Presentation Materials
Analyst Meeting Q&A (Earnings Release for the Six Months Ended September 30, 2019)
Announced on October 29, 2019
Please be advised that the following text has been edited/modified from the original Q&A conversations for the sake of clarity.
-
Questioner No. 1
Q1 I would like to know the breakdown of the incremental expenses in your revised guidance. You mentioned earlier that you plan to spend more money for subscriber migration, Smart life business and Other businesses, but the size of revision you made for cost of equipment sold and services and other expenses is quite large at 48 billion yen. Because there were no increases in the first half, I believe all incremental spend will incur in the second half. Can you share with us the breakdown of these expenses? Further, you also raised the projected amount of loss on disposal of property, plant and equipment and intangible assets by 19 billion yen from your initial projection. Please explain the items that you plan to write off using this additional amount.
Open
Q2 You are executing various campaigns this fiscal year to strengthen your payment services such as "d Payment", "d CARD" and "iD". However, when I look at the FY2019/1H results of Smart life business, it appears that these measures have not yet produced meaningful profits. I would like to know how the efforts you poured in the payment services would show in your profits from next year onwards. Please also give us a quantitative outlook because I believe payment services are expected to become a key driver of your Smart life and Other businesses profit in FY2020 and beyond.
Open
-
Questioner No. 2
Q1 This is a question about the penetration of the new rate plans. I understand the number of subscriptions was approximately 7.17 million as of Sept. 30 after acquiring some 3.4 million subscriptions in the second quarter. At this pace, however, I believe it will be difficult for you to achieve your year-end target of 17 million. How do you plan to address subscriber acquisition in FY2019/3Q and 4Q?
Open
Q2 Regarding your capital expenditures, you explained that you will employ additional flood control measures against typhoons and other disasters and bring forward the 5G-construction plan, but you only made a slight change to your full-year capital expenditures guidance for FY2019. How will you manage the implementation of additional measures within this budget? And what should we expect for your CAPEX plan for next fiscal year?
Open
-
Questioner No. 3
Q1 The expenses for the second half are projected to be lower compared to the same period of the previous fiscal year. However, if the cost efficiency improvement planned for the second half is excluded from the calculation, there will be a significant rise in expenses. Can you share with us the detailed items behind the projected increase?
For the measures for subscriber migration, if you sell tens of thousands of handsets carrying a cost of 70,000-80,000 yen per unit (50,000 to 60,000 yen for the cost of handset sold added with a subsidy of 20,000 per unit), you will incur a total cost of several tens of billions of yen. Can you explain the details of the measures you plan to implement?Open
Q2 You revised your operating revenues guidance upwards by 60 billion yen at the end of the first half, which includes an upward revision of mobile communications services revenues. I do understand this will bring about temporary increase in some expenses, but do you foresee a drop in these expenses in the next fiscal year after an increase this fiscal year? Or do you think the rise in expenses associated with revenue growth will continue going forward?
Open
Q3 This is a question about the new rate plans. Can you comment on the changes of the monthly bill of users who have switched to the new rate plan from your conventional billing plan? Have you seen a general rise in the billed amounts of users who chose a usage-based billing plan after migration?
Open
-
Questioner No. 4
Q1 How did the stepped-up subscriber migration measures impact your ARPU?
Open
Q2 What was the total number of credit cards issued as of September 30, and how fast is this growing? Please also share with us the pace of growth of the total "d Payment" transactions and your views on the profitability of this business.
Open
-
Questioner No. 5
Q1 You made an upward revision of 39 billion yen to your full-year mobile communications services revenues forecast this time around. Can you comment on the impact of the new rate plans to this upward revision?
Open
Q2 You have not changed your year-end new rate plan subscriptions target of 17 million, but the impact from the discounts turned out smaller than your initial forecast. Is this because the amount of discount per user is coming down? Or is this because the number of active users applied with discounts came in lower than your projections due to the slow adoption of the new rate plans immediately after their launch?
Open
Q3 You revised your full-year net additions forecast upwards. I believe the sales of communications modules was brisk in the first two quarters, making a significant contribution to the favorable performance of net additions. Can you share with us the breakdown of components other than communication modules? Should we consider the bulk of the upward revision of 0.5 million was attributable to the modules?
Open
-
Questioner No. 6
Q1 Given the implementation of the revised Telecommunications Business Act, you can no longer subsidize your handsets. How do you plan to promote subscriber migration from next fiscal year onwards in this environment?
Open
Q2 Don't you think the measures you can employ from next fiscal year onward to accelerate subscriber migration will be limited?
Open
Q3 Regarding your ESG-related initiatives, you have held a significant number of Mobile Phone Safety Class sessions. How has this effort contributed to ARPU growth or acceleration of subscriber migration?
Open
Q4 What about the Smartphone classes?
Open