Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
(Percentages above represent changes compared to the corresponding period of the previous year)
(Percentages above represent changes compared to the corresponding previous year)
This earnings release is not subject to the quarterly review procedure as required by the Financial Instruments and Exchange
Act of Japan. As of the date when this earnings release was issued, the quarterly review procedure on financial statements as required by the Financial Instruments and Exchange Act of Japan had not been finalized.
1. Forecast of results
Forward-looking statements in this earnings release, such as forecasts of results of operations, are based on the information
currently available and certain assumptions that we regard as reasonable, and therefore actual results may differ materially from those contained in, or suggested by, any forward-looking statements. With regard to the assumptions and other related
matters concerning forecasts for the fiscal year ending March 31, 2017, refer to “1. (3) Prospects for the Fiscal Year Ending March 31, 2017” on page 11 and “5. Special Note Regarding Forward-Looking Statements” on page 20,
contained in the attachment.
2. Resolution of share repurchase up to prescribed maximum limit
The forecasts of “Basic Earnings per Share Attributable to NTT DOCOMO, INC.” for the fiscal year ending March 31,
2017 are based on the assumption that DOCOMO will repurchase up to 220,000,000 shares for an amount in total not to exceed ¥500,000 million, as resolved at the board of directors’ meeting held on January 29, 2016.
The
environment surrounding our business has changed significantly. In Japan’s telecommunications market, competition has intensified due to the government’s pro-competition policy, market entry by Mobile Virtual Network Operators (MVNOs) and
other factors. In addition, technical advancements in areas including cloud services, IoT
*
, big data and artificial intelligence (AI), and new policy developments such as the full liberalization
of the electricity retail market, have brought about active competition and collaboration with new players from other industries, accelerating competition in new markets that transcend the conventional boundaries of the telecommunications business.
Amid these changes in the market environment, positioning the current fiscal year ending March 31, 2017 (FY2016) as the
year in which we intend to make “a vibrant leap toward further growth” beyond income recovery, we aim to achieve the various
medium-term
target indicators we announced for the fiscal year ending
March 31, 2018 (FY2017) one year ahead of the schedule. In connection with our management of our business, we are promoting the two pillars of “reinforcement of our telecommunications business” and “expansion of our smart life
business and other businesses” centered on our “+d” value co-creation strategy, through which we pursue the creation of new values by evolving our collaborative activities with a wide range of external partners.
In the three months ended September 30, 2016, we further enriched our “Kake-hodai & Pake-aeru” billing scheme in
order to allow users to enjoy the use of a larger volume of data. As part of our “+d” initiatives, we worked with our partners to create new value by engaging in activities such as expanding the number of stores where “dPOINTs”
can be given and used in order to promote the utilization of “dPOINTs” and launching an over-the-counter insurance consultation service dubbed “DOCOMO Insurance Consultation” at docomo Shops, as well as promoting initiatives
using AI, drone and other technologies.
For the six months ended September 30, 2016, despite a decrease in equipment
sales revenues and a negative impact on mobile communications services revenues caused by the further expansion of our “Kake-hodai & Pake-aeru” billing scheme, operating revenues increased by ¥73.4 billion from the same period of
the previous fiscal year to ¥2,288.3 billion, mainly due to the recovery of telecommunications services revenues as a result of the growth of the packet consumption of our “Kake-hodai & Pake-aeru” billing plan subscribers, the
expansion of smartphone use and the demand for tablets and other products purchased as a second mobile device for individual use, and the growth in the number of “docomo Hikari” users, as well as the growth of our smart life business and
other businesses such as “dmarket” and other content services.
Operating expenses decreased by ¥49.7
billion from the same period of the previous fiscal year to ¥1,702.7 billion, owing primarily to a decline of depreciation expenses as a result of our change in depreciation method used, a decrease in cost of equipment sold and initiatives to
pursue further cost efficiency, despite an increase in expenses associated with the expansion of “docomo Hikari” revenues and the growth of revenues from our smart life business and other businesses.
As a result, operating income increased by ¥123.0 billion from the same period of the previous fiscal year to ¥585.6
billion for the six months ended September 30, 2016.
Income before income taxes and equity in net income (losses) of
affiliates was ¥581.2 billion, and net income attributable to NTT DOCOMO, INC. increased by ¥88.3 billion from the same period of the previous fiscal year to ¥405.4 billion for the six months ended September 30, 2016.
Consolidated results of operations for the six months ended September 30,
2015 and 2016 were as follows:
Despite a decrease in equipment sales revenues and the negative impact on mobile
communications services revenues caused by the further expansion of our “Kake-hodai & Pake-aeru” billing scheme, operating revenues from telecommunications business for the six months ended September 30, 2016 increased by ¥49.6
billion, or 2.7%, from ¥1,807.0 billion for the same period of the previous fiscal year to ¥1,856.6 billion, as a result of the growth of the packet consumption of our “Kake-hodai & Pake-aeru” billing plan subscribers, the
expansion of smartphone use and the demand for tablets and other products purchased as a second mobile device for individual use, and the growth in the number of “docomo Hikari” users, of which there were 2.53 million as of September 30,
2016.
Operating expenses from telecommunications business decreased by ¥55.0 billion, or 4.0%, from ¥1,386.8
billion for the same period of the previous fiscal year to ¥1,331.9 billion due primarily to a decrease in depreciation expenses as a result of our change in depreciation method used, a decrease in cost of equipment sold and initiatives to
pursue further cost efficiency, despite the increase in expenses associated with “docomo Hikari” revenues.
Consequently, operating income from telecommunications business was ¥524.7 billion, an increase of ¥104.6 billion, or
24.9%, from ¥420.2 billion for the same period of the previous fiscal year.
Revenues from
communication module services, “Phone Number Storage,” “Mail Address Storage,” “docomo Business Transceiver” and wholesale telecommunications services and interconnecting telecommunications facilities that are provided
to Mobile Virtual Network Operators (MVNOs) are not included in the ARPU calculation.
Operating revenues from smart life business for the six months ended September 30, 2016 were
¥250.4 billion, an increase of ¥4.1 billion, or 1.6%, from ¥246.3 billion for the same period of the previous fiscal year, due mainly to an expansion of content services revenues such as “dmarket” and other content services.
Operating expenses from smart life business were ¥213.4 billion, an increase of ¥0.5 billion, or 0.2%, from
¥212.9 billion for the same period of the previous fiscal year, driven primarily by an increase in expenses associated with the growth in content services revenues such as “dmarket” and other content services.
As a consequence, operating income from smart life business was ¥37.0 billion, an increase of ¥3.5 billion, or 10.6%,
from ¥33.4 billion for the same period of the previous fiscal year.
Operating revenues from other businesses for the six months ended September 30, 2016 amounted
to ¥193.4 billion, an increase of ¥19.9 billion, or 11.5%, from ¥173.5 billion for the same period of the previous fiscal year, driven mainly by an increase in the number of subscriptions for our “Mobile Device Protection
Service” and the growth of revenues relating to IoT businesses.
Operating expenses from other businesses were
¥169.5 billion, an increase of ¥5.0 billion, or 3.0%, from ¥164.6 billion for the same period of the previous fiscal year, as a result of rises in expenses associated with the expansion of revenues from our “Mobile Device Protection
Service” and other services.
Consequently, operating income from other businesses was ¥23.9 billion, an increase
of ¥14.9 billion, or 166.5%, from ¥9.0 billion for the same period of the previous fiscal year.
We aspire to help build a society in which everyone can share in a prosperous life of safety and security, beyond borders and
across generations. We believe it is our corporate social responsibility (“CSR”) to fulfill the two aspects of (i) “Innovative docomo,” to solve various social issues in the fields of IoT, medicine, healthcare, education and
agriculture through the “co-creation of social values,” an initiative that we plan to pursue together with various partners to create new services and businesses, and (ii) “Responsible docomo,” to thoroughly ensure fair,
transparent and ethical business operations as a foundation for the creation of such values. Accordingly, we will strive to realize a sustainable society while expanding our own businesses.
DOCOMO was selected as a component of Dow Jones Sustainability Asia Pacific Index, which is the part of Dow Jones Stability
Indices, one of the world’s leading indices for ESG
*1
investment. Also, DOCOMO was selected as a component of FTSE4Good Index.
The principal CSR actions undertaken during the three months ended September 30, 2016 are summarized below:
We pursued more efficient use of capital expenditures and further cost reduction, and expanded
the area coverage of our “PREMIUM 4G” service to construct a more convenient mobile telecommunications network. As a result, the total amount of capital expenditures increased by 12.1% from the same period of the previous fiscal year to
¥246.1 billion for the six months ended September 30, 2016.
For the six months ended September 30, 2016, net cash provided by
operating activities was ¥671.7 billion, an increase of ¥53.9 billion, or 8.7%, from the same period of the previous fiscal year. This was due mainly to an increase in cash inflows from customers in relation to collections of
installment receivables for customers’ handset purchases, which are included in decrease in receivables for sale.
Net cash used in investing activities was ¥425.3 billion, an increase of ¥105.9 billion, or 33.1%, from the same
period of the previous fiscal year. This was due mainly to increases in cash outflows for purchases of short-term investments and short-term bailment for consumption to a related party.
Net cash used in financing activities was ¥238.3 billion, an increase of ¥99.1 billion, or 71.2%, from the same period
of the previous fiscal year. This was due mainly to an increase in cash outflows for payments to acquire treasury stock.
As a result of the foregoing, the balance of cash and cash equivalents was ¥360.2 billion as of September 30, 2016, an
increase of ¥5.8 billion, or 1.6%, from the previous fiscal year end.
The environment surrounding our business has changed significantly. In Japan’s telecommunications market, competition has
intensified due to the government’s pro-competition policy, market entry by Mobile Virtual Network Operators (MVNOs) and other factors. In addition, technical advancements in areas including cloud services, IoT, big data and artificial
intelligence (AI), and new policy developments such as the full liberalization of the electricity retail market, have brought about active competition and collaboration with new players from other industries, accelerating competition in new markets
that transcend the conventional boundaries of the telecommunications business.
Amid these changes in the market
environment, in connection with our management of our business, we are promoting the two pillars of “reinforcement of our telecommunications business” and “expansion of our smart life business and other businesses” centered on
our “+d” value co-creation strategy, through which we pursue the creation of new values by evolving our collaborative activities with a wide range of external partners. Because we expect these endeavors to have a positive impact on our
business, considering our recent business condition, we have decided to revise our forecasts announced on April 28, 2016.
Operating revenues are estimated to be ¥4,610.0 billion, a decrease of ¥10.0 billion, or 0.2%, compared to the
original forecasts, due mainly to a greater-than-expected decrease in equipment sales revenues, despite an increase in telecommunications services revenues resulting from the expansion of our smartphone user base and a growth of demand for tablets
and other devices purchased as a second mobile device for individual use, and an increase in optical-fiber broadband service and other telecommunications services revenues due to the projected growth of “docomo Hikari” users.
On the expenses side, although we project an increase in expenses associated with the expansion of “docomo Hikari”
revenues, operating expenses are projected to be ¥3,670.0 billion a decrease of ¥40.0 billion, or 1.1%, owing to the greater-than-expected progress in our cost efficiency improvement efforts, as well as a decrease in cost of equipment sold.
In view of the foregoing, we have revised upward our operating income forecasts for the fiscal year ending March 31, 2017
by ¥30.0 billion, or 3.3% from the original forecasts to ¥940.0 billion.
Previously, DOCOMO principally used the declining-balance method for calculating depreciation of property, plant, and
equipment. Effective April 1, 2016, DOCOMO adopted the straight-line method of depreciation. Data traffic has recently grown due to increased use of smartphones. As a way of addressing the rising data traffic, DOCOMO provides LTE-Advanced services,
using the carrier aggregation technology which enables higher speeds and capacities for the LTE services. With the introduction of the carrier aggregation technology, DOCOMO is able to use its frequencies more efficiently, bringing stability to
DOCOMO’s operation of its wireless telecommunications equipment. As a result, DOCOMO believes that the straight-line depreciation method better reflects the pattern of consumption of the future benefits to be derived from those assets being
depreciated. The effect of the change in the depreciation method is recognized prospectively as a change in the accounting estimate pursuant to the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 250,
“Accounting Changes and Error Corrections.”
The change in depreciation method caused a decrease in
“Depreciation and amortization” by ¥69,430 million and ¥36,049 million for the six months ended September 30, 2016 and for the three months ended September 30, 2016, respectively. “Net income attributable to NTT DOCOMO,
INC.” increased by ¥47,490 million and ¥24,657 million for the six months ended September 30, 2016 and for the three months ended September 30, 2016, respectively. “Basic and Diluted earnings per share attributable to NTT DOCOMO,
INC.” increased by ¥12.69 and ¥6.61 for the six months ended September 30, 2016 and for the three months ended September 30, 2016, respectively.
DOCOMO’s chief operating decision maker (the “CODM”) is its board of directors. The CODM
evaluates the performance and makes resource allocations of its segments based on the information provided by DOCOMO’s internal management reports.
DOCOMO has three operating segments, which consist of telecommunications business, smart life business and other businesses.
The telecommunications business includes mobile phone services (LTE(Xi) services and FOMA services), optical-fiber
broadband service, satellite mobile communications services, international services and the equipment sales related to these services. The smart life business includes video and music distribution, electronic books and other services offered through
DOCOMO’s “dmarket” portal, as well as finance/payment services, shopping services and various other services to support our customers’ daily lives. The other businesses primarily includes “Mobile Device Protection
Service,” as well as development, sales and maintenance of IT systems.
Accounting policies used to determine segment
operating revenues and operating income (loss) are consistent with those used to prepare the consolidated financial statements in accordance with U.S. GAAP.
|
|
|
|
|
DOCOMO Earnings Release
|
|
Six Months Ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of yen
|
|
|
|
|
Three months ended
September 30, 2015
|
|
|
Three months ended
September 30, 2016
|
|
|
Telecommunications business-
|
|
|
|
|
|
|
|
|
|
External customers
|
|
¥
|
928,017
|
|
|
¥
|
961,580
|
|
|
Intersegment
|
|
|
367
|
|
|
|
119
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
928,384
|
|
|
|
961,699
|
|
|
Smart life business-
|
|
|
|
|
|
|
|
|
|
External customers
|
|
|
125,018
|
|
|
|
121,327
|
|
|
Intersegment
|
|
|
2,906
|
|
|
|
3,792
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
127,924
|
|
|
|
125,119
|
|
|
Other businesses-
|
|
|
|
|
|
|
|
|
|
External customers
|
|
|
85,088
|
|
|
|
96,767
|
|
|
Intersegment
|
|
|
2,552
|
|
|
|
1,827
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
87,640
|
|
|
|
98,594
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment total
|
|
|
1,143,948
|
|
|
|
1,185,412
|
|
|
Elimination
|
|
|
(5,825
|
)
|
|
|
(5,738
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
¥
|
1,138,123
|
|
|
¥
|
1,179,674
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating income (loss):
|
|
|
|
|
|
|
|
Millions of yen
|
|
|
|
|
Six months ended
September 30, 2015
|
|
|
Six months ended
September 30, 2016
|
|
|
Telecommunications business
|
|
¥
|
420,169
|
|
|
¥
|
524,737
|
|
|
Smart life business
|
|
|
33,441
|
|
|
|
36,975
|
|
|
Other businesses
|
|
|
8,964
|
|
|
|
23,885
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
¥
|
462,574
|
|
|
¥
|
585,597
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of yen
|
|
|
|
|
Three months ended
September 30, 2015
|
|
|
Three months ended
September 30, 2016
|
|
|
Telecommunications business
|
|
¥
|
207,748
|
|
|
¥
|
254,327
|
|
|
Smart life business
|
|
|
16,565
|
|
|
|
19,772
|
|
|
Other businesses
|
|
|
2,865
|
|
|
|
12,207
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
¥
|
227,178
|
|
|
¥
|
286,306
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating income (loss) is segment operating revenues less segment operating expenses.
As indicated in “2. (3) Change in Accounting Policies,” previously, DOCOMO principally used the
declining-balance method for calculating depreciation of property, plant, and equipment. Effective April 1, 2016, DOCOMO adopted the straight-line method of depreciation. As a result, compared with the depreciation method used prior to April 1,
2016, operating income for the Telecommunications business segment, Smart life business segment, and Other businesses segment for the six months ended September 30, 2016 increased by ¥69,329 million, ¥52 million and ¥49 million,
respectively. Operating income for the Telecommunications business segment, Smart life business segment, and Other businesses segment for the three months ended September 30, 2016 increased by ¥35,978 million, ¥40 million and ¥31
million, respectively.
DOCOMO does not disclose geographical information because the amounts of operating revenues
generated outside Japan are immaterial.
18
|
|
|
|
|
DOCOMO Earnings Release
|
|
Six Months Ended September 30, 2016
|
4. Appendix
Reconciliations of the Disclosed Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures
The reconciliations for the year ending March 31, 2017 (Revised Forecasts) are provided to the extent available without
unreasonable efforts.
i. EBITDA and EBITDA margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Billions of yen
|
|
|
|
|
Year ending
March 31, 2017
(Revised Forecasts)
|
|
|
Year ended
March 31, 2016
|
|
|
Six months ended
September 30, 2015
|
|
|
Six months ended
September 30, 2016
|
|
|
a. EBITDA
|
|
¥
|
1,438.0
|
|
|
¥
|
1,454.6
|
|
|
¥
|
771.4
|
|
|
¥
|
820.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
(449.0
|
)
|
|
|
(625.9
|
)
|
|
|
(297.1
|
)
|
|
|
(220.5
|
)
|
|
Loss on sale or disposal of property, plant and equipment
|
|
|
(49.0
|
)
|
|
|
(36.5
|
)
|
|
|
(11.7
|
)
|
|
|
(14.8
|
)
|
|
Impairment loss
|
|
|
—
|
|
|
|
(9.1
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
940.0
|
|
|
|
783.0
|
|
|
|
462.6
|
|
|
|
585.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
(4.0
|
)
|
|
|
(5.0
|
)
|
|
|
(10.0
|
)
|
|
|
(4.4
|
)
|
|
Income taxes
|
|
|
(278.0
|
)
|
|
|
(211.7
|
)
|
|
|
(136.0
|
)
|
|
|
(178.7
|
)
|
|
Equity in net income (losses) of affiliates
|
|
|
—
|
|
|
|
(5.1
|
)
|
|
|
1.6
|
|
|
|
3.3
|
|
|
Less: Net (income) loss attributable to noncontrolling interests
|
|
|
(3.0
|
)
|
|
|
(12.9
|
)
|
|
|
(1.0
|
)
|
|
|
(0.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
b. Net income attributable to NTT DOCOMO, INC.
|
|
|
655.0
|
|
|
|
548.4
|
|
|
|
317.1
|
|
|
|
405.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
c. Operating revenues
|
|
|
4,610.0
|
|
|
|
4,527.1
|
|
|
|
2,215.0
|
|
|
|
2,288.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA margin (=a/c)
|
|
|
31.2
|
%
|
|
|
32.1
|
%
|
|
|
34.8
|
%
|
|
|
35.9
|
%
|
|
Net income margin (=b/c)
|
|
|
14.2
|
%
|
|
|
12.1
|
%
|
|
|
14.3
|
%
|
|
|
17.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
|
|
EBITDA and EBITDA margin, as we use them, are different from EBITDA as used in Item 10(e) of regulation S-K and may
not be comparable to similarly titled measures used by other companies.
|
ii. ROE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Billions of yen
|
|
|
|
|
Year ending
March 31, 2017
(Revised Forecasts)
|
|
|
Year ended
March 31, 2016
|
|
|
Six months ended
September 30, 2015
|
|
|
Six months ended
September 30, 2016
|
|
|
a. Net income attributable to NTT DOCOMO, INC.
|
|
¥
|
655.0
|
|
|
¥
|
548.4
|
|
|
¥
|
317.1
|
|
|
¥
|
405.4
|
|
|
b. Shareholders’ equity
|
|
|
5,393.3
|
|
|
|
5,341.2
|
|
|
|
5,466.5
|
|
|
|
5,365.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ROE (=a/b)
|
|
|
12.1
|
%
|
|
|
10.3
|
%
|
|
|
5.8
|
%
|
|
|
7.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
|
Shareholders’ equity (for annual period) = The average of NTT DOCOMO, INC. shareholders’ equity, each
as of March 31, 2016 (or 2015) and 2017 (or 2016).
Shareholders’ equity (for six months) = The average of NTT DOCOMO, INC.
shareholders’ equity, each as of March 31, 2016 (or 2015) and September 30, 2016 (or 2015).
|
iii. Free cash
flows excluding changes in investments for cash management purposes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Billions of yen
|
|
|
|
|
Year ending
March 31, 2017
(Revised Forecasts)
|
|
|
Year ended
March 31, 2016
|
|
|
Six months ended
September 30, 2015
|
|
|
Six months ended
September 30, 2016
|
|
|
Net cash provided by operating activities
|
|
¥
|
1,225.0
|
|
|
¥
|
1,209.1
|
|
|
¥
|
617.9
|
|
|
¥
|
671.7
|
|
|
Net cash used in investing activities
|
|
|
(585.0
|
)
|
|
|
(375.3
|
)
|
|
|
(319.4
|
)
|
|
|
(425.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flows
|
|
|
640.0
|
|
|
|
833.9
|
|
|
|
298.5
|
|
|
|
246.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in investments for cash management purposes
|
|
|
—
|
|
|
|
235.1
|
|
|
|
0.1
|
|
|
|
(95.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flows excluding changes in investments for cash management purposes
|
|
|
640.0
|
|
|
|
598.7
|
|
|
|
298.4
|
|
|
|
341.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
|
|
Changes in investments for cash management purposes were derived from purchases, redemption at maturity and
disposals of financial instruments held for cash management purposes with original maturities of longer than three months.
Net cash used in
investing activities includes changes in investments for cash management purposes for the year ended March 31, 2016 and September 30, 2016 (or 2015)
The effect of changes in investments for cash management purposes is not taken into account when we forecasted net cash used in investing
activities for the year ending March 31, 2017 due to the difficulties in forecasting such effect.
|
19
|
|
|
|
|
DOCOMO Earnings Release
|
|
Six Months Ended September 30, 2016
|
5. Special Note Regarding Forward-Looking Statements
This earning release contains forward-looking statements such as forecasts of results of operations, management strategies,
objectives and plans, forecasts of operational data such as the expected number of subscriptions, and the expected dividend payments. All forward-looking statements that are not historical facts are based on management’s current plans,
expectations, assumptions and estimates based on the information currently available. Some of the projected numbers in this report were derived using certain assumptions that were indispensable for making such projections in addition to historical
facts. These forward-looking statements are subject to various known and unknown risks, uncertainties and other factors that could cause our actual results to differ materially from those contained in or suggested by any forward-looking statement.
Potential risks and uncertainties include, without limitation, the following:
|
(1)
|
Changes in the market environment in the telecommunications industry, such as intensifying competition from
other businesses or other technologies caused by Mobile Number Portability, development of appealing new handsets, new market entrants, mergers among other service providers and other factors, or the expansion of the areas of competition could limit
the acquisition of new subscriptions and retention of existing subscriptions by our corporate group, or it may lead to ARPU diminishing at a greater than expected rate, an increase in our costs, or an inability to optimize costs as expected.
|
|
(2)
|
If current and new services, usage patterns, and sales schemes proposed and introduced by our corporate group
cannot be developed as planned, or if unanticipated expenses arise the financial condition of our corporate group could be affected and our growth could be limited.
|
|
(3)
|
The introduction or change of various laws or regulations inside and outside of Japan, or the application of
such laws and regulations to our corporate group, could restrict our business operations, which may adversely affect our financial condition and results of operations.
|
|
(4)
|
Limitations in the amount of frequency spectrum or facilities made available to us could negatively affect our
ability to maintain and improve our service quality and level of customer satisfaction and could increase our costs.
|
|
(5)
|
Other mobile service providers in the world may not adopt the technologies and the frequency bands that are
compatible with those used by our corporate group’s mobile communications system on a continuing basis, which could affect our ability to sufficiently offer international services.
|
|
(6)
|
Our domestic and international investments, alliances and collaborations, as well as investments in new
business fields, may not produce the returns or provide the opportunities we expect.
|
|
(7)
|
Malfunctions, defects or imperfections in our products and services or those of other parties may give rise to
problems.
|
|
(8)
|
Social problems that could be caused by misuse or misunderstanding of our products and services may adversely
affect our credibility or corporate image.
|
|
(9)
|
Inadequate handling of confidential business information including personal information by our corporate
group, contractors and others may adversely affect our credibility or corporate image.
|
|
(10)
|
Owners of intellectual property rights that are essential for our business execution may not grant us a
license or other use of such intellectual property rights, which may result in our inability to offer certain technologies, products and/or services, and our corporate group may also be held liable for damage compensation if we infringe the
intellectual property rights of others. In addition, the illicit use by a third party of the intellectual property rights owned by our corporate group could reduce our license revenues actually obtained and may inhibit our competitive superiority.
|
|
(11)
|
Events and incidents caused by natural disasters, social infrastructure paralysis such as power shortages, the
proliferation of harmful substances, terror or other destructive acts, the malfunctioning of equipment, software bugs, deliberate incidents induced by computer viruses, cyber-attacks, equipment misconfiguration, hacking, unauthorized access and
other problems could cause failure in our networks, distribution channels, and/or other factors necessary for the provision of service, disrupting our ability to offer services to our subscribers and such incidents may adversely affect our
credibility or corporate image, or lead to a reduction of revenues and/or increase of costs.
|
|
(12)
|
Concerns about adverse health effects arising from wireless telecommunications may spread and consequently
adversely affect our financial condition and results of operations.
|
|
(13)
|
Our parent company, NIPPON TELEGRAPH AND TELEPHONE CORPORATION (NTT), could exercise influence that may not be
in the interests of our other shareholders.
|
|
*
|
Names of companies, products, etc., contained in this release are the trademarks or registered trademarks of
their respective organizations.
|
20
FY2016/1H Results Presentation
docomo
October 28, 2016
Results Highlights
Key Financial Data, Segment
Results
Telecommunications Business,
Smart Life Business & Other Businesses
Revised FY2016 Full-Year Guidance
New Initiatives for Child-Raising Families
FY2016/1H Results Snapshot
U.S.
GAAP
YOY increase in both operating revenues/income
Financial data
Operating revenues: ¥2,288.3billion (Up 3.3% year-on-year)
Operating income: ¥585.6 billion (Up 26.6% year-on-year)
Operating income by segment
Telecommunications
business: ¥524.7 billion (Up 24.9% year-on-year)
Smart life business: ¥37.0
billion (Up 10.6% year-on-year)
Other businesses: ¥23.9 billion (Up 166.5%
year-on-year)
Consolidated financial statements in this document are unaudited
2
Selected Financial Data
U.S.
GAAP
(Billions of yen) FY2015/1H
(1) FY2016/1H
(2) Changes
(2)—(1)
Operating revenues 2,215.0 2,288.3+73.4
Operating expenses 1,752.4 1,702.7-49.7
Operating income 462.6 585.6+123.0
(Excluding irregular11 factors) (517.6)(+55.0)
Net income attributable to NTT DOCOMO, INC. 317.1 405.4+88.3
Capital expenditures 219.5 246.1+26.6
Adjusted free cash flow*2 298.4 341.6+43.3
*1: Excludes the impact on operating income caused by the change in depreciation method, etc. and the impact on operating
income caused by “Zutto Carryover”, etc.
2: Adjusted free cash flow is calculated excluding the
effects of changes in investment derived from purchases, redemption at maturity and disposals of financial instruments held for cash management purposes with original maturities of longer than three months.
Results by Segment
U.S.
GAAP
FY2015/1H FY2016/1H Changes
(Billions of yen) (1)
(2) (2) – (1)
Telecommunications Operating revenues 1,807.0 1,856.6 +49.6
business Operating income 420.2 524.7 +104.6
Smart life Operating revenues 246.3 250.4 +4.1
business Operating income 33.4 37.0 +3.5
Other Operating revenues 173.5 193.4 +19.9
businesses Operating income 9.0 23.9 +14.9
<Ref.> Smart life Operating revenues 419.8 443.8 +23.9
business and
Other businesses Operating income
42.4 60.9 +18.5
4
Key Factors behind Changes in Operating Income
Decrease in network- related
Decrease in selling Down 48.5
expenses*1:
(Billions of yen)(Billions of yen)
Increase in / other operating revenues:
517.6 Increase in mobile communications services revenues: Up 50.5 DDwn 26.9
Increase in other operating expenses: Up 25.7
Decrease in 585.6 462.6 Increase in optical-fiber broadband service revenues, etc.:
Up 41.7 revenues: Down 36.7 Selling revenues and expenses: Down 9.9 Income impact from the change of
depreciation method, etc.: Up 50.0
Income impact from
“Zutto Carryover”, etc.: Up 18.0
1: Sum of cost of equipment sold and commissions to agent resellers
*2: Sum of depreciation/amortization, loss on disposal of property, plant and equipment and intangible assets, and communication network charges 5 FY15/1HFY16/1H
Operational Performance (1)
(Millions subs)
Mobile telecommunications services Total smartphone tablet Churn rateuserssubscriptions
72.94
68.49 30.75
30.75 0.58% 34.09
0.58% FY15/1H FY16/1H FY15/1H FY16/1H FY15/1H FY16/1H 6
Operational Performance (2)
(Millions subs)
“Kake-hodai & Pake-aeru” “docomo Hikari”
new billing plan subs optical-fiber broadband subs
33.42
FY15/1HFY16/1H
FY15/1H FY16/1H
Enrichment of Billing Service
2014 2015 2016
For
“docomo
feature phone”
users
Š “Kake-hodai Light (feature phone)” plan
For high-usage Š “Keitai Pack”
customers
Š “Ultra Pack,” “Ultra Share Pack”
For long-term
customers Š Introduction of
two selectable discount programs:
“Zutto DOCOMO Discount Course” &“Free Course”
For low-usage Š Expansion of “Zutto DOCOMO Discount,” Reward points for contract renewal
customers
Š “Share Pack 5,” Expanded applicability of “Kake-hodai Light” plan
For low voice call
usage customers
Š “Kake-hodai Light” plan
Enrichment of
new billing plan
Š “Data L Pack,” “Packet Carryover,” Extended usage period of data top up
Launch of
New billing plan Š”Kake-hodai & Pake-aeru,” “Zutto DOCOMO Wari,” “U25 Ouen Wari”
2014 Jun. Sep. 2015 Sep. 2016 Mar. Jun. Sep. Oct. 8
| NTT
ARPU/MOU
Trend of improvement continues
Voice ARPU Packet ARPU docomo Hikari ARPU FY13/2Q
MOU
(Minutes) 11/ (Yen) FY14/2Q FY15/2Q
134 FY16/2Q
136
For an explanation of ARPU and MOU, please see the slide “Definition and Calculation Methods of ARPU and MOU” in
this document.
9
New Products
2016-2017 Winter/Spring
ModelsSimple, yet high-quality, affordable and convenient GOOD DESIGN
MONO MO-OlJ W
AWARD 2016
LTE-enabled docomo feature phones
Original Compact mobile Wi-Fi router
smartphone
VoLTE-enabled waterproof phones
Compatibility with ultra-high speed of up to 682Mbps
10
New Services
MierudenwaSwitch mode Switch mode
“Mierudenwa”
Automatically converts a caller’s spoken words to text
Support Desk: 03-XXXX-XXXX
Understand.
My name is Suzuki. Thank you for
calling
For confirmation purpose, may I have your name?
Can I now ask your phone number? Trial service started October 19, 2016
11
Service in Japanese only.
LTE Network149,600
Total no. of LTE base
stations: 115,400Expanded to 1,240 cities across Japan
370Mbps service using 3.5GHz band: Rolled out in 82
cities across Japan PREMIUM 4G-enabled base stations: 7,700
PREMIUM
38,100
FY15/1H
FY16/1H
The transmission speeds described herein are theoretical maximum downlink rates specified in the technical standard and
the actual rate may vary depending on the propagation conditions, etc.
Two frequency bands of 3.5GHz and
1.7GHz are used for the provision of 370Mbps service, which is available in 50 cities nationwide.
(The maximum
downlink speed provided in areas other than Tokyo, Nagoya and Osaka is 332.5Mbps, for which the two frequency bands of 3.5GHz and 2GHz are used. The 332.5Mbps service has been rolled out in 32 cities nationwide.)
12
Network: Planned Advancements
2014 2015 20162020
Bringing the next stage of evolution to “speed” and “comfort”
PREMIUM
up to lGbps
Further
sophistication
5G
682Mbps
256QAM
4X4 Ml MO
500Mbps
256QAM
370Mbps
3.5GHz band TDD+FDD
300Mbps
225Mbps
PREMIUM 4G
Service
launch
375Mbps
FDD
13
Cost Efficiency Improvement
(Billions of yen)
FY16/1HFY16/1HFY16 (Initial guidance)
IQ actual: -25
2Q actual:
-18
-43
-80
Focus areas:
[Network]
Capital expenditures, maintenance outsourcing cost, etc.
[Marketing]
Sales tools, etc.
[Other]
R&D, information system, etc.
The numbers
above are the amount of cost reduction compared to the FY2015 level. Smart Life Business & Other Businesses: Operating Income
Steadily progressing
14
(Billions of yen)(Billions of yen)
60.9
42.4 i
120.0
FY15/1H
FY16 (Initial guidance)
FY16/1H
Principal services, etc:
Smart life business
Content services
Finance/Payment services Group companies
Other businesses
Enterprise solutions
Support services for customers’ peace of mind, etc. 15
Content Services “d market” “Anshin Pack” 15.34
15.82
(Million subs) 13.95
12.15
dTV” “dhits” “dmagazine” “danime store” “dgourmet” “dkids” “dhealthcare pack” “dliving” “Anshin Net
Security”
“Anshin Remote Support”2
“Mobile Device Protection Service”*
FY15/1H
FY16/1H
FY16/1H
FY15/1H
Anshin Remote Support” and
“Mobile Device Protection Service” are included in the “Support Services for Customers’ Peace of Mind”. 16
Finance/Payment Services
(Million subs) “d
CARD” “d CARD Gold”
Over 1.7 million subs
16.97
15.92 NEW “d CARD PREPAID”
To start
accepting applications
from late November 2016
NEW
iD/d CARD to work on Apple Pay
Started Oct. 25, 2016
Easy set-up
FY15/1H FY16/1H using “d CARD app”
The total “d CARD” subscriptions represent the combined subscriptions to “d CARD” and “d CARD mini” 17
| NTT
“dPOINT” Loyalty Program
22 alliance partners11,100
Animate
20,900
No. of “dPOINT” merchants
A0KI’
COSMETICS
At service launch (Dec. 2015)
Oct. 2016
18
Promotion of +d
No. of +d partners: Grew to 164
164
TakashimayaPanasonicTakashimayaPanasonic
2Q2Q33
1919~FY15.2Q 3Q 4QFY16.1Q
No. of “+d” partners: The number of partners that have created new value by integrating DOCOMO’s business
assets with their own assets
+d Initiatives: Drones
Community development
using ICT
Concluded collaboration agreement for use of drones for disaster prevention/mitigation and
verification trial on near-future technology
Announced Aug. 29, 2016
Productivity improvement in agriculture/forestry
+d+dVegetation Science & TechnologyVegetation Science & TechnologyConcluded collaboration agreement on a drone verification project for maintenance/management of rice paddies and
forest reserves planted along the coastAnnounced Sep. 21, 2016Concluded collaboration agreement on a drone verification project for maintenance/management of rice paddies and forest reserves planted along the coastAnnounced Sep. 21, 2016
Proxy shopping service
+d+dVerification trial using cellular drones in long-distance, beyond-visual-range flights to start in Fukuoka City in November 2016Announced Oct. 19, 2016Verification trial using cellular
drones in long-distance, beyond-visual-range flights to start in Fukuoka City in November 2016Announced Oct. 19, 2016
20
+d Initiatives: 2020 .AI.loT
For smooth
communication with foreign visitors to Japan
Yokosuka CityYokosuka City+d+dJoint verification trial with
Yokosuka City of “word translation” and “interview translation” apps in the city’s shopping arcades
Announced Jul. 6, 2016
Translation platform to
enterprise users
“Hanashite Hon’yaku for Biz Premium” Provision and commercialization of
DOCOMO’s translation techniques for oversea travel insurance apps targeting foreign travelers to Japan
Announced Jul. 14, 2016
Development of new loT platform technologies
Verification of usability/feasibility in the field of transport services of a platform that aggregates and standardizes
various loT data
Announced Oct. 20, 2016
Share Repurchase
Period for share repurchase:
Feb. 1—Sep. 30, 2016 ? Aggregate no. of shares repurchased: Approx. 161.23 million shares*
(Approx. 40.36 million shares)*
Aggregate price
of shares repurchased: Approx. ¥416.7 billion
(Approx. ¥109.2 billion)*
Remaining share repurchase authorization: Approx. 83.3 billion
(through Dec. 31, 2016)
The cumulative number of shares repurchased based on a resolution adopted by the Board of Directors on Jan. 29, 2016.
2222The numbers in the parentheses under the aggregate number of shares repurchased and aggregate price of shares
repurchased above represent the number and price of shares repurchased on the Tokyo Stock Exchange during the period in FY2016/1H.
| NTT
FY2016 Full-Year Guidance <Revised>
(Billions of yen) FY2016 Initial guidance
(i) FY2016
Revised
guidance
(2) Changes
(2)~(1)
Operating income
(Excl. impact from change of depreciation method, etc.) 910
(860) 940
(880) +30
(+20)
Net income attributable to NTT DOCOMO, INC. 640 655+15
Capital expenditures 585 5850
Adjusted free cash flow* 600 640+40
Cost efficiency improvement -80 -100-20
*: Adjusted free cash flow is calculated excluding the effects of changes in investment derived from purchases, redemption
at maturity and disposals of financial instruments held for cash management purposes with original maturities of longer than three months.
Key Factors Behind
Revision docomo of Operating
income
2424[Reference]
(Billions of yen) Compared to Initial guidance Compared to previous year
Telecommunications business* +20 +51
Increased customer returns
(Over a 12-month
period)
Cost efficiency improvement • Baseline growth -10 (-70 -110)
+20
+10 -70
(-110)
+100
+21
Smart life business & Other
businesses* 0 +46
Impact from change of depreciation method,
etc. +10 +60
Total +30 +157
* Excluding impact from change of depreciation method, etc.
Toward 2020 and Beyond
More fun, more peace of
mind, more benefits and affordability
Bring more fun and Always there for you Provide solutions to
abundance to everyday life anytime, anywhere various social issues
Service creation/evolution “Change” Promotion of
Reinforcement of all foundations
Evolution of Network/R&D Sound financial
customer contacts (IoT, AI/5G/Services) structure
25
FY2016/1H Summary
Recorded increase in both
operating revenues/income. FY2016/1H operating income: ¥585.6 billion.
Operating income from
telecommunications business: ¥524.7 billion.
ARPU continued to recover due to expanded uptake of
“Kake-hodai & Pake-aeru” billing plan, etc.
Operating income from Smart life business and Other
businesses: ¥60.9 billion. Content, finance/payment services, etc., achieved steady growth.
Coverage of
PREMIUM 4G expanded to 1,240 cities nationwide.
500Mbps and 682Mbps services planned for launch.
Further network advancements planned in view of 5G. No. of “+d” partners grew to 164, promoting initiatives in
the areas of IoT, AI, 2020 and “d POINT” loyalty program, etc.
Increased customers returns to over
¥110 billion (over a 12-month period) through enrichment of billing service, e.g., launch of “Ultra Pack” and “docomo Child Raising Support Program,” etc.
Raised cost efficiency improvement target by ¥20 billion to ¥100 billion. Full-year operating income guidance
revised upward to ¥940 billion.
26
Results Highlights
Key Financial Data, Segment
Results
Telecommunications Business, Smart Life Business & Other Businesses
Revised FY2016 Full-Year Guidance
New Initiatives for Child-Raising Families
Enrichment of Billing Service
2014 2015 2016
For
“docomo
feature phone”
users
Š “Kake-hodai Light (feature phone)” plan
For high-usage Š “Keitai Pack”
customers
Š “Ultra Pack,” “Ultra Share Pack”
For long-term
customers Š Introduction of
two selectable discount programs:
“Zutto DOCOMO Discount Course” &“Free Course”
For low-usage Š Expansion of “Zutto DOCOMO Discount,” Reward points for contract renewal
customers
Š “Share Pack 5,” Expanded applicability of “Kake-hodai Light” plan
For low voice call
usage customers
Š “Kake-hodai Light” plan
Enrichment of
new billing plan
Š “Data L Pack,” “Packet Carryover,” Extended usage period of data top up
Launch of
newbilling plan Š”Kake-hodai & Pake-aeru,” “Zutto DOCOMO Wari,” “U25 Ouen Wari”
2014 Jun. Sep. 2015 Sep. 2016 Mar. Jun. Sep. Oct. 28
New Initiatives
| NTT| NTTBilling structure that
allows customers to use services at affordable rates for a long period of time by selecting a plan appropriate for the different stages of life
+
Initiatives that provide support to
child-raising families
NEW 1 Launch of “docomo Child Raising Support Program”
NEW 2 Addition of “Kids Keitai Plus” rate plan
NEW 3 Launch of “Maternal & Child Health Handbook App”
29
NEW 1“docomo Child Raising Support Program”
DOCOMO provides support for making family memories
Privilege 1Privilege 13,000 “d POINTS” every year
in child’s birthday month
Privilege 2Privilege 2Free storage of photos/videos
on “docomo cloud” (55GB)
Privilege 3Privilege 3Free photo album
made with
stored photos
‘docomo Child Raising Support Program”
Applications accepted at nearby docomo Shops!
| NTT
docomo
“docomo Child Raising Support Program”
Privilege 1Privilege 13,000 “d POINTS” every year in child’s birthday month
UseUsepresentpresentpoints for birthday or for a party!
TakasliimayaTakasliimayad fashion
Combi Shop
delivery
* The*The* The*Thegiveaway points expires in 6 months (limitation is applied to the period and purpose of use of points is limited). Points
will be awarded every year until the child’s graduation from elementary school image above is conceptual.
NEWNEW1 1
“docomo Child Raising Support
Program”
Share the fun of photos of your children with
your family!
Privilege 3
Privilege 2 Create a photo album*2
Safe storage (55GB)
on “docomo Cloud”*1
Use photo album
at home, or give it
Upload photos Can be viewed as a present!
and
videos on smartphones,
tablets or PCs
*1: In addition to the standard free -of-charge capacity of 5GB that can be used for photo collection or data storage box, “Cloud Capacity Option Plus 50GB service ”(usually
¥400/month)
will be provided for free up to child’s graduation from elementary school.
*2: Monthly charge for “Photo Collection Plus” (¥280/month) will be waived for up to 13 months after
subscription to “docomo Child Raising Support Program.” 32
Program Launch Campaign
period: ThroughJan. 9,
2017period: ThroughJan. 9, 2017Let’s go on a family vacation campaign
Through
Win “dtravel” coupons worth up to ¥100,000
Total ¥10 million worth of “dtravel” coupons to be offered!
1: The campaign above can be applied only by customers who have subscribed to “docomo Child Raising Support Program.
33
NEW 2
Billing Plan for Kids Keitai
For enhanced safety of children
and peace of mind of parents
“Kids Keitai
Plus”
¥500/month*1
In emergencies To find a child’s current location*2 To receive an alert informing
you of a child’s return home*3
“Tomoru”—a device compatible
with “Linking” technology:
*1: Monthly
rate for a two-year contract. Service can be canceled without any cancellation fee after completing the first two-year contract.
Handset charge is not included in the monthly rate. The service can be used by adding a line to the existing “Kake-hodai & Pake-aeru” subscription.
*2: A separate subscription to “Imadoco Search” service (¥200/month) under the parent line is required.
*3: Purchase of a separate device, “Tomoru,” is required to use this service.
“Tomoru”™ is a trademark of Braveridge, Co. Ltd. 34
NEWNEW3 3
Maternal & Child Health Handbook
App
Provide support for pregnancy, child birth and child-
raising using digital records and information
“Maternal & child health handbook app”
Direct delivery of Delivery of columns,
Digitized
health information from Q&A in accordance with
records local government child’s developmental stage
35
Child-Raising Support Services for Peace of Mind and Convenience
Plan to add more child-raising support services in the future
DOCOMO Child Raising Support ProgramDOCOMO Child Raising Support ProgramEnhanced safety and peace of nr for childrenEnhanced safety and peace of nr for childrenmindmind
More to be added in future
Develop children’s ability to thinkDonations to “Fund to Support Children’s Future” using “dPOINT’SDevelop children’s ability to thinkDonations to
“Fund to Support Children’s Future” using “dPOINT’SProvide support from the stage of pregnancy to child raising with digital records and information
NEW 1
“docomo Child Raising Support
Program”
NEW 2NEW 2Planned for launch Nov. 1, 2016
“Kid’s Keitai Plus” rate plan
NEW 3
Launched Oct. 28, 2016Launched Oct. 28,
20163737“Maternal and Child Health Handbook App”
The new of today, the norm of tomorrow
3838
Danger ahead! Smartphone-distracted walking
Appendices
Services, etc., Included in Each Reportable Segment
Telecommunications business
Mobile communications services
Xi services (LTE)
*FOMA services (3G) • International services ’Sales of handset/equipment for each service, etc.
Optical fiber broadband service and other telecommunications services *Optical-fiber broadband services * Satellite
communications services, etc.
Smart life business
Content services
“dmarket” • “Anshin Net Security” * “Sugotoku Contents” • “Cloud Storage Option” etc. Finance/Payment services
Credit service • Proxy bill collection • “d Mobile Payment“etc.
Group companies
Oak Lawn Marketing, Inc. ABC Cooking Studio, Co. Ltd. • docomo Healthcare, Inc. etc.
Other businesses
Enterprise solutions
Enterprise loT solutions • System development/sales/maintenance services etc.
Support services for customers peace of mind
“Mobile Device Protection Service” * “Anshin Remote Support” etc.
Definition and Calculation Methods
of ARPU and
MOU
i. Definition of ARPU and MOU
a. ARPU (Average monthly Revenue Per Unit):
Average monthly revenue per unit, or ARPU, is used to measure average monthly operating revenues attributable to
designated services on a
per user basis. ARPU is calculated by dividing telecommunications services revenues
(excluding certain revenues) by the number of active users
of our wireless services in the relevant periods,
as shown below “ARPU Calculation Method.” We believe that our ARPU figures provide useful
information to analyze the average usage per user and the impacts of changes in our billing arrangements. The revenue
items included in the
numerators of our ARPU figures are based on our U.S. GAAP results of operations.
b. MOU (Minutes of Use):
Average monthly communication time per user.
ii.
ARPU Calculation Methods
Aggregate ARPU = Voice ARPU + Packet ARPU + “docomo Hikari” ARPU
- Voice ARPU : Voice ARPU Related Revenues (basic monthly charges, voice communication charges)
/ No. of active users
- Packet ARPU : Packet ARPU Related Revenues (basic monthly charges, packet communication charges)
/ No. of active users
- “docomo Hikari”
ARPU : “docomo Hikari” ARPU Related Revenues (basic monthly charges, voice communication charges)
/
No. of active users
- In addition, the sum of Packet ARPU and “docomo Hikari” ARPU is referred to as
Data ARPU.
iii. Active Users Calculation Method
Sum of No. of active users for each month ((No. of users at the end of previous month + No. of users at the end of current
month) / 2) during the
relevant period
Note:
1. The number of “users” used to calculated ARPU and MOU is the total number of subscriptions, excluding the subscriptions listed below:
a. Subscriptions of communication modules services, “Phone Number Storage,” “Mail Address Storage,”
“docomo Business Transceiver” and
wholesale telecommunications services and interconnecting
telecommunications facilities that are provided to Mobile Virtual Network
Operators (MVNOs); and
b. Data Plan subscriptions in the case where the customer contracting for such subscription in his/her name also has a
subscription for “Xi” or
“FOMA” services in his/her name.
2. Revenues from communication module services, “Phone Number Storage,” “Mail Address Storage,”
“docomo Business Transceiver” and
wholesale telecommunications services and interconnecting
telecommunications facilities that are provided to Mobile Virtual Network
Operators (MVNOs) are not included
in the ARPU calculation.
ARPU and MOU calculation methods were changed beginning with the results presentation
for the first three months of the fiscal year ended March 31, 2016. Conventional ARPU calculation method is as below:
ARPU (conventional calculation): (Voice revenues + Packet revenues + Revenues accounted for in Smart ARPU)/ No. of subscriptions after subtracting communication modules and MVNO
subscriptions, etc. 41
Special Note Regarding Forward-Looking Statements
This presentation contains forward-looking statements such as forecasts of results of operations, management strategies,
objectives and plans, forecasts of operational data such as the expected number of subscriptions, and the expected dividend payments. All forward-looking statements that are not historical facts are based on management’s current plans,
expectations, assumptions and estimates based on the information currently available. Some of the projected numbers in this presentation were derived using certain assumptions that were indispensable for making such projections in addition to
historical facts. These forward- looking statements are subject to various known and unknown risks, uncertainties and other factors that could cause our actual results to differ materially from those contained in or suggested by any forward-looking
statement. Potential risks and uncertainties include, without limitation, the following:
Changes in the market
environment in the telecommunications industry, such as intensifying competition from other businesses or other technologies caused by Mobile Number Portability, development of appealing new handsets, new market entrants, mergers among other service
providers and other factors, or the expansion of the areas of competition could limit the acquisition of new subscriptions and retention of existing subscriptions by our corporate group, or it may lead to ARPU diminishing at a greater than expected
rate, an increase in our costs, or an inability to optimize costs as expected.
If current and new services,
usage patterns, and sales schemes proposed and introduced by our corporate group cannot be developed as planned, or if unanticipated expenses arise the financial condition of our corporate group could be affected and our growth could be limited.
The introduction or change of various laws or regulations inside and outside of Japan, or the application of
such laws and regulations to our corporate group, could restrict our business operations, which may adversely affect our financial condition and results of operations.
Limitations in the amount of frequency spectrum or facilities made available to us could negatively affect our ability to maintain and improve our service quality and level of customer
satisfaction and could increase our costs.
Other mobile service providers in the world may not adopt the
technologies and the frequency bands that are compatible with those used by our corporate group’s mobile communications system on a continuing basis, which could affect our ability to sufficiently offer international services.
Our domestic and international investments, alliances and collaborations, as well as investments in new business fields,
may not produce the returns or provide the opportunities we expect.
Malfunctions, defects or imperfections in
our products and services or those of other parties may give rise to problems.
Social problems that could be
caused by misuse or misunderstanding of our products and services may adversely affect our credibility or corporate image.
Inadequate handling of confidential business information including personal information by our corporate group, contractors and others may adversely affect our credibility or corporate
image.
Owners of intellectual property rights that are essential for our business execution may not grant us a
license or other use of such intellectual property rights, which may result in our inability to offer certain technologies, products and/or services, and our corporate group may also be held liable for damage compensation if we infringe the
intellectual property rights of others. In addition, the illicit use by a third party of the intellectual property rights owned by our corporate group could reduce our license revenues actually obtained and may inhibit our competitive superiority.
Events and incidents caused by natural disasters, social infrastructure paralysis such as power shortages, the
proliferation of harmful substances, terror or other destructive acts, the malfunctioning of equipment, software bugs, deliberate incidents induced by computer viruses, cyber-attacks, equipment misconfiguration, hacking, unauthorized access and
other problems could cause failure in our networks, distribution channels, and/or other factors necessary for the provision of service, disrupting our ability to offer services to our subscribers and such incidents may adversely affect our
credibility or corporate image, or lead to a reduction of revenues and/or increase of costs.
Concerns about
adverse health effects arising from wireless telecommunications may spread and consequently adversely affect our financial condition and results of operations.
Our parent company, NIPPON TELEGRAPH AND TELEPHONE CORPORATION (NTT), could exercise influence that may not be in the interests of our other shareholders.
Names of companies, products, etc., contained in this presentation are the trademarks or registered trademarks of their
respective organizations.
42