Presentation Materials
Main Q&A (Analyst Meeting after New 5G Services & Products Presentation)
Announced on March 18, 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 Regarding your 5G rate plans, you decided to raise the “Gigaho” rate by 500 yen while basically keeping other rates unchanged from your 4G offerings. You will also launch the “Data Volume Museigen” campaign that provides unlimited data usage, but I believe you should have rather aimed for a higher uplift in ARPU. SoftBank left the margin to explore upsells in spite of still having insufficiencies in their area coverage. I have the impression that you tried to limit the rate increase to a minimum. Can you explain your strategy behind the new 5G rate setting?
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Q2 When you say positive factors, does that imply the 500-yen increase in the 5G “Gigaho” rate?
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Q3 I assume “Gigaho” subscriptions account for roughly 25% of the existing new 4G rate plan subscriptions. Is this correct?
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Q4 I got the impression that SoftBank’s 5G network coverage is relatively limited. In the case of DOCOMO’s 5G, you explained that you would roll out 500 base stations in 150 locations. Do you have any quantitative indicators that describe your area or population coverage?
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Q5 Is it right to assume that DOCOMO has achieved broader area coverage compared to SoftBank?
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Q6 What exactly do you mean by viewpoint?
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Questioner No. 2
Q1 You explained that the “Data Volume Museigen Campaign” will be made available for some time. How many subscribers do you aim to achieve at each milestone (e.g., as of Mar. 31, 2021) in the growth curve toward the acquisition of 20 million 5G smartphone users? Please also share with us your expectations for the services.
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Q2 Regarding your capital expenditures, your base station deployment plan remains unchanged, with a target to complete the rollout of 10,000 stations by Jun. 20, 2021 and an additional 10,000 stations in the next six months, which will bring the cumulative number of 5G base stations as of Mar. 31, 2022 to 20,000. What are the main purposes of the base stations that will be rolled out during this period? You explained that you will bring forward the construction plan by two years. Does this imply your initial CAPEX plan of cumulative 1 trillion yen for the first five years will now change to cumulative 1 trillion yen for three years?
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Q3 Can you also comment on the CAPEX required for DOCOMO Open Innovation Cloud?
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Questioner No. 3
Q1 Do you plan to sell 4G and 5G devices in parallel? Or, will you adopt a policy to sell only 5G devices and stop selling 4G handsets to achieve your subscription target of 20 million?
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Q2 As for your 4G and 5G rate plans, you set the pay-as-you-go “Gigalight” packages at the same rates for both 4G and 5G, but you raised the “Gigaho” rate by 500 yen for 5G. What is the projected breakdown between “Gigaho” and “Gigalight” among the total 20 million 5G subscribers you plan to acquire?
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Q3 You commented that the projected CAPEX for the first five years remain unchanged at 1 trillion yen despite accelerating your construction. As you mentioned that you plan to increase the number of base stations by 10,000 in the second half of FY2021, can you confirm if we can expect flat growth in your annual CAPEX going forward?
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Questioner No. 4
Q1 I would like to hear your thoughts about the revenues from the solution business to enterprises. Can you explain the rate structure and the projected amount of mobile communications services revenues of this business?
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Q2 Are enterprise contracts included in the 20 million subscription target you mentioned earlier? If so, how many do they account for?
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Q3 Regarding the “5G Welcome Wari” discount program, the amount of discount is 22,000 yen for new subscriptions and approximately 8,000 yen for handset upgrades. Why did you differentiate the amount of discounts when handset upgrades have a significant impact on the proliferation of 5G? In particular, I would like to know the rationale behind setting a smaller amount of discount for handset upgrades.
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Questioner No. 5
Q1 Although you explained the cloud-based games you unveiled in the presentation can be accessed via both 4G and 5G, are they originally designed for use on 5G network?
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Q2 Because at this point, 5G coverage is mostly provided in outdoor environments, do you think users will have to wait a little more to start enjoying these gaming services?
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Q3 During the recent DOCOMO Open House 2020 event, you recommended the use of MEC for cloud-based games. Did you construct an MEC-enabled network environment for the games presented this time around?
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Q4 How do you foresee the likelihood of MEC employed in gaming in the future?
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Questioner No. 6
Q1 I understood that you set the 5G rates almost unchanged from your 4G rate plans. Did you announce them as sustainable offers taking into consideration Rakuten’s rate plans? Or, if you have to make a decision to further cut down your rates in the future, what kind of moves on the part of Rakuten, in your view, will trigger such judgment?
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Q2 What is the percentage of corporate accounts to your total subscriptions? In addition, with respect to the number of your partners, it is difficult to assess whether you are performing well or not by looking at the numerical target. Don’t you have any concrete numerical indicators, such as profit generated by the solutions?
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Questioner No. 7
Q1 Are the 5G rate plans predicated upon the application of “d CARD Oshiharai Wari” discounts? Please also explain the business impact of abolishing the two-year term contracts with 5G.
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Questioner No. 8
Q1 You explained that the CAPEX plan of 1 trillion yen for the first five years remains intact, as you will reduce the 4G-related investments in lieu of accelerating 5G construction. What will be the outlook of the split between 4G and 5G outlays after bringing forward the 5G investments? Which will be the case: do you plan to delay 4G capital investments, or reallocate the budget originally intended for 4G to 5G?
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Q2 Around summer 2020, the Ministry of Internal Affairs and Communication (MIC) will introduce a system that will allow the conversion of spectrum allocated for 3G and 4G into use for 5G. How do you plan to take advantage of this system?
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Questioner No. 9
Q1 Do you foresee any impact from the outbreak of novel coronavirus (COVID-19) on the procurement of handsets and network equipment, or the launch and coverage expansion of 5G?
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Q2 At present, you do not handle e-SIMs, but what are your plans for the future?
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Q3 I believe the smartphones in your current lineup do not support e-SIM. Is it right to consider that there will be no changes to your conventional policy?
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Questioner No. 10
Q1 I believe you priced your 5G rate on par with KDDI’s unlimited plan for 4G. Do you think your plan has sufficient competitiveness as it effectively offers unlimited usage?
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Q2 How should customers use your new 4G rate plan, which now offers an expanded data bucket size of 60GB instead of previously 30GB? Do the 5G handset users have the option to join a 4G rate plan?
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Questioner No. 11
Q1 In my understanding, the “Sumaho Okaeshi” program is not subject to the 20,000-yen handset discount ceiling because you removed the condition that limits the eligibility to subscribers of DOCOMO’s mobile communications services. I construed that you will be combining the “5G Welcome Wari” discounts on top of this program. Is my interpretation correct?
Please also give us an indication of the prices of the seven 5G handset models that you unveiled in the presentation after applying the “Sumaho Okaeshi” program and “5G Welcome Wari” discounts.Open
Q2 Will the price range you indicated apply to all models?
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Q3 The “5G Welcome Wari” provides a discount of 5,000 yen for change of subscriptions. I understand that this can be raised to 20,000 yen per unit. Is my understanding correct?
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Questioner No. 12
Q1 You gave us an explanation on the competitiveness of your network and rate plans, but then, why has DOCOMO been the sole loser in the MNP market? Do you think you can expand the number of users in the 5G competition?
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Q2 I thought you introduced the “Gigalight” package under your new rate structure to prevent the outflow of such users, but your strategy does not seem to be functioning properly. Don’t you think the fact that you have not been able to stop the outflow despite rolling out the new rate plans, which were intended for the retention of low-usage customers, implies your pricing measures are not functioning successfully?
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Questioner No. 13
Q1 Does the 50,000-60,000 yen price range for 5G handsets that you alluded to earlier represent the total amount paid by the user in the first 24 months?
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