Q&A of FY2015.3

Q&A for the Fiscal Year Ended March 2015

Date Tuesday, May 12, 2015, 5:00 pm-6:00 pm
Location 20F Conference Room, Garden Air Tower
Respondents Takashi Tanaka, President; Hirofumi Morozumi, Executive Vice President, Director; Makoto Takahashi, Senior Managing Executive Officer, Director; Yuzo Ishikawa, Senior Managing Executive Officer, Director; Tsutomu Fukuzaki, Managing Executive Officer, Director; Hidehiko Tajima, Managing Executive Officer, Director; Yoshiaki Uchida, Managing Executive Officer, Director; Takashi Shoji, Managing Executive Officer; Hiroki Honda, General Manager, Corporate Management Division; Kenji Aketa, General Manager, Investor Relations Department (MC)

Questioner 1

  • Starting on page 15 in the presentation, the expression "and more" appears many times. What specifically does"and more" mean? Also, it was announced that KDDI would add the health care business to its Articles of Incorporation. Could you explain the reason for this?

    In our 3M Strategy, we have made some progress with Multi-Network.
    As for Multi-Device, there has been growth in smartphones, routers, and tablets, and further expansion is expected in the IoT field. The au ARPU is completely different for each device. Moving forward, instead of simply expanding the au ARPU for each device, we would like to increase the number of mobile devices per person, and expand the communications revenues per account (au ARPA).
    As for Multi-Use, we have established the settlement platform. The number of au WALLET applications has exceeded 12 million, and we would like to bolster efforts to expand the gross merchandise value, as well as the number of users.
    Although I cannot discuss the details today, basically we would like to expand not only the online services centered around au Smart Pass, which we have worked so hard on up to this point, but also develop products in financial services, commerce, and real-world stores. We would like to expand the economic zone through these efforts, and work on increasing the settlement commissions and gross margin of sales.
    As for the health care industry, KDDI will launch the service which enables users to check their own health at home from coming summer. Local governments are actively promoting the prevention of disease among citizens. KDDI will initially work with 20 local governments to offer the service. Since demand for a general-use device or equipment of this service would grow, we would like to remain actively engaged in these efforts.

Questioner 2

Questioner 3

  • If you exclude the temporary effect of items such as impairment loss of facilities, extraordinary loss, and non-amortization of goodwill, isn't the operating income growth forecast for the fiscal year ending March 2016 low?

    The IFRS-based results for the fiscal year ended March 2015 are just for reference, but we are confident that we can reach the 10% operating income growth called for in the medium-term plan. At the same time, we also recognize the need to achieve further growth.

  • What distinguishes the expansion of KDDI value-added business from other companies that mainly deal with commerce?

    What sets KDDI apart is the au customer base. KDDI is not just a telecommunications operator. We are establishing a strategy to expand the value-added economic zone of the top layer, and are working to develop tools for introducing services to this large customer base. We are continuing to develop au WALLET, and are engaged in efforts aimed at effectively driving customers to stores and improving customer satisfaction.
    When we see that other companies are following our lead, we feel certain that our efforts are aimed in the right direction. We believe that our business model in Japan is unique compared to overseas. We would like to continue using our accumulated expertise to move forward with our business while reflecting our business on the medium-term plan for the next period.
    In this respect, this fiscal year will be an important one. In the telecommunications business, the launch of the Hikari Collaboration Model by NTT East and NTT West, and the penetration of new rate plans are changing our surrounding environment. However, we recognize that there has been no change in the strategy to expand the value-added economic zone since we announced in 2014. We will steadily execute our plan, and if a problem occurs, we know that it must be resolved through operations. We will discuss further details of the next medium-term plan at the time we will announce the financial results for the fiscal year ending March 2016.

Questioner 4

Questioner 5

Questioner 6

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