the performance and competitiveness.
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Q2 When you define DOCOMO as a consumer business company, wouldn't that affect +d initiatives?
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Q3 How about the sales organization? Will human resources be transferred from NTT Group?
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Questioner No. 9
Q1 ARPU was better than anticipated, but as a factor, did the behavior of the customers' segment that benefits from the rate plan change from the past?
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Q2 Question about the shareholder return. As the listing of SoftBank is getting closer, there is a concern that attractiveness of DOCOMO would be reduced in comparison, but in the face of this could you consider some proactive measures?
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Questioner No. 10
Q1 Use of d POINT has increased 1.7 times year-on-year, and 2.4 times in usage in participating stores, but who are the partners with higher usage? Also, according to your analysis, what kind of partners would be more effective in expanding the economic sphere for d POINT?
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Q2 The impression we have is DOCOMO users are comparatively wealthy, seniors, and good-quality customers - do you have strategic feature to revitalize economic sphere through these segments, utilizing d POINTs for them?
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Q3 DOCOMO's LTE provides 988Mbps, and precedes KDDI or SoftBank, but is 988Mbps speed significant to users? Also, are you planning to be ahead of speed competition going forward?
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Q4 If the competition catches up, will you counter them with the speed faster than 1Gbps through further carrier aggregation?
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Questioner No. 11
Q1 With regards to the number of d POINT CLUB members, we want to ask the proportions of users that use the point only for handset replacement, and those who are actively using it as participating stores, etc. Also, growth rate for each segment.
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Questioner No. 12
Q1 With regards to the network quality, MIC has population coverage as condition of license, but what other indices are important?
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Q2 Please comment on the co-existence of MNO and MVNO again.
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Questioner No. 13
Q1 NTT announces its mid-term plan at the time of announcement of Q2 financial results, and I assume DOCOMO will announce it in the same timing. What kind of items will be announced?
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Q2 New figures will be indicated other than the figures announced last year-will this be correct?
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Questioner No. 14
Q1 As a result of the investigations by Japan Fair Trade Commission on the agreement between carriers and Apple on iPhone, there seems to be more flexibility in price setting, but will there be changes in price setting from the new models, supposedly to be announced this year? For example, is there a possibility that docomo with and other plans will be applied to high-end handsets including iPhone?
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Questioner No. 15
Q1 Cost efficiency measures are progressing steadily, but how much of that is not just temporary, but with continuity, that showed an increase? Or was it just doing it up front? We would like to know the details.
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Q2 Do you anticipate certain effect on Q4 this fiscal even if you go as you are without making extra effort?
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Q3 There are items of cost efficiency measures that could be done ahead of schedule, but are there items that had more impact that anticipated, and you can expect similar effects in the remaining quarters?
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Q4 I'm sure you are in negotiation with your distributors, but how is the progress of cost efficiency measures in marketing field?
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Q5 What kind of impact does that shift have on DOCOMO's revenue?
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Q6 You haven't seen the effect of changing agent commission systems yet? Or is strong ARPU trend an impact of that measure?
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Questioner No. 16
Q1 Increase in the use of d POINT decreases expired points, and I think as a result reserve cost would rise- how much deduction do you make from ARPU in Q1, or full year?
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Q2 How should we understand this as absolute amount? For example, do you see it on quarterly basis, or recalculate at the end of fiscal year?
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Q3 When point use is encouraged, the impact on P/L is supposed to increase - why there is no increase?
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Q4 Let's say DOCOMO takes a conspicuous action on pricing of iPhone; it is likely other carriers follow suit -what do you think of this? If you take that kind of measure, is the objective increasing profit, or increasing retention?
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Q5 Even if other carriers do the similar things, it is okay if it leads to an increased earning capacity of DOCOMO?
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Questioner No. 17
Q1 With regards to d Payment, please tell us the usage trend of the users. Also, the field of QR code is getting very competitive, and commission business is getting increasingly difficult to be viable. Do you have plans to change the approach to QR code payment?
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Q2 How widely is QR code payment used?
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Questioner No. 18
Q1 Regarding cost efficiency, was 34 billion yen 4 billion yen more than the original projection? Also, for Q2, Q3, and Q4, can we assume you are going to accumulate roughly 30 billion yen each quarter? From Q2 onward you will be intensifying promotions, so how are you going to proceed with cost efficiency measures?
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