Presentation Materials
Main Q&A (Analyst Meeting concerning Sales Strategy)
Announced on Dec. 10, 2019
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 Please explain if there has been any changes in your subscriber acquisitions after you introduced the new rate plans and new handset sales model.
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Q2 You mentioned that you recorded a year-on-year decline in the MNP port-ins in November and December. Was the drop significant?
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Q3 Since you explained the overall MNP market is on a contracting trend, is it right to understand that the subscriber movement among the MNOs have been mutually decreasing?
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Q4 Whether your users find the new rate plans compelling or not will be a very important factor that will affect the adoption of the new rate plans. How do you evaluate the reputation and appeal of your new plans?
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Q5 Some media articles reported that DOCOMO’s new plans are not reasonable at all, which created a general perception that your rates are not inexpensive. Don’t you think you should more actively compare your new rates with the plans of other carriers to properly communicate the affordability of your new rate plans?
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Q6 I believe selling-related expenses before deducting the commissions used to finance handset discounts recorded a year-on-year decline. How do you foresee the long-term trend of this expense item going forward?
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Q7 Can I assume that your selling-related expenses are generally on a slight downtrend when all costs incurred in relation to handset sales are included?
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Questioner No. 2
Q1 Once things stabilize after your introduction of new rate plans and Rakuten’s market entry, on which axis do you think the MNOs will compete against one another from 2020 onwards? I personally believe finance/payment and commerce services will play an interesting role. We have recently seen a drastic business integration between Yahoo Japan and LINE under the leadership of SoftBank and there are speculations in the market as to when KDDI will ally with Rakuten.
Although we cannot tell how the alliances of other carriers will unfold in the future, in the event non-telecommunications businesses become the main battlefield, how do you plan counter the competition?Open
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Questioner No. 3
Q1 How sensitive are DOCOMO’s customers about the necessity of aligning your rates with those of second brands, etc.? I do not think you have lowered your rates to a level comparable to Y!mobile or UQ Mobile. Do you see the need of matching your rates with the second brands?
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Questioner No. 4
Q1 Please share with us your projections concerning Rakuten’s moves and the measures you can possibly take to counter them. Unless you make the necessary preparations from now, you will not be able to respond when they make their announcement. Have you considered many different scenarios?
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Q2 What are the strengths of DOCOMO vis-à-vis Rakuten?
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Q3 The rate plans circulated on the internet recently that were considered to be Rakuten’s appeared to be conceivable if they represented the rates after applying certain campaign discounts. If they truly set their rates at that level, do you plan to match your rates?
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Q4 Many people believe there are no meaningful differences in the network quality of the three MNOs, and a good number of people expect Rakuten’s will not be so different either. I do not think consumers will realize the difference unless you go as far as creating and airing a parody commercial film that compares the network speeds. What are your thoughts?
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Q5 I understand that Smart life business and Other businesses have been growing, recording an increase in segment profits. But I am concerned that your total operating profit will hit a ceiling at a level below 1 trillion yen as the government or the Ministry of Internal Affairs and Communications (MIC) will criticize if your profit increases too much. Do you foresee such risks?
For example, do you foresee the possibility of having to spin off your Smart life segment just like DOCOMO and NTT Data were divested from NTT in the past? You may also be able to pursue the option of fending off criticism by separating the telecommunications business from other businesses that are achieving growth. Have you discussed these matters internally?Open
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Questioner No. 5
Q1 I believe the MIC’s criticism complaining that you are making too much profit will not subside in the next fiscal year or so. Should I assume that you are planning to maintain your telecommunications revenues flat but instead secure growth in non-telecommunications business in the next decade, the era of 5G?
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Questioner No. 6
Q1 You commented that 5G will determine your competitiveness in the next decade, but what kind of world should we anticipate in ten years from now? Do you think consumers will still account for the large bulk of your revenues, or do you think the income from enterprise clients will take up a significant proportion of your revenues?
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Q2 What are your thoughts about overseas business? Should we not expect a lot from overseas business as you do not have any intention to roll out 5G networks outside Japan?
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Questioner No. 7
Q1 According to market consensus, DOCOMO is not forecast to recover to its previous profit level. I am sure that there are many things beyond your control, but in your view, Mr. Tsujigami, is there anything about your latent power that the market has overlooked?
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