Results Presentation for the First Six Months of the Fiscal Year - PowerPoint PPT Presentation

Results Presentation for the First Six Months of the Fiscal Year Ending March 31, 2016 October 30, 2015

1. Results Highlights Key Financial Data, Segment Results, etc.  Operational Performance  2. Revised Full-Year Guidance

FY2015/1H Results Summary U.S. GAAP Recovering steadily toward medium-term targets Operating revenues / income: Up year-on-year  Financial Data  Operating revenues: (Up 1.9% year-on-year) ¥2,215.0 billion (Up 15.8% year-on-year)  Operating income: ¥462.6 billion  Operational Data  Net additions: 1.9 million (Up 1.6-fold year-on-year)  New billing plan subs * : 23.78 million (Up 2.5-fold from Sept. 30, 2014)  “docomo Hikari” subs * : 720,000 2 2 ◆ Consolidated financial statements in this document are unaudited. * No. of subscriptions as of September 30, 2015

Selected Financial Data U.S. GAAP FY2014/1H FY2015/1H Changes (Billions of yen) (2) – (1) (1) (2) Operating revenues 2,173.0 2,215.0 +42.0 Operating expenses 1,773.4 1,752.4 -21.0 Operating income 399.6 462.6 +63.0 Net income attributable to 259.5 317.1 +57.6 NTT DOCOMO, INC. EBITDA margin (%) *1 34.2 34.8 +0.6 Capital expenditures 292.5 219.5 -73.0 Adjusted free cash flow *1*2 143.5 298.4 +154.9 *1: For an explanation of the calculation processes of these numbers, please see the IR page of our website, www.nttdocomo.co.jp *2: Adjusted free cash flow excludes the effects of changes in investment derived from purchases, redemption at maturity and disposals of financial instruments held for cash management purposes with 3 3 original maturities of longer than three months.

Results by Segment U.S. GAAP FY2014/1H FY2015/1H Changes (1) (2) (2) –(1) (Billions of yen) 1,826.5 1,807.0 -19.4 Operating Telecommunications revenues business Operating 384.7 420.2 +35.5 income Operating 208.3 246.3 +38.0 revenues Smart life business Operating 13.4 33.4 +20.1 income Operating 152.4 173.5 +21.1 revenues Other Operating businesses 1.5 9.0 +7.5 income 360.6 419.8 +59.2 Operating revenues ＜ Ref. ＞ Smart life business and 14.9 42.4 +27.5 Other businesses Operating income ◆ As we realigned our operating segments, former “Mobile communications business” was changed to “Telecommunications business” beginning with the full-year results presentation for FY2014. Accordingly, certain telecommunication service items that had previously been included in “Other businesses” were reclassified into “Telecommunications business”. ◆ In association with the change of organizational structure that took effect on July 1, 2015, certain types of Machine-to-Machine (M2M) communication services that had previously been included 4 4 in “Other businesses” were reclassified into “Smart life business” beginning with this results presentation for the first six months of the fiscal year ending March 31, 2016.

Key Factors Behind YOY Changes in U.S. GAAP Operating Income (FY14/1H → FY15/1H) Increase in Decrease in network-related other operating Decrease in Increase in expenses : revenues : ¥462.6 billion equipment sales telecommunications Up ¥78.1 billion Down ¥19.3 billion expenses *2 : services revenues *1 : Down ¥2.8 billion Up ¥35.6 billion Increase in other operating Decrease in expenses : ¥399.6 billion equipment sales Up ¥1.1 billion revenues : Down ¥25.0 billion Impact of “Monthly Support” discounts : Equipment sales P/L: Down ¥46.7 billion Down ¥22.2 billion Operating revenues: Operating expenses: Up¥42.0 billion Down ¥21.0 billion FY14/1H FY15/1H 5 5 *1: Excluding impact of “Monthly Support” discounts *2: Sum of cost of equipment sold and commissions to agent resellers

Operational Performance (1) Trend of improvement continues MNP Net adds Churn rate 列 1 (Million subs) (Million subs) 1.90 １９０ FY14/1H FY15/1H 0.58% 0.58% -0.04 １１９ 1.19 -0.18 FY14/1H FY15/1H FY14/1H FY15/1H 6 6 ◆ The churn rate calculation method was changed from FY2015/1Q. For the churn rate calculation method used in this page, please see the slide “Churn Rate” in the presentation material for FY2015/1Q

Operational Performance (2) Handset sales recording steady increase Total handsets sold Total smartphones sold (Million units) (Million units) Total handsets sold: 12.04 Smartphones sold: 10.95 7.07 6.76 New sales: 5.15 3.66 Tablets sold: 1.02 0.72 FY14/1H FY15/1H FY14/1H FY15/1H 7 7

Smartphone Users Increasing at a favorable pace 95% % of LTE-enabled (Million subs) smartphones 87% 30.75 26.36 FY14/2Q 3Q 4Q FY15/1Q 2Q 8 8 ◆ Numbers in the graph above represent the data as of the end of each quarter. % of LTE-enabled smartphones represents the proportion of LTE subs to total smartphone subs.

New Billing Plan Making favorable progress Total new billing plan subs topped 24 million Subscriptions on October 7, 2015 % of users choosing “M Pack” or larger data buckets Up-sell grew to approx. 80% 1GB data 1GB data top-up purchase rate grew to top-up approx. 40% purchase rate ◆ % of users choosing “M Pack” or larger data buckets represents the proportion of users choosing “Data M Pack,” “Data L Pack” and “Share Pack” among the total number of users opting to subscribe to the data packs and share packs of the new billing plan. The number represents the actual performance for FY2015/2Q. 9 9 ◆ 1GB data top-up purchase rate: Purchase frequency of 1GB data top-up ÷ Total number of packet packs. The number represents the actual performance for FY2015/2Q.

“docomo Hikari” Cumulative subscription applications topped 900,000 Over 20% of “docomo Hikari” subs Up-sell have switched to larger bucket plans Over 40% of “docomo Hikari” subs New mobile sub acquisition are new subscribers to our mobile service (No. of subs applied with “Hikari Sumaho Wari” discount*) Over 50% of “docomo Hikari” subs Promotion of family use have opted to join “Share Pack” * “Hikari Sumaho Wari” discount is applicable only to new or MNP port-in subscribers. ◆ The up-sell rate, new subscription acquisition rate, and Share Pack selection rate represent the actual data for FY2015/2Q. 10 10 The cumulative number of subscription applications represents the cumulative data from the launch of service through October 20, 2015.

Newly defined ARPU and MOU Trend of recovery continues (Yen) Voice ARPU Packet ARPU docomo Hikari ARPU 4,210 4,190 4,110 4,010 4,040 4,030 40 20 2,870 2,820 2,910 2,780 2,820 2,870 1,340 1,290 1,260 1,240 1,210 1,120 FY14/1Q 2Q 3Q 4Q FY15/1Q Q2 2Q New MOU 111 121 128 126 129 134 (minutes) 11 11 ◆ For an explanation on newly defined ARPU and MOU, please see the slide “Definition and calculation methods of newly defined ARPU and MOU” in this document.

Newly defined ARPU Making progress toward recovery (Yen) 4,440 4,190 4,110 40 2,900 2,820 2,910 1,540 1,290 1,240 FY13/2Q FY14/2Q FY15/2Q Voice ARPU Packet ARPU docomo Hikari ARPU ◆ For an explanation on newly defined ARPU and MOU, please see the slide “Definition and calculation methods of newly defined ARPU and MOU” in this document. 12 12

Smart Life Business & Other Businesses: Operating Income Making favorable progress (Billions of yen) Revised 42.4 FY15 full-year Up approx. operating income 3-fold forecast: ¥70 billion Main drivers behind FY15/1H operating income growth 14.9  Content services (“dmarket,” etc.)  Finance/payment services (credit, etc.)  Group companies (OAK LAWN MARKETING, INC., etc.) FY14/1H FY15/1H 13 13

“dmarket” Subscriptions Growth continues 13.95 No. of subs (As of Sept. 30, 2015) (Million subs) “dmarket” “dTV” “d anime store” 4.76 million subs 2.13 million subs “dgourmet” “dhits” 570,000 subs 3.37 million subs “dmagazine” “dkids” 7.8 610,000 subs 2.51 million subs FY14/2Q 3Q 4Q FY15/1Q 2Q ◆ No. of “dmarket” subscriptions in this page accounts for only monthly subscriptions, and one-time transactions are not included. 14 14 The numbers in the graph above represent the subscriber count at the end of each quarter.

“dmarket” Usage Per Subscriber Growing steadily (Yen) Up approx. 1,300 30% 990 FY14/2Q 3Q 4Q FY15/1Q 2Q ◆ The quarterly dmarket usage per subscriber is calculated by dividing the total amount of dmarket transactions for the quarter by the sum of unique users for each 15 15 month in the quarter. The amounts are exclusive of tax.

LTE Network Japan’s fastest mobile network: 130,000 FY2015/1H Priority roll-out of 7,700 base stations 115,400 in 640 cities across Japan Total no. of PREMIUM 4G- enabled base LTE base stations: Launch of 262.5 Mbps service stations: 18,000 97,400 From October 2015 Launch of 300 Mbps service 7,700 (410 cities across Japan) Provision of 337.5 Mbps service at 900 docomo LOUNGE, etc Sept. 30, 2015 in Tokyo, Nagoya and Osaka Mar. 31, 2015 Sept. 30, 2014 Mar. 31, 2016 (Target) ◆ The transmission speeds described herein are theoretical maximum rates specified in the technical standard, and the actual rate may vary depending on the propagation conditions, etc. 16 The 262.5 Mbps service is available only in selected areas of Tokyo, Nagoya and Osaka. 300 Mbps is the fastest transmission rate planned in Japan’s mobile communications market as of October 29, 2015.