KDDI(US:KDDIY)2021-10-30 00:37Financial Data and Key Metrics Changes - Operating income for the first half was ¥573.1 billion, achieving 54.6% of the full-year forecast, with revenue increasing but operating income decreasing [7][27] - Multi-brand communications ARPU revenue declined by ¥30.4 billion, while mobile communications revenues increased by ¥11.7 billion due to Group MVNO and roaming revenues [8][9] Business Line Data and Key Metrics Changes - Life Design Domain operating income was ¥120 billion, up ¥10 billion year-on-year, driven by a ¥4.9 billion increase in the financial business [17] - Business Services segment operating income was ¥92.3 billion, with a steady progress rate of 50.1% towards the full-year forecast [18] Market Data and Key Metrics Changes - Cumulative 5G unit sales reached 4.7 million by the end of September, with a target of 8 million units by the end of March 2022 [11] - The number of au PAY members increased by 4.3 million year-on-year, and au PAY Card members increased by 1.2 million year-on-year to 7 million [21] Company Strategy and Development Direction - The company aims to promote 5G with a multi-brand strategy, enhancing customer experience by focusing on areas frequented by customers [28] - The company is focusing on strengthening service collaboration within the Life Design Domain and expanding the Business Services segment through IoT [28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the competitive environment and demographic challenges, emphasizing the need for creativity in customer engagement and service deployment [70] - The company expects to achieve its full-year targets despite lower telecom revenues, with growth anticipated in both Life Design Domain and Business Services segments [27][56] Other Important Information - The company is targeting carbon neutrality by 2030, aiming to cut CO2 emissions by 50% compared to FY 2019 [24] - The company plans to expand its DX personnel to 4,000 members by March 2024 to support growth in key segments [26] Q&A Session Summary Question: Improvement in group ID numbers in Q2 - Management noted a net decline of 20,000 in Q1 but expected positive net additions in Q2, with good prospects for growth in the third and fourth quarters [33][35] Question: Trends for povo and its initial user reactions - The number of povo subscriptions exceeded 1 million, with a growth rate of about 100,000 per month, and initial user reactions were positive [37][38] Question: Churn rate trends for au and UQ mobile - The churn rate in Q2 was 0.74, and management expressed the need for further reduction, noting that subscribers remained with au more than expected [46][50] Question: Impact of mobile service price reductions - The impact of price cuts was estimated at ¥30.4 billion, aligning with expectations, and management indicated that roaming revenues would help offset this decline [53][54] Question: Growth in Business Services segment - Management acknowledged that the growth in the Business Services segment was not as high as expected but anticipated better performance in the second half due to the absence of one-off factors [83][86] Question: Impact of energy costs on telecom business - Management indicated that the impact of rising energy costs on the telecom business would be minimal due to bilateral contracts and energy-saving technologies [95]