New Medium-Term Management Plan （ FY20.3-FY22.3 ） May 15, 2019 Makoto Takahashi President KDDI Corporation
We Refreshing Our Brand Slogan “Tomorrow, Together” Move forward to the future with partners and continue to grow and develop “Explore the extraordinary” Choose enjoyable and playful future and provide change with excitement to the world 1
Segments in the New Medium-Term Management Plan Old segments New segments Domestic Global New Personal Services segment Personal Personal Global + Consumers Life design Life design domain New Business Services segment Business Global Business ICT Global Global businesses are now positioned to extend domestic businesses 2
The Focus of Our Business Strategies The integration of Creating innovation Further expansion telecommunications toward the 5G era of global business and life design Expanding the Utilizing big data Growth as the Group Sustainability finance business 3
Creating innovation Allocation of 5G Frequencies toward the 5G era 3.7GHz Band 100MHz × 2 ranges + 28GHz Band 400MHz = TOTAL 600MHz ② KDDI ⑤ KDDI ⑥ NTT ① NTT ③ Rakuten 3.7GHz band /Okinawa ④ Softbank /Okinawa DOCOMO DOCOMO Mobile Cellular 100MHz Cellular 4.5GHz band 100MHz 100MHz 100MHz 100MHz 100MHz 3.6GHz 3.8GHz 4.1GHz 3.7GHz 3.9GHz 4.0GHz 4.5GHz 4.6GHz ③ KDDI ① Rakuten 28GHz band ② NTT DOCOMO /Okinawa ④ Softbank Mobile 400MHz Cellular 400MHz 400MHz 400MHz 27.0GHz 27.4GHz 27.8GHz 28.2GHz 29.1GHz 29.5GHz Reference ） based on MIC Accreditation of establishment plan of specific base station for introduction of 5th generation mobile communication system (5G) (outline) http://www.soumu.go.jp/main_content/000613734.pdf Acquire 3.7GHz band and 28GHz band which expect to use worldwide as 5G, big advantage for network development and handset procurement costs 4
Creating innovation 5G Rollout Plan toward the 5G era Number of 5G specified 5G Roadmap base stations (Outdoors) -Plan FY20.3 FY21.3 FY22.3 42,863 3 93.2 ％ Ｇ 28GHz 5G area coverage 4 4G LTE in 5 years Ｇ 5 5G Pre-5G 5G （ NSA ） + LTE ★ Frequencies （ SA ） Ｇ 3.7GHz Allocation NSA SA [Non -Stan dalon e] [Standalone ] Improve existing experience Full rollout value using high-speed using unique high-volume transfer FY20.3 FY21.3 FY22.3 FY23.3 FY24.3 5G characteristics Rolling out 5G proactively, as society’s next generation infrastructure 5
Creating innovation toward the 5G era Creating Innovation by 5G Autonomous Remote Remote Free view point image Smart factories stadium views driving operations medical care Partner companies Telecommunications Open innovation Platform 5G/IoT Platform Creating new experience value through collaboration with partner companies 6
Creating Driving Regional Revitalization innovation toward the 5G era through 5G Regional case studies using IoT “Mackerel Restoration” Sake Brewery Mt.Fuji Trail ICT Installation Project Project Visualization Project at Inland Abalone Farms Hamamatsu, Aizuwakamatsu, Gotemba, Obama, Fukui Pref. Fukushima Pref. Shizuoka Pref. Shizuoka Pref. We concluded cooperation agreements with 63 organizations to utilize 5G toward further solution of regional issues and regional revitalization Establish the regional revitalization fund Established ¥ 3 billion fund for the regional revitalization in April 2019 Contribute SDGs through driving DX to utilize 5G with regional venture companies Accelerating 5G use with venture companies 7
The integration of The Integration of telecommunications and life design Telecommunications and Life Design For individual customers For corporate customers Expanding life design services Building new business models through smartphones as starting point together with customers Providing experience value Supporting the driving of DX with excitement to customers for customers Expanding growth businesses centering on telecommunications as a base 8
The integration of telecommunications Maximizing Life Time Value and life design Growth as the Group ARPA Engagement Value-Added ARPA growth through life design product Life Time Fixed line Tele communications Value × × Telecommunications Mobile Life design ARPA growth through 5G Smart Value au Smart Value (life design edition) ID The integration of telecommunications and life design ＝ ID × ARPA × Engagement 9
The integration of telecommunications Expanding the Operating Revenue and life design of Life Design Domain Growth as the Group Commerce Operating Revenue FY19.3 FY22.3 (Target) of life design domain GMV *1 Target ¥ 1.5 trillion ¥ 400 billion ¥ 250 billion → Energy FY19.3 FY22.3 (Target) Value Over au Denki Ａ Added 3.4 million 2 million → subscriptions Ｒ ¥ 946 billion Ｐ Finance FY19.3 FY22.3 (Target) Ａ Transaction ¥ 6.0 trillion ¥ 4.4 trillion → volume *2 Tele Growth through 5G commun FY19.3 FY22.3 ications *1 Gross Merchandise Value *2 Transaction Volume of Settlement/Loan Aim to expand the operating revenue alongside ARPA growth 10
The integration of telecommunications and life design Promoting Deeper Engagement Growth as the Group Significantly reduce churn rate using bundles with au Denki and credit card,etc. Churn Rate Life design Smart Value Cut in half (life design edition) au au only au + au + Wowma! + Jibun au au Mobile Bank au Smart Value Fixed line + Smart au Pass au WALLET + credit au card Denki Promoting using bundles with Mobile/Fixed line/Life design 11
The integration of telecommunications Expansion to Global Business and life design Further expansion of global business Growth Expansion of Expansion of as the Group ARPU life design life design business business Mongolia Other Asian regions Myanmar ID Increase IDs mainly Southeast Asia Number of domestic IDs /approx. 40 million （ Number of overseas ID ： 33 million ＋α） Acquiring IDs in overseas equal to or more than domestic, e xpand the model of “the integration of telecommunications and life design” 12
The integration of telecommunications Co-Creating Business and life design with Partner Companies Strengthening initiatives in new growth fields, Operating Revenue especially IoT business of new business services segment Realizing recurring business Target ¥ 1 trillion to C Individual 個人 Individual ¥ 886.4 billion Customer Corporate customers Success Co-creating business KDDI × Partner companies Platform Platform FY19.3 * FY22.3 FY19.3 FY22.3(Target) IoT Connections → 18 million 8 million Aim to create new recurring business with customers 13 *The figures of FY19.3 are referential information
The integration of telecommunications and life design Growth Fields of Global ICT Further expansion of global business Growth as the Group “Connected” cars IoT connect to everything Support KDDI IoT World Architecture throughout the world TOYOTA smart center Global Communications Global Communications Application Platform Platform Advancement Factory/Building facilities/Home electronics Connected service /Construction machinery,etc. Supporting customer businesses with global partners 14
Utilizing big data Utilizing Big Data Growth as the Group (Personal) (Business) Maximize customer experience value Realize data driven society C u s t o m e r C u s t o m e r C u s t o m e r t o u c h p o i n t t o u c h p o i n t t o u c h p o i n t w i t h c u s t o m e r s w i t h c u s t o m e r s Cyber Physical System w i t h c u s t o m e r s i n p h y s i c a l t h r o u g h G r o u p Operational o n l i n e c o m p a n i e s s t o r e s contributions 5G/IoT Data built-up/analysis Platform Customers Recommend Marketing Analysis Factory, Medical, Cloud Infrastruc To real world ture, etc. Network Collect data Optimal proposal Offer optimal info Device to customers to customers ARPA growth Engagement increase Expanding business fields through approaching customers with data 15
Expanding the finance business Expanding the Finance Business Growth as the Group au Financial Holdings * Smart Money Concept Deposit Transfer Card Telecommunications Internet Finance on Smart Fixed line Investment phone Reality Electricity Loan Insurance Pension Expanding the finance business as the center of Smart Money Concept. Starting full-scale business operations by establishing a holding company. ＊ Each company whose company name will be changed to the au brand name will change name within FY20.3. The change of the company name of Jibun Bank is subject to the obtaining of approval from the relevant authorities. Furthermore, with respect to a change of company names, au 16 Insurance Company is required to obtain consent from Aioi Nissay Dowa Insurance Co., Ltd., which is its shareholder, and kabu.com Securities is required to complete the settlement concerning the tender offer for the company, and to go private. Logos are currently under discussion, and have not been determined
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