Despite a decrease in equipment sales revenues, operating revenues from telecommunications
business for the three months ended June 30, 2016 increased by ¥16.3 billion, or 1.9%, from ¥878.6 billion for the same period of the previous fiscal year to ¥894.9 billion, as a result of the expansion of smartphone use and the demand
for tablets and other products purchased as a second mobile device for individual use, the growth of the packet consumption of our “Kake-hodai & Pake-aeru” billing plan subscribers, and growth in the number of “docomo Hikari”
users, which amounted to 2.07 million as of June 30, 2016.
Operating expenses from telecommunications business decreased
by ¥41.7 billion, or 6.3%, from ¥666.2 billion for the same period of the previous fiscal year to ¥624.5 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 ¥270.4 billion, an increase of ¥58.0 billion, or
27.3%, from ¥212.4 billion for the same period of the previous fiscal year.
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 to
our wireless services in the relevant periods, as shown below under “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.
Sum of number of active users for each month
((number of users at the end of previous month + number of users at the end of current month) /2) during the relevant period
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 three months ended June 30, 2016 were
¥125.2 billion, an increase of ¥6.9 billion, or 5.8%, from ¥118.4 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 ¥108.0 billion, an increase of ¥6.5 billion, or 6.4%, from
¥101.5 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 ¥17.2 billion, an increase of ¥0.3 billion, or 1.9%,
from ¥16.9 billion for the same period of the previous fiscal year.
Operating revenues from other businesses for the three months ended June 30, 2016 amounted to
¥94.8 billion, an increase of ¥8.9 billion, or 10.4%, from ¥85.9 billion for the same period of the previous fiscal year, driven mainly by an increase number of subscriptions for our “Mobile Device Protection Service” and the
growth of revenues relating to IoT businesses.
Operating expenses from other businesses were ¥83.1 billion, an
increase of ¥3.4 billion, or 4.2%, from ¥79.8 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 ¥11.7 billion, an increase of ¥5.6 billion, or
91.5%, from ¥6.1 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 realize a sustainable society while expanding our own businesses.
The principal CSR actions undertaken during the three months ended June 30, 2016 are summarized below:
We pursued more efficient use of capital expenditures and further cost
reduction, and expanded the coverage of our “PREMIUM 4G” service to construct a more convenient mobile telecommunications network. Furthermore, we added a new carrier, 3.5GHz, to our service compatible with carrier aggregation
technologies.
As a result, the total amount of capital expenditures we made increased by 4.3% from the
same period of the previous fiscal year to ¥97.1 billion for the three months ended June 30, 2016.
For the three months ended June 30, 2016, net cash provided by
operating activities was ¥243.8 billion, a decrease of ¥30.0 billion, or 11.0%, from the same period of the previous fiscal year. This was due mainly to an increase in cash outflows for the payments of income taxes, despite 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 ¥208.8 billion, an increase of ¥0.4 billion, or 0.2%, from the same period
of the previous fiscal year. This was due mainly to an increase in cash outflows for purchases of property, plant and equipment.
Net cash used in financing activities was ¥190.0 billion, an increase of ¥146.1 billion, or 333.3%, from the same
period of the previous fiscal year. This was due mainly to a decrease in cash inflows from proceeds from short-term borrowings and 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 ¥198.6 billion as of June 30, 2016, a decrease
of ¥155.9 billion, or 44.0%, from the previous fiscal year end.
Japan’s telecommunications market has seen a dramatic change due to the entry of a wide range of players into the market,
which has resulted in severe and continuous competition among them, as well as the government’s adoption of a pro-competition policy. Under such market conditions, we will continue our efforts to strengthen competitiveness of our
telecommunications business by using driving forces, such as the proliferation of our billing plan “Kake-hodai & Pake-aeru” launched in June 2014, as well as the “docomo Hikari” optical-fiber broadband service and the
“docomo Hikari Pack” bundle discount packages launched in March 2015. In addition, we will continue our “+d” value co-creation initiatives, aiming to deliver new values by making available the business assets that we have
accumulated through our operations, such as our payment platform and loyalty program. Through these endeavors, we expect to post an increase in both operating revenues and operating income for the fiscal year ending March 31, 2017.
Although we expect a decline in revenues from equipment sales, we estimate that operating revenues for the fiscal year ending
March 31, 2017 will increase by ¥92.9 billion from the previous fiscal year to ¥4,620.0 billion, driven by an increase in mobile communications services revenues as a result of the rise in smartphone use, the strong demand for tablets and
other products purchased as a second mobile device for individual use, and initiatives aimed at boosting the packet consumption of our “Kake-hodai & Pake-aeru” billing plan subscribers, an increase in optical-fiber broadband service
and other telecommunications services revenues due to the projected growth of “docomo Hikari” users, and an increase in revenues from smart life business and other businesses. On the expenses side, although we project an increase in
expenses associated with the growth of revenues from smart life business and other businesses and the expansion of “docomo Hikari” revenues, operating expenses are expected to decrease by ¥34.1 billion to ¥3,710.0 billion, owing
primarily to a decline of depreciation expenses as a result of our change in depreciation method used from the declining-balance method to the straight-line method, as well as a decrease in cost of equipment sold and initiatives to pursue further
cost efficiency. Accordingly, operating income for the fiscal year ending March 31, 2017 is estimated to be ¥910.0 billion, an increase of ¥127.0 billion from the previous fiscal year.
As we are not currently aware of any factor that may have a material impact on our projected results of operations, we have
not revised our forecasts announced on April 28, 2016.
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 ¥33,381 million for the three months ended June 30, 2016. “Net income attributable to NTT DOCOMO, INC.” and “Basic and Diluted earnings per share attributable to NTT DOCOMO, INC.”
increased by ¥22,833 million and ¥6.08, respectively, for the three months ended June 30, 2016.
Consolidated Statements of Income
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of yen
|
|
|
|
|
Three Months Ended
June 30, 2015
|
|
|
Three Months Ended
June 30, 2016
|
|
|
Operating revenues:
|
|
|
|
|
|
|
|
|
|
Telecommunications services
|
|
¥
|
675,255
|
|
|
¥
|
729,708
|
|
|
Equipment sales
|
|
|
201,345
|
|
|
|
165,753
|
|
|
Other operating revenues
|
|
|
200,264
|
|
|
|
213,209
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating revenues
|
|
|
1,076,864
|
|
|
|
1,108,670
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Cost of services (exclusive of items shown separately below)
|
|
|
288,904
|
|
|
|
304,479
|
|
|
Cost of equipment sold (exclusive of items shown separately below)
|
|
|
175,531
|
|
|
|
154,977
|
|
|
Depreciation and amortization
|
|
|
145,572
|
|
|
|
109,715
|
|
|
Selling, general and administrative
|
|
|
231,462
|
|
|
|
240,208
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
841,469
|
|
|
|
809,379
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
235,395
|
|
|
|
299,291
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(312
|
)
|
|
|
(240
|
)
|
|
Interest income
|
|
|
179
|
|
|
|
155
|
|
|
Other, net
|
|
|
5,349
|
|
|
|
(3,914
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total other income (expense)
|
|
|
5,216
|
|
|
|
(3,999
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes and equity in net income (losses) of affiliates
|
|
|
240,611
|
|
|
|
295,292
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes:
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
70,293
|
|
|
|
69,256
|
|
|
Deferred
|
|
|
2,328
|
|
|
|
20,392
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income taxes
|
|
|
72,621
|
|
|
|
89,648
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before equity in net income (losses) of affiliates
|
|
|
167,990
|
|
|
|
205,644
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in net income (losses) of affiliates (including impairment charges of investments in
affiliates)
|
|
|
1,619
|
|
|
|
992
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
169,609
|
|
|
|
206,636
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net (income) loss attributable to noncontrolling interests
|
|
|
(825
|
)
|
|
|
218
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to NTT DOCOMO, INC.
|
|
¥
|
168,784
|
|
|
¥
|
206,854
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share Data
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding – Basic and Diluted
|
|
|
3,881,483,829
|
|
|
|
3,754,094,845
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted earnings per share attributable to NTT DOCOMO, INC.
|
|
¥
|
43.48
|
|
|
¥
|
55.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Comprehensive Income
|
|
|
|
|
Millions of yen
|
|
|
|
|
Three Months Ended
June 30, 2015
|
|
|
Three Months Ended
June 30, 2016
|
|
|
Net income
|
|
¥
|
169,609
|
|
|
¥
|
206,636
|
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
Unrealized holding gains (losses) on available-for-sale securities, net of applicable
taxes
|
|
|
1,730
|
|
|
|
(11,821
|
)
|
|
Unrealized gains (losses) on cash flow hedges, net of applicable taxes
|
|
|
(23
|
)
|
|
|
(72
|
)
|
|
Foreign currency translation adjustment, net of applicable taxes
|
|
|
(6,716
|
)
|
|
|
(8,105
|
)
|
|
Pension liability adjustment, net of applicable taxes
|
|
|
(26
|
)
|
|
|
141
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other comprehensive income (loss)
|
|
|
(5,035
|
)
|
|
|
(19,857
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
|
|
|
164,574
|
|
|
|
186,779
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Comprehensive (income) loss attributable to noncontrolling interests
|
|
|
(856
|
)
|
|
|
423
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income attributable to NTT DOCOMO, INC.
|
|
¥
|
163,718
|
|
|
¥
|
187,202
|
|
|
|
|
|
|
|
|
|
|
|
15
|
|
|
|
|
DOCOMO Earnings Release
|
|
Three Months Ended June 30, 2016
|
(3) Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of yen
|
|
|
|
|
Three Months Ended
June 30, 2015
|
|
|
Three Months Ended
June 30, 2016
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
Net income
|
|
¥
|
169,609
|
|
|
¥
|
206,636
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities–
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
145,572
|
|
|
|
109,715
|
|
|
Deferred taxes
|
|
|
2,328
|
|
|
|
20,392
|
|
|
Loss on sale or disposal of property, plant and equipment
|
|
|
6,379
|
|
|
|
3,963
|
|
|
Inventory write-downs
|
|
|
770
|
|
|
|
4,076
|
|
|
Impairment loss on marketable securities and other investments
|
|
|
—
|
|
|
|
853
|
|
|
Equity in net (income) losses of affiliates (including impairment charges of investments in
affiliates)
|
|
|
(1,619
|
)
|
|
|
(992
|
)
|
|
Dividends from affiliates
|
|
|
4,160
|
|
|
|
4,837
|
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
(Increase) / decrease in accounts receivable
|
|
|
81,894
|
|
|
|
78,707
|
|
|
(Increase) / decrease in receivables held for sale
|
|
|
(5,708
|
)
|
|
|
15,988
|
|
|
(Increase) / decrease in credit card receivables
|
|
|
(6,224
|
)
|
|
|
(10,778
|
)
|
|
(Increase) / decrease in other receivables
|
|
|
(7,179
|
)
|
|
|
(3,384
|
)
|
|
Increase / (decrease) in allowance for doubtful accounts
|
|
|
893
|
|
|
|
1,756
|
|
|
(Increase) / decrease in inventories
|
|
|
(24,058
|
)
|
|
|
(21,333
|
)
|
|
(Increase) / decrease in prepaid expenses and other current assets
|
|
|
(16,365
|
)
|
|
|
(17,549
|
)
|
|
(Increase) / decrease in non-current receivables held for sale
|
|
|
3,278
|
|
|
|
21,618
|
|
|
Increase / (decrease) in accounts payable, trade
|
|
|
(85,782
|
)
|
|
|
(90,114
|
)
|
|
Increase / (decrease) in accrued income taxes
|
|
|
(307
|
)
|
|
|
(98,738
|
)
|
|
Increase / (decrease) in other current liabilities
|
|
|
26,887
|
|
|
|
32,519
|
|
|
Increase / (decrease) in accrued liabilities for point programs
|
|
|
(8,169
|
)
|
|
|
(7,527
|
)
|
|
Increase / (decrease) in liability for employees’ retirement benefits
|
|
|
1,865
|
|
|
|
1,905
|
|
|
Increase / (decrease) in other long-term liabilities
|
|
|
679
|
|
|
|
3,782
|
|
|
Other, net
|
|
|
(15,105
|
)
|
|
|
(12,538
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
273,798
|
|
|
|
243,794
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
|
(130,531
|
)
|
|
|
(125,769
|
)
|
|
Purchases of intangible and other assets
|
|
|
(72,028
|
)
|
|
|
(78,535
|
)
|
|
Purchases of non-current investments
|
|
|
(1,359
|
)
|
|
|
(743
|
)
|
|
Proceeds from sale of non-current investments
|
|
|
1,054
|
|
|
|
1,611
|
|
|
Purchases of short-term investments
|
|
|
(1,684
|
)
|
|
|
(5,428
|
)
|
|
Redemption of short-term investments
|
|
|
1,621
|
|
|
|
5,546
|
|
|
Other, net
|
|
|
(5,518
|
)
|
|
|
(5,480
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(208,445
|
)
|
|
|
(208,798
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Proceeds from short-term borrowings
|
|
|
143,798
|
|
|
|
5,754
|
|
|
Repayment of short-term borrowings
|
|
|
(50,146
|
)
|
|
|
(5,754
|
)
|
|
Principal payments under capital lease obligations
|
|
|
(379
|
)
|
|
|
(311
|
)
|
|
Payments to acquire treasury stock
|
|
|
(0
|
)
|
|
|
(54,641
|
)
|
|
Dividends paid
|
|
|
(134,332
|
)
|
|
|
(130,524
|
)
|
|
Cash distributions to noncontrolling interests
|
|
|
(2,310
|
)
|
|
|
(3,500
|
)
|
|
Other, net
|
|
|
(474
|
)
|
|
|
(990
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
|
(43,843
|
)
|
|
|
(189,966
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
(718
|
)
|
|
|
(884
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
20,792
|
|
|
|
(155,854
|
)
|
|
Cash and cash equivalents as of beginning of period
|
|
|
105,553
|
|
|
|
354,437
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents as of end of period
|
|
¥
|
126,345
|
|
|
¥
|
198,583
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
|
Cash received during the period for:
|
|
|
|
|
|
|
|
|
|
Income tax refunds
|
|
¥
|
653
|
|
|
¥
|
3
|
|
|
Cash paid during the period for:
|
|
|
|
|
|
|
|
|
|
Interest, net of amount capitalized
|
|
|
265
|
|
|
|
213
|
|
|
Income taxes
|
|
|
74,492
|
|
|
|
167,075
|
|
|
|
|
|
|
|
|
|
|
|
16
|
|
|
|
|
DOCOMO Earnings Release
|
|
Three Months Ended June 30, 2016
|
(4) Notes to Consolidated Financial Statements
i. Note to Going Concern Assumption
There is no corresponding item.
ii. Significant Changes in NTT DOCOMO, INC. Shareholders’ Equity
None
iii. Segment Information
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.
Certain Machine-to-Machine (M2M) services for
consumers that had been included in other businesses were reclassified to the smart life business from the second quarter of the fiscal year ended March 31, 2016 to reflect the change in its internal organizational structure effective as of July 1,
2015.
In connection with this realignment, segment information for the three months ended June 30, 2015 has been restated
to conform, to the presentation for the three months ended June 30, 2016.
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.
Segment operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of yen
|
|
|
|
|
Three months ended
June 30, 2015
|
|
|
Three months ended
June 30, 2016
|
|
|
Telecommunications business-
|
|
|
|
|
|
|
|
|
|
External customers
|
|
¥
|
878,374
|
|
|
¥
|
894,659
|
|
|
Intersegment
|
|
|
250
|
|
|
|
265
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
878,624
|
|
|
|
894,924
|
|
|
Smart life business-
|
|
|
|
|
|
|
|
|
|
External customers
|
|
|
115,515
|
|
|
|
122,161
|
|
|
Intersegment
|
|
|
2,872
|
|
|
|
3,088
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
118,387
|
|
|
|
125,249
|
|
|
Other businesses-
|
|
|
|
|
|
|
|
|
|
External customers
|
|
|
82,975
|
|
|
|
91,850
|
|
|
Intersegment
|
|
|
2,901
|
|
|
|
2,961
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal
|
|
|
85,876
|
|
|
|
94,811
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment total
|
|
|
1,082,887
|
|
|
|
1,114,984
|
|
|
Elimination
|
|
|
(6,023
|
)
|
|
|
(6,314
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
¥
|
1,076,864
|
|
|
¥
|
1,108,670
|
|
|
|
|
|
|
|
|
|
|
|
17
|
|
|
|
|
DOCOMO Earnings Release
|
|
Three Months Ended June 30, 2016
|
Segment operating income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of yen
|
|
|
|
|
Three months ended
June 30, 2015
|
|
|
Three months ended
June 30, 2016
|
|
|
Telecommunications business
|
|
¥
|
212,420
|
|
|
¥
|
270,410
|
|
|
Smart life business
|
|
|
16,876
|
|
|
|
17,203
|
|
|
Other businesses
|
|
|
6,099
|
|
|
|
11,678
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
¥
|
235,395
|
|
|
¥
|
299,291
|
|
|
|
|
|
|
|
|
|
|
|
Segment operating income (loss) is segment operating revenues less segment operating expenses.
As indicated in “2. (3) Changes 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 three months ended June 30, 2016 increased by ¥33,350 million, ¥12 million and ¥19 million,
respectively.
DOCOMO does not disclose geographical information because the amounts of operating revenues generated
outside Japan are immaterial.
18
|
|
|
|
|
DOCOMO Earnings Release
|
|
Three Months Ended June 30, 2016
|
4. Appendix
Reconciliations of the Disclosed Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial
Measures
i. EBITDA and EBITDA margin
|
|
|
|
|
|
|
|
|
|
|
|
|
Billions of yen
|
|
|
|
|
Three months ended
June 30, 2015
|
|
|
Three months ended
June 30, 2016
|
|
|
a. EBITDA
|
|
¥
|
387.3
|
|
|
¥
|
413.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
(145.6
|
)
|
|
|
(109.7
|
)
|
|
Loss on sale or disposal of property, plant and equipment
|
|
|
(6.4
|
)
|
|
|
(4.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
235.4
|
|
|
|
299.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
5.2
|
|
|
|
(4.0
|
)
|
|
Income taxes
|
|
|
(72.6
|
)
|
|
|
(89.6
|
)
|
|
Equity in net income (losses) of affiliates
|
|
|
1.6
|
|
|
|
1.0
|
|
|
Less: Net (income) loss attributable to noncontrolling interests
|
|
|
(0.8
|
)
|
|
|
0.2
|
|
|
|
|
|
|
|
|
|
|
|
|
b. Net income attributable to NTT DOCOMO, INC.
|
|
|
168.8
|
|
|
|
206.9
|
|
|
|
|
|
|
|
|
|
|
|
|
c. Operating revenues
|
|
|
1,076.9
|
|
|
|
1,108.7
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA margin (=a/c)
|
|
|
36.0
|
%
|
|
|
37.2
|
%
|
|
Net income margin (=b/c)
|
|
|
15.7
|
%
|
|
|
18.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
Three months ended
June 30, 2015
|
|
|
Three months ended
June 30, 2016
|
|
|
a. Net income attributable to NTT DOCOMO, INC.
|
|
¥
|
168.8
|
|
|
¥
|
206.9
|
|
|
b. Shareholders’ equity
|
|
|
5,394.0
|
|
|
|
5,302.4
|
|
|
|
|
|
|
|
|
|
|
|
|
ROE (=a/b)
|
|
|
3.1
|
%
|
|
|
3.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
|
|
Shareholders’ equity = The average of NTT DOCOMO, INC. shareholders’ equity, each as of March 31, 2016 (or 2015)
and June 30, 2016 (or 2015).
|
iii. Free cash flows excluding changes in investments for cash management purposes
|
|
|
|
|
|
|
|
|
|
|
|
|
Billions of yen
|
|
|
|
|
Three months ended
June 30, 2015
|
|
|
Three months ended
June 30, 2016
|
|
|
Net cash provided by operating activities
|
|
¥
|
273.8
|
|
|
¥
|
243.8
|
|
|
Net cash used in investing activities
|
|
|
(208.4
|
)
|
|
|
(208.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flows
|
|
|
65.4
|
|
|
|
35.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in investments for cash management purposes
|
|
|
(0.1
|
)
|
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flows excluding changes in investments for cash management purposes
|
|
|
65.4
|
|
|
|
34.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
19
|
|
|
|
|
DOCOMO Earnings Release
|
|
Three Months Ended June 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
FY2016/1Q Results Presentation
NTT
docomo
July 29, 2016
NTT
docomo
Ever-improving value propositions
to customers and society
Service
creation/evolution
Deliver fun, convenience and peace of mind to every single customer/family
Promotion of “+d”
Address social issues and invent new solutions for regional revitalization & 2020
1 advancement of mobile ict (device/network/software) new ideas x x speed reinforcement of all foundations cost structure reform netwrok/r&d (iot,ai/5g/services) expansion of customer
base
docomo
Ever-improving value propositions to
customers and society
(Shift to service co-creation)
x
Reinforce corporate governance
II
A healthy company that achieves both enhanced customer service and sustainable business growth
(Gain the confidence of customers, society, shareholders,
business partners and employees)
2
NTT
docomo
1. Results Highlights
Key Financial Data, Segment Results
2.
Telecommunications Business
? Operational Performance, ARPU
Network, Cost Efficiency Improvement
3. Smart Life Business & Other Businesses
Operating Income, Principal Services
Promotion of “+d”
4. Summary
NTT
FY2016/1Q Results Snapshot docomo
U.S.
GAAP
YOY increase in both operating
revenues/income
- FY2016, off to a good start
Financial data
> Operating revenues: ¥1,108.7 billion (Up 3.0% year-on-year)
> Operating income: ¥299.3 billion (Up 27.1% year-on-year)
Operating income by segment
>
Telecommunications business: ¥270.4 billion (Up 27.3% year-on-year)
> Smart life business: ¥17.2
billion (Up 1.9% year-on-year)
> Other businesses: ¥11.7 billion (Up 91.5% year-on-year)
Consolidated financial statements in this document are unaudited
4
Selected Financial Data docomo NTT
U.S.
GAAP
(Billions of yen) FY2015/1Q
(1) FY2016/1Q
(2) Changes (2) – (1)
Operating revenues 1,076.9 1,108.7 + 31.8
Operating expenses 841.5 809.4 -32.1
Operating income 235.4 299.3 + 63.9
Net income
attributable to NTT DOCOMO, INC. 168.8 206.9 + 38.1
Capital expenditures 93.1 97.1 +4.0
Adjusted free cash flow* 65.4 34.9 -30.5
* For an explanation of the calculation processes of these numbers, please see the IR page of our website, www.nttdocomo.co.jp. Adjusted free cash flow excludes 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.
5
Results by Segment NTT docomo
U.S.
GAAP
(Billions of yen)
FY2015/1Q*1
(1)
FY2016/1Q
(2)
Changes
(2)-(l)
Telecommunications
Operating revenues
878.6
894.9
+16.3
business
Operating income
212.4
270.4
+58.0
Smart life Operating revenues 118.4 125.2 + 6.9
business Operating income 16.9 17.2 + 0.3
Other
Operating revenues 85.9 94.8 +8.9
businesses Operating income 6.1 11.7 + 5.6
<Ref.>Smart life business and Other businesses Operating revenues 204.3 220.1 +15.8
Operating income 23.0 28.9 +5.9
In association with the change of organizational structure that took effect on July 1, 2015, certain types of Machine-to-Machine (M2M) communication services that had previously been
included in “Other businesses” were reclassified into “Smart life business” beginning with the results presentation for the first six months of the fiscal year ended March 31, 2016.
6
Key Factors behind Changes docomo in Operating Income ntt
(Billions of yen)
Increase in mobile
communications services revenues: Up 34.8
Increase in other operating’ revenues:
Up 12.9
235.4
Increase in optical-fiber broadband service
revenues, etc.:
Up 19.7*1
Decrease in selling expenses
Decrease in
network-related expenses*2:
U.S.
GAAP
Down 27.1
Down 21.4
299.3
Decrease in selling revenues: Down 35.6
Increase in other operating expenses:
Up 16.4
Selling revenue and expense: Down 14.2
Income impact from
change of depreciation method, etc.
Up 25.0
Income impact from “Zutto Carryover”, etc.:
Up 18.0
Operating revenues: Up 31.8
Operating expenses:
Down 32.1
FY15/1Q
FY16/1Q
*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 7
NTT
docomo
1. Results Highlights
Key Financial Data, Segment Results
2.
Telecommunications Business
Operational Performance, ARPU
Network, Cost Efficiency Improvement
3. Smart Life Business & Other Businesses
Operating Income, Principal Services
Promotion of “+d”
4. Summary
NTT
Operational Performance (1) docomo
(Millions subs)
Mobile telecommunications services subscriptions
71.61
Total smartphone churn rate
tablet users
33.44
FY15/1Q FY16/1Q FY15/1Q FY16/1Q FY15/1Q FY16/1Q
9
67.53 up 6% 29.67 up 13% 0.59% 0.62% up 5-fold 20.81 up 1.5-fold
NTT
Operational Performance (2) docomo
(Millions subs)
“docomo Hikari” optical-fiber broadband subs
2.07
[GRAPHIC APPEARS HERE]
FY15/1Q FY16/1Q
“Kake-hodai & Pake-aeru” billing plan subs
31.59
[GRAPHIC APPEARS HERE]
FY15/1Q FY16/1Q
10
0.41 up5 20.81 up 1.5
ntt Enrichment of Billing Services docomo
Rate
plans for low-usage customers
“Share Pack 5” selection rate*1:
Approx. 20%
“Kake-hodai Light” selection rate*2:
Approx. 60%
Privileges for long-term users
“Zutto DOCOMO
Discount” application rate*3:
Approx. 70%
(Up approx. 10% after expanding applicability)
*1: “Share Pack 5” selection rate= No. of “Share Pack 5” packages sold / (No. of “Data Packs” sold + No. of “Share Packs” sold). The number
represents the actual data for FY2016/1Q *2: “Kake-hodai Light” selection rate: No. of “Kake-hodai Light” packages sold / (No. of “Kake-hodai” packages sold + No. of “Kake-hodai Light” packages sold). The
number represents the actual data for FY2016/1Q
*3: “Zutto DOCOMO Discount” application rate = No.
of “Zutto DOCOMO Discount” packages applied / Total “Packet Pack” subscriptions. The number represents the actual data as of June 30, 2016 11 2,780 2,870
ARPU/MOU
NTT
docomo
(Yen)
Trend of improvement continues
Voice ARPU Packet ARPU ? docomo Hikari ARPU
4,110 4040 4,030 4,010
4,190
4,230 4,260 4,330
MOU
FY14/1Q 2Q 3Q 4Q FY15/1Q 2Q 3Q 4Q FY16/1Q
(Minutes) 111 121 128 126 129 134 136 135 136
For an explanation on ARPU and MOU, please see the slide “Definition and Calculation Methods of ARPU and MOU” in
this document.
12 20 40 60 90 130 2,870 2,820 2,2870 2,910 2,930 2,940 2,960 1,340 1,290 1,260 1,210 1,120
1,240 1,240 1,230 1,240 4, 210
“docomo Hikari”: Usage Growth docomo
NTT
Monthly usage per subscription
docomo Hikari
Optional Services
Optional Services:
FY16/1Q FY15/1Q up approx.20%
“docomo Hikari
Denwa”
IP phone service
“docomo Hikari TV Option” IP TV
“Hikari Remote Support”
Average monthly usage of customers applying for “docomo Hikari” in FY2015/lQand FY2016/1Q, respectively.
13
LTE Network
NTT
docomo
143,500
Total no. of LTE base stations: 106,900
4g 5g 15
30,900
PREMIUM 4G-enabled
base stations: 3,500
FY15/1Q 4gtm
PREMIUM
Expanded to 1,203 cities across Japan
Japan’s fastest 375Mbps service: Launched May 2016 Principal areas where service is available: Mt. Fuji,
stadiums, theme parks
370Mbps service using 3.5GHz band: Launched June 2016
Rolled out in 49 cities across Japan
FY16/1Q
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. The description “Japan’s fastest” is as of June 30, 2016.
Two frequency bands of 3.5GHz and 1.7GHz are used for the provision of 370Mbps service, rolled out in 35 cities across
Japan. (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, rolled out in 14 cities across Japan.)
Three frequency bands of 2GHz, 1.7GHz and 800 MHz are used for the provision of 375Mbps service.
14
ntt docomo LTE Network: Planned Advancements 4g 5g 15
2014
2015
2016
2020
Bringing the next stage of evolution to
“speed” and “comfort”
PREMIUM 16
Over 500Mbps
up to 1Gbps
Further sophistication
300Mbps 375Mbps
225Mbps 3-carrier aggregation
PREMIUM 4G New
combination
Service of frequencies launch
370Mbps
3.5GHz band TDD+FDD
4X4 MIMO* Planned for launch
within FY2016
* A technique that realizes simultaneous transmission and reception of different signals from
multiple antennas
NTT
docomo
Cost Efficiency Improvement
(Billions of yen)
FY16/1Q FY16 full year
(planned)
Focus areas:
[Network]
Capital expenditures, maintenance
outsourcing cost, etc.
[Marketing]
Sales tools, etc.
[Other]
R&D, information system, etc.
-80 -25
The numbers above are the amount of cost
reduction compared to the FY2015 level
NTT
docomo
1. Results Highlights
Key Financial Data, Segment Results
2.
Telecommunications Business
Operational Performance, ARPU
Network, Cost Efficiency Improvement
3. Smart Life Business & Other Businesses
Operating Income, Principal Services
Promotion of “+d”
4. Summary
Smart Life Business & Other Businesses: docomo Operating Income
Steadily progressing
(Billions of yen)
28.9 23.0 up 26% ntt
FY15/1Q
FY16/1Q
120
FY16 full year (Guidance)
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.
18
Content Services
NTT
docomo
“dmarket”
(Million subs)
14.48
12.35
FY15/1Q
FY16/1Q
“Osusume Pack”
4.92
FY15/1Q
5.17
FY16/1Q
“Anshin Pack”
15.01
10.85
FY15/1Q
FY16/1Q
“dTV”
“dhits”
“d anime store” “dhealthcare pack”
“dmagazine”
“dgourmet”
“dkids”
“Sugotoku-Contents”
“i-concier”
“Cloud Storage Option” +50GB
“Anshin Net Security”
“Anshin Remote Support”*
“Mobile
Device Protection Service”*
*“Anshin Remote Support” and “Mobile Device Protection
Service” are included in the “Support Services for Customers’ Peace of Mind”
19
(Million subs)
Finance/Payment Services
NTT
docomo
“dCARD”
16.68
15.97
FY15/1Q
“dCARD Gold”
Over 1.3 million subs
FY16/1Q
The total “dCARD” subscriptions represent the combined subscriptions to “dCARD” and “dCARD
mini”
20
ntt Promotion of +d
docomo
Received MM Research Institute Grand Prix Award 2016
Steadily increased no. of “+d” partners
Retail
NEXCO
PKSHA Technology
Transport IoT, etc:
KYOTO UNIVERSITY
Kumamoto University
FUJITSU FUJITSU TEN
Premier Mobile Solution
COIN PARK Sharing Service
hatapro act now
21
NTT data athlete yell joshin
ntt +d AI-Based +d Initiatives docomo
Realization
of taxi demand prediction
FUJITSU FUJITSU TEN +d
Verification trial on the world’s first Al-based real-time travel demand prediction technology
Started June 1, 2016
Realization of autonomous driving service (1)
KYUSHU UNIVERSITY
FUKUOKA CITY
Established consortium toward
realization of a transport service based on self-driving buses
Agreement reached July 8, 2016
Realization of autonomous driving service (2)
Selected by Ministry of Internal Affairs and Communications as its outsourcing contractor for development and verification of an autonomous mobility system
Verification trial on real-time update/distribution technology for an advanced map database
Announced July 19, 2016
22
NTT
docomo
1. Results Highlights
Key Financial Data, Segment Results
2.
Telecommunications Business
Operational Performance, ARPU
Network, Cost Efficiency Improvement
3. Smart Life Business & Other Businesses
Operating Income, Principal Services
Promotion of “+d”
4. Summary
Share Repurchase
(Purchase on the Tokyo Stock
Exchange)
Period for share repurchase:
May 2 - June 30, 2016
Aggregate no. of shares repurchased:
Approx.
20.09 million shares
Aggregate price of shares repurchased:
Approx. ¥54.6 billion
Remaining share repurchase authorization:
Approx.
137.9 billion
(through December 31, 2016)
NTT
docomo
24
NTT fy 20161q summary
docomo
Recorded increase in both operating revenues and income, making a good start toward achievement of full-year guidance.
Strong operational performance in telecommunications business, with ARPU continuing to show improvement.
Revenue growth driven by increased “docomo Hikari” subscriptions and other factors. Enriched billing services catered to “low-usage” and “long-term” customers.
Steadily expanded PREMIUM 4G coverage. Launched Japan’s fastest 375Mbps service, with further speed enhancements to
over 500Mbps planned within FY2016.
Income generation from Smart life business and Other businesses
progressing steadily toward full-year guidance.
Successfully increased number of “+d” partners.
Launched “+d” programs that incorporate artificial intelligence (Al), such as autonomous driving.
Repurchased shares worth approx. ¥54.6 billion. Share repurchase on the stock exchange to be continued. 25
The new of today, the norm of tomorrow
NTT
docomo
Danger ahead! Smartphone-distracted walking
26
Appendices
27
Principal Services Included in Each Reportable Segment
Telecommunications business
Mobile communications
services
LTE(Xi) services FOMA services International services Sales of handset/equipment for each service,
etc.
Optical-fiber broadband service and other telecommunications services Optical-fiber broadband service
• Satellite communications services, etc.
Smart life business
Content services
• “dmarket” • “Anshin Net Security” “Sugotoku-Contents” • “Cloud Storage Options” etc. Finance/Payment services
Credit service Proxy bill collection “docomo Mobile Payment” etc.
Group companies
• OAK LAWN MARKETING, INC. ABC Cooking Studio Co.,Ltd. • docomo Healthcare, Inc. etc.
Other businesses
Enterprise solutions
Enterprise M2M solutions System development/sales/maintenance services etc.
Support services for customers peace of mind
“Mobile Device Protection Service” “Anshin Remote Support” etc.
28
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”-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 ending March 31, 2016. Conventional ARPU
calculation method is as below: 29
ARPU (conventional calculation) = (Voice revenues + Packet revenues +
Revenues accounted for in Smart ARPU )/No. of subscriptions after subtracting communication module and MVNO subscriptions, etc.
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:
(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 presentation are the trademarks or registered trademarks of their respective organizations.
30
