KDDI(US:KDDIY)2021-07-31 16:47Financial Data and Key Metrics Changes - KDDI's operating income increased by ¥8.5 billion year-on-year, despite a drop in multi-brand communications ARPU revenue by ¥11.7 billion [7][8] - The net decrease in revenue from telecommunication charges is expected to be around ¥60 billion to ¥70 billion for the full year [9][10] - Overall, operating revenue and profits increased by offsetting the effects of lower telecommunications revenues through growth in other fields [26][27] Business Line Data and Key Metrics Changes - The Life Design Domain, a core service area, saw transaction volumes of settlements on loans grow by 1.3 times year-on-year, reaching ¥2.5 trillion [16][17] - The Business Services segment's operating revenues increased by 18% year-on-year, driven by Corporate DX, Business DX, and business infrastructure services [20][21] - The financial business within the Life Design Domain is identified as a growth driver, with significant increases in mortgage loan disbursements [16][17] Market Data and Key Metrics Changes - The total cumulative number of 5G units sold exceeded 3.4 million, with a steady increase of 1 million units in just three months [15] - au PAY smartphone settlements membership exceeded 33 million, indicating strong customer engagement in the au Economic Zone [18] Company Strategy and Development Direction - KDDI's growth strategy focuses on enhancing customer engagement, expanding in growth fields, and promoting 5G services while cutting costs [10][11] - The company aims to strengthen its multi-brand strategy and integrate telecommunications with life design services [12][13] - KDDI is committed to achieving sustainable growth through structural reforms and cost reductions, including the discontinuation of 3G services [9][10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the competitive environment in telecommunications and emphasized the need to enhance customer engagement to achieve sustainable growth [10][11] - The company is optimistic about achieving its full-year forecast despite challenges, citing improvements in customer churn rates since April [34][56] Other Important Information - KDDI has revised its green plan to achieve zero CO2 emissions by 2050 and aims to reduce emissions by 50% by 2030 compared to fiscal year 2019 [24][25] - The company is actively pursuing initiatives to reduce power consumption at base stations and data centers [25] Q&A Session Summary Question: Mobile telecom service revenue and multi-brand strategy - The reduction of ¥11.7 billion in mobile telecom revenue is linked to a decline in group IDs, but overall mobile telecom revenue is performing well due to increased roaming service revenue [31][32][34] Question: Cost reduction progress and life design growth - Cost reduction efforts are on track, with marketing costs being a significant factor. The Life Design Domain has seen income increases across various segments, including financial services and electricity [36][38] Question: Churn rate and measures to improve it - The churn rate has improved from 0.8% to 0.6%, with UQ mobile's popularity contributing to this trend. Management plans to continue enhancing sales operations and customer engagement [42][46] Question: Breakdown of income factors in the business services segment - A one-time income from real estate transactions last year contributed significantly to the previous year's results, while ongoing growth in the data center business is expected [72][87] Question: Competitiveness of MVNO brands - Both J:COM and BIGLOBE are experiencing growth in revenue and IDs, with J:COM leveraging its cable TV subscriber base and BIGLOBE launching new price plans to remain competitive [75][79]