Main Q&A at Earnings Results Briefing for Q1 FY2024 | About Us

Date	Tuesday, August 6, 2024 4:00 pm - 5:10 pm
Speakers	SoftBank Corp.: Junichi Miyakawa (President & CEO) Kazuhiko Fujihara (Board Director, Executive Vice President & CFO)

What impact did Pay-toku have on the increase in mobile revenue?: The high ARPU of Pay-toku has partially contributed to revenue growth. We will continue to pursue mobile revenue growth while maintaining a balance between both the number of subscribers and ARPU.

What are your thoughts on the recent increase in the churn rate for mobile service?: A certain number of users sign up for only a SIM contract and then switch to other carriers within a short period of time. Although this trend leads to new subscribers, it also pushes up the churn rate. We will consider our responses while keeping an eye on the competitive landscape.

Y!mobile marked its 10th anniversary. What is the recent number of subscribers and how do you see the current situation?: Y!mobile has approximately 12 million subscribers. It has concentrated on the low to medium data allowance band and increased its brand power. Given that “LINE” and “PayPay” are also brands offered by our group companies, we would like to provide a wide range of products in partnership with these brands and continue to develop Y!mobile over the next 10 years.

There has been a succession of small-scale communications disruptions. Have these been caused by an increase in traffic?: First, we would like to apologize to our customers for the inconvenience we have caused. The reasons for each disruption were different and unrelated to one another. Although equipment malfunctions can occur at any time, our initial responses following the disruptions were slightly delayed. Consequently, we have directed on-site staff to conduct a comprehensive inspection.

NTT DOCOMO, INC. has unveiled its eximo poikatsu plan. What are your thoughts on this plan?: We understand that eximo poikatsu is a plan that utilizes a point-based business ecosystem, as does our Pay-toku Unlimited. We believe that Pay-toku Unlimited remains a highly competitive due to the simplicity of the point awarding conditions and the utilization of the wide economic sphere of “PayPay”.

Rakuten Mobile, Inc. (Rakuten Mobile) has seen an increase in the number of subscribers. What are your thoughts on this trend?: We are aware that the net subscriber additions of Rakuten Mobile are increasing, and we are impressed with Chairman Mikitani's leadership. However, the impact on our company will be minimal. We will continue to engage in healthy competition while meeting the needs of customers.

Rakuten Mobile began providing the platinum band. What are your perspectives on this development?: We assume that Rakuten Mobile is only offering the platinum band in limited areas at this time. We would like Rakuten Mobile to make adequate investments to fulfill its responsibility as a Mobile Network Operator (MNO) that has been allocated bandwidth from the Japanese government.

PayPay Corporation achieved positive operating income. What are your thoughts on its listing?: PayPay Corporation achieved profitability earlier than expected, and we expect it to contribute to our financial results as a pillar of revenue in the future. We are aware of rising anticipation for its initial public offering (IPO). However, specific decisions should be made by Board of Directors of PayPay Corporation. Given that there is no rush for us to seek financing, we would encourage it to continue focusing on its growth.

KDDI Corporation (KDDI) announced that it has started discussions with Sharp Corporation (Sharp) on building an AI data center on the former site of Sharp Sakai Plant. SoftBank Corp. also announced that it has signed a Memorandum of Understanding for the construction of an AI data center at the same location. What is the difference between these two initiatives?: Since January 2024, we have been in discussions with Sharp on the construction of an AI data center using about 60% of the total land area of Sharp Sakai Plant. We were surprised by KDDI's announcement. We do not know the status of the negotiations between KDDI and Sharp, but we assume that they are considering the remaining approximately 40% of the site.

What is the current status of your initiatives to automate call center operations through generative AI?: SoftBank Corp. and Microsoft Japan Co., Ltd. are currently working together on this initiative. Although steady progress is being made, it is a difficult field. We will continue our efforts to achieve natural, human-like responses.

How do you perceive the risks of investments in AI?: If I had to choose, it would be the risk that the GPUs we have invested in will become obsolete due to the extremely rapid advancements in GPUs. Although it is essential to carefully consider the timing of investments, we believe that the spread of AI will certainly continue in the future. SoftBank Corp. intends to actively invest in this field.

The main topics of discussion regarding the revision of the Act on Nippon Telegraph and Telephone Corporation (NTT Law) have been clarified. What are your views on future discussions?: Nippon Telegraph and Telephone Corporation (NTT) is a unique company with special assets and public responsibilities. We believe that the discipline imposed by the NTT Law remains necessary, and we will continue to emphasize its importance. In discussions with the Ministry of Internal Affairs and Communications (MIC), we understand that there is no intention of abolishing the NTT Law.

What is your perspective on the impact of the Bank of Japan's interest rate hike on fund procurement, and the recent trends in your stock price?: In anticipation of rising interest rates, we have been working to fix our long-term interest-bearing debt for several years. Currently, approximately 90% of the debt is fixed. Therefore, even if interest rates rise, there will be no significant impact in the short term. Although it is difficult to comment on the reasons for the volatility in our stock price, we aim to increase our corporate value by producing results, with a focus on net income.

SoftBank Corp. announced that it will terminate the Thuraya satellite telephone service at the end of August 2024. What was the rationale behind this decision and what impact will it have?: First, we would like to apologize to our customers for the inconvenience we have caused. We are currently unable to provide services due to the malfunction of the Thuraya geostationary orbit satellite. Even if satellite operations are resumed, there is a strong possibility that we will not to be able to maintain the previous level of communications quality and coverage. For this reason, we decided to terminate the service. We are providing customers with information about alternate services. The impact on our financial results is expected to be very minor.