Comments from the CEO (Results for the First Half of 2019 announced on October 29, 2019)
Execute "Change" for Further Growth
FY2019 NTTDOCOMO Business Management Policy
FY2019/1H Results Overview
We positioned the fiscal year ending March 31, 2020 (FY2019) as the year to "execute 'change' to propel further growth," during which we are driving our own transformation to sustain growth toward the future.
For the first half of FY2019, operating revenues and operating profit dropped to 2,330 billion yen (down 2.5% year-on-year) and 540.3 billion yen (down 11.5% year-on-year), respectively, as a result of our proactive implementation of various customer return measures aimed at reinforcing our customer base. Operating profit from telecommunications business decreased by 15.0% from the same period of the previous fiscal year to 445.7 billion yen, while operating profit from Smart life business and Other businesses grew by 9.9% to 94.5billion yen.
Although we recorded a decrease in both operating revenues and profit, we achieved a steady progress vis-à-vis our full-year guidance. We will continue our endeavors to reinforce our customer foundation leveraging our new rate plans and steadily expand our Smart life business and Other businesses, while addressing cost efficiency improvement in a scale larger than FY2018.
Expansion of Customer Base through Provision of Customer Returns
The new rate plans, "Gigaho" and "Gigalight," introduced in June enjoy great reviews. With their total number of applications exceeding eight million in October, we believe we are making a favorable progress toward the attainment of our target to acquire 17 million subscriptions by March 31, 2020. Further, we commenced in October a program called "d CARD Oshiharai Wari," which provides a discount of 170 yen/month to new rate plan subscribers who agree to pay their monthly phone bill with "d CARD," lowering their monthly charge to the same rate as that of subscribers of a two-year contract without requiring any fixed-term subscription. We also reduced the cancellation fee for two-year contract subscribers from previously 9,500 yen to 1,000 yen.
Our goal is to solidify and further expand our customer base through these customer return initiatives and other measures.
Toward Launch of 5G Full Commercial Service
From September 20, we launched our 5G pre-commercial service in various locations across Japan in conjunction with the opening of "Rugby World Cup 2019TM Japan" tournament and started offering a wide range of new sport viewing style such as real-time multi-angle viewing via 5G-enabled smartphones. In the runup to the full commercial service launch scheduled for spring 2020, we will create new 5G services and solutions and roll them out as our pre-commercial offerings in various places across Japan. The entire DOCOMO group is committed to making an all-out effort for the construction of 5G network, deploying 5G base stations in all 47 prefectures of Japan by June 30, 2020 and further increasing the number to 10,000 stations by June 30, 2021.
In order to concentrate our managerial resources on 5G, we announced that we will stop accepting new applications for 3G (FOMA) service after March. 31, 2020, and terminate the 3G network on March 31, 2026. To make sure that users of various generations can switch to a handset they find most convenient without any worries, we will prepare devices that can be used with the same touch and feel as the models they are currently accustomed to, and offer discounts on handsets and monthly communication charges through such programs as "Hajimete Sumaho Kounyu Support" and "Oshaberi Wari 60."
Expansion of Finance/Payment Services
We strengthened the coordination between our "d POINT" and our various payment services, e.g., "iD" (electronic money), "d CARD" (credit card) and "d Payment" (smartphone payment). As a result of these undertakings, the total amount of transactions processed with our finance/payment services grew by 31% over the same period of the previous fiscal year to 2,390 billion yen for the first half of FY2019.
The total "d CARD" members increased by 5% year-on-year to 20.39 million, the number of "d Payment" app downloads topped 10 million, and the number of locations where "d POINT," "iD" or "d Payment" are available reached 1.22 million, all expanding at a favorable pace.
In September, we added a new wallet feature to the "d Payment" app to enable money charging and remittance. Further, in November, we plan to roll out "mini apps" within the "d Payment" app to allow various merchants to deliver their own services, so we can provide extra benefits and convenience to customers' everyday lives through our expanded offerings.
Publication of Integrated Report 2019
We published "Integrated Report 2019" aimed at various stakeholders including our shareholders and investors. In the report, we presented the roadmap which details, using both financial and non-financial data*, how we plan to achieve growth over the mid-to-long term leveraging the variety of assets that we have accumulated over time in association with the expansion of telecommunications business, to explain DOCOMO's value creation processes as we tackle an unprecedented transformation for our sustainable growth in the 2020s. We hope you will enjoy the read.
As always, we would like to express our sincere appreciation to our valued shareholders and investors for your continued patronage, and look forward to enjoining the same support and understanding in the future.
noticeNon-financial data refers to ESG information (environment, social and corporate governance-related information) as well as information pertaining to corporate policies such as management philosophy, vision and medium-term strategy.