Transition to the MSEnabler and Enabler Businesses

「デジタル認証基盤をベースとして、「通信サービス事業」と「デジタルトラスト事業」を展開します。」

「The Group had previously reported two segments, Japan and Overseas. Following a review of its reporting segments from the perspectives of business development and the allocation of management resources, among others, it has changed its reporting segments to a single segment, mobile communications services and mobile solutions, from the current interim consolidated accounting period.」

「As of the date of submission of the Annual Securities Report, the Company has changed its business categories to mobile communications services (MVNO business/MVNE business) and mobile solutions (MSP business).」

「This was attributable to growth in voice flat-rate and semi-flat-rate services centered on “Japan Communications SIM” in the MVNO business, up 20.1% year on year, and growth in voice services under partner brands in the enabler business, up 29.7% year on year.」

「This was attributable to growth in voice flat-rate and semi-flat-rate services centered on “Japan Communications SIM” in the MVNO business, up 18.0% year on year, and growth in voice services under partner brands in the enabler business, up 36.9% year on year.」

「This was attributable to growth in voice flat-rate and semi-flat-rate services centered on “Japan Communications SIM” in the MVNO business, up 19.5% year on year, and growth in voice services under partner brands in the enabler business, up 34.8% year on year.」

「This was attributable to growth in voice flat-rate and semi-flat-rate services for “Japan Communications SIM” in the MVNO business, up 23.1% year on year, and growth in voice services under partner brands in the enabler business, up 40.3% year on year.」

「This was attributable to growth in voice flat-rate and semi-flat-rate services for “Japan Communications SIM” in the MVNO business, up 22.6% year on year, and growth in voice services under partner brands in the enabler business, up 33.6% year on year.」

「The status of each business is as follows. (Unit: ¥ million) Revenue Same quarter of previous year Current quarter Change from same quarter of previous year Change in revenue Change from same quarter of previous year Change rate (%) MVNO business 1,237 1,477 240 19.4 Enabler business 966 1,285 318 33.0 Total 2,204 2,762 558 25.4」

「This was attributable to growth in voice flat-rate and semi-flat-rate services centered on “Japan Communications SIM” in the MVNO business, up 16.7% year on year, and growth in the enabler business, including voice services offered under partner brands, up 43.8% year on year, which increased initial fees and monthly charges associated with new customer acquisition.」

「The Company is also preparing to commercialize its FinTech platform “FPoS,” a medium- to long-term growth driver. In January 2021, its subsidiary my FinTech Co., Ltd. applied for accreditation under the Electronic Signatures Act for its “my Electronic Certificate” service, which installs private keys and electronic certificates on smartphones (iPhone and Android). On 10 November 2021, it received accreditation from the competent ministers under the Electronic Signatures Act.」

「By the end of the cumulative second-quarter consolidated period under review (hereinafter, “the current quarter”), the Company had strengthened the shareholder structure of my FinTech Co., Ltd., the operating entity for FPoS, and established a structure to advance the FPoS business through both strategic planning and technology development by bringing in Deloitte Tohmatsu Financial Advisory LLC and Climb Co., Ltd. as new equity investors.」

「The Company also provides services as an enabler supporting other companies’ businesses, safely and securely transporting and communicating data. Specifically, it provides financial institutions and others with private network services, including secure SIM-to-SIM communications, as well as services using two-module routers with backup lines. It is also PCI DSS-certified and provides services supporting the non-retention of credit card data.」

「Against this backdrop, the Company aims to commercialize “FPoS” as a secure digital ID with legal backing under the Electronic Signatures Act. In January 2021, its subsidiary my FinTech Co., Ltd., a joint venture with Japan ATM Co., Ltd., applied to the competent ministers (the Minister of Internal Affairs and Communications, the Minister of Economy, Trade and Industry, and the Minister of Justice) for accreditation as a specified certification service under the Electronic Signatures Act for its “my Electronic Certificate” service, which issues electronic certificates to iPhone and Android smartphones. An investigation by the Japan Institute for Promotion of Digital Economy and Community (JIPDEC), a designated investigation body appointed by the competent ministers, has commenced.」

「Because collaboration with other companies toward the commercialization of FPoS has been put on hold due to the COVID-19 pandemic, the Company plans to use this period to build the internal structure within its group for FPoS commercialization. On 22 July 2020, Secure ID Co., Ltd., a joint venture between the Company and Taisys Technologies Co., Ltd. (hereinafter, “Taisys”), the patent holder, developer and manufacturer of the sub-SIM used by FPoS, was established.」

「The Company is currently preparing to establish an electronic certification authority and verifying connectivity with banking systems in preparation for the commercialization of its FinTech platform.」

「Our efforts to commercialise FPoS are focused on developing use cases. Because potential customer industries for FPoS are expected to span financial institutions, payment service providers, medical institutions, educational institutions and other businesses requiring user identification, as well as national and local governments, we plan to build up individual use cases and then expand them horizontally. On 19 November 2019, we launched a joint digital banking and telecommunications project spanning Indonesia, Japan and other countries, which is one such initiative. In addition, on 30 January 2020, we established Secure ID Co., Ltd. as a joint venture with Taisys Technologies Co. Ltd., the developer and manufacturer of the sub-SIM used by FPoS.」

「As part of our efforts to commercialise FPoS, we established my FinTech Co., Ltd., a joint venture with Japan ATM Co., Ltd., as the operating company for FPoS services in Japan. In addition, on 1 November 2019, we agreed to establish Secure ID Co., Ltd. as a joint venture with Taisys Technologies Co. Ltd. (the “Taisys Company”), which holds patents for the sub-SIM used by FPoS and is its developer and manufacturer.」

「Regarding the commercialisation of FPoS, during the previous consolidated fiscal year it was recognised as compliant with the supervisory guidelines following a proof-of-concept conducted by the Financial Services Agency, and patents for its underlying technology were also obtained. As the next step, we are working to develop use cases, which will require broader and more diverse collaboration with stakeholders than ever before.」

「At present, most of our revenue comes from low-cost SIMs. However, as an enabler using FPoS, we will provide a broad range of MVNO operators with diverse communications services and platforms by offering SIM products and other services with unique functions.」

「We are advancing the enabler business along two axes: providing safe and secure communications, and developing a business using LTE technology with the 5G era in mind.」

「Because many MVNO operators are already working to reduce the cost of telecommunications services through low-cost SIMs, we will continue to lead the industry by focusing on diversifying telecommunications services as an enabler that provides mobile solutions to other partners.」

「The first commercial service using this proprietary SIM was “Henn-na SIM,” launched on 1 July 2018 by H.I.S.Mobile Co., Ltd., a joint venture between the Company and H.I.S.Co.,Ltd.」

「The results for the fiscal year ended March 2018, the second year of our new business strategy, are as follows. They represented significant progress for the Company, particularly in that we were able to move forward while maintaining a balance between the low-cost SIM and enabler businesses.」

「Following deregulation in areas including fintech, we plan to shift the centre of our business in Japan from the low-cost SIM business to the mobile solutions business. For the time being, however, we are expanding sales of low-cost SIMs, particularly those using the SoftBank network.」

「As an enabler, we provide low-cost SIMs to partner companies operating low-cost SIM businesses and solution platforms to partner companies operating enterprise solution businesses.」

「On 7 November 2016, we began collaborating with U-NEXT, a major MVNO operator with strengths in sales and marketing.」

「In the low-cost SIM-related business, the enabler ratio of revenue was 0.3% in the same quarter of the previous year, but rose to 13.6% in the quarter under review. At present, the conventional MVNO business, in which we provide services directly to customers as an MVNO, accounts for 86.4%. We will continue to promote the enabler business in order to reverse these proportions as soon as possible.」

「Many operators have entered the MVNO business from other industries, each bringing distinctive strengths, including customer bases unlike those of telecommunications services, strong sales capabilities, content offered together with communications, and technological expertise. Accordingly, as an MSEnabler (mobile solution enabler), we will actively promote collaboration among MVNO operators and work to improve the profitability of the low-cost SIM business by building a business model that leverages each operator’s strengths.」

「From the fourth quarter under review, as announced on 22 January 2016, we shifted to a new business strategy centred on the enabler business, which promotes the SIM and MSP businesses together with partner companies. Our top priority is to rapidly build the new network infrastructure made possible by deregulation.」