Response to Risks and
Opportunities

Changes in the telecommunications industry market environment (such as intensifying competition from other businesses or other technologies, the expansion of competitive layers, or the participation or cooperation of mobile service providers in other industry sectors leading to the invigoration of these sectors) could limit the Group's acquisition of new subscriptions or our retention of existing subscriptions, and could also lead to unanticipated average revenue per user (ARPU) decreases, cost increases, etc.

• Carrying out multifaceted research and analyses of market trends, as well as developing new products and services that incorporate market feedback (demand)
• Establishing billing plans that earn continued customer loyalty, based on detailed analyses of customer usage trends, sales, etc.
• Appropriately communicating to customers the Company's initiatives to strengthen network quality, simplify billing plans, expand after-sales services and make services more convenient

If the current and new services, usage patterns and sales formats proposed and provided by the Group cannot be developed according to plan, or if unanticipated expenses arise, this could impact the financial condition of the Group or restrict our growth.

• Developing competitive new products and services by constructing an efficient development process that enables the timely provision of products and services that take into account changes in the environment
• Streamlining management resources through selection and concentration of services based on regular service evaluations that reflect customer usage trends and changes in the environment
• Regularly collecting and analyzing information concerning the sales, subscriptions and usage of products and services, and identifying declines in subscriptions or sales early on

Introduction of or changes to various laws, regulations or systems (both inside and outside Japan), or the application of such introductions or changes to the Group, could impose restrictions on our business operations. This may adversely impact the Group's operational outcomes.

• Gathering information about changes in policies, such as administrative and legislative policies that may impact business operations
• Working to build understanding of the Group's opinions among stakeholders. This includes indicating Group opinions via public comment initiatives implemented by ministries or other government agencies

Limitations in the frequency spectrum or facilities available to us could impact our ability to maintain or improve our service quality and our level of customer satisfaction, and could also increase our costs.

• Building systems that can flexibly accommodate changes in capital expenditure plans through regular monitoring of traffic
• Analyzing customer feedback with respect to network areas, and implementing and promoting initiatives designed to improve customer satisfaction in each network area
• Encouraging users of existing radio stations to move to other frequencies so that services in new frequency bands can be implemented as planned

Mobile service providers around the world may fail to adopt technologies or frequency bands compatible with those used by the Group's mobile communications system. This could impact our ability to offer a full range of international services.

• Gathering and conveying information by participating in the activities of organizations involved in international standardization, as well as through alliances with overseas telecommunications operators
• Minimizing the impact of changes in frequency bands used by overseas operators on the development of our handsets and services, as well as promoting the adoption of the frequency bands used by the Group

Our domestic and international investments, alliances, collaborative partnerships or investments in new business fields may not produce the returns or provide the opportunities we expect.

• Working to better clarify revenues and profits from our investments and partnerships, as well as creating and demonstrating synergies, based on the Group's overall strategy
• Building a better understanding of the distinctive legal systems, practices, specialized knowledge, etc., of the industries in which we are involved; creating systems to regularly evaluate the progress and risk status of our business partners and other companies in which we have invested; and establishing exit rules in the event that risks do materialize

Malfunctions, defects or imperfections in our products or services (or those of other providers) may give rise to problems.

• Conducting extensive quality checks before introducing new handsets or applications
• Promoting the adoption of virus countermeasure services and phishing countermeasure services
• Establishing standards concerning quality, etc., for contents and services on platforms provided by the Group, and swiftly investigating and dealing with causes of malfunctions, etc.

Social problems arising from potential misuse of our products or services may adversely impact our credibility or corporate image.

• Continuing to work toward achieving a safe and secure mobile society by promoting and expanding appropriate services and countermeasures, providing educational activities and promoting awareness
• Training and alerting sales agents as necessary to ensure that they fully verify the identity of mobile phone subscribers and abstain from inappropriate sales methods, and working with sales agents (such as sharing customer feedback with them) to ensure that their sales methods are appropriate

Unsatisfactory handling of confidential business information, including personal information, by the Group, our contractors or others may adversely impact our credibility or corporate image.

• Rigorously implementing the appropriate handling of managed information by introducing and updating information management rules both internally and externally (including suppliers and other business partners), as well as providing ongoing educational activities
• Building robust information systems and carrying out regular testing based on established security standards

Owners of intellectual property rights essential for our business operations may fail to grant us licenses for these intellectual property rights. This may render us unable to offer certain technologies, products and/or services, and the Group could also be held liable for damage compensation if the intellectual property rights of others end up being infringed. In addition, any illegal use by third parties of the intellectual property rights owned by the Group could reduce our projected license revenues and could adversely impact our competitive superiority.

• Securing the relevant Group's rights prior to the development of any new products or services, as well as investigating rights of other companies and undertaking measures necessary to conclude licensing contracts, etc.
• Investigating the use of our intellectual properties by other companies in regard to important technologies and services that have a significant impact on the Group's business, and working to prevent the loss of licensing revenue opportunities by taking immediate action in the event that any infringement of rights is discovered

Natural or human-caused disasters (or similar events or incidents) could damage our networks, distribution channels or any other elements necessary for the Group's provision of service. Such incidents may adversely impact our credibility or corporate image, and may lead to reduced revenues or increased costs.

• Establishing basic principles for responses to large-scale natural or other disasters, as well as carrying out training on a regular basis
• Formulating business continuity procedures and establishing backup systems for our most important platforms and internal systems

Concerns may spread about the adverse health effects of wireless telecommunications.

• Conducting ongoing studies and research relating to the effects of radio waves on human health, as well as publishing the results of such research

Our parent company, NIPPON TELEGRAPH AND TELEPHONE CORPORATION (NTT), could exercise its influence in ways that may not benefit our other shareholders.

• Sharing with our parent company the opinions and demands of non-parent company shareholders, as well as opinions obtained from experts in various fields
• Constructing a system enabling the opinions of independent outside directors to be reflected in business operations

There is heightened expectation from the market concerning actions to resolve social issues and growing demand for the Group's high-quality technologies, etc., from companies and other customers based on this expectation. In addition, actions to resolve social issues may generate new profit-earning opportunities for the Group. Further technological advancements are also being made in AI and IoT fields, etc., on the back of the Fourth Industrial Revolution (4IR).

• Promoting collaboration with partner companies based on "+d"
• Advancing R&D into 5G, AI and IoT, etc., aimed at generating new innovations

The Company is able to provide services in a stable manner through initiatives to enhance service quality, improvements in the operational quality of suppliers and other business partners by way of supply chain management, etc., and solid financial foundations.

• Establishing a quality check flow that includes a meeting to determine introduction prior to starting service provision
• Conducting different kinds of monitoring of suppliers based on DOCOMO's Guidelines for CSR in Supply Chain
• Setting up a meeting body to discuss medium- and long-term strategy, etc., including investment projects, outside of the Board of Directors

Introduction of or changes to various laws, regulations or systems both inside and outside Japan, including the easing of regulations, could have a positive impact on the Group's business operations,.

• Striving to promote understanding among stakeholders of the Group's opinions, which includes submitting an opinion when the relevant authorities call for public comment, so as to set the tone for a favorable outcome for the Company

Investments in the Group and our partner companies, tie-ups and the creation of cooperative relationships, etc., may lead to suitable earnings or opportunities.

• Promoting collaboration with partner companies based on "+d"

The acquisition of intellectual property rights, etc., may enable the Group to provide specific technologies, products or services. Exercising these and other rights can lead to licensing income as well as a dominant competitive position.

• Advancing R&D into 5G, AI and IoT, etc., aimed at generating new innovations