Performance Analysis by Segment

(Years ended March 31)

Personal Services Segment

Overview of Operations

In the fiscal year ended March 31, 2018, operating revenue increased 7.3% year on year to ¥3,899.6 billion. This increase mainly reflected growth in mobile communications revenues and revenues from handset sales, an increase in revenue from the energy business, such as "au Denki," and the contribution from BIGLOBE which was consolidated in February 2017.
Meanwhile, operating income rose 3.1% year on year to ¥732.9 billion, reflecting an increase in mobile communications revenues and gross margin on revenues from handset sales as well as the impact of impairment of certain idle assets related to 3G services conducted in the fiscal year ended March 31, 2017, despite an increased expenditure on strategic costs for medium- to long-term growth.

Operating Revenue
Operating Income/Operating Margin
EBITDA/EBITDA Margin

au ARPA

au ARPA rose ¥80 year on year to ¥5,910, reflecting an increase in smartphone penetration rates, a rise in voice ARPU, primarily due to an increase in the ratio of flat-rate voice plans, and a rise in data ARPU, mainly due to an increase in large-volume data plan subscribers. In addition, subscribers for tablets, routers, and other devices grew steadily.
The new price plan launched in July 2017 caused a shortterm decline in revenue, which appeared from the third quarter of the fiscal year ended March 31, 2018 onward.

au Churn Rate

The au churn rate had remained high due to an outflow from au to low-cost smartphones. With the introduction of the new price plan in July 2017, however, the au churn rate improved steadily and was lower year on year in the fourth quarter.
Another factor reducing the au churn rate was steady growth in the number of customers using multiple services, such as "au STAR," which were introduced to encourage long-term use of au, "au Smart Value," and life design products.

Life Design Services Segment (Formerly Value Services Segment)

Overview of Operations

In the fiscal year ended March 31, 2018, operating revenue increased 15.7% year on year to ¥521.7 billion. The increase mainly reflected an increase in value-added ARPA revenues due to increases in "au WALLET Credit card" settlement commissions and revenues from "au Smart Pass/au Smart Pass Premium." It was also attributable to the impact of increased revenues at subsidiaries and new consolidations.
Meanwhile, operating income increased 8.4% year on year to ¥104.0 billion, mainly due to the increase in value-added ARPA revenues and increase in profit from subsidiaries, despite expenditure on strategic costs for expansion of the life design business and costs related to subscription services.

Operating Revenue
Operating Income/Operating Margin
EBITDA/EBITDA Margin

Value-Added ARPA

Value-added ARPA grew ¥80 year on year to ¥590. The increase mainly reflects growth in settlement commissions from "au WALLET Credit card" and "au Carrier Billing," along with a contribution from increases in the number of members and unit prices and other aspects of "au Smart Pass/au Smart Pass Premium."

Number of "au Smart Pass" Members and "au Smart Pass Premium" Members

The number of "au Smart Pass/au Smart Pass Premium" members increased by 310 thousand from the previous fiscal year-end to 15.53 million members. Of these, the number of "au Smart Pass Premium" members using premium-level services within "au Smart Pass" expanded to 4.30 million in approximately one year since the start of the service in January 2017, mainly reflecting strong in-store sign-ups due to promotion activities as well as the effect of enhancing member benefits.

Business Services Segment

Overview of Operations

In the fiscal year ended March 31, 2018, operating revenue in this segment increased 5.6% year on year to ¥750.0 billion, as higher revenues from the data center business in Japan, higher sales at consolidated subsidiaries such as KDDI MATOMETE OFFICE CORPORATION, and higher revenues from retail electric power sales absorbed a continued decrease in mobile voice communications revenues.
Meanwhile, operating income increased 11.1% year on year to ¥84.5 billion, reflecting controlled growth in operating costs associated with the increase in revenues and the contribution of profit increase at subsidiaries such as KDDI MATOMETE OFFICE CORPORATION.

Operating Revenue
Operating Income/Operating Margin
EBITDA/EBITDA Margin
  • From the fiscal year ended March 31, 2018, the consolidated subsidiary KDDI Evolva, Inc. was transferred from "Others" to the "Business Services" segment. Accordingly, results for the fiscal year ended March 31, 2017 have been restated to reflect the reorganization.

Global Services Segment

Overview of Operations

In the fiscal year ended March 31, 2018, operating revenue declined 10.3% year on year to ¥248.7 billion. The main contributing factor was a decline in revenues associated with the liquidation of unprofitable operations, despite increases in revenues from the telecommunications business in Myanmar and the data center business.
Meanwhile, operating income increased 32.1% year on year to ¥31.9 billion, mainly due to increases in revenues from the telecommunications business in Myanmar and the data centers.

Operating Revenue
Operating Income/Operating Margin
EBITDA/EBITDA Margin
  • As of September 2018
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