Japanese

Presentation Materials

• Equipment sales

  Q1 It seems that inventory is rising, isn't it a problem?

  Open

  A1 Inventory as of the end of June has increased due to the launch of 902i series. Also, regarding the previous models, per handset procurement cost has been reduced due to an increase in procurement we still have demands for these models because of strong quality. Therefore, we are strategically holding a certain level of inventory. In terms of design-oriented handsets, as these handsets are sold over the long term, there could be increase in inventory at any given time. Thus, inventory is rising due to the reasons I mentioned. We think it necessary to make efforts to adjust the level of inventory appropriately.

  Q2 Are you going to boost handset sales in second quarter since handset inventory has increased through the end of first quarter.

  Open

  A2 It will depend on future marketconditions. We see a possibility that handset replacement may increase year-on-year, however if it does, such increase may not be significant.

  Q3 Despite your full-year forecast saying that commissions per unit will be lower compared to the last fiscal year, commissions are actually rising for the first quarter. With inventory rising, can you reduce commissions per unit?

  Open

  A3 Commissions per unit are at about same level as during the forth quarter of the last fiscal year and we are not seeing any upward trends. Over the coming years, we will make efforts to lower the commissions per unit by reducing the increasing impact to the cost due to the increase in the percentage of FOMA handset sales and by pushing up the percentage of handset sales in SIMPURE (600 series) and 700 series, both of which have a lower price point in comparison to 900 series.

  Q4 There is an increase in the number of handset sales compared to the same period of the last fiscal year. Is this increase in line with your expectations?

  Open

  A4 Compared to the same period of the last fiscal year, the total number of replacement handsets has increased slightly by 120,000 units, however, this is in line with our expectations. We believe that the increase in replacement units prior to the introduction of MNP will be beneficial to retaining our current subscribers.

  Q5 As for first quarter, the number of handsets sold for replacement increased compared to the same period of the prior year. Did DoCoMo intentionally encourage handsets replacement? And can we expect this trend continue in the second quarter?

  Open

  A5 The monthly handset replacement rate in first quarter is higher than that of the same period of the prior year. We think this is the result of a below average replacement rate in the same period of the previous fiscal year. Handset replacement rate is affected by price difference between handsets sales to new subscribers and to current users. We expect that the average monthly handset replacement rate for this year will be similar to that of the prior year.

• MOU, ARPU and billing arrangements

  Q6 You explained that the impact on ARPU from the accounting procedure related to recognition of "2 month carry over service" was 200 yen. What is the breakdown between voice and packet?

  Open

  A6 180 yen comes from voice and 20 yen from packet.

  Q7 Why is data ARPU showing solid performance?

  Open

  A7 The solid performance of data ARPU is mainly due to two factors:
  -the effect of new subscriptions for "pake-hodai" packet flat-rate plan by users whose packet ARPU was below 3,900 yen, and
  -the increase of usage by migrating law-end mova users to FOMA.

  Q8 Is there any effect on ARPU resulting from the churn out of high-end users to other operators in this first quarter which has resulted in declining MOU.

  Open

  A8 We have seen no particular effect on MOU as a result of high-end users' churn out. Before making more billing plans available to "pake-hodai" users, some of these customers who choose a higher billing plan than necessary were using free bundle packages, that effects MOU increasing. Now this up-side effect is running out, so first quarter results show a decrease in MOU. However, the trend is the same as prior periods that the decreasing portion of MOU has been shrinking.

  Q9 KDDI announced flat-rate voice service for their corporate customers. What counter measures, if any, do you have? Should we be concerned that current billing information system inadequacies may cause a delay in implementation of counter measures?

  Open

  A9 We would like to consider any counter measure because we view corporate users as a very important market in the run up to MNP. We intend to consider various factors such as service spec, network coverage and internal office telephone, which do not directly correspond to the features of KDDI's service. In addition, we do not see any particular problems wtih respect to our information handling system.

• "Osaifu-Keitai" (mobile phones with wallet functions) services

  Q10 Can you explain the reason why i-mode FeliCa services are not provided on 700 series handsets?

  Open

  A10 It is a matter of maintain the balance of cost. In addition, inclusion in the number of reader/writer is currently not yet sufficient. Therefore, we need to consider 700 series in conjunction with expanding the installation of reader/writer.

• HSDPA, search engines and contents

  Q11 You previously announced your intention to introduce two HSDPA handsets this coming spring, meaning that you can not make it before the introduction of MNP. Doesn't this create a problem for you? Also, can you explain the reason why HSDPA launch has been delayed?

  Open

  A11 It is as a result of a lack in technology. Initially we intend to start with a limited handset lineup, however, we think that higher transmission speed is a powerful weapon. We will strive to increase the lineup as soon as possible while considering handset cost, service stability, and area coverage.

  Q12 What do you estimate will be the effect on packet traffic of the upcoming launch of new serch engines for i-mode?

  Open

  A12 We imagine that users will first search official i-mode sites, and if results are not sufficient, search engines will search the same keyword in accessing to independent sites. This search service will improve user convinience of official i-mode sites and independent sites, and we hope that it will enhence packet usage by our i-mode users.

  Q13 Can you explain the revenue impact of i-channel service and Tokudane News Bin?

  Open

  A13 Packet charges generated from i-channel usage can not be singled out. However, we count its monthly charge of 150 yen as content revenues and reported approximately 1.7 billion yen for the first quarter.

• Research and developments

  Q14 How is the development of Linux-base platform?

  Open

  A14 We do not see any particular difficulties in the development of a Linux-based platform.

  Q15 What does DoCoMo aim to achieve through the future implemention of super 3G.

  Open

  A15 We are plannning a maximum transmittion speed of up to 100 Mbps and actual speed of up to 20 Mbps, and are to offer super 3G services after 2010. Although we can not currently desribe specific services, however we feel it may be possible to realize new services beyond the scope of current assumptions by virtue of high speed transmittion. Once high speed broad band communication realized, various services will be offered. For example, users could store various informaion on network and download it into their handsets on demand. Also, individuals may choose to publish informtion using our services, similar to blog services which are common on PCs nowadays.

• Others

  Q16 In NTT's medium-term management strategy, they talked about introducing One Phone (a unified handset compatible with both fixed and mobile networks) for consumers. Can you explain your perspective on One Phone?

  Open

  A16 It is true that the NTT group is going to address FMC as a major pillar of our services. However, rather than attempting a unified, all in one service from the very beginning, we believe that there is a different approach from the fixed-line side and the mobile phone side. We at DoCoMo may be going to consider the matter based on mobile phone.

  Q17 How are you going to inform your subscribers about MNP?

  Open

  A17 There are services that can not be carried over after changing operators. We believe it very important to execute not only promotional activities to acquire new subscribers but also activities to make our customers understand MNP properly.

  Q18 What is the reason for the 5% increase in other non-personnnel expenses.

  Open

  A18 It was mainly due to an increase in construction costs for FOMA base stations, and sales and marketing costs such as promotion events and advertising.