KDDI Q3 2026 KDDI Corp Earnings Call | AllMind AI Earnings | AllMind AI
Q3 2026 KDDI Corp Earnings Call
Okay.
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.
My name is here okay.
From public relations department of commodity I serve as M C.
Today's meeting.
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.
Today's.
Presentation is being distributed.
On Youtube and other media in addition to the on site.
And we have put three related materials on the <unk> website.
Please refer to the materials at Hound.
This is a message for the people in D C.
All sites audience today's attendees are as follows.
He didn't meet you must adopt president representative director and CEO.
Thank you very much for gathering here today, despite your busy schedules.
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: 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.
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 K DDI 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 of 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 Big loan.
I will explain the purpose of todays 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: 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.
As the special investigation committees inquiry into in 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 26 earnings release.
Therefore.
Today.
Explanation is titled.
Q3 preliminary results explanation, we will report on the facts currently recognized by the company.
The outline of the financial impact.
Separate from this matter the business progress for the third quarter and initiatives for future growth.
Please note that the Q3 preliminary preliminary results prior ear results and financial impacts 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: 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.
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 than the growth of our core business foundations, including mobile and our key focus areas and the growth in the AI era.
Yes.
First.
Regarding the improper transactions that occurred at our subsidiary.
This was disclosed on January 14th.
Sure.
It has been discovered that improper transactions were allegedly conducted by employees of big load a consent consolidated subsidiary of the company and its subsidiary G plan with 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: 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.
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 January 14th.
Okay.
Next and.
An overview of the fictitious transactions we have identified.
Both.
So this is the left side with the 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 bleak load N G plan are in the upstream.
Okay.
<unk> agencies in publishing agency 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.
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.
Around 2017 G plan launched this business.
And big load later entered to develop new ventures.
You can see the flow here.
Within this business.
Sure.
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 E advertising agency services. Despite the absence of actual advisors 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 increase.
Sure.
So following an internal investigation K D D I instructed big load N G plan.
To reduce orders to downstream agencies to strengthen management systems and managed business risks.
This led to delayed payments from upstream agencies.
Within the structure, where downstream agencies deducted commissions from payments related to big Globe and G plans transactions.
Hiromichi Matsuda: Within the structure where downstream agencies deducted commissions from payments related to BIGLOBE and G-PLAN's transactions, the funds flowing to upstream agencies. Therefore, the upstream agency became unable to make payments to both companies. So this transaction volume snowballed and reached hundreds of billions of JPY per month in recent periods. Beyond the publishing agencies, there is number 3 and number 1, the upstream agencies. We understood that those 1 and 3 are identical. And through this fictitious transaction, BIGLOBE and G-PLAN, posting of revenue was excessive, and because it's fictitious transactions, the fee was flowing outside. The impact is on the next page.
Hiromichi Matsuda: Within the structure where downstream agencies deducted commissions from payments related to BIGLOBE and G-PLAN's transactions, the funds flowing to upstream agencies. Therefore, the upstream agency became unable to make payments to both companies. So this transaction volume snowballed and reached hundreds of billions of JPY per month in recent periods. Beyond the publishing agencies, there is number 3 and number 1, the upstream agencies. We understood that those 1 and 3 are identical. And through this fictitious transaction, BIGLOBE and G-PLAN, posting of revenue was excessive, and because it's fictitious transactions, the fee was flowing outside. The impact is on the next page.
The funds flowing to upstream agencies.
Therefore upstream agency became unable to make payments to both companies.
So this transaction volume.
Snowballed.
Sure.
And reaching hundreds of billions of yen per month in recent periods.
Thanks.
Yes.
Yes.
Beyond the.
Publishing agencies, there is number three and number one in the upstream agency, we understood that those one and three are identical into this fictitious transaction.
The Globe Engie plan.
Yes.
Posting.
Revenue was excessive and because it's fictitious transactions.
Sure.
The fee was flowing outside.
Sure.
And the impact.
Is on the next page.
But as of today.
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 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.
These are the impact that we recognize.
As I mentioned earlier because of fictitious transactions, we need to cancel book to revenue process. The booked revenue and this is before FY 'twenty foot much about 90 60 billion yen and for FY 'twenty five much 82 billion in FY 'twenty six much.
68 billion, yet the total of 246 billion yen.
Below that operating income.
The reversal of recorded income.
About 8 billion yen.
17 billion yen and about 25 billion yen.
Yes.
These profits to be cancelled in addition, as I mentioned earlier, the commissions, which are out flu.
And we have completion, Inc.
So that $5 billion 11 billion and 17 billion yen.
Hi.
And us too.
33 billion yen approximate number.
We are going to make efforts to recover.
This amount in addition.
Including the prayer is that 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: 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.
The bottom next steps as I mentioned earlier.
At the end of March of <unk>, we are going to publicize the reportable investigation as well as financial results without delay.
In addition.
In a parallel way reviewing strengthening the company group's governance and examining recurrence prevention measures will be taken.
No. This is a commitment to future actions first we are fully committed to cooperating with the special investigation Committee diligently uncovering the Fox and thoroughly analyzing the causes.
I myself will take the lead in actively addressing these issues to restore and strengthen the trust for our group.
Yes.
Company opposed for KDD Eifler Sophie <unk>.
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.
By doing so we aim to foster a culture that in house as opposed to human capabilities and ethical standards.
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: 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.
To me to your expectation and to regain trust.
Of course, we will make efforts to do everything to avoid any re occurrence of similar matters at the same time. It is indispensable for us to continue to develop our business for sustainable business operation. So from now on I would like to communicate.
To you specifically what the initiatives are meters, we would take.
No.
Sure.
This is as reference figures I present consolidated results for the third quarter.
FY 2025.
And we have revised both.
Raia era ended this year because of the impact coming from the matter. Please refer to the the bottom column.
And do we have a canceled the <unk> the revenue and income associated with fictitious transactions and on the right hand side.
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.
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.
So in year on year comparison with the actual result.
The cumulative results for the first three quarters are as follows.
<unk> revenue plus three 8% operating income plus 3% and the profit for the period plus five 3% we are performing well.
So that is the cumulative based it consolidated.
We felt.
Change of factors from the defense side, the rehab deal at a mobile personal services segment, Debase, plus 27 point to too.
1 billion yen and other China's energy loosen, plus 18.2 billion and the Dx business services segment, plus eight 5 billion technological structure reform, plus 2.9 billion NIM and impact of prior is promotional expenses minus 28 point.
9 billion yen and.
And based on those numbers, the total or plus 17.4 billion yen.
Positive.
And also they are.
The mobile related revenue grew and its expanded and the finance and the exit.
Moving on smoothly and this is the Q3 alone consolidated operating income and the factors for change.
In addition to each business domain growth negative impact from prior year's promotional expenses has also subsided. So we are seeing positive.
Nanae Saishoji: In addition to each business domain growth, negative impact from prior years promotional expenses has also subsided, so we are seeing positive growth. Now I would like to explain about this year's topics.
Nanae Saishoji: In addition to each business domain growth, negative impact from prior years promotional expenses has also subsided, so we are seeing positive growth. Now I would like to explain about this year's topics.
The growth and now I would like to explain about this year's topics.
Hiromichi Matsuda: The mobile business is making steady progress in structural transformation, building a stable business foundation that will serve as a pillar for sustainable growth. Mobile revenues bottomed out in FY March 2024, and growth accelerated on a nine-month cumulative basis in FY March 2026 with an increase of JPY 29.9 billion year on year. Right side, we are shifting away from excessive promotional competition and focusing on LTV. Structural transformation is also progressing, and we are building a lean and mean operational base with ARPU growth driven by value creation and churn rate reduction through longer contract duration. These are the key points of structural transformation of the mobile business that we explained in our Q2 financial results.
Hiromichi Matsuda: The mobile business is making steady progress in structural transformation, building a stable business foundation that will serve as a pillar for sustainable growth. Mobile revenues bottomed out in FY March 2024, and growth accelerated on a nine-month cumulative basis in FY March 2026 with an increase of JPY 29.9 billion year on year. Right side, we are shifting away from excessive promotional competition and focusing on LTV. Structural transformation is also progressing, and we are building a lean and mean operational base with ARPU growth driven by value creation and churn rate reduction through longer contract duration. These are the key points of structural transformation of the mobile business that we explained in our Q2 financial results.
The mobile business is making steady progress in structural transformation.
Building, a stable business foundation that will serve as a pillar for sustainable growth.
Mobile revenue has bottomed out EFI March 24, and growth accelerated on a nine month cumulative basis in FY March 26, with an increase of $29 9 billion year on year right side, we are shifting away from excessive promotional competition and focusing on LTV structural transformation is also progressing and we are building a lean in.
Mean operational base with ARPA growth driven by value creation and churn rate reduction to longer contract duration.
These are the key points of structural transformation of the mobile business that we explained in our Q2 financial results.
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: 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.
We are promoting initiatives to secure long term contracts by creating value that motivates customers to sign up shown on the left.
Yes.
And refining a used 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 UQM, a while we are focusing on promotions that suggest the optimal device to customers and device bundled contracts, which have higher <unk> and contract retention rate are on the rise by four percentage points.
Right side, we are also working to differentiate our planned and services and money activity plan to come to pass and Netflix are all performing well, which has increased <unk>.
Fold.
We are enhancing the value of the connected experience, which is the source of our competitiveness.
Hiromichi Matsuda: We aim to expand the 5G SA area, which provides more stable communication with standalone 5G to over 90% population coverage by the end of the fiscal year, which will be one of the highest in the industry. Right side, au Starlink Direct was launched in April 2025 and has expanded to over 80 devices, 10 million units in less than a year, with a number of connections reaching approximately 3.5 billion. Recently, there was a report of a fall while ice climbing in Hokkaido, and one of them used this service to send SOS, which led to a rescue. Last week, the coverage area doubled, now covering the Ogasawara Islands and all major ferry routes. In March, the service will be available outside of Japan, in the US as well.
Hiromichi Matsuda: We aim to expand the 5G SA area, which provides more stable communication with standalone 5G to over 90% population coverage by the end of the fiscal year, which will be one of the highest in the industry. Right side, au Starlink Direct was launched in April 2025 and has expanded to over 80 devices, 10 million units in less than a year, with a number of connections reaching approximately 3.5 billion. Recently, there was a report of a fall while ice climbing in Hokkaido, and one of them used this service to send SOS, which led to a rescue. Last week, the coverage area doubled, now covering the Ogasawara Islands and all major ferry routes. In March, the service will be available outside of Japan, in the US as well.
We aim to expand the five G. S. A area, which provides more stable communication with Standalone five G to over 90% population coverage by the end of the fiscal year, which will be one of the highest in the industry.
Right side Au Starlink direct was launched in April 2025, and has expanded to over 80 devices 10 million units in less than a year with a number of connections, reaching approximately $3 5 billion five $3 5 million.
Recently, there was a report of a fall while ice climbing in Hokkaido and one of them use this service descent, Sos, which led to a rescue.
Last week.
The coverage area doubled now covering the Ogasawara islands, and I'll measure very routes.
And in March the service will be available outside of Japan in.
In the U S as well.
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.
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.
This shows the result of our <unk> growth driven by value creation, which is a factor towards leaner and meaner operation base, our value creation efforts had been successful as shown on the left and regarding brand migration Youku mobile to AUO migrations finally serpe.
Past au to Youtube mobile migrations on a quarterly basis east.
These factors also contributed to the significant growth of mobile <unk> by 190 and 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 remained strong as shown on the <unk>.
Right.
Smartphone churn rate in Q3 of FY March 26th fell by 0.01 percentage points year on year showing steady improvement.
Hiromichi Matsuda: We are making progress in addressing the financial business, which was identified as an issue in Q2 financial results. In Q3, credit card business mainly drove profit growth, with operating income up by 30.5% year-over-year on a cumulative basis. As shown on the right, the bank's deposit procurement capability, which had been a challenge, has improved steadily, and the personal deposit balance expanded by 1.3 times year-over-year. Number of gold credit card members also increased steadily by 24.5% year-over-year.
Hiromichi Matsuda: We are making progress in addressing the financial business, which was identified as an issue in Q2 financial results. In Q3, credit card business mainly drove profit growth, with operating income up by 30.5% year-over-year on a cumulative basis. As shown on the right, the bank's deposit procurement capability, which had been a challenge, has improved steadily, and the personal deposit balance expanded by 1.3 times year-over-year. Number of gold credit card members also increased steadily by 24.5% year-over-year.
We are making progress in addressing the financial business, which was identified as an issue in Q2 financial results.
In Q3 credit card business, mainly drove profit growth with operating income up by 35% year on year on accumulative basis.
As shown on the right.
The banks deposit procurement capability, which had been a challenge has improved steadily and the personal deposit balance expanded by 1.3 times year on year and number of gold credit card members also increased steadily by 24, 5% year on year.
Another.
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: 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.
Challenge for us, namely the business services segment here growth was seen in each business area as shown on the left the gross of the third quarter alone was classic 1.7% showing a strong momentum.
In particular, the B P O S I related to business, which had been identified as an issue in the first half turnaround and increased profits in the third quarter.
On the right hand side Iot drove gross increasing about.
Double digit year on year.
And especially Iot, including the silicon.
The connection exceeded $6 6 million.
On the left hand side.
Lawson.
And it could a city in Osaka or we're working on the development of the town, where you can the leafs.
Skewed and save money and on the right hand side.
We are using the drone to instruct.
The other disaster related the location.
And we have more than 1000 locations, where we have the other drone ports and we'd like to construct very agile and safe.
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: 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.
Yes.
System for the disaster.
And now the other management as a platform.
And how to strengthen it in light of inappropriate transaction awesome subsidiaries, we will be even more conscious of the importance of governance.
And as you can see on the left hand side, although we have the other two.
T D D I know Sophie, which emphasize the human capabilities indicated the overburden of its joke based personnel system has created a mechanism to enhance expertise.
And it's shown here.
As 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 our challenge is to take on challenges and we will introduce a systems and programs that celebrates challenges and promote collaboration and advance human resource.
Development in line with our businesses strategies for growth now I'd like to talk about our efforts towards growth in the AI era.
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: 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.
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 other new AI infrastructure.
As Arie becomes more widespread in a variety of settings and air infrastructure that can process data securely with low latency will be important.
Left side with an eye towards such era, we.
Insured sovereignty and began operations at <unk>.
The other Osaka Sakai data center in January as a data hub for security Proccessing corporate data.
And we have achieved efficiency gains by utilizing.
B the existing space and following Sakai, we plan to launch them years looking at the <unk> Center in February as a communication hub leveraging the knowledge gained at <unk> to expand into an AI data center.
So we will expand operations in the country region and Kyushu and soon.
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: 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.
And utilize our existing Atlantic station to connect AI data centers with a strong communications network.
Building, an AI digital built a nationwide low latency network and AI computational infrastructure.
We will also utilize.
The London stations and submarine cables across the country to enhance the value of the digital belt.
And we are going to create a hub by connecting lending stations and submarine.
Hey, Bose.
Acadia presenting some of Japan's leading knowhow and assets covering everything from submarine cable installation to maintenance with over 60 is of experience.
306 day availability and landing stations across the country. We also have strengths in universal joints, a connection technology for optical submarine cables and possesses world class technological capabilities by leveraging these assets, we will develop landing stations near a I D.
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: 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.
CS and expand accessibility, but are computational infrastructure overseas locations, thereby capturing global demand.
Today at the board of Directors meeting.
Decided we resolved to launch a new integration business cooperation.
The communication.
Platform on top of that we need this AI platform.
We have lots of contacts with customers.
So the eyes.
In order to deliver AI as part of the of the Labor Force. It is very important to have solid.
Platform.
And for that.
We are going to utilize our expertise and technological prowess.
And also we will integrate our consulting professionals.
From the headquarters and based on that we established KDD I irate and going forward. We will also call upon more engineers from outside of targeting at about 3000 personnel by fiscal year 2028, Lastly, today's summary.
Festival.
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.
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.
The special investigation Committee will continue its investigation into the inappropriate transactions, while the company reviews and strengthen its group governance and if that means recurrence prevention measures as to the impact at Mt.
It is expected to include the reversal of a fictitious sales and profits as well as provisions for amounts that Florida outside the company. The company will make every effort to recover it externally fluid portion.
As to the schedule as I mentioned earlier.
Targeting at the end of March Special Investigation Committee is going to issue a report on the restoration and based on the results of the investigation.
<unk> two prior year financial statements and FY 'twenty six much Q3 results will be disclosed by end March and if our 26th March fully hit results will be disclosed without delay.
In the third quarter core businesses perform with a very steadily.
Especially mobile structural reforms progressed as planned and the business foundation, including focus areas continued to grow solidly as social.
Nanae Saishoji: Especially, mobile structural reforms progress, Task Plan, and the business foundation, including focus areas, continued to grow solidly. AI social implementation initiatives, including the AI Digital Belt and the AI development platform, are making steady progress. Even with the impact coming from inappropriate transactions, business is performing well. There is no revision to the dividend forecast for fiscal year 2026 March. Thank you very much.
Nanae Saishoji: Especially, mobile structural reforms progress, Task Plan, and the business foundation, including focus areas, continued to grow solidly. AI social implementation initiatives, including the AI Digital Belt and the AI development platform, are making steady progress. Even with the impact coming from inappropriate transactions, business is performing well. There is no revision to the dividend forecast for fiscal year 2026 March. Thank you very much.
Implementation initiatives, including the air digital built and the AI development platform, making steady progress.
Even with the impact coming from inappropriate transaction.
<unk> is performing well.
And also there is no revision to the dividend forecast for.
Fiscal year 'twenty six March thank you very much.
Yeah.
Okay.
Okay.
Hiromichi Matsuda: それではこの。
Nanae Saishoji: それではこの。
Sort of upon us.
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: 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.
We will now move on to the Q&A session.
We will take questions from both the Senate 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.
And if you are participating by zoom webinar. Please press the raise hand button.
So road sea third from the French work towards the exit door. Please.
[Analyst 1]: 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?
Thank you NHK Thomas is my name.
So about the fictitious transactions.
I do not have the full understanding so let me ask you a question so about the amount.
Right.
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.
Hiromichi Matsuda: 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 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 <unk> 50 billion.
And there is 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.
[Analyst 1]: 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?
Thank you and this external slow 33 billion if you could explain the scheme once again.
So this external flow.
So the upstream.
Our advertising agency and the threes are contracted party. It was the fixed neural outflow from to those parties or was there an endeavor meant by the employee.
Hiromichi Matsuda: 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. So this shown here, so to five companies, the fee was provided in this fictitious transaction. The advertising fee that goes to the publishing agencies was also returned. G-PLAN and BIGLOBE commission was also external outflow within the group. G-PLAN and BIGLOBE fees, that were deducted fees, were posted, but that was fictitious. And so the sales and profit were reversed, so that's shown in orange on the upper half.
Yes, if you could turn to the scheme diagram.
Basically this was a fictitious transactions.
The agencies.
Yes.
Received the commissions of the transaction subtracted the V. So the amount.
Okay.
Yes.
Is this external helpful recorded at fees.
I see.
Yeah.
Operator: So this shown here, so to five companies, the fee was provided in this fictitious transaction. The advertising fee that goes to the publishing agencies was also returned. G-PLAN and BIGLOBE commission was also external outflow within the group. G-PLAN and BIGLOBE fees, that were deducted fees, were posted, but that was fictitious. And so the sales and profit were reversed, so that's shown in orange on the upper half. Thank you very much.
So.
This.
Yes.
As shown here so two five companies that he was.
Provided in this fictitious transactions.
The advertising fee that goes to the publishing agencies was also returned.
G plan and Big Globe.
Commission was also external outflow within the group.
G plan and Big Globe.
Fee that would deduct deducted the world's postage.
But that was fictitious and so the sales and profit was reversed so that shown in orange on the upper half.
[Analyst 1]: Thank you very much.
Thank you very much or any of those Amos.
Hiromichi Matsuda: ありがとうございます。
[Analyst 1]: ありがとうございます。
Thank you.
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. Any other questions? Day 3 on the entrance side, please.
Yes Christian.
D three.
On the interest side plays Goodbye here from your Mudie newspaper I want to clarify some facts.
[Analyst 2]: 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?
There's no period the booking when did it start.
And also how many employees have been involved.
You may ask those questions.
Okay.
It's a multiple number of years, that's a recognition.
Hiromichi Matsuda: 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.
As a result of the internal investigation Gee plan.
This business has started in 2017 and the big Gorilla glue.
They started this business from FY 'twenty to 'twenty two.
At this time.
There are some a fictitious transactions and now if you could teach us once but the amount is 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.
Two.
I understand that the other two.
The improved from the GE plan.
Entities to a second at two other big Clove and to do these transactions were conducted by them.
That's our current recognition.
Operator: So these two people, 2017 and onward, they booked inappropriately. And the total is JPY 246 billion, am I right? From the very beginning, when the advertising business was started, it is included in that amount, but from when and from where, the investigation committee is still investigating it. And those numbers are as far as we recognize. So the most precisely, the committee will receive the report. Am I right to understand that the employees of the KDDI are not involved? Right. As to the commercial flow, we have already confirmed that no employee from KDDI has been involved. Thank you.
Hiromichi Matsuda: So these two people, 2017 and onward, they booked inappropriately. And the total is JPY 246 billion, am I right? From the very beginning, when the advertising business was started, it is included in that amount, but from when and from where, the investigation committee is still investigating it. And those numbers are as far as we recognize. So the most precisely, the committee will receive the report.
So these two people.
2017 and onward.
Perfect.
In appropriately.
And the total is 246 billion yen am I right.
Sure.
From the very beginning when the advertising business there was a dip.
It is.
It is included in that amount about the from wind and from where the investigation complete it is still our the investigating it and if those numbers are as.
As far as the re <unk>.
Recognize and so the more precisely the committee will now receive the report am I right to understand that the or the employees of the Acadia D. I.
[Analyst 2]: Am I right to understand that the employees of the KDDI are not involved?
By not invoked.
Hiromichi Matsuda: Right. As to the commercial flow, we have already confirmed that no employee from KDDI has been involved. Thank you.
Right as to this the commercial flu we have already confirmed that the new employee from TDD I has been involved in Q.
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: Thank you. Please raise your hand if you have questions. Row D, fourth from the front to the exit, please.
Thank you. Please raise your hand, if you have questions.
ROE D fourth from the branch to the exit.
[Analyst 3]: 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?
Thank goodness favorite hockey night in first question.
Yes.
So when it started this overlaps with the previous question, but.
The business started in 2017.
And since then this had been conducted so from before the business started the scheme was anticipated and started the business on top of the on based on that or.
Did the business start first and then the fictitious transaction started what do you think.
What does the investigation looked like so far.
Hiromichi Matsuda: 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.
According to our understanding.
The announced started becoming big in recent years and so.
We.
Third we have to have a tighter control tighter control internally.
Until when.
The transaction was authentic and correct. This is still being investigated by the investigation Committee.
[Analyst 3]: One more question. With this scheme, one and three were the same entity, and these agencies had to be part of the collusion. So the recovery of JPY 33 billion, will you request for the damage compensation to the agencies, or will they be sued for a criminal lawsuit?
One more question.
Operator: With this scheme, one and three were the same entity, and these agencies had to be part of the collusion. So the recovery of JPY 33 billion, will you request for the damage compensation to the agencies, or will they be sued for a criminal lawsuit? Thank you for the question. First of all, we will wait for the result by the Special Investigation Committee, and according to that, we will take appropriate measures. Thank you.
With this scheme.
One and three where the same entity.
And these agencies.
Add to the to the year part of the collusion.
So the recovery of 33 billion.
Will you a request for the damage compensation to the agencies or.
Will they be sued for a criminal.
Lawsuit.
Hiromichi Matsuda: Thank you for the question. First of all, we will wait for the result by the Special Investigation Committee, and according to that, we will take appropriate measures.
Thank you for the question.
First of all.
We will wait for the result by the special investigation Committee and according to that we will take appropriate measures.
[Analyst 3]: Thank you.
Okay.
Hiromichi Matsuda: それではご質問ある。
[Analyst 3]: それではご質問ある。
So there was some article.
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: Any other questions? Day 1, please.
Any other questions.
Okay.
D. One please.
Who cheetah Asahi newspaper I would like to clarify some facts here.
[Analyst 4]: 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.
So this diagram of the fictitious transaction at 123. The advertising agency is this just a single agency only number two is a different agency.
Multiple number of agencies are involved.
One and three are the same.
There is a note on the right hand side, so that one.
Three.
Same entity, it's just one company you mean.
Hiromichi Matsuda: 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.
Great.
Yes. So we have just confirmed one and others are yet to be investigated J plan from 2017 and to be clear from 'twenty to 'twenty two.
One in three you said, it's not about this one and three the same entity.
The 2017.
Yeah.
Okay.
When we calculated the amount we just assumed that the from the very beginning everything was a fictitious or so.
Back then this the entity is the same entity, we are still investigating it.
Operator: So going forward, there's a possibility that there are non-fictitious transactions that might be detected. That's right. As to the amount to be canceled, so about those amounts, it's not that everything is based on fictitious transactions. Well, basically, when the amounts started to be bigger, we thought that they were because of fictitious transactions. But as you can see at the footnote, it is either on the total sales amount or the pure sales amount. So recently, the profit, the cancellation that is getting canceled more, and the transaction itself is getting bigger.
Hiromichi Matsuda: So going forward, there's a possibility that there are non-fictitious transactions that might be detected. That's right. As to the amount to be canceled, so about those amounts, it's not that everything is based on fictitious transactions. Well, basically, when the amounts started to be bigger, we thought that they were because of fictitious transactions. But as you can see at the footnote, it is either on the total sales amount or the pure sales amount. So recently, the profit, the cancellation that is getting canceled more, and the transaction itself is getting bigger.
Going forward Theres, a possibility that that there is no fictitious transactions might be detected that's right.
Now so the amount to be cancelled.
So about those amounts is not that did everything is based on fictitious transactions.
Well basically.
Yes.
Yeah.
When the amount is started to be bigger we thought that theater, there because of the fictitious transactions.
But as against that the HUD note.
Okay.
It is either on the total sales amount or the pure whose amount.
So recently.
Adam.
The profits are the cancellation there is earlier ticketing and who did the consult more and theater transaction itself is getting bigger.
Bigger.
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: Next question, please. So A4 towards the MC.
Next question. Please so a four towards theme.
[Analyst 5]: 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.
M C.
Neat clean Ohtsubo is my name.
In the last financial results briefing or that it was challenges you mentioned the deposit procurement capability I have a question on that.
And then they'll to AI related question.
Yeah.
First on the deposit procurement capability. You said you are enhancing the capability could you elaborate on that.
Hiromichi Matsuda: 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.
Thank you for the question.
So <unk> 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 are working with securities brokerage partners enhancing that to expand the deposit and the other is plan benefit so money activity too is launched.
Okay.
On the bank side, we are focusing on this that this plan until the individual personal deposit is increasing on that site.
[Analyst 5]: Thank you. Next, a new AI company. 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.
Thank you next.
Next our new AI company, you're working on the implementation he said.
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?
And is 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.
[Company Representative] (KDDI Corporation): 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.
Cutler Kisan wed 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.
[Analyst 5]: 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?
Thank you.
Yes.
So soft.
Bank is <unk> been working on that the contact center.
So if you could say I'm, a little more about what you're trying to do in the new company. What is the significance of this new company.
Operator: Well, this new company is not solely for the financial industry, and as we announced this Sakai last time, for pharmaceutical companies and others, the data, internal data, and know-how that Japanese companies have will be used, managed for AI analysis. So we are being approached by pharmaceutical and other industries. Katsuki-san just talked about the financial industry, but that is the initial step. A call center is the first step. So thank you. I hope you could understand. Thank you.
[Company Representative] (KDDI Corporation): Well, this new company is not solely for the financial industry, and as we announced this Sakai last time, for pharmaceutical companies and others, the data, internal data, and know-how that Japanese companies have will be used, managed for AI analysis. So we are being approached by pharmaceutical and other industries. Katsuki-san just talked about the financial industry, but that is the initial step. A call center is the first step. So thank you. I hope you could understand.
This new company is not solely for financial industry, and as we announced the Sakai last time from pharmaceutical companies and others.
The data internal data and Knowhow that Japanese companies have.
We'll be used managed.
For AI analysis.
So.
We are being approached by a pharmaceutical and other industries.
And just talk about the financial industry, but that is the initial step.
Call Center.
Is the first step.
So thank you I hope you could understand.
[Analyst 5]: Thank you.
Thank you, we're smart about that Ghansham.
Hiromichi Matsuda: ご質問ある方、挙手。
Hiromichi Matsuda: ご質問ある方、挙手。
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.
Hiromichi Matsuda: Next question, please. Day 2, please.
Next question please.
D. Two please.
[Analyst 6]: 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?
Who oshima included fishing.
As to the inappropriate transaction that two people from GE plan.
And today was seconded to big Globe from win.
And it is to our rank and file employees or their managers, so exec tubes.
Hiromichi Matsuda: 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.
Thank you for your questions.
It's related to their privacy so I.
I would like to refrain from answering those questions sorry.
Yeah.
So the three please.
Please.
Romney Kay.
About the smelter.
There'll be no appropriate transaction these two people.
They were seconded to Victor.
That means that that they had the authorities to work both for the <unk>.
GE plan and Big Globe.
They were going to do from Japan to be close.
And the big loop.
Launched it is new business.
And these two we're working on that new business.
And during the second meant period that there will also be able to work for a triple in Nashville, Yes, usually yes.
[Analyst 6]: And during the secondment period, they were also able to work for G-PLAN as well?
Hiromichi Matsuda: Yes, usually. Yes.
US too kidney eye.
Operator: As to KDDI, to reduce the downstream ad publishing, there was a request to reduce it. When did it happen and why? It was mid-December last year, back then. In order to strengthen the control, because the amounts were getting larger, and also we need to identify the risks for business. So as to these two companies, we issued such instruction to reduce the volume. That means back then, you knew that there had been some fictitious transactions. The specific doubt, well, we reduced the orders, and the payment was delayed from upstream. When that happened, we thought that we had some doubt, were beginning to have some doubt about those transactions. In October 2025, the auditing firm pointed out some potential, the fictitious transactions, and this is the table of the research.
[Analyst 6]: As to KDDI, to reduce the downstream ad publishing, there was a request to reduce it. When did it happen and why?
To reduce the other downstream either added publishing.
The there was a request to reduce it.
When did it happen and why.
Hiromichi Matsuda: It was mid-December last year, back then. In order to strengthen the control, because the amounts were getting larger, and also we need to identify the risks for business. So as to these two companies, we issued such instruction to reduce the volume. That means back then, you knew that there had been some fictitious transactions. The specific doubt, well, we reduced the orders, and the payment was delayed from upstream. When that happened, we thought that we had some doubt, were beginning to have some doubt about those transactions. In October 2025, the auditing firm pointed out some potential, the fictitious transactions, and this is the table of the research.
Right.
Yes.
Okay.
Towards the Middle of December last year back then.
You noted the strength in the other control because the amounts we're getting.
Larger and also we need to identify the risks for business.
So.
As do these two companies are the B issued such instruction to reduce the volume.
That means back then.
Thank you.
You knew that there had been some audio the tissues transactions.
Okay.
Do you have the specific doubt.
Yes.
Well the <unk>, we reduced the orders.
And the other payment was delayed from upstream when that happened we thought that the we had some doubt beginning we're beginning to have some doubt about those transactions.
In October 2025.
Ah the auditing firm the pointed out some potential.
The the fictitious transactions and this is the table of the other research.
Operator: So we involved the outside auditor and the internal auditor together started some of the investigation, but back then, they could not get any specific evidence.
Hiromichi Matsuda: So we involved the outside auditor and the internal auditor together started some of the investigation, but back then, they could not get any specific evidence. Thank you. Next question, please. We will move to the online for now. Mamiya-san, please unmute yourself and ask your question.
So.
We are the involved the outside or the auditor and in tunnel. The auditor together started from the investigation by the box in there that they could not get to any specific evidence.
Operator: Thank you. Next question, please. We will move to the online for now. Mamiya-san, please unmute yourself and ask your question. Can you hear me? Yes. Thank you. So about the fictitious transactions. So the external outflow portion, this is number one and number three companies. It's the amount that is paid to number one and three. Is that what you mean by external outflow, or were there a possibility of outflow to other parties as well, other than one and three? Thank you for the question. So you can see this on the screen. On the right side, it says external outflow. This is the gray area. So number one and number two, well, number three and one are the same. So number one and two paid as fees of the transaction, but this transaction turned out to be fictitious.
Thank you next question please.
We will move to the online for now.
Jonathan.
Please limit yourself and ask your question.
[Analyst 7]: Can you hear me?
Can you hear me yes.
Hiromichi Matsuda: Yes.
Yes.
[Analyst 7]: Thank you. So about the fictitious transactions. So the external outflow portion, this is number one and number three companies. It's the amount that is paid to number one and three. Is that what you mean by external outflow, or were there a possibility of outflow to other parties as well, other than one and three?
Thank you.
So about the fictitious transactions.
So the external outflow portion this is number one and number three company.
It's the amount that is paid to number one and three is that what you mean by external outflow or.
Were there a possibility of outflow to other parties as well other than one in three.
Hiromichi Matsuda: Thank you for the question. So you can see this on the screen. On the right side, it says external outflow. This is the gray area. So number one and number two, well, number three and one are the same. So number one and two paid as fees of the transaction, but this transaction turned out to be fictitious. So this is the area that is outflowing, outflow externally. Thank you.
Thank you for the question.
So you can see this on the screen on the right side.
There's external Oh this is the gray area.
So number one and number two.
Well number three in one part of Hain, So number one and two.
Paid as fees of the transaction, but this transaction turned out to be fictitious. So this is the area that is outgrowing outgrew externally. Thank you.
Operator: So this is the area that is outflowing, outflow externally. Thank you.
Hiromichi Matsuda: それではもう一問。
Hiromichi Matsuda: それではもう一問。
Sort of a module.
Another question from online.
Operator: Another question from online. Sayama-san from Toyo Keizai, please unmute yourself. Sayama from Toyo Keizai. Question about inappropriate transaction. At this moment, why did it happen? How are you looking at the reason? The investigation committee is yet to come up with the conclusion, but at this moment, what is your thought? Thank you for the question. As to the reason why, and of course, we are doing an investigation about it, and at the same time, about the signs, for example, are there any signs for such a matter to happen? We need to avoid reoccurrence of similar matters.
Operator: Another question from online. Sayama-san from Toyo Keizai, please unmute yourself.
Thomas.
Toyo Keizai, there's a mute yourself.
[Analyst 8]: Sayama from Toyo Keizai. Question about inappropriate transaction. At this moment, why did it happen? How are you looking at the reason? The investigation committee is yet to come up with the conclusion, but at this moment, what is your thought?
Hi, Irma until your case I.
Christian about inappropriate transaction at this moment.
Why did it happen.
How are you looking at the reason.
The investigation committee is yet to come up with the the conclusion, but at this moment what is your thought.
Hiromichi Matsuda: Thank you for the question. As to the reason why, and of course, we are doing an investigation about it, and at the same time, about the signs, for example, are there any signs for such a matter to happen? We need to avoid reoccurrence of similar matters.
Thank you for the question as to the reason why and of course, we're doing investigation about it.
And at the same time.
The fines for example are there any signs for such a matter to happen we need to to avoid OUI occurrence of similar matters. So in December I mean that October 2025, but there was some points of mate.
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.
Hiromichi Matsuda: 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.
It does to the the documents are the are the.
The billings and the receipts, which are the evidence of that transaction existed.
And there were no problem about the impairment in our payment and then we were told that the other there was no problem from the globe as well.
And in this advertising under business there are lots of people involved from downstream to upstream.
And do we Didnt look into a very extreme.
Extreme of the floor.
So I think that's part of the reasons.
This kind of mother happened ended at some I think that we need to make improvements in.
[Analyst 8]: 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?
Other question.
So there isn't a governance issue.
You have many subsidiaries and of your business is diversified.
So a company what kind of governance issues.
Do you recognize in what kind of actions you would like to take about them.
Hiromichi Matsuda: Thank you for the question. We have been expanding our business, including outside directors. The corporate ethics should be better. Actually, we received such a point from the other directors, and since last year, we had been working on that, and still, this kind of matter happened, and I feel very sorry about it. I think there are two things. We have KDDI philosophy to raise a spirit, to improve our mindset. The KDDI and group companies together, we would like to make repeated efforts so that such philosophy will be well embedded in the organization, and also how to prevent such a matter. That process for that is yet to be established. We need to brush up our detection, the capability to see any signs. Thank you.
Thank you for the question.
<unk>.
Right.
Operator: We have been expanding our business, including outside directors. The corporate ethics should be better. Actually, we received such a point from the other directors, and since last year, we had been working on that, and still, this kind of matter happened, and I feel very sorry about it. I think there are two things. We have KDDI philosophy to raise a spirit, to improve our mindset. The KDDI and group companies together, we would like to make repeated efforts so that such philosophy will be well embedded in the organization, and also how to prevent such a matter. That process for that is yet to be established. We need to brush up our detection, the capability to see any signs. Thank you.
We have been expanding our business.
Alright.
Including outside directors.
Okay.
The corporate ethics.
There should be better actually the we received at.
Under such point from theater directors and since last year, Although we had been working on that and still this kind of mother happened and I feel very sorry about it.
I think there are two things.
Right.
We had Kate DDI philosophy.
To there is a spirit to improve our mindset.
Decades, Adi and group companies together.
Okay.
Yeah.
We would like to make repeated efforts so that readers.
We also see the will be will embedded in the organization and also how to either prevent such the matter.
That process for that is yet to be established and we need to brush up.
Sure detection the capability to see any signs.
Thank you.
Hiromichi Matsuda: 様、ありがとうございました。それ。
Hiromichi Matsuda: 様、ありがとうございました。それ。
Most of them are audio towards MSR.
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, Sayama-san. Please raise your hand if you have questions. Line B, row 4, towards the emcee, please.
Thank you to Amazon. Please raise your hand, if you have questions.
<unk> b for towards the end of February.
Humanity newspaper Ono is my name.
[Analyst 9]: 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?
So my question is also on fictitious transactions.
So in the scheme number one and two.
Agencies.
So it was elucidated because of payment was not.
Did you contact the company.
As the visit continuing.
So that's my first question.
And number two in the scheme.
Yes.
How involved is this company in the FIC dishes transactions.
In this business slow where they used or.
Did they.
Collaborate.
Did they contribute to the fictitious transactions.
Hiromichi Matsuda: 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. So you think some of them were collaborating, but you don't know the big picture. The big picture is now being investigated by the Special Investigation Committee. Thank you.
Thank you for the question.
Yes.
The transaction is.
Is of course stopped it's suspended.
Yeah.
With some agencies there were collaborations.
But we think but this accuracy is now being investigated by the special investigation Committee.
So number two.
So you think some of them are or collaborating button I don't know the big picture.
Operator: So you think some of them were collaborating, but you don't know the big picture. The big picture is now being investigated by the Special Investigation Committee. Thank you.
The Big picture is now being investigated by the special investigation Committee. Thank you are you tell them US sorry, there was some article.
Hiromichi Matsuda: ありがとうございます。それではご質問ある方。
Hiromichi Matsuda: ありがとうございます。それではご質問ある方。
Operator: Any other questions? Person at B2, please. Yamamoto from Nikkei newspaper. As to the detection process, 250 billion yen, the fictitious transactions. Why was it possible, I wonder? What kind of supervision did you take in the past? You mean the supervision on the results? Yes. The billing and other slips, documents were there, and G-PLAN and BIGLOBE, based on those documents, they did the issue results. Understood. In this commercial flow, so two companies, the parent and subsidiary, were involved. Is there any particular reason for that? The BIGLOBE came into the picture, not from the very beginning. So compared to G-PLAN, because of the level of the trust and the credibility, the BIGLOBE had started its operation as a new business. Thank you.
Operator: Any other questions? Person at B2, please.
Any other questions.
Personnel be too please.
Yes.
[Analyst 10]: Yamamoto from Nikkei newspaper. As to the detection process, 250 billion yen, the fictitious transactions. Why was it possible, I wonder? What kind of supervision did you take in the past? You mean the supervision on the results?
You remember them from Nikkei newspaper.
As to detection process.
250 billion yen.
The fictitious transactions why was it possible I wonder what's kind of the the supervision. The did you take in the past.
You mean, the supervision on the of the result.
Hiromichi Matsuda: Yes. The billing and other slips, documents were there, and G-PLAN and BIGLOBE, based on those documents, they did the issue results. Understood. In this commercial flow, so two companies, the parent and subsidiary, were involved. Is there any particular reason for that? The BIGLOBE came into the picture, not from the very beginning. So compared to G-PLAN, because of the level of the trust and the credibility, the BIGLOBE had started its operation as a new business. Thank you.
Yes.
Okay.
Alright.
Yeah.
The billing and other slips.
The documents were there.
And in Japan, and <unk> based on those.
Documents they did.
The issue results.
Understood.
In this the commercial.
No.
So two companies are the parent and subsidiary.
Improved.
Is there any particular reason for that.
The big clue came into the picture.
Not from the very beginning so compared to G plan.
Because of the other Liberal OS earlier, the trust and the the credibility and the Big loop others started its operation as a new business.
Okay.
Hiromichi Matsuda: ありがとうございます。
Hiromichi Matsuda: ありがとうございます。
Although they must.
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.
Operator: Thank you. Next question, please. B3, third row, towards the exit, please.
Thank you.
And our next question please.
B three third row towards the exit fee.
[Analyst 11]: 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.
Sunday newspaper Fuji ice name. So my question is on fictitious transactions.
So it's cumulative 246 billion yen impact on sales.
So this is quite large.
Each individual transaction was large amount or.
Just accumulated to be this big so a number of cases or the transaction volume value is I don't I know you cannot go into much detail, but just a rough image.
If you could elaborate too for us to get a better image. Please.
Thank you.
Hiromichi Matsuda: 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.
So as I mentioned earlier recently few tens of billions of money had been circulated back.
And the scheme.
Based on the assumption that the amount goes up a month after month and so it gradually increased and amounted to a few tens of billions of yen. So.
Including previous years 246 billion. So this is the.
Operator: So this is the size of the transaction. How much per case? If you explain this, it may be too much detail, but the advertisement, what's the size per case of transaction? So I understand that it was circulated back and it snowballs. I understand that, but still, the amount is large, so. You are right. Basically, there was the report, so we validated the validity of the transaction, but this is the fee for the posting of the advertisement and paid to each advertisement agency. So it was not for each individual advertisement.
Hiromichi Matsuda: So this is the size of the transaction. How much per case? If you explain this, it may be too much detail, but the advertisement, what's the size per case of transaction? So I understand that it was circulated back and it snowballs. I understand that, but still, the amount is large, so. You are right. Basically, there was the report, so we validated the validity of the transaction, but this is the fee for the posting of the advertisement and paid to each advertisement agency. So it was not for each individual advertisement.
The size of the transaction.
How much per case.
You explained this it may be too much detail, but.
The advertisement how what's the size per case.
A transaction so it's not I understand that it was circulated bagging it snowballs I understand that but still the amount is large though.
Youre right.
Basically there was the report the.
So we validated the validity of the transaction but.
This is the theme for the posting of the advertisement.
And they paid two each advertisement agency. So it was not for each individual advertisement.
Good morning, guys from us.
Hiromichi Matsuda: Any other questions? Person at the B1, please. Mamiya? Two questions. Yesterday, NTT DOCOMO, Mr. Maeda, President, said that there is a very intensified competition, but previously, at the announcement of the results, you made a shift to the LTV from the excessive competition. As to new customers and the competition for new customers. Are you slowing down your efforts? Are you slowing down your speed a little bit? As I mentioned in my presentation, the mobile revenue is increasing, and the promotional cost, I said the last time, the year-on-year basis, our promotional cost is flat. So it's not that we are using a lot more compared to the previous year.
Hiromichi Matsuda: Any other questions?
You know the questions.
Operator: Person at the B1, please. Mamiya?
Our center to be one please.
I Miss or no.
Sure.
Two questions.
[Analyst 12]: Two questions. Yesterday, NTT DOCOMO, Mr. Maeda, President, said that there is a very intensified competition, but previously, at the announcement of the results, you made a shift to the LTV from the excessive competition. As to new customers and the competition for new customers. Are you slowing down your efforts? Are you slowing down your speed a little bit?
Yesterday, NTT Docomo, Mr. Minder, President said that did it is a very intensified competition.
With the previously denouncement them to reach out to.
Do you have the new made a shift to the two D or the LTV the.
Assuming the excessive competition.
As to new customers.
And then the competition for new customers.
Okay.
Are you slowing down of your efforts.
Are you slowing down your speed a little bit.
Nanae Saishoji: As I mentioned in my presentation, the mobile revenue is increasing, and the promotional cost, I said the last time, the year-on-year basis, our promotional cost is flat. So it's not that we are using a lot more compared to the previous year. 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.
As I mentioned in my presentation, the move out revenue is increasing.
And they are the.
Promotional cost.
I said the last time.
The year on year basis, our promotional cost is flat. So it's not that we are using a lot more.
Compared to the previous year.
And did it impact us through the impact.
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.
For example, the handset replacement program and this should it be a good balance there, but in the third quarter.
Are there some of the coupon the year that is producing a good benefit.
For this year.
[Analyst 12]: 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?
Thank you my second question.
Let them move bile.
<unk> exceeded 10 million deer, the contract towards the end of last year and a sink rooming.
Yeah.
I think that there are some difficulties, but could you. Please talk about the direction and your thoughts on this area as well.
Hiromichi Matsuda: 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.
Again, it took about earlier other companies, but the.
Although competition and the collaboration for roaming included and.
And we also are competing the wisdom as well.
So in September this year.
We are discussing with them for the roaming.
For September this year.
The other day.
The record and it was faced with some other communication failures.
And that pushed a lot of traffic toward us.
The areas in other words overlapping.
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: 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.
And that should be sorted out.
So.
And although we are going to the other.
The suspend other part of earlier to communication the India they'll do course, thank you.
Operator: Line A, row 1, towards the exit, please.
Line E Rural one towards the exit please.
[Analyst 13]: 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.
Kate I watched the Kikuchi is my name.
I have a question on your business.
On page 17 of your presentation.
Can you talk about the Netflix the differentiated service subscribe.
Subscriber.
It is now.
Nine times bigger.
So the pricing plan.
Subscription how much track record do you have a day U.
And regarding Netflix.
L Y P premium of Ryan who is now launching a new plan.
So netflix can be used.
So what do you how do you see the impact there. Thank you very much.
Thank you.
Hiromichi Matsuda: 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.
So the original net for it's not the original Netflix bundle its subscription so subsequent but 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?
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.
Are you in your Q customers.
Hi.
And of course, there is 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 long time usage.
So this is a bit different than the users may be a bit different from our peers program.
[Analyst 13]: 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?
Thank you.
One more question is on your Capex.
Youre thinking on Capex.
And yesterday as NTT Docomo briefing are they.
Said.
In their capex, they are increasing from last year and FY 'twenty six.
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 these 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 any changes there or will you just keep your capex plan unchanged.
Hiromichi Matsuda: Any changes there, or will you just keep your CapEx plan unchanged? If you have any questions, please. If you have any comments, please. So we think this area expansion is the source of competitiveness, so we will continue executing and continue being the winner by the outside rating evaluation companies. Regarding 5G, we did quite a big investment last year, and so it's well-built, and it has peaked out. So instead, we are now moving, focusing on AI infrastructure, and thinking of keeping the capital expenditure flat. Thank you. Thank you. それではご質問ある方、挙手。
[Analyst 13]: Any changes there, or will you just keep your CapEx plan unchanged? If you have any questions, please. If you have any comments, please.
If you have any questions. Please if you have any any comments please.
Hiromichi Matsuda: So we think this area expansion is the source of competitiveness, so we will continue executing and continue being the winner by the outside rating evaluation companies. Regarding 5G, we did quite a big investment last year, and so it's well-built, and it has peaked out. So instead, we are now moving, focusing on AI infrastructure, and thinking of keeping the capital expenditure flat.
So we think this area expansion is the source of competitiveness. So we will continue.
Executing.
And continue being the winner by the outside of ratings evaluation companies regarding five G. We did quite a big investment last year and so it's well built and it has peaked out.
So instead, we are now moving focusing on AI infrastructure.
And thinking of keeping the capital expenditure flat.
[Analyst 13]: Thank you.
Hiromichi Matsuda: Thank you. それではご質問ある方、挙手。 Any other questions?
Thank you. Thank you put it there was some article Dr Kesten.
Any other questions.
Operator: Any other questions? The person at C1, please. Ishikawa, freelance journalist. The net increase in smartphones. Okay, to Docomo, compared to the other last time, it seems that the other number is rather low. Are you satisfied, Mr. President? Thank you. This is related to structural reform. There are pros and cons. We need to strike a good balance. The smartphone, the other numbers, connections. 33.3 million. That's the target toward the end of the year. And June and September, the +30, +20, and this time +70,000. And in the fourth quarter, we will see more growth. Rather than taking excessive increase, we would like to focus on the other contribution to lifetime value. So those numbers alone are not the basis for us to increase the other number.
The person at the C. One please.
Operator: The person at C1, please.
You should cover freelance journalist.
[Analyst 14]: Ishikawa, freelance journalist. The net increase in smartphones. Okay, to Docomo, compared to the other last time, it seems that the other number is rather low. Are you satisfied, Mr. President?
Net increase in smartphones.
Okay, two other docomo compared to the.
At this time, although it seems that they are the number is rather low are you satisfied Mr. President.
Okay.
Hiromichi Matsuda: Thank you. This is related to structural reform. There are pros and cons. We need to strike a good balance. The smartphone, the other numbers, connections. 33.3 million. That's the target toward the end of the year. And June and September, the +30, +20, and this time +70,000. And in the fourth quarter, we will see more growth. Rather than taking excessive increase, we would like to focus on the other contribution to lifetime value. So those numbers alone are not the basis for us to increase the other number.
Thank you.
This is related to structural reform there.
Pros and cons and we need to strike a good balance.
The smartphone or the other members connections.
So it is $3 3 million, that's the color get towards the end of the year and June and September.
The plus 30, plus 20, and this time plus 70000.
And in the first quarter, we will see more growth.
Rather than taking Celsius increase.
We would like to focus on the contribution to lifetime value. So those numbers alone.
The basis for us to increase the number yesterday.
Operator: Yesterday, DOCOMO talked about the other following thing: the performance aggravated because there's too much competition for the other handset. As to the replacement, do you have the good control on the replacement program or the purchase support program? And the MIC is also revisiting the issue. Are you changing any thoughts? As this slide shows, we think that we have a very well-balanced control. In the past, we struggled a little bit, and that is because why we are controlling it better way. Because new functions and new handsets, we would like to deliver those new things to the customers and strike a good balance. When you say control, exactly what are you doing? From the customer's point of view, I want something new, and after 24 months, it gets more expensive.
Hiromichi Matsuda: Yesterday, DOCOMO talked about the other following thing: the performance aggravated because there's too much competition for the other handset.
Then docomo talked about DLA following think tenure of our promos.
Aggravated because although too much the competition for the other.
Handset.
As to the replacement.
[Analyst 14]: As to the replacement, do you have the good control on the replacement program or the purchase support program? And the MIC is also revisiting the issue. Are you changing any thoughts? As this slide shows, we think that we have a very well-balanced control. In the past, we struggled a little bit, and that is because why we are controlling it better way. Because new functions and new handsets, we would like to deliver those new things to the customers and strike a good balance. When you say control, exactly what are you doing?
Do you have idea the good control on the replacement program over the other.
The purchase support program and the M. I C is also under review to think the issue are you changing any thoughts.
As this slide shows we think that the we have a very well balanced control.
<unk>.
In the past, we struggled a little bit and that is because why we are controlling it a better way.
And.
Cause the new functions are new handsets, we would like to deliver those new things to the customers.
The striking good balance.
When you say control.
Exactly what are you doing.
Sure.
Hiromichi Matsuda: From the customer's point of view, I want something new, and after 24 months, it gets more expensive. If that's the case, of course, the customer comes in to replace it with the new one. The first, such. In the past, we did not understand what could happen correctly, but we made some adjustments, and based on the plan, we are building this scheme of control. Thank you. So next question, please.
From the customers' point of view.
I want to something new and after 24 months.
It gets more expensive if that's the case of course, the customer comes in to replace it with the new one.
Operator: If that's the case, of course, the customer comes in to replace it with the new one. The first, such. In the past, we did not understand what could happen correctly, but we made some adjustments, and based on the plan, we are building this scheme of control. Thank you. So next question, please. Line D, row 2, towards the exit, please. Kyodo Nakao is my name. So I would like to go back to the fictitious transactions. Earlier, you talked about the two members from G-PLAN, so I have a question on those two members. So these two were originally in G-PLAN, or when this intermediary business was launched, they joined? So my first question is that. I am sorry. We have identified the two, but I'd like to refrain from mentioning that because it has to do with their privacy.
The first such.
Oh the others.
We in the in the pass through we did not.
Understand what could happen the correctly, but we made some adjustments.
And based on the plan, although we are building this scheme of control.
Thank you.
So next question please.
Operator: Line D, row 2, towards the exit, please.
Lang D Roe to towards the exit fees.
[Analyst 15]: Kyodo Nakao is my name. So I would like to go back to the fictitious transactions. Earlier, you talked about the two members from G-PLAN, so I have a question on those two members. So these two were originally in G-PLAN, or when this intermediary business was launched, they joined? So my first question is that.
Total nicolo is my name.
So I would like to go back to the fictitious transactions.
Earlier, you talked about the two members from G plan. So I have a question on those two numbers.
So these two.
We're originally in G plan or.
Silver.
When this intermediary business was launched they joined.
So my first question is that.
Hiromichi Matsuda: I am sorry. We have identified the two, but I'd like to refrain from mentioning that because it has to do with their privacy. So those two, from around 2017 till this was discovered, they were in this intermediary business throughout. We want to wait for the investigation result on that as well. Basically, as I said earlier, from 2017 onward, it's been recorded. So we are trying to understand how much of that was correct and how much is fictitious. So this needs to be elucidated through the investigation.
I am sorry.
We have identified the two but.
Like to refrain from mentioning that because it has to do with their privacy.
Operator: So those two, from around 2017 till this was discovered, they were in this intermediary business throughout. We want to wait for the investigation result on that as well. Basically, as I said earlier, from 2017 onward, it's been recorded. So we are trying to understand how much of that was correct and how much is fictitious. So this needs to be elucidated through the investigation. My last question is, those two, for the disciplinary action, are they G-PLAN staff, or are they already fired? Are they former employees? We are still contacting them, so they are staff, employees. Thank you.
So those two.
From around 2017.
Hill this was discovered.
They were in this intermediary business throughout.
We want to wait for the investigation result on that as well.
Basically as I said earlier from 2017 onward.
It's been recorded.
So we are trying to understand how much of that was correct and how much was is Vic dishes. So this needs to be elucidated till the investigation. My last question is those two went up for the disciplinary action or the G plan staffs or are they already fired or they former employees.
[Analyst 15]: My last question is, those two, for the disciplinary action, are they G-PLAN staff, or are they already fired? Are they former employees?
Hiromichi Matsuda: We are still contacting them, so they are staff, employees. Thank you.
We are still contacting them. So they are staffed into.
Employees.
Hiromichi Matsuda: それではご質問ある方、挙手をお願いします。
Hiromichi Matsuda: それではご質問ある方、挙手をお願いします。
Southern Europe or some article back in Charlotte.
Operator: Any other questions? Please raise your hand. A person at C3, please. Toma, NHK. So number 1, number 3, or number 2, the external flow. To whom or to what kind of company? Like sector or business form, size? Is it possible to share some other information? As to the other companies that the other flow went to, the other committee is investigating it, and I would like to refrain from talking about specific names. It is not, but it is not large ad agencies. The other antisocial organization or suspicious of the kind of status is involved, and that also is being investigated at this moment. There's nothing we can talk about it. Thank you.
Hiromichi Matsuda: Any other questions? Please raise your hand.
Any other questions. Please raise your hand.
Operator: A person at C3, please.
In person at C. Three please.
[Analyst 16]: Toma, NHK. So number 1, number 3, or number 2, the external flow. To whom or to what kind of company? Like sector or business form, size? Is it possible to share some other information?
Thomas NHK.
So number one number three or number two.
The external flue.
Yes.
To whom or chew, what kind of a company.
Mike sector business boom five.
Is it possible to share some information.
Hiromichi Matsuda: As to the other companies that the other flow went to, the other committee is investigating it, and I would like to refrain from talking about specific names. It is not, but it is not large ad agencies. The other antisocial organization or suspicious of the kind of status is involved, and that also is being investigated at this moment. There's nothing we can talk about it.
Our studio to companies to see it.
It is a fluid went to.
The committee is investigating it and I'd like to refrain from talking about specific names. It is not but it is not large ad agencies.
The anti social organization.
Suspicious of the kind of the status is involved.
And that also is in being investigated at this moment, there's nothing we can talk about it.
[Analyst 16]: Thank you.
Thank you for some article back up.
Hiromichi Matsuda: ご質問ある方、挙手。
Hiromichi Matsuda: ご質問ある方、挙手。
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.
Hiromichi Matsuda: Next question, please.
Next question please.
Operator: Row A1, towards the MC, please.
ROE a one.
Towards the M series.
Genius Nakamura is 19, thank you.
[Analyst 17]: 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?
I have a question on the fictitious transaction case.
So.
The two that are.
Or suspected to be involved.
What was the motive of reasons or trigger have they talked about that.
We want to do.
Hiromichi Matsuda: We want to not impact the investigation of the Special Investigation Committee, so allow me to refrain from mentioning that today.
Not impact the investigation of the special investigation Committee, so allow me to refrain from mentioning that today.
[Analyst 17]: 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, one more question is.
Going forward.
So in the where a large amount of money is involved if there was a falsification of the document that maybe another crime. So have you submitted the.
Damage to the police or.
Have you taken actions.
Hiromichi Matsuda: 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.
Yes, we are aware of that.
We have not consulted with the belief yet, but depending on the progress of the investigation, we will consider that and take appropriate actions. Thank you sorry, there was some article bucket.
Hiromichi Matsuda: それではご質問ある方、挙手。
Hiromichi Matsuda: それではご質問ある方、挙手。
Operator: Any other questions? Person at D1, please. Fujita, Asahi Shimbun. As to money coming in, the advertisement and the fees move together, and recently, it's the level of dozens of billions JPY per month, including fees. And the fees are the ones which are counted as revenue? Thank you. So it's about the gross amount or net amount. So it looked like the revenue canceled, decreased, but it is based on net basis. So, as you said, it's correct that the fees are counted as revenue. I think there should be some fund, the initial fund for advertisement. Right, the amount increased dramatically to a very big amount. BIGLOBE and G-PLAN, they had fund at hand. And also, we have a group finance mechanism.
Hiromichi Matsuda: Any other questions?
Any other questions.
Yes.
Operator: Person at D1, please.
Similar to DRAM. Please.
Wichita Asahi newspaper.
[Analyst 18]: Fujita, Asahi Shimbun. As to money coming in, the advertisement and the fees move together, and recently, it's the level of dozens of billions JPY per month, including fees. And the fees are the ones which are counted as revenue? Thank you.
Right.
US too money coming in.
The advertisement and the fees move together.
And recently, it's deliberate dozens of billions per month, including fees.
And the fees are the ones, which are counted as revenue.
Thank you.
So it's about the gross amount or net amount.
Nanae Saishoji: So it's about the gross amount or net amount. So it looked like the revenue canceled, decreased, but it is based on net basis. So, as you said, it's correct that the fees are counted as revenue. I think there should be some fund, the initial fund for advertisement. Right, the amount increased dramatically to a very big amount. BIGLOBE and G-PLAN, they had fund at hand. And also, we have a group finance mechanism.
So it looked like the revenue cancer decreased but it is based on net basis. So as you said is it's correct that the fees.
It is revenue.
I think there should be some fund.
The unusual fund for advertisement.
Right the amount increased.
Dramatically to a very big amount.
Big rope and G plan.
They had a fund at hand.
And also.
We have a group finance mechanism.
Okay.
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.
Who do you have the whole group we had surplus.
And occasionally I kind of the.
Concentrated.
And at headquarters and from the headquarters OUI lend money to the other group companies. So the group finance was executed for Big Globe.
The telecommunication related investment.
And last year.
57.9 billion yen also lending with extended to be globe.
Last year last fiscal year.
In the group financing.
And so group finance is.
Might be youth might have been used as part of this incoming money.
In our studios to employees invoked.
Both of them were.
Secondly, the big Globe, but they are cheap plant employees.
And then at this moment, we have not confirmed that any other employee is invoked yes. Your understanding is correct.
At this moment, we have not confirmed that any other employees involved.
But that is also subject to the investigation by the committee.
Thank you.
Okay sure.
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.
Hiromichi Matsuda: 次の方、挙手をお願いします. Next question, please.
Next question please.
Operator: Line D, row 2, towards the MC, please.
N D rose to two towards the M C.
Kildall News question is my name so fictitious transactions.
[Analyst 19]: 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.
Yeah.
Number one and number three there is a number two in the middle So number three.
Unless the order goes to the and number three the money does not circulate budge.
Does the schemes such that the money will always go from two to three is there a one company into usually I think it's multiple.
But in this fictitious scheme.
The one particular company that was in charge. Thank you.
Hiromichi Matsuda: 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.
From the Globe and G plan, the upstream companies contract and the contract with the polishing agency there were two types of contract.
And I mentioned the business practice.
Commercial practice.
Sure.
And what's beyond this downstream publishing agency, we usually don't see that we were not looking at what was it beyond the publishing agency now the money stopped coming in from the top and so we heard from the employees and after we heard from the employees are we found out that.
Operator: Now, the money stopped coming in from the top, and so we heard from the employees. And after we heard from the employees, we found out that it was subcontracted from number two and three, and number one and three were identical. Is this okay? Thank you.
Hiromichi Matsuda: Now, the money stopped coming in from the top, and so we heard from the employees. And after we heard from the employees, we found out that it was subcontracted from number two and three, and number one and three were identical. Is this okay? Thank you.
It was subcontract it from number two and three and number one and three were identical.
This okay.
Hiromichi Matsuda: それではご質問ある方、挙手をお願いします。
Hiromichi Matsuda: それではご質問ある方、挙手をお願いします。
And so there was some article that Ghansham.
Any other questions.
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: Any other questions?
Operator: A person at B1, please.
Yes.
The person that would be one please.
[Analyst 20]: 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.
So total <unk> channel.
Starlink related question. This year other carriers are going to start in the satellite telecommunications service within this year.
You had a lead time of about one ear 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 niches.
You too.
It's something that you can look forward to I would say Starlink director area.
Hiromichi Matsuda: 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. Not just at ARIA, but Starlink Direct, we would like to make advancements with something new all the time. Please count on us. Thank you.
We would like to the deliberate right away and with that in our mind, we have been developing area and a sterling.
The direct as well.
Sooner the better for customers.
Okay.
As to other each time advantage.
Without thinking about other companies.
As a front runner.
We would like to.
The work on something new.
Not just at area, but the Starlink director, we would like to make advancements with something new all the time.
Operator: Not just at ARIA, but Starlink Direct, we would like to make advancements with something new all the time. Please count on us. Thank you.
Please come join us thank you.
They beat it.
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: Line B4, towards the MC, please.
94 towards the M C piece.
[Analyst 21]: 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.
Yomiuri newspaper Ono, sorry for asking another question just one clarification, so fictitious transactions the impact on your financial results earlier, you said from till 2017 the business started.
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.
Subject to change as investigation progresses.
Hiromichi Matsuda: 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.
Thank you.
For now this is the maximum amount that we are.
Expecting.
But the fictitious transaction those started increasing in recent years. So we think the 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 firms audit. So this is subject to change.
But.
We understand that this is the maximum amount.
So we are showing you the approximate amount.
Hiromichi Matsuda: We are showing you the approximate amount. Thank you.
Hiromichi Matsuda: We are showing you the approximate amount. Thank you.
Thank you.
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?
Hiromichi Matsuda: の方をさせていただき.
<unk> is a data that came up Christian from online.
Operator: Question from online. Koyama-san, unmute yourself and start your question.
Oklahoma Sun, a mute yourself and start to Christian.
[Analyst 22]: 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.
Here's grammar regions.
Yes.
Jabil bank and deposit funding and the improvement.
And the impact of the money activity too.
You talked about other reasons as well of actors as well what is the impact coming from added money activity. Although you talked about the reimbursement they produce over 500000 and so on.
Any impact that you've seen.
And also a card business is also growing.
Is also driven by the other money activity or any other factors.
In Q2.
Hiromichi Matsuda: Katsuki-san, anything?
On anything.
[Company Representative] (KDDI Corporation): 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?
In Q.
As to deposit funding.
There are two factors as I mentioned earlier.
The bundled deposit to bundle the plan or the money activity too.
And a huge boon banks.
Yeah.
One campaign.
Drink or the bonus season for example.
Such deposit collection campaign.
Worked.
And as you can see later <unk>.
Christian data you can look at page 36 of operation data.
Y on Y and deposit increased significantly.
Operator: Deposits increased significantly, especially retail deposits, as you can see. So it's not really the growth coming from the Money Activity Plan II. We do not disclose it. Please bear with us. The credit cards, especially for Money Activity Plan II, the growth of Gold Card is paying off. As you can see on the screen, we are seeing good effect coming from that. Yamamoto-san, are you okay with that? Yes, thank you.
[Company Representative] (KDDI Corporation): Deposits increased significantly, especially retail deposits, as you can see. So it's not really the growth coming from the Money Activity Plan II. We do not disclose it. Please bear with us. The credit cards, especially for Money Activity Plan II, the growth of Gold Card is paying off. As you can see on the screen, we are seeing good effect coming from that. Yamamoto-san, are you okay with that?
Yes.
Especially retail deposits as you can see.
So it's not really the growth coming from other money activity due we do not disclose it please bear with us and.
And the credit cards.
Yes.
Especially for ammonia activity too.
The growth of <unk> card is the.
Paying off.
And so you can see on the screen.
We are seeing good effect coming from that.
[laughter].
Emerson are you okay with that is thank you.
[Analyst 22]: Yes, thank you.
Hiromichi Matsuda: 続けまして。
Hiromichi Matsuda: 続けまして。
It says it can muster.
Operator: So another question from online. TV Asahi Shimada-san, please unmute yourself and ask your question. TV Asahi Shimada, can you hear me? Can you speak up a little, please? Can you hear me? Yes, thank you. Thank you. I think this question has been raised a few times, and I'm sorry about the impact of the fictitious transactions. So March 2024, so JPY 96 billion before 24 March 2024. So G-PLAN started, since they started the advertising business, this has been posted. So the fictitious transaction started from the start of the business. Is that how this was recorded, or there was a starting line when this started? And you summarized the amount up to 24 March 2024. So what is the timeline? Thank you very much for the question.
Hiromichi Matsuda: So another question from online.
So another question from online TV Asahi She Madison. Please on mute yourself and ask your question PD is a huge shimada.
Operator: TV Asahi Shimada-san, please unmute yourself and ask your question.
[Analyst 23]: TV Asahi Shimada, can you hear me? Can you speak up a little, please? Can you hear me? Yes, thank you. Thank you. I think this question has been raised a few times, and I'm sorry about the impact of the fictitious transactions. So March 2024, so JPY 96 billion before 24 March 2024. So G-PLAN started, since they started the advertising business, this has been posted. So the fictitious transaction started from the start of the business. Is that how this was recorded, or there was a starting line when this started? And you summarized the amount up to 24 March 2024. So what is the timeline?
Can you hear me can you speak up a little please can.
Can you hear me, yes. Thank you. Thank you.
I think this question has been raised a few times and I'm, sorry about the impact of the fictitious transactions.
So 2020 for March.
So 96 billion before.
March.
24.
So G plan started since they started the advertising business. This has been posted so the fictitious transaction.
It started from the start of the business.
Is that how this was recorded or.
There was a starting line when they started.
And you summarized the amount up to March 24.
So.
What is the timeline. Thank you very much for the question.
Hiromichi Matsuda: Thank you very much for the question.
That's an internal investigation, we found out that <unk>.
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.
Hiromichi Matsuda: 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.
Before ending March 'twenty for each company.
As.
So all transaction since they started the advertisement business had been summarized so in case of G plan from 2017, and the Globe 2022.
They started the advertisement agency business.
So that's the summary of all the announce.
So.
So it started from a not from there onward, but from the very beginning they fictitious transaction was likely to have happened from the beginning of the business.
Will the authentic correct.
Yeah.
The transaction 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 are with a view that there is a possibility of suggestions transactions.
[Analyst 23]: Understood. So including those cases that were correct in the past, you are checking all cases.
Understood.
So, including those cases that we're correct in the past you are.
Checking all all cases, you don't know when the starting line was but you are including everything yes.
Operator: You don't know when the starting line was, but you are including everything, yes, including the ones that may be correct. So the maximum amount is a revenue of JPY 246 billion, and JPY 33 billion, the external outflow. Is this maximum or at least, or this is the maximum amount? So this time, this is the external outflow. So we are provisioning this amount shown on the table. We think this is the maximum amount. Understood. Thank you very much.
[Analyst 23]: You don't know when the starting line was, but you are including everything, yes, including the ones that may be correct. So the maximum amount is a revenue of JPY 246 billion, and JPY 33 billion, the external outflow. Is this maximum or at least, or this is the maximum amount?
Including the ones that maybe correct. So the maximum amount is a revenue of 246 billion and 33 billion. The out external outflow is this maximum or at least or.
This is the maximum amount.
Hiromichi Matsuda: So this time, this is the external outflow. So we are provisioning this amount shown on the table. We think this is the maximum amount.
So at this time this is the external outflows, though we are provisioning. This amount shown on the table. We think this is the maximum amount understood. Thank you very much.
[Analyst 23]: Understood. Thank you very much.
Hiromichi Matsuda: もう1問、オンライン。
Operator: もう1問、オンライン。
A much one Oh my gosh.
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: One more question online. Horikoshi, Nikkei Business, please unmute yourself.
One more question online articles Sun urban Nikkei business is mute yourself.
[Analyst 24]: Here's Horikoshi speaking. Can you hear me?
Here's how it goes just speaking can you hear me yes.
Hiromichi Matsuda: Yes.
[Analyst 24]: 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?
Two questions first.
Inappropriate transaction.
Within this the scheme of diode round numbers shoes.
Yes.
Yes.
Yes.
It could to be invoked from the very beginning with number one and three or that it could.
<unk> to be invoked the later so.
India the supply chain as a whole my question is why you did not detect the others such a D or the transactions.
I think it is because of failure or the other control schemes.
So do you could you please share your thoughts.
Hiromichi Matsuda: 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.
Yeah.
So the group governance and it did this related to the are the responsibility of supervision.
So.
Monthly transaction itself has.
The vouchers and slips accounting slips reach verify that the transactions occurred.
And today, we're continuing this at the business as normal transaction and the Big Club also gave some information about the other.
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.
Hiromichi Matsuda: 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.
Our objective.
But the objective evidence.
The objective evidence.
Who was not detected about.
Inappropriate transaction. So it took time for us do detector or that.
So as I mentioned earlier group finance as part of the picture.
Yes.
Ultimate work Council most of <unk> either add amount.
That is currently being investigated so I do not make any comments on that.
[Analyst 24]: 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.
Second question is about EMEA was Lucky data center.
Two years ago.
You did some of the construction work or what is the size of the investment and what is the size of data center.
As you can see on the screen and digital belt concept or initiative.
You have about well there are about three big.
Data centers.
Are you going to other open three are the 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.
Yes.
The belt diagram. The other is showing that there is no coverage in the north but actually we are constructing the builds in the north as well setting aside whether it's big fives or not.
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.
Yes.
What kind of a data center should be there that is in our mind.
The AI or the processing out there will be a the happening in the different other locations.
So.
It's not that the other everything will be concentrated on big data centers.
So the connection like mesh.
And as a whole the built.
Which covers the whole or the other or the Japanese.
And as archipelago, that's what we are thinking about and immune sake.
We have secured the adjacent land so that we can easily expand the dislocation as well, though watching closely the demand level. Although we are going to make the next move.
<unk>.
In the next image terms strategic our midterm strategy Adobe are going to give you more details. Thank you.
So the dog Osama.
Hiromichi Matsuda: それではご質問。
Hiromichi Matsuda: それではご質問。
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.
Hiromichi Matsuda: So next question, please.
So next question please.
Sure.
Brody three.
Operator: Row D3, towards the exit, please.
Towards the exit fees.
[Analyst 25]: 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.
Youll find the immediate clashes names are adaptive so 33 billion in external outflow with my question.
In Q3 up to Q3.
17 billion has been provisioned if my.
I understanding is correct.
And maximum 33 billion has flown outside.
Yes.
So in <unk> P&L.
How much will eventually be posted as loss. So that's my first question.
Nanae Saishoji: 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.
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.
Mount that is shown vertically will be posted on our P&L.
<unk> 33 billion.
And there may be additional impairment.
For this fiscal year 17 billion is provisioned.
So reversal of profit is <unk>.
25 billion.
And other than that there is a possibility of impairment in addition.
Operator: So then JPY 33 billion may not be your loss. So of the JPY 33 billion and JPY 17 billion, I'm not understanding the difference between the two. Are there prior year portions? So how can I sort this out? Thank you. So this table is grouped into three. First, March 2026 is up to Q3, the provision up to Q3. This is JPY 17 billion. And JPY 33 billion to the right is including the prior years. It's the total of prior years. So including that, it is JPY 33 billion. And this is assuming that we cannot recover the entire amount. So we will provision this for once for now. But if we can recover, of course, we're trying to recover. And if the amount can be recovered, the recovered portion will be added to the profit in the following years.
Nanae Saishoji: So then JPY 33 billion may not be your loss. So of the JPY 33 billion and JPY 17 billion, I'm not understanding the difference between the two. Are there prior year portions? So how can I sort this out? Thank you. So this table is grouped into three. First, March 2026 is up to Q3, the provision up to Q3. This is JPY 17 billion. And JPY 33 billion to the right is including the prior years. It's the total of prior years. So including that, it is JPY 33 billion. And this is assuming that we cannot recover the entire amount. So we will provision this for once for now. But if we can recover, of course, we're trying to recover. And if the amount can be recovered, the recovered portion will be added to the profit in the following years.
So then <unk>.
33 billion can may not be your loss. So all of the 33 billion.
And 17 billion I am not understanding the difference between the two are their prior ear portion. So how can I sort this out.
Thank you.
So this table.
Is grouped into three first.
March 26.
Is up to Q3, the provision up to Q3. This is 17 billion and 33 billion to the right is including the prior years. It's the total of prior years, so including that is 33 billion.
And this is.
Assuming that we cannot recover the entire amount. So we will provision this for once for now but.
If we can recover of course, we're trying to recover.
And if the amount can be recovered.
The recurring portion.
Will be added to the profit in the following years.
Then at this point 17 billion loss is provision or is assumed for this fiscal year. Yes. This is the expected loss one more question. Please so there are a few advertisement agencies.
Operator: Then at this point, a JPY 17 billion loss is assumed for this fiscal year. Yes, this is the expected loss. One more question, please. So there are a few advertising agencies. So those that were involved in the fictitious transactions, do you know how many advertising agencies were involved? We only know that multiple are involved, but we don't have the exact number or the names. That is left in the hands of the Special Investigation Committee. Is it two or three or maybe 10 agencies? I'd like to refrain from mentioning that as well. Understood.
Nanae Saishoji: Then at this point, a JPY 17 billion loss is assumed for this fiscal year. Yes, this is the expected loss.
[Analyst 25]: One more question, please. So there are a few advertising agencies. So those that were involved in the fictitious transactions, do you know how many advertising agencies were involved?
Yes.
So those that were involved in the fictitious transactions do you know how many advertising agencies were involved.
Hiromichi Matsuda: We only know that multiple are involved, but we don't have the exact number or the names. That is left in the hands of the Special Investigation Committee. Is it two or three or maybe 10 agencies? I'd like to refrain from mentioning that as well.
Yes.
We only know that multiple are involved.
But we don't have the exact number or the names that is left in the hands of the special investigation Committee is it two or three or maybe 10 agencies.
Oh I like to refrain from mentioning that is well understood.
[Analyst 25]: Understood.
Hiromichi Matsuda: ありがとうございます。 So.
Hiromichi Matsuda: ありがとうございます。 So.
Those Amos.
Operator: Thank you. Any other questions? It seems that there are not many questions left. The two people are raising their hands. So starting with A4, the person at A4, please. What's up, Bunekin? Last week, Docomo, using Docomo Shop, they will give support for financial business. I think they already started it, actually. But your company, for example, they're opening the account for the au Kabucom securities. Or are you planning to use the shops for providing similar support? Could you please talk about your thought? Thank you. We have been providing support and using the au shops as the other agencies for the au Jibun Bank. In addition, we have credit card business as well. So I think your question is about the au based on the au securities, au salesperson qualification.
Hiromichi Matsuda: Thank you. Any other questions? It seems that there are not many questions left. The two people are raising their hands.
Thank you.
Any other questions.
Themes.
There are not many questions left.
Yeah.
The two people are raising their hands.
Operator: So starting with A4, the person at A4, please.
So starting with a fool.
The person that April please.
[Analyst 26]: What's up, Bunekin? Last week, Docomo, using Docomo Shop, they will give support for financial business. I think they already started it, actually. But your company, for example, they're opening the account for the au Kabucom securities. Or are you planning to use the shops for providing similar support? Could you please talk about your thought? Thank you.
What's the book when he Qing.
Last week Docomo.
Using docomo shops.
Although you do give support for financial business I think they already started it actually.
But your company.
For example, due to opening the account for you to eat Smart Securities.
Oh sure.
Are you planning to use the shops.
Before providing similar support.
But could you please talk about the other.
Your thoughts thank you.
In Youtube and bunk.
Indeed, we have been providing support and are using the au shops as who the other agencies, who the EOG been bunk.
Hiromichi Matsuda: We have been providing support and using the au shops as the other agencies for the au Jibun Bank. In addition, we have credit card business as well. So I think your question is about the au based on the au securities, au salesperson qualification.
In addition, we have credit card business as well.
So I think your question is about to the.
The other based on other securities under sales person qualification.
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.
Hiromichi Matsuda: 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?
Our product.
Sure.
Online intermediary.
Did the securities So SVR securities using the a huge boon Banca that kind of alliance is our current focus.
So when it comes to either the securities sales slip, if which requires a special qualification and development such personnel on real World. We are not thinking about it at this moment.
I answered your question. Thank you.
[Analyst 26]: 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?
Not only about securities account for.
For example, the various services that are there.
Had you been banca or mortgage loans.
In those areas what is your thought.
Hiromichi Matsuda: 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?
And of course always the we are reviewing every potential the possibility.
There are various financial services.
Some new emerging in financial services.
Especially au financial holdings.
The astute they're operating other areas, we would like to give serious thought.
My answer to your question. Thank you.
[Analyst 26]: Thank you.
Hiromichi Matsuda: 最後。
Hiromichi Matsuda: 最後。
So the last question.
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.
Operator: So the last question, C3 towards the entrance, please.
C III towards the entrance place.
[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.
Sorry, and eat keto Ma.
Again, so regarding the fictitious transactions. So the two employees were involved he said.
So if I could put this in perspective the two.
Or still.
Second did two big law.
They are yes D plan employees accounted to be globe.
So 600 to the globe.
And there are multiple.
So they are.
Belonged to G plan.
So theres a contingency plan.
But why.
Big.
The.
Despite the absence of the two can this transaction continue.
So they're not engie plan, but.
Why.
Can they operate G plans transaction or it can be involved in G plans transaction.
So their dual headed there are 600 budge there is the proportion between the second and seconding, a destination and the source company. So they are dual headed.
I see.
So the tools employees.
So they were not checked.
Yeah.
The transactions that you 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.
[Analyst 27]: 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 the transaction that only two of them were involved were fictitious.
So this 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 the globe and G plan.
They are fictitious transactions that is our understanding so we're trying to have the special investigation committee checking check the accuracy of that number one and number three or identical company.
Hiromichi Matsuda: 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.
That's one company.
Yeah.
So yes one.
Entity, we want to refrain from saying how many companies they are.
But the.
Hearing or the.
Entry withdraw.
Withdraw money and digital forensic is utilized.
Yeah.
And not understood that one and three are the same that's what we're seeing today and last question.
[Analyst 27]: And last question. So in your investigation so far, have you heard any motives or reasons the two did this? Were they pressured to have large sales, or were they just trying to embezzle the money, or?
Operator: So in your investigation so far, have you heard any motives or reasons the two did this? Were they pressured to have large sales, or were they just trying to embezzle the money, or? The Special Investigation Committee is investigating that. It's their scope. So I want to refrain from saying anything here. But of course, BIGLOBE is a business operating company. So the development of the business plan and the target management is done. But from our company, we have a medium-term plan. We are in the final year of the medium-term plan. So communication and financial, or DX and enterprise business, energy, these are our main businesses. So this advertisement agency business is not a driver for us to achieve the medium-term plan target.
So in your investigations so far.
Have you.
Heard any motives or.
Reasons that you that this they were pressured it you have a large sales or were they just trying to you and that's all the money or.
Hiromichi Matsuda: The Special Investigation Committee is investigating that. It's their scope. So I want to refrain from saying anything here. But of course, BIGLOBE is a business operating company. So the development of the business plan and the target management is done. But from our company, we have a medium-term plan. We are in the final year of the medium-term plan. So communication and financial, or DX and enterprise business, energy, these are our main businesses. So this advertisement agency business is not a driver for us to achieve the medium-term plan target.
The special investigation Committee.
Is investing that it's their scope, so I want to refrain from saying anything here, but.
Of course, the globe is a business operating company.
So the development of the business plan and the target.
Isn't that management has done.
But from our company.
We have a medium term plan we are in the final year of the medium term plan, so communication and financial or Dx and enterprise business energy. These are our main businesses.
So this advertisement agency business.
Is not a driver for us to achieve the medium term plan target.
Now the amount that you have found out this time in each ear.
Operator: Now, the amount that you found out this time in each year, BIGLOBE and G-PLAN, what is the proportion of this in BIGLOBE and G-PLAN revenue? BIGLOBE and G-PLAN are consolidated. Consolidated BIGLOBE revenue is around JPY 230 billion. This is last fiscal year, and of which this is JPY 82 billion. Thank you.
Hiromichi Matsuda: Now, the amount that you found out this time in each year, BIGLOBE and G-PLAN, what is the proportion of this in BIGLOBE and G-PLAN revenue? BIGLOBE and G-PLAN are consolidated. Consolidated BIGLOBE revenue is around JPY 230 billion. This is last fiscal year, and of which this is JPY 82 billion.
The globe and G plans.
What is the proportion of this in Piccolo and G. G plans revenue.
Biglow N G plan, our consolidated <unk>.
Consolidated big low revenue is around.
230 billion.
And this is last fiscal year end of which this is 82 billion.
[Analyst 27]: Thank you.
Thank you.
Operator: Thank you. With that, we would like to conclude the Q&A session. Lastly, I would like to say a few words. Again, we are very sorry for this matter. And of course, we are going to avoid reoccurrence and strengthen our governance. And at the same time, we are going to solidify our business platform to grow our business. And that is the path that we need to take to take our responsibility. And I will take the lead in making efforts, and we will continue to make advancements. Thank you for your continuous support.
Operator: Thank you. With that, we would like to conclude the Q&A session. Lastly, I would like to say a few words. Again, we are very sorry for this matter. And of course, we are going to avoid reoccurrence and strengthen our governance. And at the same time, we are going to solidify our business platform to grow our business. And that is the path that we need to take to take our responsibility. And I will take the lead in making efforts, and we will continue to make advancements. Thank you for your continuous support.
Thank you.
We start we would like to conclude the Q&A session.
Right.
Lastly.
I would like to say a few words again.
We are very sorry.
For this matter.
And of course, we're going to avoid a rare occurrence and strengthened our governance and at the same time, we are going to solidify our business platform to grow our business and that is the path that we need to take to take our responsibility and I will take the lead.
<unk> efforts.
And we will continue to make advancements. Thank you for your continued support.
Hiromichi Matsuda: 以上を持ちまして。
Hiromichi Matsuda: 以上を持ちまして。
You don't want to muster with that.
Operator: With that, we will conclude this meeting.
Operator: With that, we will conclude this meeting.
We will conclude this meeting.
Hiromichi Matsuda: 本日はご参加いただきまして。
Hiromichi Matsuda: 本日はご参加いただきまして。
When you talk with Alcatel I can muster.
Operator: Thank you very much for joining us today.
Operator: Thank you very much for joining us today.