Presentation Materials

For the first six months of the fiscal year ending March 31, 2017 (FY2016/1H), we recorded an increase in both operating revenues and income, which were 2,288.3 billion yen (up 3.3% year-on-year) and 585.6 billion yen (up 26.6% year-on-year), respectively. We are seeing a solid income recovery as a result of our company-wide endeavors toward the turnaround of the telecommunications business, growth of income from smart life business and other businesses, and improved cost efficiency.

In the telecommunications business, we saw continued improvement in ARPU led by increased data usage driven by the expansion of our smartphone user base as well as growth in the subscriptions to "Kake-hodai & Pake-aeru" billing plan and "docomo Hikari" optical-fiber broadband services. In the area of smart life business and other businesses, content and finance/payment services demonstrated a steadfast growth.

Upgrades to our network will realize Japan's fastest transmission rate1 for smartphones of 500Mbps in March 2017, and the launch of an even faster service at 682Mbps is scheduled in or after March 2017. With the introduction of 5G in sight, we will seek further advancements in our network infrastructure.

Meanwhile, our "+d" open collaboration efforts have expanded the number of partners to 164. Going forward, we will join forces with these partners in tackling social challenges, regional revitalization and other initiatives toward 2020.

Giving back to our customers is also an area we are enhancing. We do this by making continuous enrichments to our rate plans, primarily through adding options to the "Kake-hodai & Pake-aeru" billing plan originally launched in June 2014. Recent additions include the "Ultra Pack" and "Ultra Share Pack" data plans tailored to high-usage customers in September 2016, followed by the introduction of a variation of the "Kake-hodai Light" billing plan and "Keitai Pack" data package for LTE-enabled "docomo Keitai" (feature phone) users in October 2016. Further, to focus on supporting families with children, we plan to introduce initiatives such as our new "docomo Child Raising Support Program." We remain committed to expanding returns to our customers on an ongoing basis.

Cost efficiency improvement efforts have also made favorable progress. To explore further opportunities for efficiency improvement, we are raising our annual cost reduction target by 20 billion yen to 100 billion yen.

Last but not least, we are making upward revisions to our FY2016 full-year operating income and free cash flow projections. We forecast operating income at 940 billion yen, up 30 billion yen from our initial guidance, and free cash flow at 640 billion yen, up 40 billion yen. While stepping up returns to our customers, we will continue with our corporate efforts in further cost efficiency and other areas. We will devote our maximum efforts toward the fulfillment of both "enhanced customer satisfaction" and "sustained growth of the company."

Upon the announcement of FY2016 full-year results, we plan to unveil our next medium-term strategies. I hope you won't miss it, as we expect to present concrete actions for realizing "ever-improving value" that is more affordable, convenient, fun and bring about greater peace of mind.

I ask for your continued support and understanding as we go forward with our endeavors.

• 1 As of October 19, 2016, compared to domestic mobile telecommunication carriers.