Presentation Materials
Analyst Meeting Q&A (Earnings Release for the Six Months Ended January 01, 2020)
Announced on January 01, 2020
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 In relation to the liquidation of receivables, can you share with us the balance of ”d CARD receivables” and handset installment receivables as of Dec. 31, 2019? Please also share with us your thoughts about the liquidation plan for FY2020.
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Q2 Can you comment on your plans as to how you plan to counter the new entrant that will start their mobile phone business from April? There are various options that you can possibly take, such as continuing the ”Gigaho Zouryou Campaign” or increasing the ”d POINTs” you grant to customers. Please let us know if you have any concrete measures in mind.
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Questioner No. 2
Q1 How do you assess the change of the regulatory framework for handset sales that took effect from October? Was it a favorable or unfavorable development for you? Please explain your thoughts and the reasons why you believe so.
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Q2 You achieved very favorable progress in the generation of operating profit vis-à-vis your full-year guidance. If you have not revised your internal projections, how do you foresee its landing? Please explain from the viewpoint of one-off expenses and the projected amount of EBITDA.
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Q3 Does that imply you plan to spend a large sum of expenses in FY2019/4Q for your sales/marketing measures? Should I expect that you will stop heavily promoting these measures at some point during the next fiscal year?
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Questioner No. 3
Q1 This is a question relating to the customers returns to be provided through your new rate plans. You mentioned that the estimated size of its impact was 200 billion yen in your initial forecast, but you later revised it downwards by 10-20 billion yen after a review at the end of the first half. Was there any change to your views after finishing three quarters? If you have made any changes, please explain which element was reviewed and which factor (e.g., the impact from the new rate plans per se, or the impact from the Monthly Support program) was different from your earlier assumptions.
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Q2 There are talks about the conversion of the existing 4G spectrum for 5G use. Can you share with us your views on this matter? Please also explain your policies as to how to respond to the possible tax incentives that may be applied to 5G-related capital expenditures. Do you have any plans to bring forward your plan to roll out 10,000 base stations by spring of next year?
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Questioner No. 4
Q1 As you achieved a significant improvement in your churn rate performance, can you tell us which segment has stopped flowing out from DOCOMO? Was there any causal relationship between your churn rate and your earlier comment concerning the better-than-expected upsell records within the old rate plans? Please indicate the specific user segment (e.g., high-end or low-end) that showed an improvement.
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Q2 Which segment do you think was most affected after October, high-end or low-end? I would appreciate your comment as this could have an impact on your future ARPU trends.
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Q3 Have the best-selling models shifted to low-end handsets?
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Questioner No. 5
Q1 You indicated that the maximum size of your receivable liquidation program would be 1 trillion yen. Please elaborate on the timeframe of its execution.
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Q2 When I look at the progress of your capital expenditures, it has been faring roughly 10% lower compared to the same period of the last fiscal year. Do you think you will be able to achieve the projected full-year CAPEX budget in the remaining 2-3 months? Have you already resolved the component supply issue, etc.?
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Q3 Can you give us an update on your recent 5G-related capital outlays?
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Questioner No. 6
Q1 Can you disclose the percentage of ”Gigaho” users to your total new rate plan subscribers, and if you have witnessed any changes in its trend following the launch of ”Gigaho Zouryou Campaign?”
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Questioner No. 7
Q1 Recently, we have seen an accelerating trend among your competitors to open up their ecosystem using the payment service as a pivot or by forming alliances with other players. Amid these market trends and the moves of your competitors, what kind of impact do you foresee on DOCOMO’s economic sphere and your future profit from Smart life business?
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Q2 Does that mean the market consolidation centered on payment services that we have seen in the last three months will not likely have significant direct repercussions on your business, and you are happy to stay on your existing strategy?
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