Maintaining the Mobile Business's Revenue Base

「Recognizing that reducing operating risks in the business and restructuring it were the highest priorities, we transferred the sales agency business for mobile information and communications equipment operated by the Company as of 31 March 2020.」

「Our Group determined that further concentrating management resources on the strategically prioritized Cloud Solutions Business would contribute to enhancing corporate value over the medium to long term. Accordingly, in a mature market environment with an uncertain outlook, we decided to transfer the sales agency business for mobile information and communications equipment to イリオスネット株式会社.」

「The lengthening smartphone replacement cycle and changes in market conditions caused the growth rate of new unit sales to slow, while selling, general and administrative expenses, including sales promotion expenses, tended to increase. Under these conditions, we expanded sales by operating as a locally rooted business and improving customer satisfaction, including by enhancing our smartphone classes.」

「As consumers increasingly sought lower prices, our Group worked to secure revenue by focusing on improving customer satisfaction through initiatives such as holding smartphone classes and promoting the provision of services, including those in the smart-life area.」

「In the Mobile Business, our Group's mobile phone unit sales declined due to the decrease in total device shipments in Japan's mobile phone sales market and the lengthening replacement cycle, but the provision and promotion of use of services, including those in the smart-life area, remained strong. Revenue was ¥2,896,530 thousand and segment profit was ¥355,179 thousand.」

「In the Mobile Business, our mobile phone unit sales declined in line with the decrease in total device shipments in Japan's mobile phone sales market, but higher unit prices and the receipt of support payments contributed to securing profit. Revenue was ¥1,874,041 thousand, down 1.2% year on year, while segment profit was ¥205,148 thousand, up 10.9%.」

「In the Mobile Business, the average selling price of devices rose following the launch of new products by smartphone manufacturers in September, resulting in Mobile Business revenue of ¥906,971 thousand, up 4.2% year on year. However, commissions declined because unit sales fell short of the target, resulting in segment profit of ¥95,525 thousand, down 3.0%.」

「In the Mobile Business, revenue improved and the average selling price increased following revisions to the prices of certain devices, but our unit sales continued to decline as the number of contracts in the mobile phone and PHS markets in the Kansai region decreased. In addition, we focused on improving employee retention by improving working conditions, including setting regular closing days and holidays during the year-end and New Year period and shortening operating hours.」

「In the Mobile Business, our unit sales declined as the number of contracts in the mobile phone sales market in the Kansai region decreased, but revenue improved as revisions to the prices of certain devices increased the average selling price. In addition, as we significantly strengthened the provision of non-telecommunications smart-life services to existing users, we worked to improve our ability to make proposals to customers and increase customer satisfaction. As a result, Mobile Business revenue was ¥2,954,355 thousand, down 3.4% year on year, while segment profit was ¥307,198 thousand, up 3.0%.」

「In the Mobile Business, our unit sales declined as low-cost smartphones increased their market share, but control of device prices and the provision of services in the smart-life area, including media content and financial and payment services, contributed to securing profit. As a result, Mobile Business revenue was ¥1,896,879 thousand, down 5.2% year on year, while segment profit was ¥184,941 thousand, up 35.0%.」

「In the Mobile Business, the decline in unit sales due to consumers postponing purchases and the continued shift toward lower prices as the market share of so-called low-cost smartphones, including second brands of major telecommunications carriers and MVNOs (Note 6), expanded. Under these conditions, we worked to reduce expenses, improve operational efficiency and increase customer satisfaction. In addition to device sales, we focused on securing profitability by proposing value-added products, including digital content providing smart-life services and mobile accessories. As a result, Mobile Business revenue was ¥870,082 thousand, down 9.9% year on year, while segment profit was ¥98,497 thousand, up 53.7%.」

「As consumers increasingly sought lower prices, we worked to secure revenue by focusing on improving customer satisfaction through better service and store quality.」

「Against this backdrop, we focused on securing revenue by strengthening sales of fiber-optic broadband lines and improving store quality, while also working to reduce personnel expenses by curbing discount sales and controlling staffing shifts.」

「In the Mobile Business, we focused on initiatives centered on fiber-optic broadband lines and tablet devices, as well as thorough improvements in store quality. However, unit sales have continued to decline, partly due to the impact of the Task Force on Mobile Phone Pricing and Other Terms of Provision formulated by the Ministry of Internal Affairs and Communications in December 2015.」

「In the Mobile Business, we focused on strengthening sales of accessories and broadband services, including docomo Hikari, and improving the overall capabilities of our stores. The September launch of the iPhone 7 also progressed smoothly.」

「In the mobile phone retail industry, to which the Mobile Business belongs, sales of mobile phone handsets are expected to face challenging conditions. Nevertheless, we will work to maintain our earnings base by improving store operating efficiency and through other measures.」