Presentation Materials

First, I would like to express my deepest apologies for causing inconvenience to many people with the fraudulent use of "docomo kouza" service. Along with compensation to customers, we have introduced an online personal identification system (eKYC*) to strengthen fraud prevention. We, at DOCOMO, are committed to making ongoing efforts to reinforce security measures, so that customers can use our services more safely with greater peace of mind.

* eKYC: Abbreviation for "electronic Know Your Customer," an online personal identification procedure. The procedure requires customers to take photographs of themselves as well as their photo ID (e.g., driver’s license) using the "d Payment" application, and upload them to get a confirmation that the person in the photograph taken is identical to the person of the photo ID.

FY2020/1H Results Highlights

Positioning this fiscal year ending March 31, 2021 (FY2020) as the "start year for growth in a new era" of the 2020s, we have hitherto undertaken various actions to address the three key pillars of (i) "Further reinforcement of customer base," (ii) "Full-scale execution of a business foundation centered on our membership base" and (iii) "New value creation for the 5G era," as well as the "structural reform" that underpins these initiatives. Due to the impact of the customer returns provided through the new rate plans, "Gigaho" and "Gigalight, and the decline of selling revenues and international roaming revenues due to COVID-19, operating revenues came in at ¥2,282.5 billion, recording a decrease of 2.0% compared to the same period of the previous fiscal year. On the other hand, due to the steady results of our initiatives towards expanding our Smart life business and other factors, operating profit came in at ¥563.6 billion, recording an increase of 4.3% compared to the same period of the previous fiscal year, thus recording a decrease in revenues but an increase in profit. Operating profit from telecommunications business dropped by 2.7% from the previous fiscal year to ¥433.6 billion, and operating profit from Smart life business and Other businesses posted a year-on-year increase of 37.5% to ¥130.0 billion, due to the steady growth of finance/payment business and factors regarding the accounting system. The total number of "d POINT CLUB" members grew by 8% year-on-year to 78.15 million, achieving our FY2021 target of 78 million ahead of schedule.

To Further Strengthen NTT DOCOMO

Recently, Nippon Telegraph and Telephone Corporation ("NTT") made an announcement regarding the commencement of a tender offer for the common stock of the Company to make DOCOMO its wholly-owned subsidiary, and we also announced our opinion in support of the tender offer. I would like to explain the rationale and the significance of this decision, which was made with the objective of making DOCOMO even stronger.

The environment surrounding DOCOMO is undergoing a major change. In telecommunications business, competition has intensified due to the market entry of a new network operator and the aggressive moves of sub-brands. In the area of non-telecommunications, the competition with players from other industries has shifted into high gear. Further, in the broader society, the outbreak of COVID-19 has induced a rapid transition to "remote-style". For enterprises, this has had an effect to further accelerate digital transformation, and for general consumers, it has entailed a remarkable change in the style they work and communicate.
Amid these changes in the environment, the demands of customers are becoming increasingly diverse, sophisticated, and complex, which, in some cases, cannot be met with the offerings in our existing business domains. I believe it is necessary to expand our current mobile-centered business areas and transform ourselves into an existence capable of providing total services that can accommodate the expectations and needs of society at this juncture, when the society is transitioning to a new shape and 5G service has started in full throttle.
In addition to meeting customers’ expectations by creating more convenient and easy-to-use services ahead of the competition, helping solve various social issues by realizing "smart" society/industries through digitalization and thereby playing a positive role to further advance Japan’s ICT sector and raise their level of international competitiveness are the roles expected of NTT DOCOMO in the 2020s and 2030s.

After becoming a wholly-owned subsidiary of NTT, we will assume the role of core company of the NTT group and aim to transform ourselves into an existence that will accommodate, as a "front for all customers," the diversifying needs of customers, whether consumers or corporations, through the provision of total services including not only mobile networks but also applications and solutions. To this end, we need to thoroughly strengthen our "capability to create and provide services" and further enhance the "competitiveness of our telecommunication networks." We recognized that the fastest and most certain way to accomplish this is to become a wholly-owned subsidiary of NTT and strengthen our business foundation by strategically and agilely utilizing the resources and assets owned by NTT group companies.

Reinforcement of Business Foundation

Specifically, we will focus on reinforcement of three key areas.
First, we will strive to improve the competitiveness of our telecommunications business through sophistication and efficiency improvement of our networks. For example, by strengthening the coordination among the various networks owned by NTT group companies, we will be able to achieve integrated networks and services encompassing mobile, fixed-line and Wi-Fi. Further, the collaboration with other group companies for utilization of communication facilities as well as operation and maintenance of equipment and facilities will allow us to deliver more stable and cost-competitive networks. This, in turn, will enable the creation of new communication services catered to the diversifying needs of customers and realize more affordable and user-friendly pricing.
Secondly, we also need to beef up our corporate sales and Smart life business even further. In addition to expanding the spheres of our solutions through creation of new services that integrate mobile with fixed-line and higher-layer services, we will also realize "stronger" sales capabilities by stepping up our collaboration with the corporate sales teams of other companies in the NTT group. In Smart life business, we will aim to expand the ecosystem centered on our membership base at an accelerated pace by increasing the level of collaboration with group companies, and strive to create new businesses by incorporating the technologies and services owned by the NTT group in our video distribution and healthcare services as well as other offerings that have high growth prospects.
Finally, we will also address reinforcement of our R&D capabilities. By enhancing the collaboration with NTT laboratories, we will employ the achievements of NTT’s basic research in a timely manner and establish a system for early creation of high-quality services. Meanwhile, we will also continue to step up our R&D capabilities toward the evolution of communication technologies and realization of next-generation networks such as 6G and IOWN that are indispensable for the improvement of our medium-to-long-term corporate value.

In Conclusion

Now that a new era of 5G has opened, we, at DOCOMO, will expand our realms of business and transform from previously a mobile-centered business into an existence that can respond to customer requirements through total services, by strengthening our collaboration with NTT group companies on various fronts. To make DOCOMO even stronger so we can make greater contributions to society, we will take on new challenges without fearing change, and spearhead the growth of not only DOCOMO but also the entire NTT group.

In closing, to our valued shareholders, I would like to express my sincere gratitude for the warm understanding and support that you have extended to our business over the years. We are committed to make ongoing efforts in creating new value and solving social issues, and your continued support and understanding would be very much appreciated.