Q1 2025 KDDI Corp Earnings Call

First is consolidated results.

Consolidated revenue and income increased in Q1 of FY ending March 2025 under.

Unknown Speaker: The First is the Consolidated Result Consolidated revenue and income increased in Q1 of FY ending March 2025. On the left, operating revenue was $1,389.1 billion, with progress towards the full-year forecast of 24.1%; in the middle, operating income was $277 billion, with a progress rate of 25%. On the right, profit for the period attributable to owners of the parent was $176.9 billion, with a progress rate of 25.6%. Next are the factors for change in consolidated operating income, from the left. Group MVNO revenues and Rakuten Roaming revenue are down $6.2 billion year-on-year.

On the left operating revenue was one trillion $389 1 billion with progress towards full year forecast of 24, 1% in the Middle operating income was 277 billion with progress rate of 25% on the right profit for the period attributable to owners of the parent.

<unk> was $176 9 billion with progress rate of 25, 6%.

Speaker Change: Next are the factors for change in consolidated operating income from the left group N V N O revenues and Roxanne roaming revenue is down $6 2 billion year on year multi brand communications ARPA revenue up $22 9 billion <unk>.

Speaker Change: Natural and energy businesses up $4 6 billion Lawson's equity method investment income up $2 2 billion Dx and business services segment up $5 4 billion in communications ARPA revenues increased and focus areas such as Dx are driving growth, resulting in an increase of 10 point.

Speaker Change: $3 billion.

Speaker Change: Next key points of consolidated financial results for Q1 of fiscal year ending March 2025.

Unknown Speaker: Multi-brand communications is Poo revenue, up $22.9 billion; financial and energy businesses, up $4.6 billion; Lawson's equity method investment income, up $2.2 billion; DX and business services segment, up $5.4 billion. Communications revenue is increasing, and focus areas such as DX are driving growth, resulting in an increase of $10.3 billion. Next, key points of consolidated financial results for Q1 of the fiscal year ending March 2025. On the left, communications ARPU revenues exceeded Q1 of the fiscal year and did March 2023 levels, offsetting the impact of price cuts and are trending upwards. On the right, operating income of the business services segment increased by 11.2% year-on-year and is progressing as expected toward full-year double-digit growth.

Speaker Change: On the left communications <unk> revenues exceeded Q1 of fiscal year ended March 2023 level offsetting the impact of price cuts and are trending upwards on the right operating income of business services segment increased by 11, 2% year on year and is progressing as expected toward full year double digit.

Speaker Change: <unk>.

Speaker Change: I will now explain the various topics of the satellite growth strategy, starting with five G and generative AI in the center.

Unknown Speaker: I will now explain the various topics of the satellite growth strategy, starting with 5G and Generative AI in the center. Regarding connectivity quality, we focus on initiatives that connect customers every day and extraordinary. On the left side, we are deploying high-speed 5G sub-six areas in high density. We have deployed 39,000 sub-six base stations, which is the highest in the industry, and 5G speeds are about three times faster than 4G conversion. In addition, dominant frequency bands will be leveraged, as shown on the right. Furthermore, in addition to having two frequency allocations in close proximity, dual frequency masses Mimo will be introduced for the first time in Japan.

Speaker Change: Regarding connectivity quality, we focus on the initiatives that connect customers everyday and extraordinary.

Speaker Change: Left side, we are deploying high speed five G sub six areas in high density.

Speaker Change: We have deployed 39000 sub six base stations, which is the highest in the industry and five <unk> speeds are about three times faster than forgey conversion.

Speaker Change: In addition dominant frequency bands will be leveraged as shown on the right.

In addition to having two frequency allocations in close proximity dual frequency massive mimo will be introduced for the first time in Japan.

Speaker Change: This will contribute to efficient connectivity of improvement and area expansion.

Unknown Speaker: This will contribute to efficient connectivity improvement and area expansion. As sub-six enters full-scale U-says, we aim to make AU the customer's choice for connectivity quality. We are also promoting area development, connecting the extraordinary tailored to customer usage scenes. On the left, Mountain Hut Wi-Fi using Starlink has been expanded to 100 locations, centering on 100 famous mountains. On the right,

Speaker Change: As sub six enters full scale use phase, we aim to make au the customer's choice for connectivity quality.

Speaker Change: We are also promoting area development connecting the extraordinary tailored to do customer usage scenes on the left.

Speaker Change: <unk> Hot Wi Fi using star link has been expanded to 100 locations centering on 100 famous mountains.

Speaker Change: On the right.

Speaker Change: We provide comfortable communication environment at events, such as festivals and fireworks as well as on Mount Fuji and at sea by developing Wi Fi environments, and using mobile base stations.

Unknown Speaker: We provide a comfortable communication environment at events such as festivals and fireworks as well as on Mount Fuji and at sea by developing Wi-Fi environments and using mobile-based stations. Next is our Generative AI initiative. Thank you very much.

Speaker Change: Next is our generative AI initiatives.

Speaker Change: We will accelerate corporate use of generative AI to drive business transformation in three areas large scale computing infrastructure development L. L M development and solution provision leveraging partnering as a strength on the left for the development of large scale computing infrastructure, we planned for.

Unknown Speaker: We will accelerate corporate use of generative AI to drive business transformation in three areas, large-scale computing infrastructure development, LLM development, and solution provision, leveraging partnering as a strength. On the left, for the development of large-scale computing infrastructure, we plan for a mid- to long-term CAPEX of about 100 billion yen, utilizing grants from METI, the Ministry of Economy, Trade, and Industry. We are also discussing the construction of an AI data center on Sharp's former Sakai plants. In The Middle, for LLM development, we will work with Eliza and NICT on the development of Japanese LLM using open models and joint research on LLM enhancements.

Speaker Change: Mid to long term capex of about 100 billion utilizing grants from Mettie Ministry of economy trade and industry. We are also discussing the construction of AI data center on Sharps, former Sakai plant site.

Unknown Speaker: On the right, in Solution Provision, we will collaborate with Altheus Link on next-generation contact centers and with NRI, Nomura Research Institute, to promote the use of highly secure AI. Next is our cooperation with ELIZA. Left Side Right Side, our partnership with ELIZA allows us to use OpenModel and save computational resources and time required for LLM development. Right Side Right Side, Eliza's strength is the rapid development of high quality Japanese LLMs. In June this year, Eliza achieved the highest at-your-see Japanese LLMs, equivalent to global models in about two months, based on Neta's Lama 3. Together, we will streamline LLM development resources and aim for speedy value delivery. We are also accelerating the social implementation of generative AI.

Speaker Change: In the middle.

Speaker Change: For L. L. M development, we will work with Elisa and Nic's key on the development of Japanese LLM using open model and joint research on L. L M enhancement.

On the right in solution provision.

Speaker Change: We will collaborate with Altium link on next generation contact centers and with NRI Nomura Research Institute to promote the use of highly secure AI.

Speaker Change: Next is our cooperation with Eliza left side, our partnership with Elisa allows us to you can use open model.

Speaker Change: And saved computational resources and time required for L. L M development.

Speaker Change: Right side.

Speaker Change: <unk> strength is rapid development of high quality Japanese elements.

Speaker Change: In June this year.

Speaker Change: <unk> achieved the highest accuracy Japanese L. L ends equivalent to global models in about two months based on metals Lamour III.

Speaker Change: Together, we will streamline L O M development resources and aim for speedy value delivery.

Speaker Change: We are also accelerating the social implementation of generative AI on the left we offer next generation contact center.

Eliza: Eliza has a track record of introducing multiple AI products, including contact centers of large corporations. In addition.

Unknown Speaker: We offer next-generation contact centers. Eliza has a track record of introducing multiple AI products, including contact centers of large corporations. In addition, AU Contact Center uses AI in customer service and has accumulated much experience and know-how by leveraging these achievements and strengthening group cooperation with Altius Link.

Eliza: Contact center use AI in the customer service and has accumulated much experience and knowhow.

Eliza: By leveraging these achievements and strengthening group cooperation with Altice link.

Eliza: We will further upgrade our contact center.

Unknown Speaker: We will further upgrade our contact center. In July, we started a three-way collaboration with NRI and ELISA, as shown on the right. We will provide AI solutions with high security and accelerate corporate use of Gen AI. Next is the personal services segment. This is a personal service segment. The first is the momentum for the personal services segment on the left; smartphone subscriptions, which is the foundation of the growth, are increasing. The smoothness of friction, which is the foundation for output growth, is increased. And on the right, while on the right, it turns great for multi-brand i.e.

Eliza: In July we started a three way collaboration with NRI and Elisa as shown on the right.

Eliza: We will provide AI solutions with high security and accelerate corporate use of Gen AI.

Eliza: Next is personal services segment.

Eliza: First is the momentum for the personal services segment on the left smartphone subscriptions, which is the foundation of our growth is increased and.

Eliza: The smooth and subscriptions, which is the foundation for our papers is increased.

Speaker Change: And on the right by all in the right churn rate for multi brown I E is rising those for you.

Unknown Speaker: is rising; those for AU, our Next is the status by brand towards communications output growth. On the left, AU, UQ Mobile, of the RAPU is growing. Many subscribers choose a limited data plan of AU or medium to high-capacity. On the right... This is a conversion from UQ Mobile to AU. This was about 2.2 times the number of those of a year ago.

Speaker Change: Our name brand remains small.

Speaker Change: Next is the status by brand towards communications RFP closed on the left and Hugh you to mobile.

Speaker Change: Each of the RFP is growing many subscribers chose unlimited data plan or a U or medium to high capacity plants of Youtube mobile.

Speaker Change: On the right.

Speaker Change: This is the conversion from U K mobile to a year.

Speaker Change: This was about two two times of those of a year ago. Many.

Speaker Change: <unk> Ah <unk>.

Speaker Change: Converging our friend UK Mobile hotel <unk> and the percentage of U K mobile users have migrated to a new contract is also increasing.

Unknown Speaker: Many customers are converging from UQ Mobile to AU, and the percentage of UQ Mobile users who migrated to AU contracts is also increasing. This is to expand value-added services to contribute to the continued growth of communications in the personal services segment. On the left, expanding value-added services through bundling with the telecom services. On the right, among those, the AU Money Activity Plan, which is a combination of communications and financial services. Our winning popularity and number of users exceeded 1 million in July.

Speaker Change: This is to expand value added services to contribute to the continued growth of the communications of the personal services segment on the left expanding value added services through bundling with a telecom services on the right.

Speaker Change: Among those whose money activity plan, which is a combination of our communications and financial services.

Speaker Change: Meaning copyability.

Speaker Change: Number of users exceeded 1 million in July the synergy contribution to the girth of the communication is one of the example, and the churn rate is.

Unknown Speaker: The synergy contribution to the growth of communication is one of the examples, and the churn rate is improved by about 20%, and Komeigekasians Aripu is approximately 10% higher. So this is the synergy between communication and financial services. Communication plus value added synergy improves the growth of the value added service. On the left, the AU Money Activity Plan increases the use of financial services. A new Jibun Bank account holder rate of Money Activity Plan subscribers is... Approximately 4.8 times that of the total AU subscriber rate. On the right, Sinerji is positive.

Speaker Change: Has improved by about 20% and communications RP is at approximately 10% up. So these are the synergy but win.

Speaker Change: The communications and financial services.

Speaker Change: Communications, plus a valley at synergy in peer to the growth of other value added services.

Speaker Change: The left and your money activity plan increases the use of financial services.

Speaker Change: And you chip in bank account holder rate of money activity plan subscribers is.

Approximately four eight times of the total new subscribers.

Speaker Change: On the right synergy is positive.

Speaker Change: Bank businesses, scrubbing, and a well financed muhtar boost deposit as well as fund, which are growing over 50% year over ear for each.

Speaker Change: In particular housing bond is performing quite well the total loan dispersed exceeded $4 five trillion.

Unknown Speaker: [inaudible] Thank you very much. In particular, the housing loan is performing quite well. The total loans disbursed exceeded 4.53 yen.

Speaker Change: Next let me present on the business services segment.

Unknown Speaker: Next, let me present on the business services segment. By promoting communications plus value-added strategies, this growth area grows in a steadfast manner. On the left is the operating revenue, which was $333.4 billion, which was 16.3% year-over-year.

Speaker Change: By promoting communications plus value added strategy gross area goods in a steadfast manner.

Speaker Change: On the left is the operating revenue, which was $333 4 billion, which was 16.3% year over ear.

Speaker Change: In particular gross area drive double digit growth at 39, 2% year over year.

Unknown Speaker: In particular, the growth area drives double-digit growth at 39.2% year-over-year. Of the strong areas, IOT-related services, data center, and digital GPPO marked a double digit on the right. Aiyori Connections, through 29.8% at Keiga.

Speaker Change: A strong area Iot related services data center and digital G. P. P O marked a double digit growth on.

Speaker Change: On the right.

Speaker Change: <unk> connections grew 29, 8% CAGR.

Speaker Change: Expanding the customer contact points for data collection and utilization.

Unknown Speaker: Expanding the customer contact points for data collection and utilization In order to provide the customer contact information, we will provide the customer contact points for data collection and utilization. Next, is about Wakum Kros [inaudible] Our company is providing our business platform that fits the AI era, which we are accelerating customers' DX through industry by industry approaches. On the right, by promoting DX solutions for the industry's common challenges, customers' burden of digital investment is reduced, and those customers can enhance investment for their own competitiveness, and KDDI provides connection points and data or AI to assist customers to improve competitiveness and enhance their added value. We are poised to continue to upgrade our platform so that customers find it easier to use, and KDDI can innovate with customers. These are the cases for Logistics DX by industry.

Speaker Change: Next is about walk on cross.

Speaker Change: Our company.

Speaker Change: Is providing our business stop for them, which fits to the AI era, which are we are accelerating customer dx through industry by industry approach on a run rate by promoting Dx solutions for industry. It's common challenges customer that's burden of digital investment is reduced and those customers can.

Speaker Change: And hence investment for their own competitiveness.

Speaker Change: And Katy I provides connection points and data or AI to assist customers to improve competitiveness and enhance their added value.

Speaker Change: We are poised to continue to upgrade our platform so that customers find it easier to use and Katie I can innovate with customers.

Speaker Change: These are the cases for logistics Dx by industries.

Speaker Change: Working with partners to create solutions for industry challenges, we are providing solutions on the left we've started discussion an open joined thankfully with Itochu Corporation using digital technology.

Unknown Speaker: Working with partners to create solutions for industry challenges, we are providing solutions. On the left, we've started discussions and often joined together daily with 802 Corporation using digital technology. On the right, [inaudible] As for Warehouse Automation, a company named NexWare was established with Tsubaki, utilizing the strength of each.

Speaker Change: On the right.

Speaker Change: As for warehouse automation a company named next were.

Speaker Change: Was established with a key.

Speaker Change: Utilizing the strength of each.

Speaker Change: Next aware will provide one stop warehouse dx surfaces for warehouse operation in manpower optimization.

Unknown Speaker: LexaWare will provide one-stop warehouse DX services for warehouse operation and manpower optimization. In Digital BPO, we will serve customer needs by leveraging data and AI and improve customer experiences across Altia's length. On the left..., which is the value co-creation platform; so this is called LTS-1. This will be permitted to help support customers in their data-driven business transformation. And on the right... our group company Eliza, as well as Flywheel, are fully cooperating with us.

Speaker Change: In digital V. P O, we will serve customer needs by leveraging data and AI and improve customer experiences around <unk> link.

Speaker Change: On the left which is the value cocreation with platform services called Altice one.

Speaker Change: This will be promoted to help support customer for their data driven business transformation.

Speaker Change: And on the right.

Speaker Change: Other group company, Elisa as well as flywheel.

Speaker Change: Our fully cooperating with us and we'd like to utilize the strengths of our holding the support resources about Microsoft Copilot with just the in the top in the industry and we would like to further sophisticate that it'll be Peel services going forward.

Unknown Speaker: And we'd like to utilize the strengths of holding the support resources of a Microsoft co-pilot, which is the top in the industry. And we would like to further sophisticate digital BPO services going forward. Involute [inaudible] We will showcase our vision of communication in AI next month. On the 3rd and 4th of September, we will hold the KDDI Summit 2024. The wakong crafts that we presented earlier and sports entertainment and other latest examples are going to be presented.

Speaker Change: In order to.

Speaker Change: Showcase our vision of a communication and AI next month on the third and fourth of September we will hold the Katy I summit 2024.

Unknown Speaker: On the 1st day, President Nagasaki of OpenAI Japan is invited to talk about the potential of telecommunication in AI. On the right, KDDI entered into a Team Japan Gold Partnership Agreement with the Japan Olympic Committee and supports Team Japan, which is Japan's National Athletic Team Foo Paris 2024 Olympics, with the power to connect.

Speaker Change: The walk on cross that we presented earlier and sports Entertainment and other latest examples are going to be presented on the first day president of sake of opening of Japan is invited to talk about the potential of telecommunication and AI on the right Katy I entered into a team.

Speaker Change: Karen Gould partnership agreement with Japan Olympic Committee, and supporting team, Japan, which is the Japan's National Athletic team for Paris, 'twenty 'twenty Four Olympics.

Speaker Change: With the power to connect we also provide international media transmission services to deliver exciting moment to Japan, we are seeing a create a momentum.

Unknown Speaker: We also provide international media transmission services to deliver exciting moments to Japan. We are seeing great, and momentum, so we'd like to fully support this event. We will further advance power to connect via the latest technology, telecom, and AI, and we aspire to become a company continuously producing excitement. Next is regarding Steelers of Lawson Shirt Acquisition Shirt Acquisition, Lofan Shirts are delisted in July, and smooth progress focusing on a position of Shirts is expected toward the end of September.

Speaker Change: So we'd like to fully support this event, we will further advance power to connect via latest technology Telecom and AI and we all aspire to become a company continuously producing excitement.

Speaker Change: Next is regarding the status of loosens Schurz acquisition.

Most insurers did this debt in July and smooth progress food clothing on acquisition of shirts are expected towards the end of September.

Speaker Change: Look where half a M. At the completion of the squeeze out actions and strategies are being discussed among loosen Mitsubishi Corporation and Katie D. I.

Unknown Speaker: Lower half Amid the completion of Squeeze Out, actions and strategies are being discussed among Lawson, Mitsubishi Corporation, and KDDI. We would like to make further efforts in this regard. This is the summary for today's discussion. Revenue and Income increased for the first quarter of the fiscal year ending March 25, and this is completely in line with the full year forecast.

Speaker Change: We expect to make further efforts in this regard.

Speaker Change: This is the summary for todays discussion.

Speaker Change: Revenue and income increased for the first quarter for fiscal year ending in March 25, and this is completely in line with the full year for a guest and communications, our third revenue increased and our focus areas such as the X are driving the growth.

Speaker Change: That was for satellite gross strategy.

Speaker Change: We are number one in the number of sub six base stations for high speed five G, making a you the customers choice for connectivity quality.

Speaker Change: Through partnering our strengths, we promote the use of generative AI in companies and business transformation.

Speaker Change: In the personal segment steady trust and positive momentum in each brand's upper.

Speaker Change: And aim for the sustainable ARPA revenue growths through communications plus value added synergies.

Speaker Change: For it that there's a segment gross area drives the growth of our business services segment, and we are accelerating the initiatives a walk on cross which is the business problem for them before AI era. Thank you very much for your kind attention we will have Q&A.

Speaker Change: Thank you for waiting we will now begin the financial results briefing and Q&A of K D. D. I Corporation for the first quarter of fiscal year ending March 2025. Thank.

Unknown Speaker: And communications per revenue increased, and focus areas such as DX are driving the growth. As for satellite growth strategy... We are number one in the number of sub-six space stations for high-speed 5G, making AU the customer's choice for connectivity quality. Through partnering as strengths, we promote the use of generative AI in companies and business transformation.

Speaker Change: Thank you very much for taking time out of your busy schedule to join us today.

Unknown Speaker: In the personal segment, study growth and positive momentum in each branch of birth, and aim for sustainable a profit occurs through communications plus valley-added synergies for the business segment. Growth area drives the growth of the business segment, and we are accelerating the initiatives of Wakong Kras, which is the business platform for AIRF. Thank you very much for your kind attention. We will have GMJ.

miyagawa: I am miyagawa of Investor Relations Department, and I will serve as the moderator today.

Miyakawa: Thank you for waiting. We will now begin the financial results briefing and Q&A on KDDI cooperation for the first quarter of the fiscal year ending March 2025. Thank you very much for taking time out of your busy schedule to join us today. I am Miyakawa from the Investor Relations Department, and I will serve as the moderator today. This briefing will be broadcast live on the Internet with simultaneous Japanese to English interpretation. The presentation will be available on demand on our IR website at a later date. Thank you for your understanding in advance.

miyagawa: This briefing will be broadcast live on the Internet with simultaneous Japanese to English interpretation. The presentation will be available on demand on our IR website at a later date. Thank you for your understanding in advance.

Speaker Change: Let me introduce the participants today.

Speaker Change: <unk> Executive Vice President and executive director of business sector.

Miyakawa: Let me introduce the participants today: Executive Vice President and Executive Director of Business Sector. Matsuda, Managing Executive Officer, CDO, and Executive Director of Advancing Business Technology Sector. Saishoji, Managing Executive Officer, CFO, and Executive Director of Corporate Sector. Takezawa, Managing Executive Officer and Executive Director of Personal Business Sector. Aketa, Executive Officer and Executive Director of Corporate Management Division. Three financial results-related materials are posted on our IR website. Please refer to the disclaimer in the materials regarding statements made in those documents, performance targets, and projected subscriber numbers, etc., explained in the Q&A session today. Managing Executive Officer Saishoji will first explain the financial results summary, followed by Q&A. Miss Saishoji, please.

Speaker Change: Matilda managing executive Officer, CDO, and executive director of advancing business technology sector.

Facial G: Facial G managing executive officer, CFO, and executive director of corporate sector.

That is our managing executive officer, and executive director of personal business sector.

Facial G: I get the executive Officer, and executive director of Corporate Management Division.

Speaker Change: Three financial results related materials are posted on our IR website. Please refer to the disclaimer in the materials regarding statements made in those documents performance targets and projected subscriber numbers et cetera explained in the Q&A session today.

Speaker Change: Managing Executive Officer say Shoji will first explain the financial results summary, followed by Q&A.

Speaker Change: Thanks, Joe G suite.

Speaker Change: Yeah.

Sae Shoji: Thank you for taking time out of your busy schedule to attend the results briefing today.

Miss Saishoji: Thank you for taking time out of your busy schedule to attend the results briefing today. Before the Q&A session, I will explain the key points of the Q1 financial results for the year ending March 2025. Consolidated Revenue and Income Increased in Q1 of FY ending March 2025 On the left, operating revenue was 1,389,000,000,000, with progress towards the full year forecast of 24.1%. In the middle, operating income was 277,000,000,000, with a progress rate of 25%.

Speaker Change: Before the Q&A session I will explain the key points of the Q1 financial results for the year ending March 2025.

Miss Saishoji: On the right, profit for the period attributable to owners of the parent was 176,900,000,000, with a progress rate of 25.6%. Next are the factors for change in consolidated operating income, from the left. Group MBNO revenues, and NROX-10 roaming revenue are down $6.2 billion year on year.

Speaker Change: Consolidated revenue and income increased in Q1 of FY ending March 2025 on the left.

Speaker Change: Operating revenue was one trillion $389 1 billion with progress towards full year forecast of 24, 1% in the Middle operating income was 277 billion with progress rate of 25% on the right profit for the period.

Speaker Change: <unk> attributable to owners of the parent was $176 9 billion with progress rate of 25, 6%.

Speaker Change: Okay.

Speaker Change: Next are the factors for change in consolidated operating income.

Speaker Change: From the left.

Speaker Change: Group N V N O revenues and rocks and roaming revenue is down 6.2 billion year on year.

Speaker Change: Multi brand communications, our blue revenue up $2 9 billion Phi.

Speaker Change: Financial and energy businesses up $4 6 billion yen Lawson's equity method investment income up $2 2 billion yen Dx and business services segment up $5 4 billion yen.

Speaker Change: Communications, our Blu revenues increased and focus areas such as Dx are driving growth, resulting in an increase of 10.3 billion yen.

Next key points of consolidated financial results for Q1 of fiscal year, ending March 2025 on the left communications ARPA revenues exceeded Q1 of fiscal year ended March 2023 level offsetting the impact of price cuts and are trending upwards on the right operator.

Miss Saishoji: Multi-brand communications Poo revenue, up $2.9 billion, financial and energy businesses, up $4.6 billion, Lawson's equity-missed investment income, up $2.2 billion, DX, and business services segment, up $5.4 billion year. Communication revenues have poor increased, and focus areas such as DX are driving growth resulting in an increase of 10.3 billion yen. Next, key points of consolidated financial results for Q1 of fiscal year ending March 2025. On the left, communications ARPU revenues exceeded Q1 of fiscal year ending March 2023 levels, offsetting the impact of price cuts, and are trending upwards.

Speaker Change: Income a business services segment increased by 11, 2% year on year and is progressing as expected toward full year double digit growth.

Miss Saishoji: On the right, operating income of the business services segment increased by 11.2% year-on-year and is progressing as expected toward full-year double-digit growth, indicating momentum for mobile. On the left... Smartphone subscriptions are increasing, which is the foundation of our food growth. On the right, the churn rate for multi-brand ID is rising, while the churn rate for AU, our main brand, remains small. Next is the status of Brandt towards communications arbitrage. On the left are a pair of both AU and UQ mobiles. He's growing.

Next is regarding momentum pool mobile.

Speaker Change: On the left.

Speaker Change: Smartphone subscriptions is increasing which is the foundation of ARPA growth.

Speaker Change: On the right the churn rate for multi brand I D is right zinc, while tune rage food a use our main brand remains small.

Speaker Change: Next is the status by Brown towards communications arbitrage.

Speaker Change: On the left RP Booth, a U and Youtube mobile.

Speaker Change: It's growing.

Speaker Change: Many subscribers choose unlimited data plan are being used or a medium to large capacity plants of Youtube mobile.

Miss Saishoji: Many subscribers choose the Unlimited Data Plan of AU or the Medium to Large Capacity Plans of UQmobile. On the right, conversion from UQ Mobile to AU was approximately 2.2 times that of a year ago, year-on-year. The percentage of UQ mobile users who migrated to AU contracts is also increasing. Next, regarding the Business Services segment. By promoting Communication Plus Value Addict Strategy, our Value Addict Growth Area, Growth Stivity. On the left, operating revenue was 333.4 billion, up 16.3% year-on-year.

Speaker Change: On the right.

Speaker Change: Conversion from Youku mobile to US was approximately two two times of those of a year ago.

Speaker Change: Year on year.

Speaker Change: Percentage of Youku mobile users, who migrated to a new contract is also increasing.

Speaker Change: Next regarding the business services segment by promoting communication plus value added strategy of a value added growth area growth steadily.

Speaker Change: On the left operating revenue was 333.4, beating our yet up 16, 3% year on year.

Speaker Change: Among the votes Ghost area was up.

Speaker Change: 39 point to 2%.

Miss Saishoji: Among those, gross area was up 39.2%, making double digit growth. Other strengths, such as IoT-related services, data center, and digital BPO, are all making double-digit growth. On the right, the CAZR of IoT Connections was 29.8%, which is growing, and we are expanding customer contact points for data collection and utilization. Last is the summary of the 1st quarter result. This is the summary of the 1st quarter result. Consonately, results and key points have already been explained.

Speaker Change: Aching, a double digit growth.

Speaker Change: I'm a strength such as Iot related services data center and digital P. P O R O, making double digit growth.

Speaker Change: On the right.

Speaker Change: Kitschy a Z R of Iot connections was 29, 8%, which is growing and we are expanding customer contract contact points for data collection and utilization.

Speaker Change: Last is the summary of the first quarter results.

Speaker Change: Consolidated results and key points, we're already explained.

Speaker Change: As for the satellite growth strategy.

Speaker Change: We are number one in the number of sub six base stations for high speed five G, making a you the customer choice for connectivity quality.

Miss Saishoji: As for the satellite growth strategy, we are number one in the number of sub-6 base stations for high-speed 5G, making AU the customer's choice for connectivity quality. Through partnering as a strength, we promote the use of generative AI in companies and business transformation. As for the personal services segment, since steady growth and positive momentum in each brand's RIP, we are aiming for sustainable RIP revenue growth through communications plus value-added synergies. Growth areas drive the overall growth of the business services segment. We will accelerate the initiative of WACON CROSS business platform for the AI era.

Speaker Change: Sure Partners, Inc.

Speaker Change: Strengths, we promote the use of generative AI, Inc companies and business transformation.

Speaker Change: As for personal services segment since steady growth and positive momentum in each brand's RFP or a pud, we are aiming for sustainable RP revenue growth through communications both value added synergies.

Speaker Change: Gross area to drive the overall growth of the business services segment, we will accelerate initiative of walk on cross business brought forth for AI era.

Speaker Change: Koons.

Speaker Change: Concludes my presentation, and we will take questions.

Miss Saishoji: Takahashi, that concludes my presentation, and we will take questions. Thank you very much, Ms. Saishoji. We will now take your questions. If you have questions, please tap the Zoom raise hand icon. When you are nominated, please tap unmute and ask your question after the presenter mentions your company name and your name. In order to receive questions from as many people as possible, please, I would like to limit your questions to two per person. If you have two questions...

Speaker Change: Yeah.

Speaker Change: Thank you very much Miss size Giorgi.

Speaker Change: We will now take your questions.

Speaker Change: If you have questions. Please tap the zoom raise and icon.

Speaker Change: When you are nominated please tap a mute and ask your question. After the presenter mentioned your company name and your name in order to receive questions from as many people as possible. Please I would like to limit your questions to two per person.

Speaker Change: If you have two questions.

Speaker Change: Please ask your second question. After the first question is answered so we will take your questions until the scheduled time.

Speaker Change: First question is from Mr. Tokunaga from Daiwa Securities. Please on mute yourself.

Miyakawa: Please ask your second question after the first question is answered. So, we will take your questions until the scheduled time. The first question is from Mr. Tokunaga from Daiwa Securities. Please unmute yourself. This is Mr. Tokunaga from Daiwa Securities. Yes, we can hear you.

Tokunaga: This is tokunaga from Daiwa Securities. Yes, we can hear you I have two questions first is regarding cash flow.

Mr. Tokunaga: I have two questions. The first is regarding cash flow. In your Q4 briefing, you talked about the buyback, $300 billion will be completed by October, and there is some headroom, you said. After that, in the Shireholder briefing, you said many other things.

Speaker Change: In your Q4 briefing you talked about the buyback 300 billion will be completed by October and there are some headroom you said.

Speaker Change: After that in the shareholder a briefing you said many other things as well regarding this point as the first quarter do you have any updates, especially the headroom.

Unknown Speaker: So regarding this point, as regards the first quarter, do you have any updates, especially regarding the headroom? Thank you very much. Thank you for the question. Regarding cash flow... Regarding the share buyback policy, your question was whether there's any change in our policy. First, regarding cash flow allocation... We just ended Q1, so... In our medium-term two-year cash flow plan, we have no major changes, and our policy remains unchanged. Now share buybacks. Up to the ones that we have executed so far.

Thank you very much.

Speaker Change: Thank you for the question.

Speaker Change: So regarding cash flow.

Speaker Change: Regarding the share buyback policy.

Speaker Change: Your question was whether there's any change in our policy first regarding cash flow allocation.

Unknown Speaker: We've also said that we have the possibility of conducting more buybacks. It's not that there weren't any changes. So... Nothing has been decided at this point, so I hope this answers your question. Yes, so, uh, the fact that you still have some headroom remains unchanged. Kewon is now trending favorably in line with the plan. So, regarding the headroom, or further possibility of further buybacks... On that point, we have no changes. We have no changes.

Speaker Change: We just ended Q1.

Unknown Speaker: Thank you, I understand. And my second question is on Arpuu. By Brand R. Poo Arpuu is rising, which is good news.

Speaker Change: No.

Speaker Change: In our medium term two year cash flow plan, we have no major changes in our policy remains unchanged.

No share buyback.

Speaker Change: Oh up to the ones that we have executed so far.

Speaker Change: We've also said that we have possibility of conducting more buybacks.

Speaker Change: It's not that there weren't any changes.

Speaker Change: So.

Speaker Change: But nothing has been decided at this point so I hope this answers your question.

Speaker Change: Yes so.

Speaker Change:

Speaker Change: The fact that you still have some headroom remains unchanged.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: Q1 is now trending favorably in line with the plan.

Speaker Change: So regarding the headroom or further possibility of further buyback.

Speaker Change: On that point, while we have no changes.

Speaker Change: Thank you I understand.

Speaker Change: And then my second question is on <unk>.

Speaker Change: By brand our poo is rising which is good news.

Speaker Change: But it is flat year on year so.

Speaker Change: Is this in line with the company plan.

Unknown Speaker: But it is flat ear on ear, so... Is this in line with the company plan? And this year, the excess charge impact will probably emerge. And so, can you increase ARPU on that basis? Thank you very much. Personal R. Pooh. So, Mr. Takizawa will answer that question. Thank you for the question. Let me answer that question.

Speaker Change: And this year the access charge impact will probably emerge and so can you increase ARPA on based on that basis. So could you elaborate on RPM with Q1.

Speaker Change: You very much.

Speaker Change: Personal our pool.

Speaker Change: So Mr touches all I'll answer that question.

Speaker Change: Thank you for the question, let me answer that question.

As you rightly said.

Speaker Change: Q1 <unk>.

Is <unk>.

Speaker Change: <unk> 3930, and so on a year on year basis. It is basically flat.

Unknown Speaker: As you rightly said... Q1 Arpu is 3930 yen, so on a year-on-year basis, it is basically flat. On the other hand... As he also rightly mentioned, AU and UQ are 3 and 8 percent, respectively, so they're up.

On the other hand.

Speaker Change: As you also rightly mentioned, a U and you queue.

Speaker Change: Our three and 8%.

Speaker Change: Respectively, So theyre up.

Speaker Change: Now what is related to this is the brand mix.

Unknown Speaker: Now, what is related to this is the brand mix. Compared to last year, the UQ to AU conversion is more than doubled on a year-on-year level, year-on-year basis. And therefore, regarding this unit price... It is basically in line with the initial plan. Thank you. I hope this answers your question.

Speaker Change: Compared to last year.

Speaker Change: <unk> Q2, a U conversion.

Is more than double on a year on year level year on year basis.

Speaker Change: And therefore regarding this unit price.

Speaker Change: It is basically in line with your initial plan.

Speaker Change: Thank you I hope this answers your question.

Speaker Change: Yes, if I could dig this deeper there's a use 3% and <unk> 8%.

Unknown Speaker: If I could dig this deeper, this AU 3% and UQ 8%, this will continue for this year or the medium-term plan period. Regarding our poo... Arbu, Arbu Total Revenue, we need to also focus on the unit price. So, this level... A.U. Subscription. A.U. A.U.

Speaker Change: This will be this will continue for this year or the medium term plan period.

Speaker Change: Regarding <unk>.

Yeah.

Speaker Change: Our our boot like ARPA total revenue, we need to also focus on the unit price.

Speaker Change: So this level.

Speaker Change: A you subscription are the yield.

Speaker Change: We need to take more measures. So that was a you yield will remain unchanged and also grow further.

Unknown Speaker: We need to take more measures so that you will remain unchanged and also grow further. So, this will be on a by-brand basis, and the yield will be the improvement factor going forward? Well, yes, yield. It accounts for a bigger portion than we think. So...

Speaker Change: So this will be a by brand basis, and the yield will be the improvement factor going forward well, yes equaled.

Speaker Change: It accounts for a bigger portion than we think so.

Speaker Change: This will be a urgent a matter that we need to address.

Unknown Speaker: This will be an urgent matter that we need to address. But as I mentioned earlier... a U proportion of total, The decline is becoming milder. And so we want to take more measures on this point. Thank you very much. Mr. Tokunaga, thank you very much.

Speaker Change: But as I mentioned earlier.

A proportion of total.

Speaker Change: Yeah.

Speaker Change: The decline is becoming milder.

Speaker Change: And so we wanted to take more measures at this point.

Speaker Change: Thank you very much.

Speaker Change: Mr. Tokunaga, Thank you very much.

Speaker Change: We'll move on to the next question S. N B C Nikko Securities a kicker Tucson, please on mute and start your question.

Unknown Speaker: We will move on to the next question. SNBC Niko, Securities, Kikuchi-san, please unmute and start your question. This is Kikuchi.

Kikuchi: This is kikuchi two questions. Please first in regard to the personal services segment the contribution from <unk>, which will be the equity method investment earnings that contribution has to be made but what about the business side are there any initiatives or actions that.

Satoru Kikuchi: Two questions, please. First, in regard to the personal services segment, the contribution from Lo-Sun, which will be the equity method investment earnings, that contribution is being made. But what about the business side? Are there any initiatives or actions that may contribute to the contribution or your business performance? Are there any prospective actions that may positively affect your business performance? Thank you very much for your question.

Speaker Change: May contribute to the contribution or your business performance are there any prospective actions that may positively affect your business performance.

Speaker Change: Thank you very much for your question, so Wilson's business contribution.

Wilson: Are there any and are there any actions that we're taking for that point, we will invite to talk with all of our fans to answer. Your question. Thank you for the question well Lawson.

Unknown Speaker: Are there any, and are there any actions that we are taking? At full that point, we will invite Takesawa-san to answer your question. Thank you for the question. We'll listen. While cruising is expected. This is the first time I've ever seen this kind of thing in my life.

Speaker Change: Well cruising is expected.

Till the end of September.

Speaker Change: Yeah.

Unknown Speaker: Till the end of September. Thank you very much. Therefore, it is too early to communicate the details about what we are going to do that we, in terms of higher or enhanced relations with a low sun, back in July from KDDI. There is a group of ten people who were seconded to Lawson's headquarters.

Speaker Change: Therefore.

Speaker Change: It is too early to communicate the details about what we're going to do.

Katie I: But are we in terms of a higher or installations with our low sun back in July from Katie I.

Speaker Change: There is a group of 10 people.

Speaker Change: Who were second it too low since headquarters.

Speaker Change: And are there is more than 10 working groups, where it started and they are trying to to discover the potential area for making positive contributions.

Unknown Speaker: And more than 10 working groups have been started, and they are trying to discover the potential areas for making positive contributions. Hopefully, soon, we will be able to communicate more detail. Thank you very much.

Speaker Change: So.

Speaker Change: Hopefully soon we will be able to communicate more details. Thank you very much.

Speaker Change: Thank you.

Speaker Change: Second question is our business services segment.

Speaker Change: No.

Unknown Speaker: Thank you. The second question is the business services segment. So an increase in profits in DX, for example, the acquisition of the data centers and also integrating the BPO companies will probably affect things. And during the first quarter...

Speaker Change: So increase in profit Cindy X for example, our acquisition of a data center and also integrating the P. P O companies will probably affecting and during the first quarter.

Speaker Change: In the business services segment, where there any specific quantified read thoughts, which proofs of the poverty contribution from such actions and initiatives.

Unknown Speaker: In the business services segment, were there any specific quantified results that prove the quality of contribution from such actions and initiatives? Thank you for the question. During the first quarter, were there any actions or movements that may result in a positive impact going forward? After that, we will invite Kuwahara-san.

Speaker Change: Thank you for the question or business segments T X.

Speaker Change: During the first quarter are there any actions or movements that may result in positive impact going forward. After that we will invite quite often.

Unknown Speaker: Thank you for the question. First of all, Operating Revenue and Operating Income growth during the first quarter is coming mostly from the grossed area. The grossed area has grown tremendously at nearly 40% of the growth of the operating revenue that we observed, and the operating income made a similar growth.

Speaker Change: Thank you for the question.

Speaker Change: First of all.

Speaker Change: For Oh break them Ribbing me and operating income growth during the first quarter is coming mostly from the gross area the tourist area have.

Unknown Speaker: So the composition of that is the data center, IOT, and the BPO equally. You compare that to the previous fiscal period. Now, since September of the last fiscal year, Outlast Link started, and the former Relia communications were fully integrated, and that had a major impact. In regard to the data center, Canadian data centers were acquired through M&A. And the income contribution started in September. That concludes my explanation. Well, thank you.

Speaker Change: Grown tremendously and nearly 40% of gross Oh I'll break revenue that we observed in the operating income I made a similar gross so composition of that is a data center I O T.

Speaker Change: And are they a BP or equally and compared to the previous fiscal period.

Speaker Change #100: Now since September of last fiscal year, Ultra Slink started and a former rely our communications were fully integrated and that had a major major impact in regards to the data Center Canadian data centers were acquired through Monday.

Speaker Change #101: And of the income contribution starting in September that concludes my explanation well. Thank you. So it is a simple additions of some businesses during the first quarter, but in regards to the contents of the business were there any.

Unknown Speaker: So it is a simple addition of some businesses during the first quarter. But in regards to the contents of the businesses, were there any... Thank you very much for clarifying your question in regard to the substance of the businesses. Well, I think each and every one is performing quite well.

Speaker Change #102: Activities that May result in southwestern to profit increase going forward that was the intent of my question. Thank you very much for clarifying your question in regard to the substance of the businesses.

Well I think each and every line is performing quite well Dx.

Speaker Change #102: Even if compare it with other S I R.

Speaker Change #102: Yeah.

Unknown Speaker: M&F compared with other FIRs, everyone says that demand for DX is increasing in a steadfast manner. We are capturing that demand and, therefore, resulting in an increase in operating revenue and income. Like I mentioned earlier, as a case example, other lines of the system are also contributing to the growth, both in revenue and income. Thank you very much.

Speaker Change #102: Everyone.

Speaker Change #103: First that the demand for D. Axis is increasing instead fast money, we are capturing that demand and therefore resulted in increase in operating revenue and income like I mentioned earlier as a case example, other lines of business is also contributing to the growth both in revenue.

Speaker Change #103: And income thank you very much.

Speaker Change #103: Yeah.

Speaker Change #104: Thank you very much Mr Kikuchi.

Speaker Change #105: We will take the next question.

Unknown Speaker: Thank you very much, Mr. Kikuchi. We will take the next question. Mizuho Securities, Mr. Hody, please unmute yourself and ask your question. This is Hori from Mizuho Securities. Thank you. I have two questions.

Speaker Change #106: Mizuho Securities Mr. Hoodie, Please on mute yourself and ask you a question.

Unknown Speaker: One is related to the earlier question on the business services segment. So, if you could elaborate on the profit further... Growth is growing, but the data center... Unknown Executive, Yasuaki Kuwahara, Hideaki Tanaka, Makoto Takahashi, Shinji Moriyuki, But on the other hand, the base is... profit declines slightly. [inaudible] So if the equipment sales decline and communication increases, then that will have a bigger impact on pushing up the profits. In relation to revenue increase-decrease, what part contributes to profit increase?

<unk>: This is <unk> from Mizuho securities. Thank you.

Mr. Hoodie: I have two questions.

Unknown Speaker: So that's my first question. Thank you. So, business services segment revenue and profit increase. If you could elaborate, please. Yes, thank you for the question. So, first of all, the three categories.

Mr. Hoodie: One is related to the earlier question on business services segment.

Mr. Hoodie: So if you could elaborate on the profit further.

Speaker Change #109: Grow growth is growing but the data center.

Speaker Change #110: You established after new establishment of there will be higher depreciation.

So maybe the accounting basis profit will not follow right away and B P O.

Speaker Change #111: In addition to the new consolidation this is not where the marginal profit is high so a lifecycle or won't be suppressed and get more business for the future.

Speaker Change #111: So this.

Speaker Change #111: But on the other hand base is.

Speaker Change #111: It declined slightly.

Speaker Change #111: So the equipment sales decline in communication increases and that will be a bigger impact in pushing up the profit so.

Speaker Change #111: Our revenue.

Speaker Change #112: In relation to revenue increased degrees of what part contributes to profit increase so that's my first question.

Speaker Change #113: Thank you.

Speaker Change #113: So a business services segment.

Speaker Change #114: Our revenue and profit increase if you could elaborate please yes. Thank you for the question.

Speaker Change #115: So first of all the three categories.

Speaker Change #116: So the growth Iot data Center N.

Speaker Change #115: And video.

Unknown Speaker: So the growth of IoT, data center, and BPO. First of all, IoT IoT of the connections is growing steadily in Q1. 44 Million 44 Million, And on a full year basis...

Speaker Change #115: First of all Iot.

Speaker Change #117: A V a collections is growing.

Speaker Change #117: Steadily in Q1.

Speaker Change #117: 44 million.

Speaker Change #117: And on a full year basis.

Speaker Change #117: Yeah.

Speaker Change #117: It is growing at seven to 8 million.

Speaker Change #117: And so this is one big contributor rigor.

Unknown Speaker: It is growing at 7 to 8 million. And so this is one big contributor. Regarding data centers, I mentioned the Canadian Data Center, M&A Impact [inaudible]. We have more than 45 data centers. They are all trending strongly, and Europe, and Thailand Data Center, and Toshitake Amamiya. So those are big contributors. Regarding BPO, labor-intensive.

Speaker Change #118: Regarding data center.

Speaker Change #118: I mentioned, the Canadian data center M&A impact.

Speaker Change #118: We have more than 45 data centers and they're all trending strongly.

Speaker Change #118: In Europe.

Speaker Change #118: In Thailand datacenter.

Speaker Change #118: It's opened last year.

Speaker Change #118: So those are big contributors.

Speaker Change #119: Regarding V P O.

Speaker Change #120: Labor intensive.

Speaker Change #120: But going forward, we will digitalize and enhance the efficiency.

Unknown Speaker: But going forward, we will digitalize and enhance efficiency, and this higher efficiency will be shifted to higher added value areas to achieve higher revenue and income. Thank you. I hope this answers your question.

Speaker Change #120: And this higher efficiency will be shifted to the higher added value areas to achieve higher revenue and income.

Speaker Change #120: Thank you I hope this answers your question.

Speaker Change #121: Yes, so the base.

Speaker Change #121: The total.

Speaker Change #122: Revenue, a slight decline, but what's the content Oh communication is increasing or could you elaborate on that part well on the base side on a full year basis, we plan for both revenue and income increase but in Q1.

Unknown Speaker: [inaudible] The total revenue is slightly declining, but what's the content? Communication is increasing, or could you elaborate on that part? Well, on the basis side, on a four-year basis, we planned for both revenue and income increases, but in Q1... Dinky, A.U. Dinky, for Corporate. The number of customers is declining slightly, so that is negative. On a four-year basis... Our plan is to increase both revenue and income. Understandable, thank you. My second question is... Personal Services [inaudible] Communications are poo.

Speaker Change #123: Thinkgeek au denki.

Speaker Change #124: For corporates.

Speaker Change #125: The number of customers is declining slightly and so that is a negative.

Speaker Change #124: So.

Speaker Change #124: On a full year basis.

Speaker Change #124: Plan is to increase both revenue and income.

Speaker Change #126: Understood. Thank you.

Speaker Change #127: My second question is.

Speaker Change #128: Our personal services Oh communications are Pute ARPA. So on the right side of page 14, you talked about Youtube the au conversion.

Unknown Speaker: So on the right side of page 14, you talked about the UQ to AU conversion. This is 2.2 times. So against your plan, how is this progressing? I received a campaign notice. And initially, it may incur some cost and reduce the ARPU, but after a while, this will have a positive impact. So on your four-year plan. You see, our pool is slightly diminished, but... How do you see AUUQ, and how do you view the current status? Thank you. So UQ to AU 2.2 times. So the progress against our plan. Mr. Takezawa will explain. Thank you for the question. So first of all, 2.2 times.

Speaker Change #129: Well there is two two times.

Speaker Change #130: So against your plan how is this progressing.

Speaker Change #131: I receive campaign notice.

Speaker Change #132: And initially it may incur some costs and reduce the ARPA, but after a while this will be positive impact so on of your full year plan.

Speaker Change #133: You see our booth.

Speaker Change #134: Slightly decline, but.

Speaker Change #136: How do you see a U and how do you view the current status. Thank.

Speaker Change #135: Thank you.

Speaker Change #137: So you go to a U 2.2 times.

Speaker Change #137: So the progress.

Speaker Change #137: Against our plan.

Speaker Change #137: Mr Tucker as I'll explain.

Speaker Change #138: Thank you for the question.

Speaker Change #138: So first of all 2.2 times.

Speaker Change #138: This is basically in line with our forecast.

Unknown Speaker: This is basically in line with our forecast. As I said earlier... Yusuke Okumura, Impact is large. So now it is 2.2 times, but the key is how we can offer value to our customers and measures to convert to AU. We need to increase the AU portion earlier more. This will push up the unit price further, so we are aiming for higher. Thank you.

Speaker Change #138: But.

Speaker Change #138: As I said earlier.

The brand mix impact is large.

Speaker Change #138: So now it is 2.2 times, but the key is how we can offer value to our customers.

And.

Speaker Change #138: Measures to convert to a U.

Speaker Change #138: We need to increase au portion.

Speaker Change #138: Earlier more this will push up the unit price.

Further so we are aiming for higher thank you.

Okay.

Speaker Change #138: Understood.

Speaker Change #139: One additional piece of information.

Unknown Speaker: Just one additional piece of information, in the business services segment. One is Digital BPO that is pushing up the revenue. Altius Link and Relia were integrated in September. So on a quarter, first quarter to first quarter basis. Last year we did not have Relia, and this year Relia is included in our revenue and income. If we compare the first quarter of two years.

Speaker Change #139: In the business services segment.

Speaker Change #139: One as digital B P O that is pushing up the revenue.

Speaker Change #139: O L T link.

Speaker Change #140: Link and rely on it was integrated in September so on a quarter first quarter to fourth quarter basis last year, we did not have rely out and this year rely on is included in our revenue and income.

Speaker Change #140: If we compare the first quarter of two years. Thank you.

Speaker Change #140: Mr. Jorge Thank you very much for your question Nick.

Speaker Change #141: Next question.

Nomura Securities must Nelson, please on mute and start of your question.

Unknown Speaker: Thank you. Mr. Horii, thank you very much for your question. Next question, Nomura Securities, Masuno-san, please unmute and start your question. Masuno Okumura, two questions.

Speaker Change #142: Muscle milk Nomura two questions first is the total picture about profit.

Speaker Change #141: No.

Speaker Change #143: In each as sub segments and sectors are growing and steadily.

Unknown Speaker: First is the total picture of profit, in each segment and sector growing steadily, and this is a well-balanced KDDI-like number, and the EPS target for the next year is probably the ultimate goal. So during this fiscal year, it will simply try to move toward this line of plan. But next year, a cost reduction of 20 billion yen is expected.

Speaker Change #144: And this is a well balanced a kitty D I like numbers.

Speaker Change #145: EPS targets for the next year is probably the ultimate goal. So during this fiscal year. It will simply trying to to move towards the this a minor plant, but next year the cost reduction of our attune TBD on Gan is expected on the other hand, the investment into data centers or <unk>.

Unknown Speaker: On the other hand, the investment into data centers or investment into AI, there will be some extra investment items as well. So, the Burden of Investment, and others. Would you expect to recover that amount because...

Speaker Change #145: I spent into AI, there won't be some extra investment items, such as well so.

Speaker Change #144: Burden of investment in others.

Speaker Change #144: Would you expect to recover that amount because.

Speaker Change #146: Probably answer would be yes, because in the state will not increase as much as 20 billion, but what is the size of the investment increase and also AI data center will have reduced our costs and where should we expect that our cost work would be stored through the efficiency gains and allow us to.

Unknown Speaker: Probably, the answer would be yes, because the investment will not increase as much as 20 billion, but what is the size of the investment increase? And also, AI data centers will reduce the cost, and we usually expect that cost to be restored through efficiency gains. And Lama 2 was only finished in two months, although it took six months; however, for Lama 3, it was only two months.

Speaker Change #146: Was oney finished in two months or the six two to six months. However, if all of them are three it was only two months and the investment itself well recover the cost so cost reduction next year, and Oh, how to recover them and payback.

Unknown Speaker: And the AI investment itself will recover the cost, so cost reduction next year, and how to recover and pay back the investment into AI. If you could give us a total picture, thank you. Thank you for the question. With regard to the overall picture about operating income, now... For this fiscal year, during the first quarter, against the internal company plan, we were able to see very steady progress. As mentioned earlier, the ultimate target will be the EPS targets of the next fiscal year.

Speaker Change #146: Investment into a if you could give us a total picture.

Speaker Change #146: Thank you. Thank you for the question.

Speaker Change #146: So you got to that the total picture about operating income now.

Speaker Change #146: For this fiscal year during the first quarter.

Speaker Change #146: Against the internal company plan, we were able to see very steady progress.

Speaker Change #149: As mentioned earlier, the ultimate target will be the EPS targets are of the next fiscal year.

Speaker Change #146: And.

Speaker Change #146: Currently.

Speaker Change #146: The progress so far is.

Unknown Speaker: Currently, the progress so far is... Well in advance, and therefore we can secure sufficient investment for the next year as well as now. For the investment items, AI data centers are expected to increase their investment, but as a part of the medium-term management plan, as we explained, for such investments. In a few years' time, 100 billion yen of investment will be made. On a single-year basis, it is not as large.

Speaker Change #146: Ah well in advance and therefore, we can secure sufficient investment for the next year as well now.

Speaker Change #146: For the investment items in our data centers are expected to increase its investment.

Speaker Change #146: But as a part of the medium term management plan.

Speaker Change #150: He explained for such investment.

Speaker Change #150: In a few years Muhtar hundred billion yen of AR in Smith investment will be made on a single Euro V says.

Speaker Change #150: It is not as large.

Speaker Change #151: It may be so lucky mm happening on the front end Muhtar. However, not the full amount will be invested at once in a year and therefore for the next fiscal year as is our plant we are poised to achieve that you'd be a target.

Unknown Speaker: It may be slightly happening on a front-end manner; however, not a full amount will be invested at once in a year, and therefore, for the next fiscal year, as planned, we are poised to achieve the EVS target. Now, in regards to AI investment, are there any comments to add? Matsuda san, Well, we already covered that topic earlier. Well, Efficiency gains of the current facilities will be explored so that we will make investment in cutting-edge technologies, for example, sharing of the base stations or, or virtualization of existing technology will be applied so that AI technology will be more easier to be used, and that is efficiency gains. And existing equipment facilities will be sophisticated through AI so that efficiency gains will be reinvested into AI and other areas. That is my supplemental comment.

Speaker Change #150: In regards to our investment.

Speaker Change #150: Are there any.

Speaker Change #152: Comments to add.

Speaker Change #152: Much of the phone.

Speaker Change #153: Well, we already cover that topic earlier well.

Speaker Change #152:

Speaker Change #154: Efficiency gains of the current facilities will be explored so that we will make investments into the cutting edge technologies for.

Speaker Change #154: For example, sharing of base stations or.

Speaker Change #154: Virtualization of existing technology will be applied so that the AI technology will be a more easier to be used and that is the efficiency gains and the existing equipment and facility will be sophisticated through AI AR, so that our efficiency.

Speaker Change #155: <unk> will be reinvestment reinvested into AI and other areas that as far as supplemental comment. Thank you.

Speaker Change #154: Did we answer your question.

Speaker Change #154: Ah sorry, there were two questions.

Speaker Change #154: And so.

Speaker Change #156: Well for over four years 100 billion and there will be investment in the media press release I'm Sakai event investment is expected next year and the time, a new data center will be made and.

Unknown Speaker: Thank you. Did we answer your question? I'm sorry, there were two questions. And so... For over four years, a hundred billion yen will be invested in the media press release. Sakai plant investment is expected next year, and the TAMA new data center will be made. All these were covered under this 100 billion yen investment. Is this correct? Yes, that is correct. Emmy for the Era of A.I.

Speaker Change #156: All these were covered under this 100 billion investment.

Speaker Change #157: Is this correct, yes that is correct and me for the era of AI.

Speaker Change #157: Well, we own network, so we'd like to capture the data center for sure as well. So 100 million young includes the construction of a data center and also large computation capacity construction are all included.

Unknown Speaker: Well, we own the network, so we'd like to capture the data center for sure as well. So 100 billion yen includes the construction of a data center and also large computation capacity construction are all included. Thank you. My second question is... The sales of the AU brand are growing from my point of view as well, and it was a bit unexpected, but what the hell?

Speaker Change #157: My second question is.

Speaker Change #157: The sales of a good ground escrow bank and from my point of view as well.

Speaker Change #157: It was a bit.

Speaker Change #157: Unexpected, but how.

Speaker Change #157: You are I.

Speaker Change #157: Maintaining the USA utilization of.

Unknown Speaker: You are maintaining the U.S. utilization of Who are the AU users? Why are AU subscribers willing to stay in AU, and more people are willing to use AU? Of course, the UQ provides lower charges than TEEs, but what are the motivations for the subscribers to use AU brodges?

Speaker Change #158: Au users why you subscribe, they're willing to stay in a new and more people are willing to use a you of course are the youku provides mover charges and teeth about what are the motivations for the subscribers to use au brand.

Speaker Change #159: Thank you what are the strategies and our backgrounds are for the good performance of Au brand that will be answered by took us all of a sudden.

Unknown Speaker: Thank you. What are the strategies and backgrounds for the good performance of the AU brand? That will be answered by Takezawa-san. Thank you for your questions. Well, there are many users who wish to use AI nowadays.

Speaker Change #160: Thank you for your question.

Speaker Change #160: No.

Speaker Change #160: Well there are many users who wish who wish to use AI nowadays.

Speaker Change #161: The situation is that once they experience you Q1s in the past some are coming back to eight years.

Unknown Speaker: The situation is that once they have experienced UQ1s in the past, some are coming back to AU, and we are taking action for that to happen. On the other hand, at the end of June, data traffic per person. When I, Momotarou, The Data Traffic Per Subscriber, both AU and UQ, data traffic is increasing for both brands. For AU... We provide meat to a large capacity, but even if we provide such a plan, the unlimited service is the choice of the customers nowadays, so... That's why... Many users are migrating to AU because AU provides an unlimited capacity plan.

Speaker Change #162: Uh huh.

Speaker Change #163: We are taking action for that to happen on the other hand at the end of June data traffic per person.

When I monitor.

Speaker Change #163: The data traffic per subscriber booth and Youtube data traffic is increasing for both brands. So it a U.

Speaker Change #163: We provided mid to large capacity, but even as we provide such plan C.

Speaker Change #164: One minute of it.

Speaker Change #164: Service.

Speaker Change #164: Is the choice of the customer nowadays.

Speaker Change #164: So.

Speaker Change #164: That's why.

Speaker Change #164: Many users are migrating to a us because <unk> provides the unlimited.

Speaker Change #165: Capacity plan.

Speaker Change #165: That is all thank you very much so.

Speaker Change #165: Unlimited use is provided by a year, but in the media session conversion would've rocketing wasn't mentioned recently the Sim only a plan is increasing yet they are not using the data a lot but from your point of view, you're able to capture the heavy data users and.

Unknown Speaker: That is all. Thank you very much. Thank you very much. Unlimited use is provided by U, but in the media session, a comparison with Rakuten was mentioned recently; the film-only plan is increasing, yet they are not using the data a lot. But from your point of view, you're able to capture the heavy data users, and you are successful in the area. Is that right, correct? In fact, our company also provides them only for sale as well, but combined with the devices, the terminal, when the subscriber, Thank you very much.

Speaker Change #165: Our successful in our area is that right correct.

Speaker Change #166: In fact, our company also provides sim only sales as well, but combined with a devices terminals.

Speaker Change #167: When the subscriber.

Speaker Change #168: Purchase an antivirus altogether, so that they can use our devices for sure and accessing to the rich contents of a U and increasing the traffic. So a that is something that we are confident thank you very much. Thank you.

Speaker Change #168: Yeah.

Speaker Change #168: Next question.

Speaker Change #168: Yes.

Speaker Change #169: City Securities Mr. <unk>. Please.

Unknown Speaker: Thank you. Next question is... City Securities, Mr. Tsuruo, please. Mr. Tsuruo from City Securities.

Speaker Change #170: The duo from Citic Securities.

Speaker Change #170: Thank you I have two questions first.

Speaker Change #172: It is about net addition smartphone growth.

Unknown Speaker: Thank you. I have two questions, is it about net addition, smartphone growth, or Marty Bland ID? Which should I look at? So, Q1 status and... MNP to Rakuten. If you could also touch on that point, I'd appreciate it.

Speaker Change #173: Or Mark D Bland, I D, which should I look at.

Speaker Change #174: So Q1 that is and.

Speaker Change #175: M N P two rocks Dan.

Speaker Change #176: So you could also touch on that point I'd appreciate it and second question is about generative a a 100 billion yen investment.

Unknown Speaker: And the second question is about Generative AI, a 100 billion yen investment. Sakai Plant, construction, if you have any update on that. And out of 100 billion, how much is the government grant?

Speaker Change #177: As a guy who plant construction, if you have any update on that and how does 100 billion. How much is the the government grant I'm, sorry, I do not have the information at hand so.

Unknown Speaker: I'm sorry, I do not have the information at hand. Thank you very much for the question. First, it is about our view on Net Edition and... Rakuten matters also. So Takezawa will respond.

Speaker Change #178: Thank you very much for the question.

Speaker Change #179: First is about our view on net addition, and.

Speaker Change #179: Rock than matter also.

Speaker Change #179: No.

Speaker Change #179: Because of our will respond.

Speaker Change #180: Thank you for the question.

Speaker Change #180: So our view on net addition.

Speaker Change #181: Our blue revenues base is the smartphone net addition, and this is growing steadily.

Unknown Speaker: Thank you for the question. So, our view on net addition. ARPU Revenues Base is the smartphone net addition, and this is growing steadily. Regarding the competitive landscape, we are not optimistic by any means, including NMP.

Speaker Change #181: Regarding the competitive landscape, we are not optimistic by any means.

Speaker Change #182: Including an M P.

Speaker Change #182: It's not that there is a large outflow to other peers.

Speaker Change #182: Our Q1.

Speaker Change #182: During the.

Unknown Speaker: It's not that there is a large outflow to other peers. Part Q1, During the, Up until May, the spring season, spring shopping season, and June, so there are two timelines. But at the device, the handset, uh... If the customers can join together, then I.D. multiplied by R.Poo I.D. will become positive for our revenue, and so we focused on that point for Rakuten. The situation is similar. President Takahashi mentioned this to the mass media. It's true that there is more momentum now. But the momentum may be too much...

Speaker Change #182: Up until May of the spring season spring shopping season and June So there is two timelines.

Speaker Change #182: But at the device handset.

Speaker Change #182:

Speaker Change #183: If the customers can join together then I D multiplied by our pool.

Speaker Change #183: We will become positive at all on our revenue.

Speaker Change #183: And so we focus on that point.

Speaker Change #184: For rock then.

Speaker Change #184: The situation is similar.

Speaker Change #184: President Takahashi mentioned this for the mass media.

Speaker Change #185: It is true that there is more momentum now.

Speaker Change #185: But the momentum maybe too.

Speaker Change #185: Radical.

Speaker Change #186: So we will work on device and network coverage and the connectivity quality as differentiating factor.

Unknown Speaker: Radical, so we will work on device and network coverage and the connectivity quality as a differentiating factor so that we can achieve further network addition. Thank you. I hope this answers your question. The second question is on the AI Data Center. So from the social contribution aspect and government grants.

Speaker Change #186: So that.

Speaker Change #186: We can achieve further net addition, thank.

Speaker Change #186: Thank you I hope this answers your question.

Speaker Change #186: And the second question is on AI data Center.

Speaker Change #187: So soc from social contribution aspect and government grants.

Speaker Change #187: So Mr Matsuda will respond.

Speaker Change #188: Thank you for the question.

Unknown Speaker: So, Mr. Matsuda will respond. Thank you for the question. A.I.

Speaker Change #189: So AI data center.

Mr Matsuda: As I touched on earlier, the computing infrastructure G. P. U G. P U N C P U.

Unknown Speaker: Data Center. As I touched on earlier, the computing infrastructure, GPU, and CPU require power and high cooling capacity, so it has to be equipped with such functions, and LLM needs to operate on top of that, and the Network, which will serve as the basis of that. [inaudible] So, this is what we call the AI Data Center. Sakai, the Former Sakai plant of SHARP is a great location.

Mr Matsuda: It requires power and high cooling capacity and so it has to be equipped with such functions and L. L and a need to operate on top of that.

Mr Matsuda: And network, which will serve as the basis of that.

Mr Matsuda: So this is what we call AI data center.

Mr Matsuda: Sakai.

Mr Matsuda: Former Sakai plant of sharp is a great location.

Mr Matsuda: As of today.

Mr Matsuda: I have not visited the visit.

Unknown Speaker: As of today, I have not visited the site. It is a grand, it's a vast land. So we're discussing how this can be best utilized. At any rate, 100 billion yen investment in the medium to long term remains unchanged, and the subsidy, the grant from the government, is around 10 billion yen. So we will move aggressively towards the completion of this Data Center. Thank you very much. Mr. Tsuruhashi, thank you very much. We are open for the next question. If you have any questions, please tap the raise hand button on the zoom.

Speaker Change #191: Visit to the site. It is a grand has a vast atlanta.

Speaker Change #191: And so we're discussing on how this can be best utilized.

Speaker Change #191: At any rate 100 billion investment in the medium to long term remains unchanged.

Speaker Change #191: And the subsidy the grant from the.

Speaker Change #191: Government is around 10 billion yen.

Speaker Change #191: So we will move aggressively towards the completion of this.

Speaker Change #192: Datacenter, thank you very much.

Speaker Change #192: Let me say to us thank you very much.

Speaker Change #193: We are open for next question. If you have any questions. Please tap the raise hand bought in Arlington.

Speaker Change #193: No further questions.

Speaker Change #193: Yeah.

Speaker Change #194: From Nomura Securities that's no fun piece on mute yourself and start your question.

Unknown Speaker: No further questions. From Nomura Securities, Masuno-san, please unmute yourself and start your question. I have some additional questions just for clarification.

Speaker Change #195: So much no question just for a clarification. So loosen after the closing date and there will be new strategy, new synergy or they hold some press conference or the media opportunity in the future.

Unknown Speaker: So Lawson, after the closing date, there will be a new strategy, new synergy. Are they holding some press conference or media opportunity in the future? That I'd like to ask. And also, in the second half...

Speaker Change #195: I'd like to ask and also in the second half.

Speaker Change #196: In regards to the additional returned to the shareholder policy well you will carefully observe the interim results, perhaps and at the time of the interim results announcement.

Unknown Speaker: In regard to the additional return to the shareholder policy, well, you will probably carefully observe the interim results perhaps, and at the time of the interim results announcement, will you be expressing your plan for the future? So, I just want to clarify the next step going forward. Thank you.

Speaker Change #197: Will you be expressing your plan in the future.

Speaker Change #197: So.

I just wanted to clarify the next steps going forward. Thank you.

Speaker Change #197: I think it was like two questions in regard to the first question well Nelson after their clothing are there going to be briefing session or press conference.

Unknown Speaker: Thank you for the two questions. With regard to the first question, for Lawson, after the closing, are there going to be a briefing session or press conference? On that point, Takezawa-san will answer.

Speaker Change #197: On that point took us all of a sudden will answer.

Speaker Change #197: Thank you for your question.

Speaker Change #197: At this moment Lawson Mitsubishi Corporation included.

Unknown Speaker: Thank you for your question. At this moment, Lawson Mitsubishi Corporation included, we are currently discussing what we are going to do after the closing, and our plan is to have some breaching activity, a briefing, or other forms so that people will raise questions. And in regard to the second question, for the second half of this fiscal year, in regard to the shareholders' return policy, probably at the time of the first half results announcement, is there anything the company is prepared to make comments on? Well, there is no point.

Speaker Change #197: Yeah.

Speaker Change #198: We are currently discussing what we are going to do after the Coos, Inc. And our plan is to have some opportunity a briefing or other forms so that people will raise questions and in regards to the second question.

Speaker Change #199: For the second half of this fiscal year in regard to the shareholders' return policy probably at the time of the first half results announcement are there anything the company is prepared to make comments well on that point.

Speaker Change #198: Fortunately.

Speaker Change #198: Well, probably keep point will be in the buyback but are we.

Unknown Speaker: Unfortunately... Well, probably the key point will be the buyback, but we will make a flexibly, execute a flexibly buyback. So in regard to what timing we'll be able to announce an additional buyback plan, answer it with a no. So if a company finds that it's necessary to execute additional buyback, then we will quickly share the information. If that happens, did I answer your question? Thank you very much

Speaker Change #200: We will make a flexibly execute flexibly buybacks. So you really got to what timing will be able to announce additional buyback bond answered within our so if a company records that is necessary to execute additional buyback then we will quickly share the information.

If that happens did I answer your question. Thank you very much.

Speaker Change #201: Oh, sorry.

Speaker Change #201: My intent was that after the first half results announcement.

Unknown Speaker: Well, sorry, my intent was that after the first half results announcement... Would the company share the idea of or feeling about how to achieve EPS targets and so forth and for the opportunity to share its thoughts in the future? Thank you for clarifying your question. In regard to achieving EPS, first, we need to grow the profits from the business. That is the first point. And the second is to acquire some of our own shares.

Speaker Change #202: But the company shares the idea of or feeling about how to achieve EPS targets and so for sound for the opportunity to share our company's thoughts in the future. Thank you for clarifying your question in regard to achieving a P. S. First we need to grow the.

Speaker Change #203: Profits from the business that is the first point and the second is to acquire some of our own shares and if a buyback front loaded as much as possible that will be quite effective for a positive impact on EPS next year of course, we will carefully monitor the timing and discuss.

Speaker Change #204: In our company did I answer your question. Thank you that's it so thank you very much.

Speaker Change #204: Okay.

Speaker Change #205: So it is time, so with that we will close K D D I.

Unknown Speaker: And if a buyback is front-loaded as much as possible, that will be quite effective for a positive impact on EPS next year. Of course, we will carefully monitor the timing and discuss it at our company. Did I answer your question? Thank you. That's it. So it is time. So with that, we will close KDDI's Q1 Financial Results Briefing for the year ending March 2025. Thank you very much for your attendance

Speaker Change #206: Q1 financial results briefing for the year ending March 2025, Thank you very much for your attendance.