From now, we would like to start the press conference on the financial results for the three months ended June 30th, 2026 of NTT, Inc. Thank you very much for gathering despite your very busy schedule.

I will be serving as MC from public relations department, NTT, Inc. My name is Ichihashi.

Let me introduce the attendees today. At the beginning, President and CEO, Representative Member of the Board, Akira Shimada.

Senior Vice President, Head of Finance and Accounting, Toshihiko Nakamura. Senior Vice President, Head of Corporate Strategy Planning, Akitoshi Hattori.

These are the three members. As for the materials for today, they are uploaded on our official website at 1:30 p.m.

We will start the conference. Shimada-san, the floor is yours.

Thank you very much for sparing your precious time out of your busy schedule to attend this meeting. This is Shimada, President.

First and foremost, our deepest sympathies go out to everyone affected by the recent Kumamoto earthquake and their families. We are fully committed to restoring services and supporting recovery efforts as quickly as possible, working in close cooperation with telecom companies and local governments to restore communication infrastructure and assist affected areas.

Although mobile services were disrupted in two municipalities, they were restored within approximately two days. During this period, we worked to maintain connectivity through measures such as the rapid implementation of Japan roaming.

We are also continuing to provide support at evacuation shelters through the Tsunagukakeru project collaborating with telecom companies and battery manufacturers. We remain dedicated to contributing to the earliest possible recovery and reconstruction.

Now, I will proceed with the explanation of our financial results of the first quarter of this fiscal year. Overview of consolidated financial results.

Increase in both revenues and income year-on-year. Operating revenues reached new record-high levels.

Operating revenues increased by ¥355.7 billion to ¥3,617.7 billion driven by the data group overseas and domestic business group, as well as the smart life business increase centering around the finance of docomo. Out of this increase, foreign currency impact positive ¥75 billion.

Profit, despite the costs related to docomo's customer base enhancement and network quality improvement, growth in smart life business profit and business growth of data group, it increased. EBITDA increased by ¥34.8 billion to ¥836.2 billion.

Operating profit was up ¥20 billion year-on-year and was ¥425.1 billion. To achieve full-year plan, we are committed to work to expand enterprise business both at home and abroad and expand smart life business.

Net profit was driven by the increase in operating profit and others and ¥274.8 billion, up ¥15.1 billion. By segment, in all of the segments, delivered growth both in revenue and profit.

Integrated ICT business segment, despite the cost spent for reinforcing customer base and improving network quality, as a result of customer base enhancement initiatives and others, while smart life business expansion resulted in increase in revenues and profit YoY. As a result of customer base enhancement initiatives, MNP performed strongly and improved from the previous year.

docomo MAX have been selling well and resulted in ARPU improvement, and the rate of decline in mobile communication services revenue decreased steadily against the previous year. We aim for the turnaround to increase revenue year-on-year.

Global solutions business segment, in addition to business growth in Japan and overseas, increased due to foreign exchange impact, both revenues and profit increased year-on-year. Regional communications segment, and though legacy business revenues declined, increase in Hikari business revenues resulted in increase in revenue year-on-year, and profit remained at almost the same level as that of last year.

Net increase in Hikari service was almost at the same level as that of the previous year. Others, while real estate and energy, growth in real estate business of urban solutions led to increase in revenue and profit year-on-year.

Next, I would like to move on to explain four topics, starting from the global expansion of IOWN. To further drive IOWN business, with the support of government, we accelerate service deployment globally in Chile.

Survey and demonstration to advance remote operations of heavy machinery through IOWN APN has begun at Codelco-operated copper mines to solve issues such as working environment improvement. In India, a feasibility study aimed at improving energy efficiency of data centers in India through the deployment of switches incorporating photonics-electronic convergence devices, SPEC2, has begun to achieve power-saving, large-scale distributed processing with financial institutions and other partners.

Going forward, we will continue to expand use cases in various countries and industries, steadily promoting steps to social implementation of photonics-electronic convergence devices and accelerate global expansion. Next, I will explain launch of distributed GPU demonstration environment using IOWN APN.

We launched the GPU over APN testbed, a nationwide distributed GPU demonstration environment using IOWN APN in July, enabling customers to experience the use of distributed GPU resources, low latency, high-volume connectivity, and distributed GPU resources across eight nationwide locations enable verification of advanced AI load, including distributed AI training, distributed AI inference, and high-volume data transfer between sites. Through provision of real-world environment, we will accelerate the realization of AI-IOWN through customer co-creation, generating new use cases and practical expertise.

Thirdly, I will explain the initiatives for sustainable operation of social infrastructure. In social infrastructure including water, wastewater, and waste management, aging infrastructure and labor shortages are getting serious, and new mechanisms for sustainable operation is expected.

To solve this issue, NTT will promote operational efficiency through DX at water and wastewater treatment plants through business alliance with METAWATER. At this juncture, we acquired METAWATER's shares to build long-term collaborative relationship.

Furthermore, building on this initiative, we will aim for the achievement of cross-sector, wide-area social infrastructure management services through deployment in areas such as renewable energy, road, and disaster resilience, and contribute to building sustainable social infrastructure along with the municipalities and communities. The progress under medium-term management strategy since May is as shown here.

That concludes my explanation. Thank you very much for your attention.

We now like to take questions from the members of the press. We would like to start by inviting questions from the reporters present here at the venue.

If you have a question, please raise your hand. Our staff member will bring a microphone to you.

Please state your company name, media, and your own name before asking your question. Due to time constraints, we ask that you limit your questions to two per person.

If you have two questions, please state them both at the same time. We now like to take questions.

From me on the left-hand side in the second row, and the reporter in gray suit. Kobayashi from Yomiuri Shimbun.

docomo Financial Group was launched in July. In this particular, while quarter, financial results and docomo finances have really greatly contributed to the business performance.

What is the expectation as to this particular service?

Thank you for the question. As Kobayashi-san has just mentioned, and as of the July the 1st, docomo Financial Group was launched.

Banking, securities, loans, insurance, all these, while the so-called across the financial sector comprehensive services are now being well available. With this, making it a very, well, big starting point, and d POINT could also be combined together and to really offer a very robust and strong, while, financial services.

We have come to a stage whereby we will be able to build even a more reinforced the financial platform. The major one is the banking arm.

Docomo, SMBC, is the setup the name, but, well, it is named under the docomo. This banking function is, well, drawing much, well, attention and expectation.

There are approximately 2,000 docomo Shops. Currently, as of the end of August, 200 shops will be able to really, well, provide support to the opening of the bank accounts as well as securities.

Other than the docomo Shops, we will have 80 e-shops which would be able to really offer the support. By the end of this year, and we would like to really have the facilities amounting to 1,000 to really provide the various support for these financial, sort of, the functions.

We are really going to have the, well, 50% of them to be, while are able to provide the support from demand really, well, outlets. That is what we would like to really, well, see achieved by the end of this fiscal year.

Thank you.

The next question, please. The person at the back row.

Takagi from Sankei Shimbun.

I have two questions related to the response to Kumamoto earthquake. As for the damage in fixed line in East and West, there seems to be some damage in docomo business.

Also in the mobile phone business, compared to the past, it was a rather minor damage. It's not a possible to have the simple comparison, but what was the factor for mitigating the disaster impact?

Now collaborating with the four companies, I believe you had a good benefit of Japan roaming. What went smooth, and did you have any challenges?

Thank you for the question. This was seismic scale of 7.

With respect to docomo, there were impacts in two cities. We partially used Starlink, and over two days, we were able to recover at an early stage just spending two days.

Also in intra-prefectural network and extra-prefectural network, we have operations, and that is related to the cables on the bridges. The bridge was damaged, and as a result of that, the connection was cut.

Now we are diverting to ensure the connectivity. In terms of the communications, we do not have any issue on the fixed line.

From that perspective, at an early stage, we were able to provide services. Compared to Noto Peninsula earthquake, it was peninsula, in order to recover, to secure the routes for recovery, there were challenges.

This time, in order to recover and restore the environment, the conditions were better. Along with that, Japan roaming, each company is using Japan roaming, we were able to extend support.

With the connectivity project, we did coordinate which areas to support, and we have divided the responsibilities amongst the four companies, which ensured efficient support. Along with that, mobile battery, with the support of the battery manufacturers, at an early stage, we were able to provide mobile batteries.

From that perspective, broad area support structure was ensured, which was good for the company. This should work well.

This earthquake, we would like to reflect, and we would like to prepare for the other earthquake that may arise in the future. We would like to move on.

Just in front of us. Shimizu from Nikkei.

In July, and, well, had the issuance of the foreign currency-denominated bonds of ¥1.6 trillion. I think, well, when I really met in May, and, well, we had this, well, the downgrade in, well, S&P.

Also, well, in terms of your business strategy, what would be the sort of the potential impact from the rate hike?

S&P downgrade, as for that, originally making, well, the data a wholly owned subsidiary company, we were expecting this. It's not that, well, we were taken by surprise.

Moody's and, well, other were two rating agencies for in Japan, they are maintaining the same rating. Not virtually, well, or substantially, there's not much of the impact.

The interest rate, and 0.1% or so, it's not really, well, up to 0.1%. That is the level of the impact, and so very, well, moderate impact.

Basically speaking, we can say that we are free from the impact. BBB, even with that, because the outlook is stable.

Going forward, for the capex in our businesses in the future and also the equity participation or the investment, there is no, well, particular issues related to this in this context. Did it answer to your question?

Thank you. Miyoshi from NHK.

I have two questions. The first question is mobile communication service revenues.

You were able to shorten the level of decrease in revenue, and you have announced a new plan. With respect to the rate plan, revision of the existing plan, are you planning to have any plan for revenue increase?

That is the first question.

Mobile communication service revenue, thanks to your support, consumer communications last year was roughly ¥40 billion plus reduction in revenue, but this year, this will be explained by docomo, but it was ¥1.4 billion decrease in revenue, about 1/10th. We believe that this has bottomed.

From that perspective, ARPU is increasing. This time, we saw the increase by ¥70, and MNP is also working positively.

With 3G suspension, this is impacting, but overall, we are seeing the recovery. On the other hand, as you said, labor cost and expenses, they are increasing overall.

As docomo, at certain timing, cost should be borne. Also, there is still 20% increase, and there is a decrease of the capital expenditure for traffic.

We just need to make sure to cover that. That should be reviewed further by docomo.

ahamo, 30 GB, and there is addition of 10 GB to 30 GB. This is from marketing perspective.

Since there is a heightened need from the perspective of the customers, once they use, and we wanted to wait and see what the reactions are from the customers. We would like to make sure to see that in the future.

Thank you. I have another question.

I'm sorry to ask about the competitors. SoftBank will make the investment to 7 & i, and PayPay and ID integration will be promoted.

With respect to telecommunication operators, points, payment, strengthening of the collaboration is in progress. Once again, for you to differentiate, what are your strength?

You mentioned about docomo Financial Group, but once again, what will be the uniqueness or the differences in order to expand your ecosystem?

With respect to the convenience stores, we are in principle open to them. With 7 & i, we have a close collaboration to do business.

From that perspective, for example, Lawson, when KDDI made investment, this was the case. If you think about the convenience of the customers, all of a sudden unable to pay in d Barai may not be good for the store.

Up to now, 7 & i, d POINT, Lawson and FamilyMart, it's possible to accumulate and also use d POINTs. That was not the case for 7-Eleven.

With the capital partnership with SoftBank, from customers' perspective, it will be helpful if d POINT can continue to be used. From the perspective of the customers, from ID and a marketing perspective, docomo itself has alignment with customers and a marketing company called docomo InsightMarketing.

So 7 & i collaboration would be SoftBank, PayPay, and other than that, there is even more extensive collaboration. I don't find any impact.

Thank you.

Next, at this point in time, we would like to take questions from journalists participating online. You can, well, submit your questions via voice or chat.

For voice question, please press the Ask a Question by Voice button on the right side of the screen, select your microphone device, and then press the Raise Hand button and wait. We will call on you.

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Are there any questions? At this juncture, we don't seem to have questions from journalists participating online.

We would like to go back to the venue, and those of the media reporters at the venue, if you have any questions, please.

Nakao from Kyodo News. Thank you very much for your explanation.

I have two questions. The first question, a very detailed questions.

Earlier, Shimada-san at the outset, docomo Financial Group and the docomo Shops which are going to be able to really support the financial, them you're really going to increase this number up to 1,000 by the end of this year or fiscal year? By the end of fiscal year.

Also I think, well, you are really going to accelerate achievement of this kind of target number. Are there any background factors to support that?

What was the sort of the leadership being played by the holding side? That is the very first question.

I'd like to really respond to this part. Docomo, well, they were not really saying that they are really going to move slowly in any way.

When the press conference was made for this of their financial group, and they were really talking about what they would like to really achieve. It's not that we have pushed them to really work faster, but that was really being the case.

Sorry. I was not really confirming very well in that.

On a different note, an economic policy are promoted by Takaichi administration. This time around, and in terms of their growth strategy and basic policy and all these government-led policies have been formulated.

AI and, well, IT and space, and so very, well, practical investment is going to be made. That was really decided by the government.

Also, I think, well, it's exceptionally, well, monetary, sort of, policy, it would be adopted. Also, we have seen quite a big, sort of, movement in terms of the weaker yen.

That is a sort of the movement in the market. Vis-a-vis the general policy of the administration, what is your take on that?

Also in addition to that, and because of the rate hike, well, probably the funding might become, well, more difficult. As for the interest rate, any request or demand that you have for the current administration?

What is being promoted by the Takaichi administration, and the 17 core areas, and so we are to be really engaged. Because once again, well, in order for Japan to really revive, I think these are really essential in our view.

In that context, and we are really called and we have given the opportunity to really explain on our part. Mainly, AI was the main topic.

The network to really connect this AI through APN and to really support that, well, you may need to have the distributed, sort of, power supply. On the other hand, in terms of economic security perspective, and marine cables, well, both in Japan and also the overseas, well, we may have to really pay really attention and make efforts to that.

These are the challenges. We hope that the government is going to take the leadership, and we, on our part, would like to be engaged in sufficient manner.

From Sapporo all the way we have the APN, also between data centers we do have all these installed. All the way to the outside of Tokyo in the outlying regions, we may really have to have all these being installed.

I think something that should be really looked at from the legal perspective, and also we have to take care of that, and to really provide the sort of the system or organization whereby we will be able to provide the adequate support. I think that will serve as the platform and foundation for further growth.

In terms of the industrial policy, well, I think it is really important for the infrastructure to be developed. Now as for the monetary policy, I am not in a position to say anything about that.

If the inflation should be well-controlled, and then it is a common sense that rate should be, well, hiked. For a private company, it is better to see, well, lower interest.

The inflation is even more scary. We would leave the judgment to be made by the regulator, so that the inflation would not be, well, accelerated.

Also the foreign currency exchange rates, well, are hopefully to be well stabilized, and so it would not really be volatile and fluctuating too much. Did it answer to your question?

Any other question, please?

The person to the left, the third row.

My name is Suzuki. This is a question about the docomo FG.

When I heard from President Hiroi, securing deposit was difficult. After acquiring a net bank, enterprise sales was required, and group asset was required.

For example, group employees and sales resources of the group to be utilized. Can you speak about the progress around those topics?

Yes, competition over deposit. Now we are in the world with interest rates, not just net banks, but megabanks and other banks are competing amongst each other to secure deposit.

Given the circumstances, ORIX Bank is trying to secure deposit in this competition so that there will be another business growth. To all the group employees, we can ask to join this financial group, but we cannot mandatorily ask them to open the accounts.

We need to make sure to have our cohesiveness in order to advertise this financial group. If they can open account for securities, that will be helpful.

Thank you. Any other questions?

We have received a question in chat, I would like to read a question from Mizushima-san from Nikkan Kogyo. Semiconductor procurement, it would take longer, and also what is your view as to the soaring price of semiconductor?

We are not directly procuring semiconductor. As the sort of parts and components of devices, semiconductor is being used.

From the device vendors and from the earlier stage, well, there is some request for the potential procurement. An innovative device might see some what impact, and optical-related parts and components, and they are really asking us to really place orders early on.

We are aware of that so that we would not really cause any inconveniences to our customers and also not to lower the quality of services. There are some cases whereby we are really start placing orders and procuring earlier.

The prolonged, sort of, situation, we are going to respond to that. Also as for the soaring prices, well, it depends of the market, and so we will be procuring at the market price.

Thank you. Kobayashi first, please.

I'm sorry to ask for the second time. When you talked about the financial results at the beginning, you mentioned that there was increase of revenue due to the exchange rate.

From pure management perspective, depreciation or appreciation of the yen by ¥1, what is the impact to the management of the company? That's the first question.

I should have asked this question earlier. docomo's domestic share is now 33% or so, and you mentioned that the mobile revenue of docomo is now bottoming.

What is your expectation for docomo?

Yes, as for the exchange rate impact, I would like to ask the finance responsible person to respond. Speaking about market share, we mentioned 35% as the target, but that was the message for not going any further down.

In other words, we want to increase if possible. We said the 35 last time, we hope it will increase.

On the other hand, if we include MVNO, we have been able to secure to certain level, we should be able to keep that. With respect to domestic share, we do not want to go any further down, we would like to make sure to hold.

Please convey this to Maeda-san, the next speaker. If I may add on the impact of exchange rate, now with NTT Group, overseas revenue is roughly ¥3 trillion per annum.

For example, the exchange rate is between ¥150 to ¥160 with ¥1 fluctuation, there will be roughly ¥20 billion impact, and the profit is roughly 1/10th of that amount. That is all from me.

The person in white shirt.

Kurashima from Kyodo News. I'd like to really ask questions related to Kumamoto.

There has been not much of the impact, and also are you really going to review the BCP? As for the unwinding of metal, if there are any, possible, the postponement?

As for the metal, I don't think there is going to be an impact. As for the BCP, and whether we are really going to revisit BCP or not, constantly we are reviewing.

This time, those affected, and so what was in shortage because of the Kumamoto earthquake, and so at this point in time, we have not yet really reflect the lesson on ourselves yet. This is something we do every time constantly if there is any disaster and if there is any incident.

Every time, we are revisiting the plan, so that's what we have been doing.

Thank you.

In the interest of time, the next question will be the last question. If you have any questions, please raise your hand.

Since there is no further question, with this, we would like to conclude the press conference of NTT, Inc. We would like to move on to NTT DOCOMO Group press conference.

Please wait while being seated. Thank you.

Thank you for waiting. From now, we would like to start the press conference on the financial results for the three months ended June 30th, 2026 of NTT DOCOMO Group.

Let me introduce attendees: President and CEO, Representative Member of the Board, Yoshiaki Maeda; NTT DOCOMO Executive Vice President, General Manager of Corporate Strategy and Planning Department, Shuji Sakamoto; NTT DOCOMO Senior Vice President, General Manager of Accounts and Finance Department, Jun Fujioka. These are the three members.

From President Maeda, overview of the financial results will be explained and entertain questions from those who are on-site and online. The floor is yours, President.

This is Maeda speaking. We would like to extend our heartfelt sympathies to everyone affected by the Kumamoto earthquake and their families.

As the docomo Group, we will continue to work toward providing support to the affected areas and ensuring the stable operation of our communications services. Now, I will explain the financial results for the first quarter.

Here are the results of highlights. We achieved increase in both revenues and profit for the first quarter, marking a strong start to the mid- to long-term growth.

Although the increase in earnings is modest, the results of the transformation initiatives we've been implementing are steadily emerging. Progress against the full-year plan is proceeding smoothly, and we remain committed to achieving our targets.

In the consumer communications business, we have seen improvements in customer base and earnings, while the smart life business has grown mainly driven by finance offerings. The enterprise business is also capturing customer needs for the AI era, expanding its area of growth.

I will explain the status of each segment in the following slides. First, the overview of the financial results.

Operating revenues increased by ¥126.9 billion to ¥1,617.0 billion. Operating profit grew by ¥6.5 billion to ¥246.2 billion and resulted in increase in both revenues and profit.

Operating revenues was driven by smart life and enterprise businesses and increased over ¥100 billion. Smart life grew in its existing business, in addition to the consolidation effect of banking, and enterprise business expanded in its growth areas.

Mobile communication services revenues saw a smaller scale of decline from ¥14.1 billion the previous year to ¥1.4 billion, and performance is improving as planned, heading towards a bottoming out. Group-wide operating income increased and was driven by the growth of smart life.

Consumer communications still result in declining profit, but the rate of drop is almost halved from the previous year and keeps improving. Sales promotion expenses stepped up from the previous year, but while expanding in the number of port-ins, it's being controlled within the scope of our plan.

For the full year, we plan to drive efficiencies and achieve year-on-year reduction. I will now start explaining core businesses' actions and results.

First, consumer communication business. MNP recorded net positive performance in three consecutive quarters and remains improving trend.

We believe positive growth secured throughout the first quarter demonstrate the improved customer base has started to take root. Also, with enhanced sales capability and increasing the number of loyal users and lower short-term churn are leading to lower acquisition costs.

In FY 2026, not merely acquiring the number, but we are trying to enhance engagement with our customers and build more robust customer base. The number of loyal users using docomo MAX, finance, and d eneko services has steadily increased from 12.9 million last year to 15.3 million.

Also, the port-out rate of loyal users has significantly lowered. Those who are subscribing to two or more services, the rate is about approximate 1/3rd of non-loyal users.

We believe the customer base reinforcement to support mid- to long-term growth is steadily progressing. We will keep committed to expand the loyal users.

docomo MAX topped 4 million subscribers towards the year-end target of 5 million, the progress already marked 80%. Furthermore, the number of applications for selectable benefits is expanding, and value offered, not just in terms of the rate, but also including that of the content is supported and appreciated by the customers.

We will remain committed to achieve the year-end target of 5 million and aim even higher for further uplift. With the docomo MAX expansion, ARPU reached ¥3,990, up ¥70 year-on-year.

We are making steady progress toward annual target of ¥4,010 and keep working towards improving ARPU. Mobile communication services revenues, despite the declining impact from lower utilization handsets, with a strong recovery ARPU improvement momentum is continuing, as it is progressing in line with the progress with the plan, and bottoming out is now visible.

Also today, we announced a new U15 plan to support child's smartphone debut and docomo Oyako Wari. This is easy-to-use, adapting to the growth of a child and how it is used by the child, and monthly fee start at ¥780 for the first year, and discounts are available for parents, too.

We intend to be recognized docomo as a family brand, offering services easy to start by both parent and child, and they find easy to keep using. Next is smart life.

The operating revenues increased from ¥301.1 billion to ¥418.4 billion, up 39% year-on-year. In addition to consolidation effect of the bank, existing areas including finance, entertainment, and marketing have also increased.

Finance payment transactions increased over ¥500 billion from last year with expanded use of d CARD and d Barai. Through daily payment, our contact with customers daily, monetary use is expanding.

This is the solid strength of docomo Group. Going forward, placing banks as origin, we will expand this daily point of contact even further.

The nexus of the strengthening is docomo Kouza. Setting docomo Kouza as a payment account for d CARD will increase reward rate of shopping.

If it is paid in d CARD, it is subject to cashback, and in the initial year, it will be the maximum of 3% even by touch payment or d Barai. Further, if securities or brokerage are combined, maximum will increase to 4.5% depending on terms, even higher.

The tripartite collaboration among NTT DOCOMO Financial Group, docomo Kouza, and Monex Securities enabled this. The foundation built by communications will expand from banks as origin to entertainment and asset formation.

To ensure use of financial services to more customers, we assure in support structure is essential. The nationwide docomo Shop is our strength, and we will expand the support capabilities cultivated by smartphone classes to financial services.

Already, some docomo Shops support opening brokerage and NISA accounts. Also, support for bank accounts openings and initial settings will roll out shortly.

We will expand the number of docomo Shops capable of ushering and supporting financial services to 1,000 early to strengthen engagement with customers. Next is enterprise business.

The growth area integration and platform grew 8.4%, driving increase in revenue. It also covers security demand of large enterprises and continues to accelerate expansion of growth area.

Our focus area, AI business, increased 12% in revenue year-on-year, driving growth of enterprise business. Its core, AI-centric ICT platform, materializes AI-IOWN promoted by NTT Group and accelerates deployment as platform to achieve social implementation.

Furthermore, security expected in the era of AI is strengthened, such as threat information sharing of docomo Business Rink. AI, SOC, NTT DATA aligned services are strengthened, and we will support customers' AI use and secure business operation together.

The number of AI-centric ICT platform increased by fivefold. docomo Business dX, docomo Business Rink is expanding as a platform to provide enterprise network on-demand and with flexibility.

Going forward, we will enrich services catering to the needs of the customers and evolve as AI-native infrastructure in the era of AI. Network.

We will continue to build base stations at the same pace from the second half last year to improve network communication quality. In Q1 FY 2026, we built approximately 2,500 base stations, of which 1,500 are 5G base stations, which is the same level as the first half of FY 2025.

Establishment of base stations is making steady progress. Although we see annual increase in traffic, the average download throughput in center of major cities nationwide is improving.

To achieve more nationwide connectivity and offer comfortable communication environment to customers, we will further drive building of base stations. Further, expansion of 5G area in subway stations is steadily making progress.

As of July, 303 subway stations have been completed across Japan, and over 70%, 206 subway stations have been completed in metropolitan Tokyo. We will continue to promote this.

Actions for further improvement of experience quality cannot be measured by the number of base stations. We started to introduce latest equipments.

Let me share two points today. Firstly, the commercial introduction of the latest base station equipment first in Japan.

The new Ericsson equipment has the four times processing capacity compared to the existing equipment and 50% less power consumption, achieving both performance and environmental performance. Secondly, operation of the largest bandwidth tri-band massive MIMO by using three spectrum bands owned by docomo together, 280 MHz band is used simultaneously, allowing maximum threefold speed compared to conventional communications.

Through the introduction of the latest equipment, we will ensure comfortable communication environment in areas with uses concentration of customers, such as congested urban centers and event venues. docomo Starlink Direct launched on April 27th topped 6.5 million users within approximately three months.

In September, we will launch international roaming and deliver reliable connectivity when sky is in sight. In addition, we are promoting demonstrations of balloon-type HAPS.

From September, as MIC project, we plan for three demonstrations in Noto. Combination of air-to-ground communication and high-resolution image capture, primary industry labor saving, and infrastructure monitoring including dams to be applied in grasping disaster situations, deliver the peace of mind of having reliable connectivity in mountains, on remote islands, and at sea in emergencies.

Q1 started with increase in both revenues and profit. We will improve consumer communications, further promote growth in smart life and enterprise to steadfastly achieve full-year plan.

Thank you for your attention.

We will now take questions from the members of the press on financial results overview. We would like to start by inviting questions from the reporters present here at the venue, and then we would have the questions coming from the journalists joining online, and then we once again would like to come back to the venue.

As we wish to entertain questions from as many reporters as possible, please limit your questions to two per person. I will call on you, and when you are called, please state your company name and the media and your own name.

Please raise your hand. From me on the left-hand side in the second row.

Sano, a freelance writer, and two questions. Firstly, this is not directly related to financial results, but there has been some failures in docomo Bike Share, and what are the sort of reason, and also how long would it take to really restore the services?

Sorry if we're causing inconveniences. The system is for switching over to new system, and then there seems to be some troubles coming from that switch.

In the limited manner, Nara City in Nara, we are working on restoration of the services, and there are no issues. Tomorrow in Tokyo and outside of Tokyo eventually.

Very sorry for inconveniences we have been. Have you identified specific causes?

This is the sort of shift or switching over to the new system, and the issues were caused by that.

Second question related to HAPS in your company. Also you have been engaged in the H-type, and this time, you are really going to use the balloon-type.

LT-type of SoftBank, is it similar or is there any difference, and why are you going to use this balloon-type HAPS? What is the sort of rationale behind choosing this?

We have been using the conventional type, but the balloon-type, from a little before, we started considering the use of it. Balloon-type, and so compared to that of the SoftBank, it is smaller in its scale.

Relatively speaking, you can really fly that from within the sites in Japan. Also, I think, well, it has more flexibility.

Also with the winged ones, you have to make the device or aircraft or sort of body lighter. As you have that, and cameras and sensors could be installed on this balloon-type.

It is more suitable to really install these devices. Of course, we are really working with this Starlink.

In order to have the wider coverage, but vis-a-vis different industrial sectors, we would like to really offer more solutions. Also at the time of the disaster, many people might use the communication from the air.

If we have diversified sort of methods, that would be more really preferable. We would like to really expand these types of possibilities.

Thank you.

Moving on to the next question. The person in the second row to the left.

Takagi from Sankei Shimbun. The first question is related to Kumamoto earthquake.

In terms of the status of use of Starlink, do you have any case of using communication through Starlink?

At the time of Kumamoto earthquake, I do not have any material of how many people accessed. As soon as we know, we would like to inform you.

The second one is think me. You mentioned that you're going to have a full-scale in summer, and it's getting hotter now.

Now it is in the demonstration, but what is the potential in the future?

Yes, this is being used by quite a number of people, and we did mention that it is planned for summer, but we would like to improve further functionality, and we would like to enhance the capabilities. We would like to now shift the timing, and now adjusting for fall for think me.

From the past, we heard your reactions, and we would like to use a data and to provide AI services. Even without entering, you will be able to obtain enormous information, and we have seen positive reactions.

We will add further functionalities to make it even more convenient.

Thank you.

The very front row on the right-hand side. Ishikawa, freelance writer.

And

40 GB campaign started in August. When I really go to ahamo site, there is not much of the information, and so 30 GB and there is not, well, much of the sort of a strong promotion, appetite.

Also at the previous financial results briefing, if you could update us as to how you are really thinking about the rate.

Giga capacity, and as Shimada-san mentioned earlier, basically speaking, the way the customers are using, and so we would like to really look at how this is being used. The traffic volume is increasing 20% every year, and that's what we have been sharing with you in ahamo.

There were so many opinions, and so we have been offering 30 GB from two years ago or so. Perception, data volume is increasing.

Data volume itself of the content is increasing. This is not something the customers can control.

In this way, the environment in which the customers are using is really changing. At what level should we really offer services in their daily life?

If they are thinking that they are short of the capacity, and even if there is a sort of limit imposed, then that might not be so good for the customers. If we really like to really increase this capacity, and then to verify how this could be used, and so we would be trying to really understand the actual sort of usage.

That's about the sort of data capacity. As for the rate plan change, and our peers are constantly changing, but various costs soaring in various ways.

Having said that, the traffic is increasing, and so making investment and to really provide the higher quality service to the customers, and if that is really essential, then we have to secure the fund. We are in the same situation as our competitors.

In what way should we do that? We need to really consider.

Nothing has been decided, but we are really having that kind of perspective.

Thank you. The person to the right behind.

Sekiguchi from Keitai Watch. This is a follow-up.

ahamo is now increasing, and this is just for verification. If you think about it, this is a substantive reduction of price.

To you, it is not leading to upsell. According to what was explained, there is an increase in cost.

It seems like there is inconsistency in your explanation, but can you elaborate on that?

Yes, so as I said, in principle, what we do at an increase of gigabyte is just for demonstration purpose. Rate is separate.

We are not trying to make sure that this is going to be the permanent plan as a service plan. If you connect all of those factors, it may seem inconsistent, but we are considering this as something independent.

As for the rates to customers, we will balance service level and cost.

Thank you. I have one more question on communication quality.

At the end of the presentation, you talked about base station construction, and you mentioned that the throughput is also improving. This kind of outcome, it's very difficult to provide numerical indicators, but to which level are you reaching compared to the goals you have?

What is the progress so far?

I might have mentioned that this is quite favorable against our plan, but we will implement what we are supposed to do to ensure high-quality communication to our customers. That is the background for building base stations.

As we have been explaining, this fiscal year, we would like to make sure to have 10,000 more base stations for 5G. If you ask whether this is sufficient, that is not necessarily the case.

There are causes. We had a shortage of components, and we are slightly behind our schedule on a nationwide basis.

Including 23 wards where the population is concentrated, we are prioritizing. Versus our plan, it is overachieving our plan at the moment.

As to which level and which step are we reaching, it's difficult to say, but as I said, we need to expand the number of base stations. Not only that, we also need to do the tuning as well.

As a result, we are trying to enhance our quality. We are still halfway through in our process until we fill the gap.

We are cognizant, and we are trying to enhance our quality with speed.

Thank you.

Next, dressed in yellow. After that, we would like to check questions from online.

My name Tanaka from Nikkei. think me and also the cross-use in finance, and you are really talking about the collaboration within the group.

The other competitors are trying to really combine the purchase data and various other data. Are you really going to really have this sort of common ID and integrate ID with others by partnering with somebody else?

ID, we do have 100 million worth our ID. We cannot really increase to that number just by us on our own.

We have really worked together with our partners and reached this far. D POINT merchants and payment merchants, and we have worked together with them, not just in terms of the number of members, but the data related to understand how the customers are using this is being available.

Also the payment itself, as I have really shared with you on slide earlier, just in this first quarter already, and almost ¥5 trillion in yen, the transaction amount was achieved, and also the payment amount of ¥19 trillion is being aimed at. Our strength, and d POINT itself has d POINT merchants, and we have been working together with them, and we have more than 700 companies inclusive of them.

What are the payment transactions, what would be the potential for growth for the transaction volume, and not just limited to d CARD, but the point. I think, well, annually we have more than ¥20 trillion worth of.

The lifestyle of customers should be understood very well. Then on top of that, we are going to make use of the data related to customers, and by utilizing various different types of data, and we are really going to create more of the offerings.

I think the sort of relationship with the partners are really supporting this. Also amongst the partners, and by the linkage of ID have already been established with some of the partners.

Over 10 million IDs have been, well, linked together with some of the partners already. With this, this is where AI comes in.

With the AI, well, we are to really have the better understanding of customers and trying to really improve our corporate value. As one way of achieving that, we have finance, and on the same platform as finance, to support the daily life of customers, we are to really offer think me as well.

We believe that we are able to really broaden this area, and so that's something we would like to further pursue. Thank you.

Next is a question from online. You may speak up, or you may enter through chat.

If you would like to speak up, please use the Raise Hand function. If you would like to submit your question through chat, please enter in the chat and send button.

If you have any questions, please. We have a question in chat.

I will read. Mr.

Mizushima from Nikkan Kogyo Shimbun. MIC has demonstrated a policy to have the split of the maximum of one year as a benefit for switch-over for hopping a measure.

What is your view?

From last year, this is becoming a challenge not for only us, but other operators as well. In order to have the countermeasures against the hopping, the view in the last council meeting is that there is a progress which we welcome.

By implementing measures, we will ensure measures against hopping and to secure customers with high quality. In the presentation, I did mention, but how to increase loyal user, and spending promotional expenses, how are we going to ensure efficiency?

In order to do that, we need to suppress the number of churn customers. We would like to implement our measures.

Once again, how to control handset price? We were taking measures that not so many customers will be included.

If we have application of numerous or multiple benefits to customers, we are trying to prevent that so that the customers will not churn at an early stage. We would like to ensure to have such measures.

Thank you.

One more question we received in chat.

Kaneko of ITmedia. ahamo 10 GB is being offered.

Also SNS, there are some complaints with respect to the communication qualities vis-a-vis users. When would the communication quality could be improved, and also what are the issues that you need to really address at this point in time?

As I said earlier, still it's been improving, but we are still on our journey. Also particularly, the densely populated areas, we really have to really do more.

From the users' perspective, of course, inclusive of SNS, we are tracking the customers' voices, and also vis-a-vis these challenges, how we will be able to implement measures as quickly as possible. Just this boils down to that.

In terms of the progress, we hope that we will be able to share with you the progress made to that point in time.

Once again, we'd like to go back to the venue. In the middle, and in the front row, the blue shirt.

Again

on ahamo question. In June, JAL Mobile Powered by ahamo started, and what is the reaction, and what is the actual, and what is your plan going forward?

From President Maeda, we do have positive reaction. Those customers who are fans of JAL, many of them are travelers.

When they go overseas, they can be assured to use data volume, it is a service that provides assurance, and we are catering to such needs, and the sales are in progress according to plan. As I explained, this is a kind of ecosystem, and we are providing functionalities.

Of course, to such partners, it will be useful. From our perspective, we are able to capture new customers, not only limited to JAL, but to other customers, we would like to continue with our efforts.

Understood. My second question is what you announced today, this parent and child discount.

For parent, there will be one-year discount, and ahamo will be significantly low in terms of rate. I think this is opposite to your plan of increasing rate.

Originally, we had a strong image that the family equals docomo, but do you think that this image is weakening?

Yes, in the past, there was impression that the family is docomo, but now this perception is getting lower. This is what we recognize as the challenge.

Of course, depending on services, we are expecting that the payment will be made, but at the same time, we would like to have a customers with a long-term use. Not only about MNP, but a net increase of handset is also important, and we also consider this important.

In the past, because the share was very high, those are in senior population, when they die, they churn, and against that, there are customers who use smartphones newly. We need to make sure to have good structure of our business.

As the aim of our business, we find the importance there. This kind of initiative is something that we are relaunching.

Thank you.

Thank you. On my left, and the person in the first row, please.

Football World Cup, and DAZN had broadcasted the games. It was monopolized by DAZN.

Because of that, docomo MAX, the subscription, was there any positive impact from that? That's the very first part of my question.

Just the other day, the millimeter wave has been auctioned, and you won that spectrum. How are you going to make use of it?

Also

I think there was a positive impact from the World Cup. As for the customer acquisition, well, it contributed to a certain level of the customer acquisition.

Since spring time, World Baseball Classic and also there were other sports events, and so there are quite large number of sports events. From the end of year to the first quarter, I think that was one of the factors of an increase in subscription.

Also I think it was really conducive to activate the market. Particularly, June, July, and the active usage of DAZN was really high, and I think there have been, well, a positive impact in different ways.

Also the millimeter wave and the 28 GHz, it's not that we would be able to really install these base stations in a short period of time. As we're seeing such a growth in the data volume, and also the way the content is being consumed, and also with the AI, and from IoT devices as well, and also the traffic increase, which will be caused by the use of AI, we can really anticipate such volume increase.

We would like to make sure that we will be able to take advantage of the millimeter wave and so 28 GHz. Also we have the other millimeter wave, and we would like to take advantage of our strength so that we will be able to really offer higher quality service to customers, and we would like to really get ready for such upcoming trend.

The person in the middle row and at the front. Koyama from freelance.

It's been just one month with docomo FG, and is there any trend of the users? Is there activation or is there outflow?

Is there any unique activity of the users, although it has just begun?

Yes, we have just begun this service. As we explained, the first major initiative is the collaborative campaign with the bank, and we would like to have a good reputation so that we can acquire more customers.

In order to promote financial services, it is important to have increasing number of bank accounts and a deposit in order to improve our profitability. The biggest scale is d CARD, and we hope that this will be used for the account for payment of d CARD, and that will be one of the measure to expand our sales.

We would like to start from there, and if possible, we would like to expand to other financial services. The second question is exchange rate, and you have the strength in enterprise business.

Have you seen any progress? To be specific, with the sales trend of enterprise business, there isn't anything that we can explain.

There are inquiries as far as I know, but this is a more related to Financial Group. We have some projects with Taimee, and once again, there are needs for these services for verse, and if possible, we would like to strengthen this.

In this ecosystem, this is a novel service, this is becoming one of the weapons for our differentiation. Thank you.

Then,

in the interest of time, we have three journalists who are raising their hands, and so we would like to really take their questions. The person at the very back of this room.

Kuwashima from Kyodo News. Going back to HAPS, and by the end of this fiscal year 2026, you are to start the service.

Is it going to be just on a trial basis, and also how many HAPS are you going to have? Also for the disaster prevention, and also some usage in industry, what are the possible application, and also if you really have some plans for in Noto?

Commercialization by the end of FY 2026, but we have not made any firm decisions yet. The reason why we have shared this because we get confirmed this kind of needs, and the needs for the companies as well as the municipalities, rather than individual.

Relatively speaking, within smaller areas, if this kind of solutions can be offered, I think that could be possible. What kind of HAPS will be required, and by having this demonstration, we would like to really confirm the specific needs.

Approximately, we are going to do this until the end of September.

Thank you.

The person to the front. Eguchi from Asahi Shimbun.

Again on HAPS question. This is demonstration, and why was Noto area selected?

Yes. Originally, we had collaborative agreement with Ishikawa Prefecture two years ago, using HAPS, what kind of solution could be possible, that is what we have worked together.

We are now demonstrating and coming to this stage. Thank you.

Another question is about competitor. SoftBank has said and made announcement that this will be after August.

In the industry, this kind of development is becoming quite a competitive, but what is your take on that? Yes, rather than competition, what could be the possible approaches and what can be delivered as values through social implementation, that is still at the exploration stage.

There are different technologies, and there are different choices. For them to become the real value, it is important.

Not only us, but the other players to address this will be good for the society. Thank you.

The last question.

The reporter in the middle. Ishii, freelance journalist.

As for the acquisition of smartphone handset, I think this was also mentioned as being critical. Also the smartphone price is rising.

Miyakawa-san of SoftBank, and high-end handset model price is going to increase. What is your view from the NTT DOCOMO?

Also how are you really going to really acquire the handset sales? What would be the sort of price trend of the handset, we are going to deal with.

Generally speaking, in terms of the memory prices, there is on upward trend. I think that is indeed true.

What we can do is to really collaborate with manufacturers and to secure the things that we need early on and to really offer the needed devices vis-a-vis the customers. We hope that we would be aiming for the affordable price.

However, it tends to be higher. To activate the second-hand device market, and also we are to really upgrade the programs.

To the extent possible, we would like to really lower the burden placed on the customers. There are different ways that we need to really explore.

In order for the customers to use it for longer term, and also if they are to really buy a new handset and come to us, we need to really make sure that we will take the adequate and appropriate approach. That might be very important.

Lastly, if I can just supplement earlier, and as for the Kumamoto earthquake 2026, and also there was this usage of Starlink on the same day of the previous week, and the usage was quite increased by threefold or three times.

With this, the financial results briefing of NTT DOCOMO is concluded. We are really going to have the press conference of NTT DATA Group financial results briefing.

Thank you very much for your attendance, and you are requested to remain in your seats for a short period of time.

I'm Nakayama, NTT DATA Group. Thank you for taking the time out of your busy schedules to attend today's financial results briefing.

Before I begin my presentation, I'd like to express my heartfelt sympathies to all those affected by the Reiwa 8 Kumamoto earthquake. I now will present the financial results for the first quarter of FY 2026.

This is today's agenda. First, I will explain the Q1 results of FY 2026.

Please turn to page 4. Here is a summary of our first quarter year-on-year changes.

Net sales increased by ¥174.6 billion YoY. Operating profit increased by ¥5.7 billion year-on-year.

Net income decreased by ¥0.8 billion year-on-year. New orders received increased by ¥334.6 billion year-on-year.

This marks a solid start to the fiscal year in line with our earnings forecast. Please turn to page 5.

First, new orders received, as I said, increased by ¥334.6 billion year-on-year. In Japan segment, it increased by ¥88.6 billion driven mainly by large-scale projects won in public and social infrastructure and financial businesses.

Overseas segment saw an overall increase of ¥249.3 billion by data center businesses, GTSS, and large-scale deals won in EMEA. In EMEA and APAC, where we aim for performance recovery, new orders received increased year-on-year.

Please turn to page 6. Next, net sales increased by ¥174.6 billion year-on-year.

Japan segment grew in all the businesses by ¥43.6 billion year-on-year in total. Overseas segment increased in all the units and segments, and segment total increased by ¥136.9 billion.

Just as we saw in new orders received, net sales was also very strong. Please turn to page 7.

Operating profit rose overall by ¥5.7 billion year-on-year. Japan segment posted an increase in all the businesses with year-on-year growth of ¥9.8 billion in the total segment.

Overseas segment declined due to the ¥4.7 billion impact from the absence of usage fee income of the data center sold to Singapore REIT in July 2025, which was included in the first quarter last year. In addition, non-recurring revenue in data center business decreased year-on-year.

However, excluding these impacts, the profit recorded grew. We believe operating profit was generally in line with the expectations as well.

In the first quarter, no gain on sale of data center was recognized. Please turn to page 9.

This shows the breakdown of Japan segment results. In all three businesses, new orders received, net sales, and operating profit increased year-on-year.

Public and social infrastructures increased in both net sales and profit primarily due to favorable business for central government-related agencies. Financial increased both in net sales and profit, chiefly supported by insurance industry businesses and banking businesses.

Enterprise increased both in net sales and profit thanks to entertainment industry businesses, a steady start for the entire segment. Going forward, based on the recent solid orders, we will strive to achieve our target.

Please turn to page 10. I will explain the breakdown of overseas segment results.

In North America, the expansion of scale in network equipment-related business resulted in increase in both net sales and profit. EMEA increased in both net sales and profit overall, driven by growth in IT services in Spain and Latin America, efficient operation in direct segments, and impact on transfer in some segments.

APAC decreased in profit due to gross profit reduction in Australia, but it is strengthening consulting segment and others to recover performance. Global Technology & Solutions Services decreased profit on constant currency basis, barring impact from the earlier mentioned data center business, it is viewed as effective increase in profit.

We will continue our efforts to improve profitability and aim for the achievement of the overall performance target of the overseas segment. Please turn to page 11.

This shows the status of the data center business. I will skip the details, but the investments are going steadily, and the total power capacity and operating results are in line with our plan.

Please turn to page 13. From here, let me share key business topics to achieve quality growth strategy.

We aim to advance AI-driven client value creation and reliability enhancement in two focus areas: AI-empowered new value and productivity, and next-gen infrastructure. In addition, we are strengthening our capability to implement and deploy AI solutions in Japan and abroad through collaboration with NTT Group companies and M&A.

From the next page onward, I will talk about each initiative. Please turn to page 14.

First, AI-driven client value creation and reliability enhancement. NTT DATA AI Vista has launched core AI platform to achieve industry-specific AI.

It has proven high-level accuracy in early adoption for insurance BPO business and won orders in Europe and the US. Domestically, we promote deployment in the banking and insurance industries.

Furthermore, leveraging Frontier AI, we launch comprehensive cyber risk management service supporting vulnerability detection, recovery, and continuous response. Based on our development capabilities and experience in critical system operation, and by combining NTT DOCOMO business network area security expertise, we will contribute to the achievement of secure digital society.

Please turn to page 15. Let me now turn to the enhancement of capability to drive client business transformation with AI.

In Japan, NTT Marketing ACT ProCX will become joint venture between NTT WEST Japan, targeting October 2026, placing our AI platform, MiFron, as a core and integrating the strength of the two companies, the related business including contact center will evolve to next-generation BPS business and aim for ¥100 billion in FY 2030. In overseas, we acquired over 1,000 Microsoft Azure and AI-specialized talent from the acquisition of Beamwire Technologies.

By combining company's AI data and cloud implementation capabilities and our industry knowledge and customer base, we will accelerate our AI business growth primarily in North America. That concludes my explanation.

Thank you.

I'd like to ask questions related to external environment. Big tech AI investment outlook and hyperscalers, there have been increasing on the sort of issuance of the corporate bonds.

I don't think there is much of the immediate change, but they are really doubling all these. Going forward, the growth of the investment, if there is any potential risk of the declining investment going forward, if you could give us your outlook?

For the next questions related to, while, Chinese AI model, Moonshot model is emerging. Also, it is, while, almost becoming equivalent to that of others.

In the system area of your company, are you focusing on the Europe and the US models? Also, you have more of the data centers in those regions.

As you see the emergence of these AI models in China, what could be the potential impact on your business?

The first question, big tech issuance of the corporate bonds is being done in a very active manner, and they are increasing their investment size. Going forward, depending on the circumstances, if they're not able to recover the investment, could be a possible that they may withdraw from the sector.

Got it. AI, big tech, and in the financial market, they are really issuing the corporate bonds in a massive manner, and also the equity-wise, IPO is ongoing, and AI-related as well as data center-related areas, there are this sort of circulation of the investment amount, and then there is for the increase in terms of the demand.

On our part, data center business is one in order to really capture such a demand. What we can do with our own fund or own money at hand, and also in order to secure the future cash flow, we are to establish REIT.

Wherever we have the increased demand in order to address that, development-type joint venture is going to be established during the course of this year, and to really capture the very robust demand. Big tech and other funds are allocating much fund to this, and so we would like to really make use of such fund so that we would not be losing against the others in the competition.

As you have just said, too much of the money, and going forward, if there are any changes such as the sort of the changes in technology, and there could be some risk of not recovering investment. Whatever we do in terms of the business, in case of data centers, a 10-year or 15-year contracts are being signed with the customers.

Only after receiving orders we are to really build. In the immediate future, there is no such risks.

Also lately, everything is becoming data-driven. It's not that we are preempting the market demand early on, but we are a kind of trying to catch up with the demand.

Even if there are any event in the future, we would be able to really manage by controlling the adequate size of the business. The next question is Chinese LLM are emerging, and how are we going to really respond and address such emergence?

As we have explained earlier today, LLM and others, not really deciding on which of the model we are going to use, but we are trying to figure out what should be the best depending on each circumstances. Not just limited to Japan, but overseas, APAC region particularly, they are really affected more strongly by the Chinese players.

If there is any request from the customers to use them, then we would like to be forthcoming in trying to accommodate their risk. Depending on the circumstances prevailing in each of the countries, and what model should be chosen as the best choice, what it differs from one country to another.

We would like to really make the adequate choices depending on the situation. Thank you.

My name is Takagi from Sankei Shimbun. You mentioned about using patch for security, and that is done as one-stop a service.

SoftBank is also appealing on that, and they're quite aggressive in their sales activities. This service business, what kind of competitive landscape are you expecting?

Where is the strength of NTT DATA?

Thank you for the question. This service, on July 7th, we announced that we will implement, and this will start from the end of July.

It has been just a while since we started, we need to have more services. Now we have inquiries from over 50 companies.

To your question, we have been managing system operation of many important customers. As to how to promote cyber risk response, we do have the know-how.

Internally, technology supporting team that is existing, and so-called the Frontier AI. On the Frontier AI, we have LLMs from many players, and there is a team that is researching and also analyzing such LLMs.

We do have the know-how, and we have the team. From the customers' perspective, there are only limited number of customers who are able to respond to this internally.

Through the system building and our expertise, and there is a team to oversee this development. I don't know how I can compare this team with the others, but I think we have the strength.

Another point is related to the entire NTT Group after TOB, especially collaboration with docomo Business is progressing. From the maintenance of network perspective, they have the knowledge, and they have the know-how, which is the unique strength of us, and we would like to focus on that.

Thank you. As a follow-up, within the patching a service, you have mentioned the use of multiple Frontier AIs with the access right issue.

Is it possible to continue to use the latest model? We do have concern looking from outside.

How are you going to do the relationship with big techs? What is your view on that?

The so-called big techs, with them, not only limited to Frontier AI, but more broadly, we are collaborating. Especially DATA Group is now having a certain level of scale, we are able to have direct communication with the top management of such players, which is good for us.

As you pointed out, the latest model, for example, some can be received with our offer, or sometimes it is regulated, and it is not possible for us to use. We need to respond steadfastly.

On the other hand, although there are ones that we are able to use, some have higher levels of attacks, and there are several of them. We are trying to combine them, and we are trying to adapt as much as we can.

We would like to look at this more comprehensively. Thank you.

Satomi from Nikkei xTECH. I have two questions.

First question related to FTE. Overseas, particularly centering in the US, whether there is a need for the upgrading of the FTE, and how are you looking into that?

Also the changes in organization and also related to that, how many talent do you need to secure? If you have any concrete information, please let us know.

Also the EBITDA, there is a sort of target to increase by 50% in five years. What is your outlook of achieving this?

Firstly, I'd like to really respond to the question related to FTE. Satomi-san, I was expecting that you're really going to ask how many people, but today, I'm afraid I will not be able to really answer to your question.

How to define FTE, and also those of the employees who are resident in customers and also as for the big tech, how they are going to really introduce AI and how to take the lead in introducing AI and also the actual implementation of AI. That is how we should define them in the first place.

They do services and to deploy the AI-related services, and so in actually implementing them, they are to really upgrade or reinforce FTE. Also in domestic business of ours, and we do have a long-standing relationship with customers.

On the customers' site, we have the decent number of the resident engineers. As for the legacy type of businesses, they are on the resident engineers in the customers' site, and then they would pick up the customers' wants and needs and then address that.

In the last few years, that would not be sufficient enough. The consulting type, the SI should be promoted and to really have the good understanding of the customers' business.

From us, to really offer proposals for their business transformation, and what kind of systems need to be introduced. In terms of the direction, FTE definition and consulting type of the services would be offered and to promote the implementation on the part of the customer.

We have been doing it. How to really combine AI?

Internally, the so-called FTE and how many the employees are qualified for that, and so we need to really start defining adequately and start counting them. Also in the career development, very recently, starting from this fiscal year, we have included this for FTE and to really start certifying some of our employees to really promote their jobs.

Also the US big tech, if you're to apply the same line of thinking, in December last year, we have set up the AI Vista on the West Coast of the US. As we have explained it a little bit, core AI platform is to be built, and by utilizing this, there is going to be the switch-over and shift of the system on the customers' site.

We are to really offer proposals for doing that. Which page was it in the information deck?

On the left-hand side, you find that, first of all, the US and European type, and also we are promoting this in Japan as well, and deploying this on the customers' premise, and we are to really modify the core system to the customers' system. That kind of job could be done by the personnel who could be classified as FTE, which is very similar to FTE.

We would like to increase the number of such talent. Rather than non-recurring business, we would like to increase the proportion of the recurring type of business.

In that sense, we hope that we will be able to promote while introducing this for FTE type of personnel. EBITDA-related question.

When we announced the financial results in May, as a company in 2030, EBITDA, and ¥800 billion of EBITDA in 2025, and it will be increased to ¥1,200 billion, which is the sort of the increase we aim for. As to the feasibility, we have just begun this, and so quantitatively, I have nothing to share with you at this point.

We have this five-year plan, and we are to really execute the annual plan so that we will be able to achieve this. This is a 50% increase.

And 50% increase in five years, and so 10% growth per annum. The profit level needs to be increased 10% in revenue and profit.

I think that this is the kind of the industry standard of the industry in which we are operating. Also, the mid-term, the growth target of the similar size is being indicated in Japan as well as in overseas markets.

As for the data center business, growth rate, we had been saying that the growth rate ranged between 15% to 20%, and also 25% per annum growth is sometimes indicated. Though it is challenging, but in terms of feasibility, we believe it is quite achievable.

Qualitatively, man, sort of the a month type of business, if we are just depending on that, it could be quite challenging to achieve because we have to increase the headcount by 50%. IT service in domestic market, we have to really compete to really secure talent, and 50% increase may be very difficult.

Also the evolution of IT by the use of AI, and quite a large part of the jobs will be seen the sort of the labor saving achieved. Per project, in terms of the value, we are not so much concerned.

AI Vista and asset-type or the recurring-type business should be increased in its proportion. We are often times talking about full-stack model.

You have data center, and on top of that GPU service, and also on top of that cloud, and sovereign cloud could be put on, and then we have the AI application. I have referred to this in our strategy, and also the AI-empowered something something.

This for the lower layer is more of the asset-based business, and to make the adequate investment, and the time horizon is five years. We are to really increase the profit-generating capability.

That's it from me. Thank you.

The person in blue shirt to my right, please.

My name is Murai from Diamond. I have two questions.

The first question is the full-stack business you pointed out. With respect to that business, asset-type business is something you would like to increase.

On that point, as a full-stack layers, there are data centers and a GPU as a service. For the data center plan, you have a five-year plan, and this fiscal year, ¥100 billion plus investment is now on track.

For GPU as a service, the investment to GPU is still unclear as a policy. If you are going to work on GPU as a service, would there be investment required for GPU, or even without investment to GPU, would it be possible to have lighter assets?

Can you talk about the investment policy for GPU?

Yes, thank you. For data center business, this fiscal year, ¥500 billion as an investment, and last year's actual was ¥400 billion.

In the upcoming five years, roughly ¥400 to ¥500 billion per annum. In total, roughly ¥2 trillion or above at that amount.

On the other hand, GPU as a service, what is the level of investment? At this point in time, it's not clear to indicate what is the level of investment and how we plan to invest.

Having said that, for us to grow over the next five years, if you take a look at the total cash flow, considerable amount of investment will be invested. That is our plan.

This is what we are going to consider looking at the total budget. We do not have the specific figures, but if we make the investment, if it is high amount, if we buy one unit, it can be above ¥10 billion.

From our financial position, we are in a position to be able to buy that scale and making investment, and we need to move forward. That is something that is required.

As an answer to your question, we do not have any plan of how much that will be, and we will not be able to respond today. Even if there is a scale of ¥10 billion-level investment, we should be able to manage that within our budget.

That is the only point I want to explain.

If I may ask further, the latest GPU system, are you planning to access to the latest GPU system of NVIDIA? Yes.

The more recent and the latest it is, it has a higher performance. To what is it going to be used for inference or also for training,

it really depends on the application. From our perspective, what will be the case if we introduce the latest ones, that is what we are studying if there is a need, it worth introduction.

Thank you.

There's one more question. Cyber risk response service, maybe I'm not understanding the explanation, but to be specific, Frontier AI, the latest one, if you are to introduce the latest one, OpenAI or Anthropic, who respond to that model?

Are you in a position to introduce the latest versions?

Yes, as I explained earlier, there are cases where we can use the latest versions and not. Then do we need to have the latest versions in order to respond?

I don't think that is the case. If it is a decent level, there are some products which are at that level.

We are now trying to combine them in order to provide the services to our customers. If we are able to use the latest versions, of course, we will include that in order to proceed.

What can be used and what cannot be used, if possible, we would like to have the latest versions, and that will be best. We will respond with the best possible combination we have, and we should be able to deliver certain level of results.

Do you have any target of to how many companies you're going to introduce this service? Eiji Yoshida (Senior Vice President, Head of Corporate Strategy Office, Corporate Planning General Headquarters):

This is Yoshida speaking. No, we have not set any target as a figure.

As was mentioned, we have inquiries of over 500. Since the start of the service, it has increased with momentum.

We would like to consider that going forward. Thank you.

I'd like to ask questions related to AI Vista. Also, currently, both in domestic market and overseas, and you are really trying to consider how you're really move that.

What is the progress for a year? Also you are in the process of promoting that.

Also in terms of BPO, you are to really refine the solution so that it could be offered to the market. What is the current status of this particular service?

In December last year, we have established the company, and then we are gathering the personnel, and it's just about 20 to 30 headcount. In this universe, while the critical key is speed.

In around June, July, first of all, as shown here, insurance-related core AI platform was already established. Then while having the interaction with the customers, we are to introduce it into other customers.

In terms of the number of the customers, it says for several customers in the US or Europe. As for the starting point, the number itself is not that big, and so a handful of the customers in the other areas, meaning that manufacturing sector, and here again, we have some visibility in control and management of supply chain, and that is the area of the application of this.

As shown here, in the domestic in Japan, and we are promoting the deployment in the banking and insurance industries. It's not that how we're going to change the business processes of the customers with AI.

That's not the concept we are going to apply. We are to really start from the very scratch how to really establish the flow of the jobs for a certain business process.

For example, in case of the insurance products, terms and conditions and also the policy clauses, and so there are very complicated system. Far, there has been much dependence on the paperwork or the documents.

We are going to use the agent and to automate all these processes and to really reduce the human intervention. If you use the typical LLM, accuracy is just about 50% to 60%, and the remaining part should be adjusted by the human beings.

What we are trying to achieve is to really have the higher accuracy rate, and the ones with the 90% or higher sort of proportion would not require the human intervention. Also on top of that, higher efficiency as well as a new product offerings could be achieved.

The new services could be launched more easily. That's what we are really promoting.

In terms of the number of the customers we are working with together, well, it's not that big. This is quite a scalable business.

Initially, we are to really do it very carefully and then to really establish the track record and to deploy it more widely.

The last question. When we have the discussion with NTT Group people, and AI Vista is often talked about.

If I am wrong, well, please forgive me. Within the group, are you going to deploy AI Vista more widely?

What I have explained today, this is something we are to deploy vis-a-vis our customers. Of course, within NTT Group, the use of AI Vista is within our vision.

In terms of the timeline, do you have any specific timeline for this to be used in the group companies?

We have not explicitly decided on the timeline. This kind of activities unlike the conventional systems which would be based on the two to three-year or five-year plans, but we will be able to do it more quickly compared to the conventional system.

We hope that we will be able to promote that within the shorter time frame. Now,

Yes, let me go one by one. Starting from AI Vista, personally, with Baratini Sano, who is the top person for AI Vista, I have a regular contact once a month.

He comes to Japan every two months, and due to various reasons, I go to the US. Last week, I was in the States, and I had half-day discussion with the members.

In terms of the reaction from the users against the original schedule that was planned, it is on track. The method that they are deploying, how can it be introduced to Japan, that was one of the discussion points.

The others would include it is fine to promote business, but what kind of impact would that pose to the enterprise value? We did have quite extensive discussion on that topic as well.

This was set up in December, and it is about six months plus old, but it is on track with our plan. We are also in a position to discuss the outlook, I think we have sufficient level of reaction.

As for the response to customers, we are still premature to state clearly at this phase. We create system, and we show the system.

As I explained, the accuracy is improving, and there is possibility for deploying new business. For those customers who have placed the orders, they are now quite satisfied with the current status.

Did I answer to your question? Did that answer your question?