Presentation Materials
Analyst Meeting Q&A (Earnings Release for the Six Months Ended September 30, 2020)
Announced on October 29, 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 Operating profit from Smart life business and Other businesses for the three-month period of FY2020/2Q recorded a year-on-year increase of over 20 billion yen. Can you explain the factors behind this growth with a breakdown by business line?
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Q2 Then, will it be right to conclude that a large portion, or nearly 90%, of the profit increase of Smart life business was attributable to an accounting factor? Did you carry out this accounting treatment in the second quarter and not in the first quarter of FY2020?
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Q3 It is widely speculated that you will shortly unveil a new rate plan. Can you share with us the views of NTT and DOCOMO, respectively, following the announcement by SoftBank and KDDI of their new plans and the request from the government. Also, when do you plan to make an announcement of your new rates?
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Questioner No. 2
Q1 As it is difficult to analyze the number of enterprise users and net additions from the information you disclose, can you inform us if there has been any impact on the quarterly net additions trend from COVID-19? I recall that you executed a free trial in FY2020/1Q under which you offered remote-work systems, etc., for free. Have you been able to convert them into commercial contracts?
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Q2 Can you once again sort out what will change after you become a wholly-owned subsidiary of NTT, as opposed to being a public company? According to NTT’s explanation, collaboration with NTT Communications and NTT COMWARE and cost reduction were the projected benefits. I would appreciate if you could explain in concrete terms what kind of changes you foresee from your perspective.
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Questioner No. 3
Q1 With the introduction of the new rate plans in the last fiscal year, you are providing customers with returns worth hundreds of billions of yen, so I believe your customers are already satisfied as demonstrated by the low churn rate. Under such circumstances, can you expect any ripple effects on other businesses or services by executing another round of rate reduction?
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Q2 Can you share with us some details about your enterprise business, including the overall size of business, mobile subscription revenues from enterprise clients, and the revenue contribution of individual services such as solutions and IoT, etc? Please also present your views on the overall vision and prospects for enterprise business.
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Q3 Which service, in particular, do you have high expectation for?
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Questioner No. 4
Q1 Please give us a breakdown of the revenues from Smart life business and Other businesses. I understand that the revenue impact from the consolidation of NTT Plala has already run its course, so please explain the reasons behind the huge revenue growth. In fact, operating revenues from Smart life business for the three months of FY2020/2Q recorded a 22% year-on-year increase. Can we expect a similar pace of growth in FY2020/3Q and beyond?
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Q2 This is a question relating to your earlier comment on rate plans. I got an impression from your statement that you are considering to introduce a more competitive rate plan than those of other operators to address the issue of the 20GB plan, an area where you have not yet introduced sufficient measures, if you cannot foresee the benefit of acquiring customers from your rivals just by offering something comparable. What are your views?
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Q3 In my understanding, I thought all carriers have so far refrained from providing a rate plan for 20GB, in order to make it easier to upsell customers to higher plans. Is it correct to understand that carriers have no choice but to study the launch of a 20GB plan given the prevailing socioeconomic circumstances?
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Questioner No. 5
Q1 It seems that you are contemplating a pricing measure for the 20GB large-capacity plan. Can you share with us how you plan to counter the sub-brands, including your current assessment of your price competitiveness?
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Q2 In the last several years, we have seen pricing pressure coming out of the government on a regular basis. After implementing the new rate plan that you are currently reviewing, can we expect you will be able to completely eliminate the risk of rate reduction requests from the government? Overseas investors have voiced their concerns that it is difficult to make investments if regulatory risks emerge all of a sudden on a repeated basis.
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Questioner No. 6
Q1 Concerning the number of 5G subscriptions, can you provide us with your target number of 5G users for December 31, 2020, and the actual number of 5G-enabled iPhones sold as well as its percentage to your net additions after its release in October?
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Q2 The total “d POINTs” used recorded a favorable increase of over 20% year-on-year, but how has the points awarded been faring? Please also explain your sales performance after the fraud case involving “docomo kouza” service came to surface in October.
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Q3 Do you have any plans to suppress the amount of points to be awarded in FY2020/3Q following the “docomo kouza” incident?
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