Q&A at Earnings Investor Briefing for Q3 FY2021

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Date Thursday, February 3, 2022 6:00 pm - 7:00 pm
Speakers SoftBank Corp.:
Kazuhiko Fujihara (Board Director, Executive Vice President & CFO)
Takashi Naito (Vice President, Head of Finance and Accounting Division)
Osamu Akiyama (Head of Strategic Finance Division)
  • Regarding the mobile business, in the current environment where churn rate is high, what is your sales strategy? Will you continue to focus on selling the Y!mobile brand?

    Even in this fiercely competitive environment, we are still competitive, and our sales is progressing steadily. The growth in the Y!mobile brand stands out, but the SoftBank brand also has users switching from outside carriers. We will continue to focus on our multi-brand strategy, by providing a large capacity data plan (Merihari unlimited plan) through the SoftBank brand, encouraging migration from the Y!mobile to the SoftBank brand, and improving user experience in combination with PayPay, Yahoo! JAPAN and LINE, our group services that have strong affinity with smartphones.

  • Looking at the telecommunications environment in which customer liquidity is high, do you think that the churn rate will fall? Do you think it is possible to bring down the churn rate by bundling multiple services offered by your group companies?

    Since the first quarter, we have grasped the trend of the market and strengthened our competitiveness. But in terms of churn rate trend, I think it will probably stay at the current level. We can't be too optimistic. Compared with the level before mobile service price reductions, the churn rate is still at a high level. We will continue to endeavor on improving churn rate by providing more attractive services while monitoring carefully the high liquidity environment.

  • You said ARPU may slightly decrease further in the fourth quarter. What kind of factors led to this forecast?

    Compared with the trend before the second quarter, the brand migration has calmed down. However mobile service price reduction continues to impact negatively, including the penetration of the new prices and migration of users to lower priced brands. On the other hand, positive impact comes from lower year on year growth of smartphone debut plan that has lower ARPU, and accounting factor from the first-year / half-year discounts. We are considering using these funds to launch new campaigns.

  • Your 5G population coverage has achieved 85%. How would that contribute to subscriber acquisition?

    We should leverage 5G more for our user acquisition. We are working to address this opportunity. We will also build new businesses for the Broadband and the Enterprise where we can use 5G.

  • Regarding 5G ARPU strategy, do you think it more important to increase the number of subscribers through sales promotion on device discounts, rather than increasing ARPU through increasing the ratio of unlimited data plan users?

    Though we conduct sales promotions through device discounts, the focus on providing a large capacity data plan that services a majority of our customers does not change. We will continue to focus on offering the large capacity data plan, for which we are conducting a tie-up campaign with YouTube. Additionally, we are promoting sales through device discounts. I recognize that we have to educate our Y!mobile customers to upgrade to a large capacity data plan.

  • In the headwinds such as ARPU declining, you are actively spending CAPEX. How do you consider keeping the balance between cost reduction and investment for growth? Can you explain how you are controlling costs?

    We are working further on cost reduction measures. While looking at the balance with consolidated profits, we will focus on shifting to non-telecom businesses and building 5G network, which is important not only for our Enterprise business but also for society. Currently, we are spending CAPEX for accelerating 5G rollout. We will manage 5G CAPEX not in one year, but in a longer term. We are taking various initiatives, such as structural reform by shifting human resources towards non-telecom areas, and by improving operational efficiency through digitalization.

  • In terms of sales promotion expenses in the next fiscal year, will you keep it flat from this fiscal year or do you plan to reduce for the next fiscal year?

    It depends on the competitive environment. But overall, we will take a stringent look at how we use costs including sales promotion costs.

  • In the earnings results briefing, CEO Miyakawa mentioned Consumer profit would hit bottom in fiscal year 2022. How can you achieve that when you expect mobile service price reduction impact will last till fiscal year 2023?

    Under the pressure of mobile service price reduction, we will first create a structure to cover the Consumer profit decline by profit growth in the Enterprise, which is also a telecommunication business. Furthermore, we will identify business areas that contribute to profit increase in the Consumer segment.

  • What are the specific businesses that have potential to be new sources of revenue?

    About 330 group companies are still in their growing phase, but each of them has its own strength. We are working to strengthen synergies with these companies. For example, in the Enterprise business, in addition to the large corporates we have been mainly addressing so far, we will strengthen our approach to SMEs. I believe that there is a lot of room to leverage the services and customer base of our group companies, such as the 30 thousand enterprise accounts which ASKUL Corporation holds, and various products from LINE Corporation.

  • In order to achieve JPY1 trillion operating income for next fiscal year, what are the businesses and factors that will contribute?

    We plan to announce the detailed forecasts in our earnings results announcement scheduled in May. I would like to say that we have the will to stick to our target communicated to the market.