Financial Results for the Third Quarter of FY2023

First, about 97% of the area has been recovered from an area point of view. Although we are carrying out restoration activities on a mobile-line first basis, the number of base stations that remain affected in the area due to the lack of road access has not recovered to about fifteen. In addition, the number of communication stations for which fixed lines have not been recovered is two.
It is not clear exactly how much it will cost since there are still some inaccessible areas, but I think it will be about 10 billion yen based on past disaster recovery. About two-third of the restoration cost will be fixed line. However, the fixed line will be restored after evacuees return to their homes and rebuild their homes, so we don't know the details yet.

NTT DOCOMO owns about 2% of Lawson's shares, but, we have not decided any action on how to proceed with this so I am not able to comment on this matter at this time. As for payment services, Takahashi, President of KDDI said at the press conference that he would not restrict to only his own services, so I expect NTT DOCOMO's services to continue.
We will work hard to ensure that your payment service is used as widely as possible. We're not in talks about specifics at this point.

I'm not going to follow the same strategy. For example, in the supply chain, not only the final retailers but also the upstream process is connected. We have been supporting DX in each field, but we would like to continue to do so. We also have business relationships with three major convenience store companies, and we would like to continue to strengthen them.
We have no intention of entering the convenience store business.

Compliance is very important for companies, and it is not so much compliance with laws and regulations, but rather the need to respond to changes in the social environment with firm discipline. I believe that there is always compliance that suits the modern era.
The NTT West is deeply sorry for the leakage of customer information of 9.28 million clients and 69 companies caused by cyber-attacks last year. Since last year, we have been investigating whether similar problems have occurred not only in the NTT West but also in the entire NTT Group as an emergency response. We took measures by the end of December last year, and some of them were dealt with past December, but we took measures for the time being.
However, for example, to completely ban USB thumb drives, the process of their operation must be changed, and in addition, new facilities must be built. Therefore, in the interim measures, we are taking measures such as strengthening the management of USB thumb drives, but this is not enough. Therefore, we are having each company in the NTT Group seriously discuss making a budget including investment for the next fiscal year by the end of February this year, and we intend to switch from interim measures to full-scale measures. This operation has already started in some places, but we are considering full-fledged measures over the next fiscal year, such as reviewing the system and implementing specific log checks.
The NTT West Group's investigation into the information leak is being investigated by a committee including third parties, and we are told that the investigation report will be finalized by the middle of February this year. At the end of February, the NTT West Group instructed the president of NTT West to create an opportunity to make a presentation based on the report, including measures that have been taken and measures that should be taken in the future.
In any case, we recognize that compliance is very important for the survival of a company, and we would like to continue to strengthen it.

Since the Great East Japan Earthquake, we have recognized that the customer's need is to restore mobile lines as soon as possible. Of course, important lines such as seismometers of the Self-Defense Forces and the Japan Meteorological Agency are given the highest priority, but other than that, we instructed NTT West and NTT DOCOMO to restore mobile lines as soon as possible.
Now that the Ministry of Internal Affairs and Communications has started working on universal service in relation to the NTT Law, I think we need to create a system that considers mobile lines as the core of universal service.
Conventional metal fixed lines provide point-to-point communication to residences and business establishments, but I believe that what customers today are seeking, for example, when there is a disaster such as the recent one, is communication not over points but over planes, such as evacuation centers and major roads in the process of evacuation. Therefore, I think it is necessary to think based on universal service centered on mobile lines in the future.
Of course, we have to protect the optical line service, which is the backbone of the service, but it is important not only for NTT but also for fiber optic cables provided by cable companies and subsidiaries of electric power companies. In addition, mobile operators have their own backhauls and their own optical networks for core networks. I think it is important to deepen discussions based on these issues and create a new universal service system.
There is a lot of discussion about last resort, but I think it should be made to be cheap and efficient in view of the national economy. In the end, I think it would be good for the government to be able to choose a business operator.
However, as I have said before, if there is an area where no one raises their hand, NTT EAST and NTT West are prepared to take the last resort in that area, and I think mobile operators themselves may need to be prepared to do so.

ARPU at the end of the third quarter was 3,990 yen, slightly below 4,000 yen. One factor is that irumo is selling well. The impact of the launch of a second brand is coming out a little later, but the perception has been reversed since then.
With the release of new iPhone handsets and the third quarter of the handset overhaul, NTT DOCOMO hasn't really cut prices. As a result, the mobile number portability (MNP) has not necessarily performed well, and the ARPU has not completely reversed, so we are now considering how to respond to the business situation in the spring.
Also, how to secure future customers is very important, so how to appeal attractive services to young people will be a big factor.

I don't know because we didn't conduct a survey, but I think there aren't many of them. NTT DOCOMO also reflected on the fact that we have been a little slow to respond to the traffic volume since the end of the COVID-19 pandemic. After that, we took firm action, and as far as our plan is concerned, we did everything we could to make improvements until the end of December last year.
In the future, there are some areas where it is necessary to increase the number of base stations. In this regard, there may be some areas where negotiations took longer than expected, and there may be some areas that exceed the fiscal year, but we are making steady improvements. We have also made considerable improvements along the so-called "commuter lines," and we will continue to improve the quality of our services by carefully managing the performance of our applications. We will do our best to ensure that there will be no more press conferences about the quality of communication.

I think the streaming business is now in an era where each of them is competing for their own content. In this sense, customers are contracted to multiple services and choose the content they want to see at the time. Therefore, we recognize that it is important in the era of competition to provide content that can only be found in Lemino, such as the case of boxer, Naoya Inoue.
As part of this, we have also signed this contract, and we would like to do our business to win the hearts of our customers by providing outstanding content such as broadcasting when Manchester City FC recently came to Japan.

First, I haven't received a demand letter from the NTT union yet. I have always said that people create services to enhance the customer experience, and I believe that investing in people is very important. In that sense, we've been raising wages for the past 10 years. For example, the consumer price has increased by about 8% in 10 years, and the cumulative wage increase in our company has been about 30% in 10 years, which is considerably higher than the consumer price.
I believe it is important to raise wages continuously and steadily. Therefore, I believe that it is important not to suddenly raise wages at a certain point in time, or to stop suddenly, but to steadily raise wages, which will effectively contribute to the overall growth of society. Therefore, we will continue to raise wages this year.
I believe that the extent of the wage increase will be concluded after a discussion between labor and management. Naturally, we are aware of the trend of raising wages to boost the world economy, so I would like to make a conclusion based on this.

First, in most countries, the obligation to install public telephones has disappeared. The main idea is to focus on covering mobile lines as the basic idea.
The current system of public telephones consists of a metal line, and if you want to provide service through an optical line, of course, you have to create new software, a billing system, and so on, which is costly. This is not to say that we do or do not do it because it is costly, but I think we need to discuss how we can achieve the most desired benefits in terms of economy and convenience. In that sense, I think it is necessary to discuss how public telephones should be in the discussion of universal service that is taking place right now.

I don't think it's directly related. I don't know about the collaboration strategy with Lawson until I ask KDDI, but as far as I can tell from the news reports, I don't think it will have a big impact because I know that d payment and d POINTs won't suddenly become unavailable at Lawson stores.

In response to the Noto Peninsula Earthquake, NTT DOCOMO brought WIDESTAR II terminals to the affected areas. The reason is that WIDESTAR II is good at making voice calls, compared to WIDESTAR III, which has many functions such as linking with smartphones, we decided that it would be best to bring in a service that can secure contact.
In addition to the fact that satellite communications will be used in various ways depending on the application from time to time, it is necessary for the time being to look at the convenience and characteristics at the timing of the future evolution of satellite communications and make a choice at each timing of use. Therefore, I recognize that we need to participate in various projects and look at their superiority and convenience.
There is a debate about whether Japan should also build a low-earth orbit satellite, but NTT Group alone cannot do that, so I think it is necessary for the government to take the lead in building such a satellite.
We're now focusing on HAPS. I would like to bring HAPS to the area of Japan as soon as possible and do the experiment as soon as possible. However, HAPS itself has a problem in that the output of electricity can be suppressed to some extent by solar panels at high latitudes, so I think it is necessary to carefully observe the characteristics of satellite communication and HAPS.
For the time being, space services need to be tested and put into practical use while taking on various challenges.

The NTT Group's policy has always been B2B2X, and it was intended to support customers in Center B. Therefore, for example, the financial industry was based on providing various support for Center B.
But we've moved into an era where the world needs to be able to complete things in a single smartphone app, so I think it's true that NTT DOCOMO is a little late in that area.
There is a growing need for life insurance and non-life insurance to be combined, including point-of-sale linkage, and we are in the process of putting this in place but I believe that we are still lacking. It will take a little more time, but we would like to build a system that can firmly respond to customer needs and catch up with them in the next fiscal year if possible.

It is difficult to state clearly here now, but I believe that it is very difficult to continue a loss-making business. Therefore, I believe that an appropriate profit level is necessary, and I would be grateful if they could review this systematically if possible.
It's a little off topic, but metal landlines had more than 60 million contracts at their peak, but they dropped to 13.5 million at the end of last year. Currently, we receive about 100,000 requests for new installation annually, but on the other hand, we receive about 1.6 million requests for removal or discontinued subscription, which is a decrease of about 1.5 million per year.
However, due to the universal service obligation, we have to open the phone within a week, upon request. The fact that we have to open all over the country upon application means that we have to maintain such a huge amount of metal fixed telephone equipment. Currently, we are losing about 60 billion yen a year, but 10 years from now, we will lose more than 90 billion yen a year. If we add up the number, it will be a very large amount.
It is important to allocate such cash to the upgrading of advanced infrastructure as soon as possible, so I think it would be appreciated if the current discussion on universal service takes a close look at these aspects, revises the areas that need to be reviewed, and proceeds with discussions to promote the allocation of caches to advanced new networks.