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Last updated : May 13, 2021
Will there be any review of the medium-term management strategy based on the transaction to make NTT DOCOMO a wholly owned subsidiary and the synergies with NTT Communications and NTT Comware?
Regarding our medium-term management strategy, once the Ministry of Internal Affairs and Communications has released its report on its “Study Meeting on the Ideal Way of Ensuring Fair Competition,” we will clarify the specific details of the reorganization between NTT DOCOMO, NTT Communications and NTT Comware, and will then plan to undertake a review of the strategy that will incorporate synergies from the reorganization and other factors. EPS is expected to be ¥300 for FY2021, and we are aiming to achieve the FY2023 target of ¥320 one year ahead of schedule. Furthermore, we have set a target of cost reductions*1 of ¥840.0 billion for FY2021, and are working to achieve the FY2023 target of ¥800.0 billion of cost reductions two years ahead of schedule.
*1Fixed and mobile access; amount represents cumulative reductions since FY2017.
What was the extent of the impact of COVID-19 on FY2020 results? Please also discuss its impact on FY2021.
COVID-19 had a negative impact of approximately ¥(200.0) billion on operating revenues and approximately ¥(50.0) billion on operating income in FY2020. As a result of NTT DATA working to steadily acquire projects from its existing customers and to expand its digital field, and a recovery in NTT DOCOMO's sales of devices from and after the second quarter, among other factors, we were able to reduce the impact of COVID-19 compared to initial estimates (which were a negative impact of ¥(350.0) billion on operating revenues and ¥(70.0) billion on operating income). For FY2021, our plan contemplates a negative impact of ¥(65.0) billion on operating revenues and ¥(35.0) billion on operating income, in light of the negative impact on certain businesses including NTT DOCOMO’s international roaming revenues and overseas SI business.
Given that a negative impact on FY2021 results is expected from the adoption of “ahamo” and “Gigaho Premier,” how will NTT DOCOMO achieve an increase in revenues and income?
Since “ahamo” was launched on March 26, the number of contracts has already exceeded 1,000,000*2 and it has been well received. Although we expect there to be decreases in revenues in FY2021 caused by the introduction of “ahamo” and other factors, we are aiming to increase revenues and income compared to the previous fiscal year by way of growth in the Smart Life area through the expansion of the finance/settlement business and an increase in revenues from sales of devices, together with cost reductions from organizational reforms, including improvements in network efficiency and advancing the digitalization of sales channels, among other factors.
*2As of the end of April, 2021.
Although there is a plan to increase overseas operating income margin by 3.0 pts compared to the previous year to 6.0% in FY2021, in what way do you plan to implement this?
We will work to improve our income margin by promoting further cost reductions and expanding our high-value added services, including data centers and managed services, at NTT Ltd., and through the effects of cost reductions resulting from structural reforms implemented in the previous fiscal year and efforts in digital-related businesses at NTT DATA, among other things.
Please discuss your response to the recent dining incident with ministry officials.
We sincerely apologize for causing great inconvenience and concern to all of our related parties. In order to regain the trust of our customers, our shareholders and all other related parties, we are undertaking a review of our internal rules regarding situations such as dinner events, and will implement thorough initiatives to prevent any reoccurrence. In addition, based on the opinions of our Special Investigations Committee, we will formulate and announce initiatives to shift towards management that is suitable for the new era.
Please discuss your future initiatives to strengthen governance.
In the same manner as previously adopted by NTT (the holding company), NTT DOCOMO and NTT DATA, our major unlisted subsidiaries will also adopt an executive officer system and seek to stimulate discussions at the Board of Directors and promote strengthened governance by appointing outside Members of the Board who are equivalent to independent officers. In addition, we will increase the ratio of performance-linked compensation at NTT and its major group subsidiary companies from 30% to 50% and adopt a new stock-based compensation system that better reflects medium- and long-term results.
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