SoftBank Corp.

This is Miyakawa of SoftBank Corporation. Thank you so much for your coming.

I would like to begin with our consolidated financial results for fiscal year 2023. First about the consolidated results.

The revenue was JPY 6.84 billion, up by 3%. By segment, Enterprise distribution, Media and EC Financial 4 segments increased revenues.

As for consumer business, the decrease in sales of electricity to the market had a negative impact on revenue.

Now operating income was JPY 876.1 billion. Excluding last year's paper remeasurement gain, the actual gain was 14%.

By segment it's as follows. The consumer business, which had been affected by price reductions finally turned positive in all businesses increased profits.

Also, Enterprise, Media, EC business had achieved double-digit growth.

Net income was up by 45% on actual basis. Adjusted free cash flow was JPY 532.8 billion.

It was down compared to last year due to the investment of JPY 67.5 billion in Cubic Telecom for medium- to long-term growth. But excluding this investment, free cash flow was generated at a high level, similar to last year.

Regarding this Cubic Telecom investments, JBIC and 4 major banks provided us with a syndicated loan with a very long term. Therefore, we are now able to approach this business from a long-term perspective.

Here is the consolidated results of the summary is here. On an actual basis, we were able to achieve both revenues and profit, increased operating income and net income both increased by double digits, exceeding JPY 100 billion.

So here is the comparison. Revenue operating income and net income all exceeded the revised forecast announced in February.

As for dividend committed at the beginning of the fiscal year, it is scheduled at JPY 86 per share.

Now I'd like to explain the consolidated earnings forecast for the fiscal year 2024. As you can see, we expect to increase both revenue and income in FY 2024.

By segment, the mainstay consumer business is expected to increase profit by 7%. Excluding the impact of the reversal of the provision in FY 2023, the Enterprise business is expected to increase 7% on an actual basis.

We expect the financial business to return to profitability for the first time. This time, in other segments, we plan growth investment for Generative AI, which I will touch upon later.

As for dividend in fiscal year 2024, it is projected to be JPY 86 per share, where we'll continue to maintain a high level of returns. From here, I'd like to share with you our approach to the forecast for fiscal year 2024 and the midterm plan target.

As you can see, when we announced our medium-term management plan last year, we announced that we would aim to achieve an operating income of JPY 970 billion in fiscal year 2025. Since then, business has been stronger than expected, especially in consumer, Media and e-commerce businesses, and we have achieved an upward swing in profit for fiscal year 2023.

As a result, we are on track to generate more than JPY 930 billion in operating income this fiscal year and more than JPY 1 trillion in fiscal 2025.

Since our business foundation has stabilized faster than expected, in order to accelerate growth towards the next midterm business plan, we have decided to make an additional investment in the area of Generative AI. We are committed to both achieving the goals of the current medium-term plan and investing in growth for the next medium-term plan.

This fiscal year, we'll be investing in additional AI computing infrastructure. We are going to enhance the current computational capabilities by 37x to build 1 trillion parameter Generative AI.

The investment is expected to be around JPY 150 billion. As we did last year, we have applied for subsidy from the METI just before, it was --announced publicly.

We're here to say that we have applied for the subsidy, but we applied for the subsidy of maximum JPY [ 421 ] billion. So the investment amount to be around JPY 150 billion.

So the DGX B200 is the latest GPU announced by NVIDIA in March, and we are the first company in the world to implement it. The funds raised through the bond type class shares last November will be used for this purpose.

We expect the market for Generative AI to expand rapidly. The market size is expected to be around JPY 2 trillion by 2030 in Japan alone.

In order to become a market leader in the age of Generative AI, we decided to make this investment. There is a solid demand for AI computing infrastructure and investment costs can be recovered through lending alone.

However, we will also use it to build our own 1 trillion parameter Generative AI when our original AI is completed, we will provide it to companies and local governments in earnest. This is going to be a pillar of our long-term vision.

As a specific initiative, as announced recently, we are jointly developing a solution for call center automation with Microsoft. It's not a call center that simply responds to calls based on pre-learned information, but a call center that understands real-time changes in the situation and the response autonomously.

We are building such solutions.

So as an example at mobile phone call center, a phone call was made an hour ago, and such a history is important for telecommunications company like us. And the signal status of the base station connect to the history, to match the database and real-time information such as payment at the convenience stores and so on.

So, we are building a super AI that can process and co-relate vast amounts of information.

First, we will demonstrate this in our own call center and we would like to develop this and deploy this business as an Enterprise solution. In order to accelerate this initiative, it's necessary to invest for growth in a short term.

In the long turn however, we are committed to achieving a higher growth trajectory, and we sincerely appreciate to your understanding.

And now I'd like to explain the progress made in each segment of the medium-term management plan. First, consumer business.

In the medium-term plan, we explained that mobile sales would start to increase from FY 2024. But we were able to increase revenues from FY 2023 one year ahead of schedule.

I also stated that we are aiming for a turnaround in operating income after bottoming out in FY 2022. But in FY 2023, we were able to achieve this goal after making upward revisions since the announcement progress has been strong.

In addition, as for the number of smartphone subscribers we were aiming for a cumulative total of JPY 30 million in FY 2023, with a net increase of JPY 1 million a year, but the result was a net increase of JPY 1.47 million, far exceeding our target. Additionally, to improve ARPU, we have been working on to expand value-added services and create new services.

And last year, we began offering a new service, such as Pay-toku. For further growth, we seek to enhance attractiveness and expand competitiveness of group ecosystem.

A 10-for-1 stock split will be implemented to expand the group ecosystem. The purpose is to make it easier for individuals to purchase shares by lowering the investment amount per share unit.

In addition, a shareholder special benefit program has been established for shareholders who have held one or more units of stock for one year or longer. We've decided to award PayPay points worth JPY 1,000.

The reason for this is that our customer base is characterized by a relatively large number of young people, but the age structure of our shareholders shows that there are a few shareholders and they're 40 years old. So, we'd like to increase the number of younger shareholders by reducing the minimum purchase price through a 10-for-1 split, and by offering special benefits.

Our dividend yield was 4.7% as of the announcement on April 25. PayPay point worth JPY 1,000 are equivalent to 5.4% in terms of the benefit yield.

Therefore, the combined real yield is 10.1%. We believe that increasing the number of young shareholders who are willing to work with us in our growth will be extremely significant for our long-term growth over the next 10 to 20 years.

Therefore, we've decided to implement such a program. Now let me change the topic a bit.

I will explain the status of mobile network initiatives. The number of 5G base stations increased by 20,000 in the last fiscal year, reaching 85,000 by the end of the fiscal year.

As a result, 5G population coverage has exceeded 95%. This is a big data aggregation of the areas where users are actually using 5G.

The area where 5G is available, has expanded by more than 40% in the past year.

As a result, 5G data volume has doubled compared to the previous year. The left side shows on this slide a comparison of communications fees when connected to 4G and 5G.

5G construction is progressing as planned and 5G quality is improving year-by-year. We will continue to further develop 5G base stations to bring 5G up to its full potential aiming to increase the speed of 5G deployment and enhance the efficiency of capital investment.

I'd like to explain how we have decided to further expand our collaboration with KDDI. Before collaborating with KDDI, please look at the left side of the slide.

We were building antennas, radios and transmission lines one by one. 5G Japan a joint venture with KDDI it's been established.

As you can see on the right side on this slide, we have been working together to build each facility. The 2 companies built shared antennas and radios and wireless and a share transmission path.

As a result, over the past 4 years, we've jointly built 38,000 base stations and reduced CapEx by JPY 45 billion by ourselves.

We would like to enhance this collaboration. Currently, the collaboration covers only rural areas, but this will be expanded nationwide.

Also, not only 5G, but 4G will be added through these efforts, we aim to achieve a cumulative total of 100,000 stations, base stations and a CapEx reduction of at least JPY 120 billion by 2030.

Now let me talk about the Enterprise business. First, revenue.

When we announced a midterm management plan, we said that we want to pursue double-digit growth for the 3 years. As for the progress, we saw increased by 16% year-on-year in FY 2023.

We are expecting continued steady expansion. For operating income, we saw increase by 13% year-on-year in FY 2023.

Looking back the past 5 years, in FY '18, we saw JPY 76 billion. And last year, we saw JPY 128 billion.

So we achieved a 5x growth for the last 5 years. We want to keep the momentum for the next 5 years.

In terms of Enterprise business, we are developing a new field for our long-term growth. And let me touch upon some of the initiatives that we are working on.

First, as for Gen AI solution, we have been asked by a lot of potential customers. In fact, we signed a contract with over 400 companies.

OpenAI ChatGPT is the basis of our Gen AI solution that we provide to customers. SB institutions are developing their own Gen AI.

We want to start utilizing their Gen AI. And when it comes to sales and marketing activities, we established our Generative AX, which is up and running.

This is 100% wholly owned subsidiary. This company will help companies to implement the Gen AI solutions.

So, from a technical perspective and sales and marketing perspective, we are building our strength in terms of Gen AI solutions.

We need data centers to provide AI solutions. Currently, we have 17 data centers up and running across the nation.

And in order for us to meet growing customers' needs, we are going to expanding our data centers. Going forward, not only [ IRs ] to provide hardware and facilities.

As a platform, we want to strengthen part so that we can build a SoftBank made cloud services that have high profitability.

On 25th of April, we made announcement making SB Technology a wholly owned subsidiary. Currently, we have 53% of SB Technologies interest.

We decided to go through TOB paying JPY 28.3 billion to acquire SB Technology. SB Technology has a lot of engineers that have strength in AI and cloud.

As SoftBank, we want to expand cloud and AI businesses, so our SB Technologies technical expertise and engineering resources, what we want to take advantage of as a part of our assets.

That's why we decided to make SB Technology 100% subsidiary. Currently, SB Technology performance is counted in other segment.

Going forward, the SB Technology will be classified as a part of Enterprise business. Enterprise business and SP Technology, they are aiming to hit JPY 170 billion in FY 2024.

Now talking about Cubic Telecom, we completed the acquisition at the end of March. Cubic Telecom came from Volkswagen Group.

Therefore, they have a lot of customers in Europe, but as a part of our Group, we are going to reach to global customers, potential customers. In fact, after our acquisition, we have Honda as one of our customers.

And by leveraging synergy, we want to expand our Cubic Telecom customer base so that in 2030, we can have over 100 million connections.

We want to start from supporting Cubic Telecom in terms of sales and marketing, so we want to actively engage with the Japanese potential customers to build a customer base. Now talk about Media and EC business.

Yesterday, LINE Yahoo made a financial result announcement. So here, I'm going to just quickly walk you through Media and EC business.

For revenue in FY '23, thanks to more efficient business operation, we saw increase by 24% year-on-year. For FY '24, we expect increase of revenue.

That's why we are hoping to get a double-digit growth in FY 2020 for Media and EC business, we want to strengthen those 3 businesses as shown on the screen so that we can enhance and enrich our service offerings.

Last but not the least, this is one of the very hot topics, if I may. LINE Yahoo security issue.

LINE Yahoo announced yesterday that they are going to gradually terminating outsourcing contract with Naver strongly requested by LINE Yahoo, we are currently discussing with Naver in terms of capital relationship and capital structure. We have not reached any agreement yet.

But whenever we have information that we should share with you, we will do so.

Now financial business. As the target of midterm plan, we want to turn this segment profitable by FY 2025.

In terms of progress, we saw a loss reduced significantly in FY 2023. That's why for FY '24, we expect to turn the segment profitable.

Especially, PP plays an important role. QR-based payment and Card payment, they are seamlessly integrated to help GMVs are steadily growing.

PayPay registered users exceeded JPY 63 million in FY '23, they are still enjoying double-digit growth.

PayPay's consolidated EBITDA in FY '23 achieved full year profitability. PayPay has the high market share.

We want to strengthen financial services based upon this PayPay's strong platform. As a part of our efforts to diversify financial services, we launched PayPay [indiscernible] or PayPay Funding, which started in March.

This is a service to meet merchants immediate need for money. So AI predict the future PayPay sales, and we provide deposits to prescreened merchants by purchasing future PayPay sales and we expect return from the settlement from sales.

And we get some commission, and we believe that this offering will grow going forward. In the mid-tier business, we announced to aim at 15% growth rate for the payment service.

In FY '23, we saw increase by 19% year-on-year. We want to continue growing this business, mainly in non-telecommunication areas.

Now next-generation social infrastructure. As a part of diversified data center, we saw some progress, and we want to share with you some of the progress that we have made.

In February this year, we established global AI-Ran Alliance. This project was kicked off by SoftBank and NVIDIA, but now we have this outstanding Board members in this AI-Ran Alliance.

Those are the 3 major research themes of AI-Ran Alliance. One [AI 4 RAN] which is to advance RAN capabilities through AI; second, AI and RAN.

This is to share equipment between RAN and AI. And third, AI on RAN.

Here, we are talking about [HAI] application. With that, we want to generate value-added services in non-telecom area.

We will promote effective use of new technologies centered around AI-Ran Alliance.

Last but not the least, we want to update on ESG. First, we want to share with you what we have done to strengthen corporate governance for continuous enhancement of corporate value.

We are going to change our Board of Directors so that we have more external directors than internal directors. As you know, SoftBank Group is our parent company, and we want to protect minority shareholders.

And in order for us to do that, we need to meet a very strict governance requirements and expectations.

And our initiative for renewable energy has made some progress that I want to share with you. In midterm business plan, we said that we want to reach 50% of renewable energy ratio in FY '25 and 100% in FY '30.

As of FY '23, we had 48% of renewable energy ratio. We want to achieve the goal probably much later than we expected.

In summary, we exceeded upwardly revised forecast for FY 2023. We aim to achieve midterm targets while investing in growth of Generative AI, et cetera, in FY 2024 and FY 2025.

We want to strengthen corporate governance for continuous enhancement of corporate value. And we have made progress in next-generation social infrastructure initiatives.

Our vision of information revolution, happiness for everyone remains the same, and we are committed. And thank you very much for your kind attendance today.

Regarding the LINE Yahoo. So right now, you are negotiating on acquiring shares from Naver.

Once it's done and once you have a higher percentage of shares, then how much you are going to involve in the transformation of in LINE Yahoo. And the other day, you mentioned about the change of the structure of the LINE Yahoo organization.

How much you're involved in providing the opinions on that?

So I want to avoid giving clear answers when it is only assumptions. So this answer would include my own thoughts, please allow me to do so.

So right now, the ratio of shares is 50% to 50%. Now we do have [ A Holdings ] in there.

So, let's say, right now, the ratio has not been even discussed yet. But let's say if -- since we are now consolidated, so A Holdings Board members, the number of Board members of A Holdings with SoftBank has one person more.

And it could be deferred once the share ratio would change. But we already have a control on A Holdings.

So no major change would be required.

Regardless, the change of the ratio of shares, we believe that it would not have a major change. Regarding the restructuring of the organization.

So now within LINE Yahoo, there is the system called designated Board members committee, and there's such a system. I also joined the conversations to give my opinion -- so that is -- so I -- the environment was actually like the equal to what Naver has.

So, if the ratio of shares would change, then our yes or no would have more power, but nothing has been fixed yet. So, I want to avoid giving further answers.

However, I now personally think that I could have involved more in a way that -- so this time, more like security governance, we received the administrative governance. So, we could have involved more expertise in such area.

So, one or 2 people of such expertise could have been added -- but now within LINE Yahoo, there is -- now they do have a new structure, which we would like to provide utmost support. So sorry, nothing is really fixed.

Therefore, I would like to stop my answer at this point. Thank you.

I have 3 questions. First, about the LINE Yahoo.

The -- you mentioned you have not reached an agreement with regards to the negotiation with Naver. If there is any obstacle you can share with you?

And second, do you have any intention to how much you want to have interest? And yesterday, LINE Yahoo mentioned that they are going to terminate our outsourcing contract at all altogether with Naver.

As SoftBank, when it comes to LINE Yahoo's growth strategy and development, I wonder, SoftBank will have more engagement in LINE Yahoo in terms of their development efforts, et cetera.

First whether there is any obstacle in the process of negotiation with talks with Naver, there is no obstacle at all. What we are talking with Naver includes since SoftBank and Naver are parent companies of LINE Yahoo, this discussion is centering around the security governance of LINE Yahoo and from our business strategy perspective, what would be the best for us.

That's the main point of discussion with Naver. And as a part of a discussion, we are talking about our capital relationship because we were strongly asked by LINE Yahoo to talk about this.

So again, there is no obstacle in our negotiation. And second percentage or ratio, currently 50-50 in terms of interest in LINE Yahoo or A holding.

So, either one can be a majority if either one of us have 1% more than the other. SoftBank is an operating company.

And at SoftBank, we need to make a business decision whether the capital ratio or serves for us. So, we want to reach the conclusion that should not have any negative impact on our business.

The third, if there is no outsourcing relationship between LINE Yahoo and Naver whether SoftBank will have more engagement in LINE Yahoo in terms of development and security governance? Wherever and whenever we can help, we would love to help LINE Yahoo.

In fact, CISO or Chief Information and Security Officer will join their security committee. We, as a carrier has expertise in security, and we want to actively help them in terms of our security effort.

First, it's related to the previous questions. Since there is other party involved so I cannot buy when it is the right time to give you the answer.

It could take longer to conclude the negotiations. But we would like to set face-to-face and seriously, and we also like to have a full understanding of what Naver's position is and which we believe that we do have understanding.

We do not want to hurry so that we can avoid going through unnecessary problems.

So we had expected and also we had assumed this could be a part of what's happening -- what's coming up. So -- so we have switched to 90% to the long-term lending and about the interest rate things.

So when we look at 10 to 20 years as a long term, then if we have a certain amount of loans. So we would like to have -- we would like to pay attention to this interest rate change as well.

As of the first question, we want to have them ready for reporting and concluding this issue by July 1. In fact, yesterday, we had a one-on-one meeting.

I had a one-on-one meeting with their CEO. But we agree that there were still a lot need to be done.

So we will continue discussing with them, and of course, we need to respect the other parties' views and thoughts. And as far as SoftBank is concerned, there are certain things that we can do and we cannot do in terms of size of capital and what we can do.

So, July 1 is one of the milestones or next milestones. But from the gut feeling, I think it's very challenging for us to conclude the issue by July 1.

But we will keep making efforts to address this issue.

Second question, whether 0% or not? When March 5th, the administration guidance was issued.

We were asked to do the 2 things to split technically from their system and to review the outsourcing contract. And we were told that management and control was not done properly because of the strong dependency on outsourced party.

So, if there is no outsourcing relationship between Naver and LINE Yahoo, maybe you don't have to do anything about current capital relationship.

But again, strongly asked by LINE Yahoo we are having discussion with Naver, whether those 2 points raised by the government should we address both or if we address either of them, we should be fine. We are having that kind of discussion.

And we take it very seriously and Naver is still on the table very actively. So again, we continue discussing the Naver on this matter.

PayPay ID and LINE ID integration, your first question. So we -- SoftBank Mobile, and so we would like to link in many different ways.

So the debt linking -- I mean the integration has been delayed, which is hurting us as well. PayPay, SoftBank Mobile ID integration has been progressing more and more, and LINE is now reinforcing the security of ID integration, the level where that LINE is secure enough to integrate with others.

So, until then, we need to be a little bit more patient and expectations towards integration and how I'm looking at integration.

That's your second question. I see that it's a little bit slower than I had expected, and decision-making should -- could have been more integrated.

That's what I have been feeling from the history of SoftBank,. We have gone through various M&As of carriers.

And once it's integrated, the organizations being integrated as one organization. And to move forward, that's the style of SoftBank.

So of course, we had expected it could have difficulties, but it's a little bit longer than I had expected. But of course, there are different -- there is a different environment we had to go through.

So -- but for -- we would like to -- we would like them to move forward to the direction that they could be more confident.

Well, NTT law, I remember April, something devised one was passed. And for company name change or disclosure obligation of research activities.

They're not a big deal. So that's fine.

We want to make a strong claim about any disagreement. As for the universal service I think optical fiber should be the universal service matter.

Mobile phone, I don't think any experts want mobile service as a universal service. So I think optical fiber should be either subject of universal service.

Thank you so much.

Well -- it's not everything related to the security governance -- and even before security governance, the party that we were working under the consignment contract. And so, the capital relation was as strong as its consignment relationship.

So, with or without capital involvement, it could be even -- it could have been a litigation level. Now why not to that level because it's the parent and child company relationship.

That was the beginning of this these abnormal relationships, which we need to review and reconsider the structure of the relationship between us.

So right now, we are seriously sitting at the table for negotiation. So as of today, none of us has concluded that we do not have to look at capital involvement.

So therefore, so LINE Yahoo strongly requested us a lovely subsidiary of us -- strongly requested us to review the ratio of capital ratio. So, we would like to, of course, seriously consider it.

So, regarding the consignment relationship to be zero why LINE Yahoo was able to announce it because Naver was very cooperative even though there are a lot of information in the black box, but they openly disclosed. So therefore, LINE Yahoo was able to make such an announcement in the presentation yesterday.

So, it's a big company. So, there are a lot of people have a say.

So, once we start negotiation, there will be a lot of opinions from different people. But at the CEO level, we are on the same -- we are on the same level and in the medium, long-term growth perspective for LINE Yahoo.

We would like to make a conclusion which would contribute to the further growth of LINE Yahoo.

It's already a consolidated subsidiary, what will be the advantage to you by increasing the shares? If we were to purchase 100%, then we would be -- have more choices -- and for the further strategies, it could be more options that we could have.

And if we have -- if we were to have a little bit more than 50%, it would not make a big difference. But what we were told by MIC is that as a parent company, as a telecommunications company and facing 2 security issues on a daily basis and need to step even further and deeper in security issues.

And yes, we have a strong intention to step deeper. And of course, there are different patterns of purchasing shares from 1% to 100% -- so under -- it could be deferred depending on the conditions.

The first question is about 5G Japan, rather a broad question. When we established a 5G Japan, that was, I believe, in 2020, Tanaka san was the Chairman back then, and I came from worldwide congress and I ran into Tanaka san, and the investment in 5G will be humongous we talked about.

And the cost wise in Japan, when it comes to 5G, carriers would have a huge challenge when it comes to investment and rolling at 5G.

Why don't we build 5G coverage together whenever wherever possible? That's the background of establishing of 5G Japan.

Reducing mobile communication fee or price reduction, that's another challenge that we need to address. So why don't we go even further and build a cell site together that helped us to reduce our cost?

Going forward, -- we are not saying that we should work together. KDDI and we should work together because there are a lot of noises around NTT and NTT low.

In fact, we have built a common radio equipment with KDDI. So, we want to roll out those common infrastructure across Japan.

And 100,000 5G sites in Japan are not enough. If you want to really realize real 5G.

Look at the Chinese market, we are far behind in terms of the number of 5G cell sites. Wherever we can work together, we work together.

Wherever we should compete, we should compete. So that's our mindset.

And going forward, whenever we have opportunities, for example, operations and troubleshooting and disaster recovery. Wherever we can cooperate, we want to do.

So that's the discussion we are having with TDDI.

And now talking about 6G. Of course, we want to upgrade 5G to 6G going forward, and then we would need more and more 6G cell sites.

So, I assume there will be more opportunities for KDDI and us to work together. Talking about Rakuten.

Currently, we are working with KDDI alone, and it's been 3, 4 years doing this. And finally, it's up and running.

We welcome any competitor to join this 5G Japan efforts, but it's not easy. Because we have different interest by different companies.

So, we need to come to an agreement in terms of where we should work together. So, if a third one, fourth one coming to join us, we welcome, but it takes time to make it real.

But I think we are open and welcome to any newcomer to our 5G Japan initiative.

Second question is about the smartphone users, which are seeing very enjoyable growth. At the moment, we don't have anything to talk about today, but Shimba san, you may want to add any flavor.

Shimba, I am in charge of the Consumer business. The driver of smartphone growth includes PayPay.

Pay-toku is one of our price offerings. Since I think 2016, -- we have been leveraging our Group synergy.

And I think that our customers like our service offering backed by our Group companies and business law was revised and the terminal prices, handset prices are going up.

But I think what we are offering is really meet customers' needs. And Softbank shop and [ iMobile ] shop and dealer shops, those are very important customer touch points.

So, I think the owners and the store manager of those retail outlets are very important asset for us. So, we want to really achieve triple win customer, shops and us.

And in the midst of COVID-19 pandemic, we had challenge in marketing and sales activities. But since the pandemic was over.

We have been really rebuilding sales and marketing activities and efforts. And the network -- SoftBank network is really much better and third-party really acknowledge that and recognize that.

I think those are very --various positive factors behind smartphone growth.

As for Rakuten, we are watching closely, but anything Rakuten is doing, we don't think it's going to have a huge impact immediately. Thank you.

The first question about my number card. So recently, it's been talked about.

Under the current operation, the actual my number card to be checked and ID need to be checked. These 2 ID checks -- ID checks are being conducted at a physical store.

And some physical stores were not doing it enough. So, I apologize for not doing it enough for this double check.

So, we are reinforcing and imposing this to all the physical stores. At the same time, under the system, we are going to handle.

So, it will be also implemented throughout the stores. So how to do it?

So, we cannot disclose how we are going to manage under a certain system, but it will be controlled under a certain system, which we are working on right now.

The second question about PayPay. This year, as I stated, operating income is turning profitability.

And also, the question is raised, whether PayPay is going to be listing or not. But -- in addition to payment service, other financial services need to be linked on top.

And that's what we would like to do. There is a lot of room to improve, I believe.

So, we would like to take action step by step. And other companies also expanding their business, centering our financial service.

So, we believe that PayPay could even further improve and grow. So, it's still early to say that its growth may slow down.

Can you make one comment about online authentication? Yes, it's still not stringent, strict enough, I would say.

So, we have to keep improving and we have to keep developing further to improve. So, it's not that we have done enough.

Thank you.

First, about the mid- and long-term plan in terms of CapEx. Mobile, which is our core and core business, or origin of our business.

You mentioned that we investment more in AI than in 5G or infrastructure. I mentioned AI RAN in my presentation, as you said, and AI RAN is one of my focuses.

Going forward, technology will enhance or evolve from 5G to 6G and the RAN and core I think will be located very close to each other. You may call it MIC.

I think it's a matter of how you interpret the MIC.

Sell sites and NTT switching center are connected with world lines. But if core is more and more closer to radio.

It's part of AI RAN. So whether your investment in infrastructure or AI, I think the result can be the same.

AI RAN or HAI is what I'm talking about actually. When AIs in RAN, what will happen is, from a sell-side perspective, AI for connectivity and AI 4- or sorry, radio occupant can be used for communication and data center capacity.

So, AI for RAN, AI and RAN or AI on RAN, so whatever radio can do can be done by data center or in other words, what the data center can do can be done by a RAN equipment.

So, whether 5G or data center, I think equipment can be physically close each other. On the cost side, we are in the process of development.

That's why maybe presentation-wise, 5G investment or infrastructure investment may be seen as different from AI investment. But effectively, I think investments in AI and investment in infrastructure effectively is the same.

Next question is about universal service, shifting from fixed to mobile. I think that's just one way of thinking.

But from Softbank perspective, I think the Universal Service definitely should be optical or fiber-based service. I think no other choice is possible than optical fiber when it comes to universal service.

That's our strong claim.

And as Shimba just as mentioned about that. So, the second question will be answered by Shimba.

The difficulties or a bottleneck was SoftBank operation and Naver we are both listed companies with a number of stakeholders. And our job is to earn and then to provide dividends.

So, our roles are the same, which we are clearly aware of. And if we are both happy, the answer is one that is to grow our business.

And if it could happen on both of us, I'll be happy, but if only one side is happy, then it's an unfair deal.

So that's why we are now sitting at a table, and we would like to find out a right answer. So, the second question, we have come out of the long dark tunnel.

So, this is my fourth year as a CEO from the very beginning of my taking office. I have studied a lot.

I have experienced a lot. I have taken many actions.

I've visited all the stores. I've studied a lot for the first time after a long time.

Once we have come through the long tunnel, the impact of price reduction to cover it up, we have taken different measures. One is cost reduction and also how to improve the revenues in other ways and also the financial -- also different financial measures, which Harrison supported.

And so now more than we expected last year, we had better results. That's why we are on ease this year.

So, after going through this tough tunnel long tunnel, something that we've done good. So now Shimba will answer.

As CEO said, or more than him, I had heavier responsibilities. So, for the past years, it was really tough, but more than we had expected, we were able to recover and turn around.

So, I would like to take this opportunity to express my appreciation to all the stakeholders. And -- but this is not a goal.

Our business is not that we can be on ease as of now. So, because our customers can any time cancel the contract.

So, there are a lot of things that we have to work around.

As CEO said, one is that the call center to be handled by AI and this to be deployed throughout the shops to improve the customer satisfaction. So, for AI utilization, we would like to also closely pay attention to.

And the PayPay, LINE Yahoo synergies with them needs to be more realized and to -- go along with customers' lifestyles so that the customer can think of SoftBank first when it comes to utilizing this kind of service.

I hope I answered to your questions. Thank you.

Second -- 2 questions. First, about LINE Yahoo's capital relationship.

Hearing what Miyakawa is saying, the choices are from one share to all shares and if getting 100% stake or one stake, depending on that conditions or terms will be different. So that sounds like it's possible that you take all stakes out of Naver's stake.

So, my question is, is Naver considering exit from A Holding or, in other words, you are going to have 100% stake in A Holding? Or I wonder if SoftBank will absorb increased on investment.

So, if you could clarify your position about LINE Yahoo's situation.

First from 1% to 100%, anything is possible. But again, so long as any percentage has not have a negative impact on the business.

And also, we have a limitation in terms of financial capacity. So, I think you can imagine how much we can do in terms of getting more stake in A Holding.

And if LY increase capital, I don't think we will help them. SoftBank and Naver has the agreement as shareholders.

So, I don't think that LINE Yahoo is able to increase the capital and doing some deal by using SoftBank's shares is something that they cannot -- can do.

So from 1% to 100%, currently Naver has 50%, so 1% from 50% yes. What I'm talking about is currently 50% to 50%, then the options would be 51% to 200%.

So, there are possible, but any percentage increase should not have any negative impact on your business? Yes, that's what I meant.

And then JPY 150 billion of investment in Generative AI. Specifically, what are you going to use the money for?

Business acquisition or acquiring some talent? What are you going to do?

This is purely for building hardware. The investment does not include labor or any talent acquisition.

The hardware that is going to be implemented soon and the fall this year and next year, we will get those different generations. So [ 800, B200 and BGX ], so those are 3 generations of hardware that we are going to get.

That's the investment for.

This is Masuno. I have one question regarding the next-generation social infrastructure investment.

As you stated, for it will be the next core for the next midterm business plan. And -- so operating income of JPY 1 trillion.

So, JPY 150 billion of investment would not be enough, I believe. So, if you would make it as a core of your business in the next midterm business plan, then it has to be bigger than that.

So the volume of investment and making it a core of your business, I think we need to consider its balance.

And this year, liabilities would be more than JPY 60 billion. So, when you think about next 5 years, it will be like JPY 30 billion.

So, the JPY 60 billion of liabilities and you have to think about the appropriate amount of JPY 150 billion of investment.

Thank you for your questions. Yes, you're right that JPY 150 billion of investment would not be enough.

So, when you look at GAFAs and they are investing like JPY 1 trillion level on an annual base. So, what is the necessity for us?

What is the necessary amount of CapEx right now for us is that for hardware -- for hardware we need could be covered with JPY 150 billion. And now the phase is for learning and the next phase would be inferencing.

That time we'll be selling to customers as we increase the amount of investment. So, it could be a sales cost or R&D cost, we have not been able to calculate yet.

Therefore, we need to well consider even more. And as we work around the 1 trillion parameter Generative AI.

So of course, we need to increase the amount of investment when we look at IRs, but we want to go into past area. And for that, it's not fighting over CapEx, but it will be more for talent and capabilities.

And the second question, JPY 60 billion of the breakdown of R&D of JPY 60 billion.

So, there are many different things. So well, you are right Masuno, JPY 30 billion is what we had calculated roughly.

However, other than this, HAPS or battery development, we are doing many different things. So, it's been accumulated.

And then we look at everything as under R&D. So, the aggregated amount will be JPY 60 billion for R&D cost.

So, the depreciation costs as well -- so depreciation cost is not included here. So, this time, we are building on Generative AI parameter, so -- which is included in this R&D cost.

So once this amount gets bigger and bigger, we would like to reconsider allocating it. But as a company, we would like to expand the range of budget for R&D that we can even further work on.

So, it will be like JPY 50 billion to JPY 60 billion range to be necessary. So, as we steadily improve this and in the mid- and long-term perspective, we would be even stronger.

Thank you so much.