KDDI Corporate Information: Investor Relations

Our medium-term target—"Challenge 2010", which is the strong message that in collaboration with our customers, business partners, employees, and other stakeholders, we are determined that KDDI will be a sustained growth company.

		Maintain the momentum of increasing revenues and income in Mobile Business. Enlarge sales by expanding customer base and business domain.
		Promote broadband such as FTTH business, etc. and make a turnaround in Fixed-line Business.
		Develop FMBC [1] and expand non-traffic business domain.
		Expand corporate business to be an all-round player which can offer ICT [2] as one-stop shopping.
		Making progress based on improved CSR to increase satisfaction among all stakeholders.

	[1]	Fixed Mobile and Broadcast Convergence
	[2]	Information and Communication Technology

In FY2010, Mobile for Consumer, mainstay business, "au" will continue to drive the consolidated business performance, and, we are aiming to bring the Fixed-line Business back into the black along with the expansion of our FTTH businesses. We will also be aggressively expanding into other business domains and bring up new business.

KDDI has distinguished itself from its competitors by utilizing the strengths of the au 3G infrastructure, and the comprehensive product advantages it offers in terms of mobile handsets, charges, and content.
Toward FY2010, KDDI is working to further raise competitiveness in order to maintain the current increases in revenue and earnings in the Mobile Business. We are aiming to maximize revenue by increasing our market share steadily and expanding ARPU through content and other non-traffic revenues.

Figure: Further Strengthening Competitiveness

Japan's fixed-line market is at a turning point, with its legacy services being transformed to direct-access, IP, and broadband services. At KDDI, we are also moving in this direction, working toward the next growth phase in the business through the development of our new services "METAL PLUS" [3] and "HIKARI-one".
Toward FY2010, we are aiming to bring the Fixed-line Business back into the black along with the expansion of our FTTH and other broadband businesses based on our expansive and diverse access network.
We anticipate that our "METAL PLUS" [3] service will move into the black in FY2007. Of the Fixed-line business, all but the FTTH business will be profitable. We intend to reinvest the improved profits of other services in expanding the subscriber base of our FTTH business and targeting a 30% share of FTTH market in Tokyo metropolitan service area.

[3]	including "ADSL one"

Figure: Image of Operating Income of Fixed-line Business

Development of Fixed Mobile and Broadcast Convergence (FMBC), in terms of infrastructure, will be realized by "Ultra 3G" and the key here, will be an integration at the upper level-the content and media, prior to that in the networks. Our main focus in Content and Media Business is to use every available means to increase points of contact with customers. This includes au shops, customer service centers, the KDDI DESIGNING STUDIO, mobile phones, PC screens, and a huge diversity of content. We will adopt a dual approach to maximize earnings: it will extend its customer reach to increase the number of people using KDDI content, while pursuing earnings opportunities outside the conventional boundaries of telecommunications business.

Figure: Expansion and Enhancement of Touch Points

KDDI regards the return of profits to shareholders as a priority management issue. For the time being, our main method of returning profits to shareholders will remain dividends. While maintaining a certain level of capital investment to attain sustainable growth, we will continue to aim for stable dividends with a payout ratio of 20% or more.