Q3 2026 KDDI Corp Earnings Call

February 6, 2026

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Let me start the explanation meeting.

Nanae Saishoji: Let me start the explanation meeting. My name is Hirooka from the Public Relations Department of KDDI. I serve as MC. Today's meeting, as is disclosed on a timely basis, is to present preliminary results of Q3 of the year ending in March 2026 of KDDI. Today's presentation is being distributed on YouTube and other media in addition to the onsite, and we have put up three related materials on the KDDI website. Please refer to the materials at hand. This is a message for the people in the onsite audience. Today's attendees are as follows: Hiromichi Matsuda, President, Representative Director, CEO; Nanae Saishoji, Senior Managing Executive Officer, CFO, Executive Director, Corporate Sector; Tomohiko Katsuki, Managing Executive Officer, Director, CSO and CDO, Executive Director, Corporate Strategy Division; Kenji Aketa, Executive Officer, Executive Director, Corporate Management Division, Corporate Sector. These four are in attendance. President Matsuda, please.

[Company Representative] (KDDI Corporation): Let me start the explanation meeting. My name is Hirooka from the Public Relations Department of KDDI. I serve as MC. Today's meeting, as is disclosed on a timely basis, is to present preliminary results of Q3 of the year ending in March 2026 of KDDI. Today's presentation is being distributed on YouTube and other media in addition to the onsite, and we have put up three related materials on the KDDI website. Please refer to the materials at hand. This is a message for the people in the onsite audience. Today's attendees are as follows: Hiromichi Matsuda, President, Representative Director, CEO; Nanae Saishoji, Senior Managing Executive Officer, CFO, Executive Director, Corporate Sector; Tomohiko Katsuki, Managing Executive Officer, Director, CSO and CDO, Executive Director, Corporate Strategy Division; Kenji Aketa, Executive Officer, Executive Director, Corporate Management Division, Corporate Sector. These four are in attendance. President Matsuda, please.

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As is disclosed on a timely basis to present, the preliminary results of the soda quartile of the year ending in March 2026 of Kt D. I.

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Presentation is being distributed.

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Q3 2026 KDDI Corp Earnings Call

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Q3 2026 KDDI Corp Earnings Call

KDDIY

Friday, February 6th, 2026 at 7:00 AM

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Hiromichi Matsuda: Thank you very much for gathering here today despite your busy schedules. First and foremost, we sincerely apologize for the significant inconvenience and concern caused to our customers, business partners, shareholders, investors, and many other stakeholders, including our employees, due to the suspected improper transactions at our subsidiary. We recognize this matter as a serious issue that could potentially undermine the trust in the entire KDDI Group. As the top management, I feel a profound sense of responsibility for the occurrence of this matter and for failing to prevent it. Today, I will carefully explain the details available at this time and sincerely answer your questions. Please be assured that this matter relates solely to transactions within the advertising agency business and has no impact whatsoever on the provision of communication services, including BIGLOBE. I will explain the purpose of today's preliminary results explanation.

Hiromichi Matsuda: As the Special Investigation Committee's inquiry into inappropriate transactions is ongoing, the impact on our financial statements remains undetermined at this time. Therefore, we have decided to postpone the disclosure of our Q3 FY March 2026 earnings release. Therefore, today's explanation is titled Q3 Preliminary Results Explanation. We will report on the facts currently recognized by the company, the outline of the financial impact, and separate from this matter, the business progress for the third quarter and initiatives for future growth. Please note that the Q3 preliminary results, prior year results, and financial impact figures related to this matter presented today are reference values based on facts currently recognized by the company. These figures may be subject to revision based on the findings of the Special Investigation Committee and the audit results of the accounting auditor. Final figures will be reported promptly upon completion of the investigation.

Hiromichi Matsuda: At this time, we plan to receive and disclose the investigation report from the Special Investigation Committee by the end of March. Based on this assumption, we will plan to announce the Q3 results at the end of March, and we currently intend to proceed with FY March 26 financial results announcement without delay. I will now outline the key points of today's business performance briefing and preliminary results explanation. First, the inappropriate transactions that occurred at our subsidiary. Then, the growth of our core business foundations, including mobile and R&D-focused areas, and the growth in the AI era. First, regarding the improper transactions that occurred at our subsidiary. This was disclosed on 14 January. It has been discovered that improper transactions were allegedly conducted by employees of BIGLOBE, a consolidated subsidiary of the company, and its subsidiary G-PLAN, within their advertising agency business.

Hiromichi Matsuda: Regarding the advertising agency business, the possibility that sales and other figures had been overstated came to light following delayed payments from certain agencies in December 2025. To clarify the facts and causes related to this matter, we determined it necessary to conduct a more specialized and objective investigation. Accordingly, we established a Special Investigation Committee composed of external attorneys and certified public accountants on 14 January. Next, an overview of the fictitious transactions we have identified. Both. So this is the left side which we have anticipated. Usually, from the advertiser, advertiser approaches us. Usually, there is a request to the advertising agency, and the web media becomes multiple, so there is another existence: publishing agencies. This BIGLOBE and G-PLAN are in the upstream. Advertising agencies and publishing agencies, they are the intermediary.

Hiromichi Matsuda: Around 2017, G-PLAN launched this business, and BIGLOBE later entered to develop new ventures. You can see the flow here. Within this business, the money is also flowing, subtracting the fees, and the advertisement fee is paid. Within this business, we confirmed suspicions that subsidiary employees conducted fictitious transactions for advertising agency services despite the absence of actual advertisers, resulting in the recording of fictitious sales revenue and other figures over multiple years. Now, let me use the right side to explain. First of all, the discovery process. The transaction volume increased. So following an internal investigation, KDDI instructed BIGLOBE and G-PLAN to reduce orders to downstream agencies to strengthen management systems and manage business risks. This led to delayed payments from upstream agencies.

Nanae Saishoji: At the top, as of today, these are the impacts that we recognize. As I mentioned earlier, because of fictitious transactions, we need to cancel booked revenue, part of the booked revenue. This is before FY 2024, March about JPY 96 billion, and for FY 2025, March JPY 82 billion, and FY 2026, March JPY 68 billion, the total of JPY 246 billion. Below that, operating income, reversal of recorded income, about JPY 8 billion, JPY 17 billion, and about JPY 25 billion. These profits are to be canceled. In addition, as I mentioned earlier, the commissions which outflowed, and we have reasoning for that, JPY 5 billion, JPY 11 billion, and JPY 17 billion. As to JPY 33 billion, approximate number, we are going to make efforts to recover this amount. In addition, including the prior years, there is a possibility of recognizing impairment losses.

Nanae Saishoji: At the bottom, next steps, as I mentioned earlier, at the end of March or beyond, we are going to publicize the report of investigation as well as financial results without delay. In addition, in a parallel way, reviewing and strengthening the company group's governance and examining recurrence prevention measures will be taken. Now, this is our commitment to future actions. First, we are fully committed to cooperating with the Special Investigation Committee, diligently uncovering the facts and thoroughly analyzing the causes. I must tell we will take the lead in actively addressing these issues to restore and strengthen the trust for our group. Our company upholds the KDDI philosophy, which embodies the shared values and code of conduct that every individual should uphold. We will create an environment where transparency and fairness underpin our work, ensuring that these principles are communicated throughout the entire group and practiced consistently.

Nanae Saishoji: By doing so, we aim to foster a culture that enhances both human capabilities and ethical standards. To meet expectations and to regain trust, of course, we will make efforts to do everything to avoid any reoccurrence of similar matters. At the same time, it is indispensable for us to continue to develop our business for sustainable business operation. From now on, I would like to communicate to you more specifically what initiatives or measures we will take. Now, this is as reference figures. I present consolidated results for Q3, FY 2025. We have revised both prior year and this year because of the impact coming from the matter. Please refer to the bottom column. We have canceled the revenue and income associated with fictitious transactions. On the right-hand side, we are showing the numbers as reference values after the provisioning of external outflow.

Nanae Saishoji: So in year-on-year comparison with the actual results, the cumulative results for the first three quarters are as follows: operating revenue +3.8%, operating income +2%, and profit for the period +5.3%. We are performing well. So that is the cumulative-based consolidated results change factors. From the left-hand side, we have the mobile personal services segment base +JPY 27.2 billion, and the finance, energy, Lawson +JPY 18.2 billion, and the DX business services segment +JPY 8.5 billion, technological structure reform +JPY 12.9 billion, and impact of prior years promotional expenses -JPY 28.9 billion. And based on those numbers, the total of +JPY 17.4 billion positive. And also the mobile related revenue grew and it's expanded, and the finance and the DX are moving on smoothly. And this is the Q3 alone consolidated operating income and factors for change.

Hiromichi Matsuda: We are promoting initiatives to secure long-term contracts by creating value that motivates customers to sign up, shown on the left, and refining au's communication quality and differentiated value services shown in the center. This shows creating value that motivates customers to sign up to maximize LTV. Left side, at UQ mobile, we are focusing on promotions that suggest the optimal device to customers, and device bundled contracts, which have higher ARPU and contract retention rate, are on the rise by 4 percentage points. Right side, we are also working to differentiate our plans and services, and Money Activity Plan II. Ponta Pass and Netflix are all performing well, which has increased ninefold. We are enhancing the value of the connected experience, which is the source of our competitiveness.

Hiromichi Matsuda: This shows the result of ARPU growth driven by value creation, which is a factor towards leaner and meaner operation base. Our value creation efforts have been successful, as shown on the left. Regarding brand migration, UQ mobile to au migrations finally surpassed au to UQ mobile migrations on a quarterly basis. These factors also contributed to the significant growth of mobile ARPU by JPY 190 year-on-year, as shown on the right. The second factor towards leaner and meaner operation base is churn rate reduction due to longer contract trend. Left side, au contract retention rate is improving as customers are finding the value they receive during sign-up attractive. These trends are accumulating, and the momentum remains strong, as shown on the right. The smartphone churn rate in Q3 of FY March 2026 fell by 0.01 percentage points year-on-year, showing steady improvement.

Nanae Saishoji: Another challenge for us, namely the business services segment. Here, growth was seen in each business area. As shown on the left, the growth of the third quarter alone was +7.7%, showing a strong momentum. In particular, the BPO SI-related business, which had been identified as an issue in the first half, turned around and increased profits in the third quarter. On the right-hand side, IoT drove growth, increasing about double-digit year-on-year. And especially IoT, including the Soracom connections, exceeded 66 million. On the left-hand side, we have the Lawson and Ikeda City in Osaka. We are working on the development of the town where you can live in a secured and safe manner. And on the right-hand side, we are using drones to extract the disaster-related locations. And we have more than 1,000 locations where we have the drone ports.

Nanae Saishoji: We would like to construct a very agile and safe system for the disaster. Now the management of the platform and how to strengthen it. In light of inappropriate transactions of our subsidiaries, we will be even more conscious of the importance of governance. As you can see on the left-hand side, we have the KDDI philosophy, which emphasizes human capabilities. The KDDI version of its job-based personnel system has created a mechanism to enhance expertise. As shown here, with the shift to a new management structure, we will further strengthen our core competencies by combining these with our aspiration to be a company that inspires challenges. To take on challenges, we will introduce systems and programs that celebrate challenges, promote collaboration, and advance human resource development in line with our business strategies for growth.

Nanae Saishoji: Now, I'd like to talk about our efforts towards growth in the AI era. As a social infrastructure provider, it is our responsibility to support Japan's digital society and contribute to strengthening industrial competitiveness with both our cultivated communications infrastructure and our new AI infrastructure. As AI becomes more widespread in a variety of settings, an AI infrastructure that can process data securely with low latency will be important. Left side, with an eye towards such an era, we ensured sovereignty and began operations at the Osaka Sakai Data Center in January as a data hub for securely processing corporate data. We have achieved efficiency gains by utilizing the existing space. Following Sakai, we plan to launch the Miyazaki Network Center in February as a communication hub, leveraging the knowledge gained at Sakai to expand into an AI data center.

Nanae Saishoji: So we will expand our operations in the Kanto region and Kyushu and so on, and utilize our existing land stations to connect AI data centers with our strong communications network, building an AI Digital Belt nationwide low-latency network and AI computational infrastructure. We will also utilize the landing stations and submarine cables across the country to enhance the value of the AI Digital Belt. We are going to create a hub by connecting landing stations and submarine cables. KDDI possesses some of Japan's leading know-how and assets, covering everything from submarine cable installation to maintenance with over 60 years of experience, 360-day availability, and landing stations across the country. We also have strengthened Universal Joint connection technology for optical submarine cables and possess world-class technological capabilities.

Nanae Saishoji: By leveraging these assets, we will develop landing stations near AIDCs and expand accessibility by AI computational infrastructure to overseas locations, thereby capturing global demand. Today, at the Board of Directors meeting, we decided we resolved to launch a new AI integration business corporation. The communication platform on top of that, we need this AI platform. We have lots of contacts with customers. So in order to deliver AI as part of the labor force, it is very important to have a solid platform. For that, we are going to utilize our expertise and technological prowess. Also, we will integrate consulting professionals from the headquarters. Based on that, we established KDDI i-let. Going forward, we will also call upon more engineers from outside, targeting about 3,000 personnel by fiscal year 2028. Lastly, today's summary.

Nanae Saishoji: First of all, the Special Investigation Committee will continue its investigation into the inappropriate transactions while the company reviews and strengthens its group governance, and examines recurrence prevention measures. As to the impact amount, it is expected to include the reversal of fictitious sales and profits, as well as provisions for amounts that float outside the company. The company will make every effort to recover the externally float portion. As to the schedule, as I mentioned earlier, targeting at the end of March, the Special Investigation Committee is going to issue a report on the investigation. Based on the results of the investigation, corrections to prior financial statements and FY26 March Q3 results will be disclosed by end March. FY26 March full year results will be disclosed without delay. In the third quarter, core businesses performed very steadily.

Operator: We will now move on to the Q&A session. We will take questions from both this venue and the Zoom webinar. When asking a question, please state your media name and affiliation, and your name before your question. In order to receive questions from as many people as possible, please limit your questions to two per person. If you have two questions, please ask your second question after the first question is answered. If you have questions, please raise your hand. If you are participating by Zoom webinar, please press the raise hand button. So, Row C, third from the front towards the exit door, please. Thank you. NHK. Toma is my name. So about this fictitious transaction, I do not have the full understanding, so let me ask you a question. So about the amount. So maximum amount, is this amount that you have shown here?

Operator: Thank you for the question. As of today, the amount that we have confirmed, the impact on revenue is this amount, and the profit impact is minus JPY 50 billion. There's a possibility of additional impairment, but the Special Investigation Committee and the audit firm will confirm, and there may be a possibility of revision going forward. Thank you. This external flow, JPY 33 billion, if you could explain the scheme once again. So this external flow. So upstream advertising agency and the three subcontracted parties, was this external outflow to those parties, or was there an embezzlement by the employees? Yes, if you could turn to the scheme diagram. Basically, this was a fictitious transaction. The agencies received the commissions of the transaction. It subtracted the fee. So the amount, is this external outflow recorded as fees? I see.

Operator: Thank you. Any other questions? Day 3 on the entrance side, please. Kobayashi from Yomiuri Shimbun, I want to clarify some facts. There's no period at the booking. When did it start? And also, how many employees have been involved? May I ask those questions? It's a multiple number of years; that's our recognition. As a result of internal investigation, G-PLAN, this business started in 2017, and BIGLOBE, they started this business from FY2022. This time, there are some fictitious transactions and no fictitious ones, but the amount shown in the materials, they are all based on it; all of them are fictitious transactions. And as to the number of employees involved: G-PLAN, 2. I understand that the other 2 are involved from the G-PLAN, and these 2 are seconded to the BIGLOBE, and these transactions were conducted by them. That's our current recognition.

Operator: Thank you. Please raise your hand if you have questions. Row D, fourth from the front to the exit, please. Sankei Shimbun, Takaki, my name. First question. So when it started, this overlaps with the previous question, but the business started in 2017, and since then, this has been conducted. So from before the business started, the scheme was anticipated and started the business on top of the based on that, or did the business start first and then this fictitious transaction started? What do you think? What does the investigation look like so far? According to our understanding, the amount started becoming big in recent years, and so we said we have to have a tighter control, tighter control internally. So until when the transaction was authentic and correct, this is still being investigated by the investigation committee. One more question.

Operator: Any other questions? Day 1, please. Fujita from Asahi Shimbun, I would like to clarify some facts here. So this diagram of the fictitious transaction one, two, three, the advertising agency, is this just a single agency, or only number two is a different agency? Multiple number of agencies are involved. One and three are the same. There's a note on the right-hand side. So one, three are the same entity. It's just one company, you mean. Yes, we have just confirmed one, and others are yet to be investigated. G-PLAN from 2017 and BIGLOBE from 2022, one and three, so it's not about this one and three. It's the same entity. The 2017, when we calculated the amount, we just assumed that from the very beginning, everything was fictitious. So back then, the entity is the same entity. We are still investigating it.

Operator: Next question, please. So A4 towards the MC. The Nikkin Otsubo is my name. In the last financial results briefing, there were challenges, you mentioned, of the deposit procurement capability. I have a question on that. And then about AI-related question. First, on the deposit procurement capability, you said you are enhancing the capability. Could you elaborate on that? Thank you. Thank you for the question. So Jibun Bank program, we are trying to enhance the benefit, but not only that, the channel. There are multiple channels, and so we're trying to appeal and working with securities brokerage partners, enhancing that to expand the deposit. And the other is plan benefit. So money activity two is launched. On the bank side, we are focusing on this plan, and so the individual personal deposit is increasing on that side. Thank you. Next, a new AI company.

Operator: You're working on the implementation, you said, and trying to establish the development infrastructure. In the financial industry, the AI is used more and more. So in the financial industry, what kind of implementation are you working on or planning? Thank you. Katsuki-san would like to respond. Thank you for the question. AI implementation. In various industries, there are common areas. First, contact center and the fraud detection. AI will start from those areas. In our financial group, we are studying, examining the possible implementation and working with other financial institutions to conduct the POC, proof of concept. Thank you. So SoftBank has been working on that, the contact center. So if you could say a little more about what you're trying to do in the new company, what is the significance of this new company?

Operator: Next question, please. Day 2, please. Kuroshima from Kyodo News. As to the inappropriate transaction, there are two people from G-PLAN, and they were seconded to BIGLOBE. From when? And these two are rank-and-file employees or their managers or executives? Thank you for the questions. It's related to their privacy, so I would like to refrain from answering those questions. Sorry. So Day 3, please. Hosokawa from Nikkei. About this matter of inappropriate transaction, these two people, they were seconded to BIGLOBE. That means that they had authorities to work both for G-PLAN and BIGLOBE. They were seconded from G-PLAN to BIGLOBE, and BIGLOBE launched this new business, and these two were working on that new business. And during the secondment period, they were also able to work for G-PLAN as well? Yes, usually. Yes.

Operator: So in December, I mean, in October 2025, there were some points made, but as to the documents, the billings and the receipts, which are the evidence of the transaction, existed, and there was no problem about the inpayment and outpayment, and we were told that there was no problem from BIGLOBE as well. And in this advertising business, there were lots of people involved from downstream to upstream, and we didn't look into a very extreme of the flow. So I think that's part of the reasons this kind of matter happened, and that's something that we need to make improvements. Another question. So there's a governance issue. You have many subsidiaries, and your business is diversified. So a company, what kind of governance issues do you recognize, and what kind of actions you would like to take about them? Thank you for the question.

Operator: Thank you, Sayama-san. Please raise your hand if you have questions. Line B, row 4, towards the emcee, please. Yomiuri Shimbun, Ono is my name. So my question is also on fictitious transactions. So in this scheme, number one and two agencies. So it was elucidated because the payment was not done. Did you contact these companies? Is the business continuing? So that's my first question. And number two in the scheme. How involved is this company in the fictitious transactions? In this business flow, were they used, or did they collaborate? Did they contribute to the fictitious transactions? Thank you for the question. The transaction is, of course, stopped. It's suspended. With some agencies, there were collaborations, but we think, but this accuracy is now being investigated by the Special Investigation Committee. So number two.

Operator: Thank you. Next question, please. B3, third row, towards the exit, please. Sankei Shimbun, Fujii is my name. So my question is on fictitious transactions. It's cumulative, but JPY 246 billion impact on sales. This is quite large. Each individual transaction was a large amount, or it just accumulated to be this big? Number of cases or the transaction volume, value, I know you cannot go into much detail, but just a rough image, if you could elaborate for us to get a better image, please. Thank you. So as I mentioned earlier, recently, a few tens of billions of JPY had been circulated back. In the scheme, based on the assumption that the amount goes up month after month, and so it gradually increased and amounted to a few tens of billions of JPY, so including previous years, JPY 246 billion.

Hiromichi Matsuda: The impact, as to the impact, for example, the handset replacement program, there should be a good balance there, but in the third quarter, the Smartphone Start Plan, the year that is producing a good benefit for this year. Thank you. My second question. Rakuten Mobile, they exceeded 10 million other contracts to the end of last year, and I think roaming. I think that there are some difficulties, but could you please talk about the direction and your thoughts on this area as well? I cannot talk about the other companies, but the competition and the collaboration for roaming included, and we are also competing with them as well. So in September this year, we are discussing with them for the roaming for September this year. The other day, the Rakuten was faced with some other communication failures, and that pushed a lot of traffic toward us.

Hiromichi Matsuda: The areas, in other words, are overlapping, and that should be sorted out. And we are going to suspend the other part of the other communication in due course. Thank you. Line A, row 1, towards the exit, please. Sekiguchi is my name. I have a question on your business. On page 17 of your presentation, you talk about Netflix, the differentiated service subscriber, is now nine times bigger. So the pricing plan, subscription, how much track record do you have as au? And regarding Netflix, LYP Premium, LINE Yahoo is now launching a new plan, so Netflix can be used. So how do you see the impact there? Thank you very much. Thank you. So the original Netflix, it's not the original Netflix bundle, it's subscription. So 20% point back if you subscribe, and maximum five months you get free. So that's the campaign.

Hiromichi Matsuda: au and UQ mobile customers. And of course, there's the product appeal of Netflix that attracts these users, but we want this to be used. So from March and April onward, we will continue, and as I showed, this will lead to the long-term usage. So this is a bit different. The users may be a bit different from our peers' program. Thank you. One more question is on your CapEx. Your thinking on CapEx. In yesterday's NTT Docomo briefing, they said in their CapEx, they're increasing from last year, and FY26, they will build the base station quite aggressively, and by next year, they said they will catch up with the other competitors. So not all base stations will directly lead to the communication quality, but you will be caught up. So based on that assumption, what is your thinking on your CapEx?

Operator: Next question, please. Row A1, towards the MC, please. Jiji Press, Nakamura is my name. Thank you. I have a question on the fictitious transaction case. So the two that are suspected to be involved, what was the motive or reasons or trigger? Have they talked about that? We want to not impact the investigation of the Special Investigation Committee, so allow me to refrain from mentioning that today. Yes, one more question is, going forward, so where a large amount of money is involved, if there was a falsification of the document, that may be another crime. So have you submitted the damage to the police, or have you taken actions? Yes, we are aware of that. We have not consulted with the police yet, but depending on the progress of the investigation, we will consider that and take appropriate actions. Thank you.

Operator: For the other whole group, we have surplus, and the KDDI kind of concentrated it at headquarters, and from the headquarters, we lent money to the other group companies. So the group finance was executed for BIGLOBE. The telecommunication-related investment, and last year, JPY 57.9 billion or so lending was extended to BIGLOBE last year, last fiscal year, in the group financing. So group finance might have been used as part of this incoming money. As to these two employees involved, both of them were seconded to BIGLOBE, but they are G-PLAN employees. At this moment, you have not confirmed any other employees involved. Yes, your understanding is correct. At this moment, we have not confirmed any other employees involved. But that is also subject to the investigation by the committee. Thank you.

Nanae Saishoji: For the other whole group, we have surplus, and the KDDI kind of concentrated it at headquarters, and from the headquarters, we lent money to the other group companies. So the group finance was executed for BIGLOBE. The telecommunication-related investment, and last year, JPY 57.9 billion or so lending was extended to BIGLOBE last year, last fiscal year, in the group financing. So group finance might have been used as part of this incoming money. As to these two employees involved, both of them were seconded to BIGLOBE, but they are G-PLAN employees. At this moment, you have not confirmed any other employees involved. Yes, your understanding is correct. At this moment, we have not confirmed any other employees involved. But that is also subject to the investigation by the committee. Thank you.

Operator: 次の方、挙手をお願いします. Next question, please. Line D, row 2, towards the MC, please. Kyodo News, Kawashima is my name. So fictitious transactions. Number one and number three. There's number two in the middle. So number three, unless the order goes to the number three, the money does not circulate. But was the scheme such that the money will always go from two to three? Is there one company in two? Usually, I think it's multiple. But in this fictitious scheme, was there one particular company that was in charge? Thank you. From BIGLOBE and G-PLAN, the upstream companies contract and the contract with the publishing agency. There were two types of contracts. And I mentioned the business practice, commercial practice. And what's beyond this downstream publishing agency? We usually don't see that. We were not looking at what was beyond the publishing agency.

Operator: Any other questions? A person at B1, please. Sato, Freelance Channel. Starlink-related question. This year, other carriers are going to start the satellite telecommunication service within this year. You had a lead time of about 1 year. What is the advantage? Do you think that there is an advantage for you? And how are you going to differentiate yourself this year? Are there any specific measures? Thank you. It's something that you can look forward to, I would say. Starlink Direct or ARIA, we would like to deliver it right away. And with that in our mind, we have been developing ARIA and Starlink Direct as well. The sooner, the better for customers. As to the lead time advantage, without thinking about other companies, as a front-runner, we would like to work on something new.

Hiromichi Matsuda: Line B4, towards the MC, please. The Yomiuri Shimbun, Ono. Sorry for asking you another question. Just one clarification. So fictitious transactions, the impact on your financial results. Earlier, you said from 2017, the business started and sales, you mentioned full amount. But as the investigation progresses, the fictitious portion and the actual transaction will be clearer. So this amount is the current estimated amount, or this amount is subject to change as investigation progresses? Thank you. For now, this is the maximum amount that we are expecting. But the fictitious transaction started increasing in recent years, so we think a fictitious portion will account for a large portion. So now, so this is the amount that will be reversed. Is this already fixed? Of course, it depends on the Special Investigation Committee and the audit firm's audit. So this is subject to change. But we understand that this is the maximum amount.

Operator: の方をさせていただき. Question from online. Koyama-san, unmute yourself and start your question. Here's Koyama, Freelance. Jibun Bank and the deposit funding and the improvement and the impact of the Money Activity Plan II. You talked about other reasons as well, factors as well. What is the impact coming from the Money Activity Plan II? You talked about the reimbursement, if it is over JPY 500,000 and so on. Any impact there you've seen? And also, card business is also growing. Is also driven by the Money Activity Plan II or any other factors? Thank you. Katsuki-san, anything? Thank you. As to deposit funding, there are two factors, as I mentioned earlier. The bundled, the deposit bundled plan, the Money Activity Plan II, and au Jibun Bank own campaign during the bonus season, for example. Such deposit collection campaign worked. And as you can see later, the operation data, you can look at page 36 of operation data. Why?

Operator: As an internal investigation, we found out that before the fiscal year ending March 2024, each company, so all transactions since they started the advertisement business have been summarized. So in case of G-PLAN from 2017 and BIGLOBE 2022, they started the advertisement agency business. So it's the summary of all the amounts. So it started from, not from there onward, but from the very beginning. The fictitious transaction was likely to have happened from the beginning of the business. Well, the authentic, correct transaction, and fictitious transactions are now being separated, but now we're seeing an increase of the fictitious transaction portion. So we are looking at all the transactions with a view that there's a possibility of fictitious transactions. Understood. So including those cases that were correct in the past, you are checking all cases.

Operator: One more question online. Horikoshi, Nikkei Business, please unmute yourself. Here's Horikoshi speaking. Can you hear me? Yes. Two questions. First, inappropriate transaction. So within the scheme diagram, number two, it could be involved from the very beginning with number one and three, or that it could be involved later. So indeed, the supply chain as a whole, my question is why you did not detect such transactions. I think it is because of failure of the control scheme. So could you please share with your thought? So the group governance, and it is related to the responsibility of supervision. So monthly transaction itself has the vouchers and the slips, accounting slips, which verify that the transactions occurred and they were continuing the business as normal transaction. And BIGLOBE also gave some information about the appropriateness of the other transactions as well.

Operator: Objective, but the objective evidence was not detected about inappropriate transactions. So it took time for us to detect all that. So as I mentioned earlier, group finance is part of the picture. Ad network, the council, most of the other ad amount that is currently being investigated. So I do not make any comments on that. Second question is about the Miyazaki Data Center. Two years ago, you did some other construction work. What is the size of the investment, and what is the size of the data center? As you can see on the screen, AI Digital Belt concept or initiative, you have about, well, there are about three big data centers. Are you going to open three big data centers in Japan, or what about Tohoku and Hokkaido area? Is there any possibility for you to go to those areas as well? Thank you.

Operator: The belt diagram is showing that there is no coverage in the north, but actually, we are constructing the belt in the north as well. Setting aside whether it's big size or not, what kind of AI data center should be there that is in our mind? The AI processing will be happening in other different locations. So it's not that everything will be concentrated on big data centers. So the connection, like mesh, and as a whole, the belt which covers the whole Japanese archipelago, that's what we are thinking about. And the Miyazaki, though we have secured the adjacent land so that we can easily expand the location as well, though watching closely the demand level, though we are going to make next moves in the next midterm strategy, though we are going to give you more details. Thank you.

Hiromichi Matsuda: The belt diagram is showing that there is no coverage in the north, but actually, we are constructing the belt in the north as well. Setting aside whether it's big size or not, what kind of AI data center should be there that is in our mind? The AI processing will be happening in other different locations. So it's not that everything will be concentrated on big data centers. So the connection, like mesh, and as a whole, the belt which covers the whole Japanese archipelago, that's what we are thinking about. And the Miyazaki, though we have secured the adjacent land so that we can easily expand the location as well, though watching closely the demand level, though we are going to make next moves in the next midterm strategy, though we are going to give you more details. Thank you.

Operator: So next question, please. Row D3, towards the exit, please. Yomiuri Kobayashi is my name. Sorry to ask you. So JPY 33 billion external outflow is my question. In Q3, up to Q3, JPY 17 billion has been provisioned, if my understanding is correct. And maximum JPY 33 billion has flown outside. So in KDDI's P&L, how much will eventually be posted as loss? So that's my first question. Thank you for the question. So this year, impact, we need to wait for the result by the Special Investigation Committee for the amount to be fixed. But for now, this amount that is shown vertically will be posted on our P&L. So JPY 33 billion, and there may be additional impairment. For this fiscal year, JPY 17 billion is provisioned. So reversal of profit is JPY 25 billion. And other than that, there is a possibility of impairment in addition.

Operator: For that, online intermediary, the other securities, so SBI Securities using the au Jibun Bank, that kind of alliance is our current focus. So when it comes to the securities sales step, which requires special qualification, development of such personnel in the real world, we are not thinking about it at this moment. Have I answered your question? Thank you. It's not only about securities accounts, for example, the various services of the au Jibun Bank or mortgage loans. In those areas, what is your thought? And of course, always we are reviewing every potential, the possibility. There are various financial services and some new emerging financial services, especially au Financial Holdings. As to their operating other areas, we would like to give serious thought. Have I answered your question? Thank you.

Operator: So the last question, C3 towards the entrance, please. Sorry. And NHK Toma, again. So regarding the fictitious transactions, so the two employees were involved, you said. So if I could put this in perspective, the two are still seconded to BIGLOBE? They are, yes, G-PLAN employees seconded to BIGLOBE. So seconded to BIGLOBE. And there are multiple, so they belong to G-PLAN? So they're seconded to G-PLAN. But why, despite the absence of the two, can this transaction continue? So they're not in G-PLAN, but why can they operate G-PLAN's transaction or can be involved in G-PLAN's transaction? So they're dual-headed. They're seconded, but there is a proportion between the seconding destination and the source company. So they are dual-headed. I see. So the two employees, so they were not checked, the transactions that the two were involved.

[Analyst 27]: Sorry. And NHK Toma, again. So regarding the fictitious transactions, so the two employees were involved, you said. So if I could put this in perspective, the two are still seconded to BIGLOBE? They are, yes, G-PLAN employees seconded to BIGLOBE. So seconded to BIGLOBE. And there are multiple, so they belong to G-PLAN? So they're seconded to G-PLAN. But why, despite the absence of the two, can this transaction continue? So they're not in G-PLAN, but why can they operate G-PLAN's transaction or can be involved in G-PLAN's transaction? So they're dual-headed. They're seconded, but there is a proportion between the seconding destination and the source company. So they are dual-headed. I see. So the two employees, so they were not checked, the transactions that the two were involved.

Operator: So the transactions that only two of them were involved were fictitious. So these fictitious transactions, we have elucidated up to now, this much fact is already clear. There are authentic or correct transactions as well. So we're trying to draw a line between the two. And for the ones that the two were involved in, BIGLOBE and G-PLAN, they are fictitious transactions. That is our understanding. So we're trying to have the Special Investigation Committee check the accuracy of that. Number one and number three were identical companies. That's one company. So yes, one entity, we want to refrain from saying how many companies they were. But the hearing or the entry, withdrawal, money and digital forensics is utilized. And understood that one and three are the same. That's what we're saying today. And last question.

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Q3 2026 KDDI Corp Earnings Call

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