NTT DOCOMO : FY2019 Analyst Meeting Material

FY2019

Results Presentation

April 28, 2020

１．FY2019 Results Highlights

２．FY2020 Principal Actions

1

FY2019 Results Highlights

(Billions of yen)

IFRS

	FY2018	FY2019	Changes	Changes
	(1)	(2)	(2) -(1)	(%)
Operating revenues	4,840.8	4,651.3	‐189.6	‐3.9%
Operating profit	1,013.6	854.7	‐159.0	‐15.7%
Profit attributable to shareholders of	663.6	591.5	‐72.1	‐10.9%
NTT DOCOMO, INC.
Adjusted free cash flow	619.4	798.6	+179.2	+28.9%
Capital expenditures	593.7	572.8	‐21.0	‐3.5%

◆Consolidated financial statements in this document are unaudited.

◆Adjusted free cash flow is calculated excluding the effects of changes in investment derived from purchases, redemption at maturity and disposals of financial instruments held for cash management purposes with original maturities of longer than three months. In association with the adoption of IFRS16 "Lease" effective Apr. 1, 2019, lease‐related expense items has been reclassified into

"depreciation/amortization" from previously "cost of equipment sold and services, and other expenses" and "communication network charges." The figure above represents the amount excluding this	2
impact, etc.

Results by Segment

			IFRS
	FY2018	FY2019
	Changes
(Billions of yen)	(1)	(2)	(2) -(1)

Telecommunications	Operating revenues	3,977.1	3,687.0	‐290.1
business	Operating profit	866.3	706.5	‐159.8

Smart life	Operating revenues	448.2	543.7	+95.5
business	Operating profit	69.2	32.5	‐36.7
Other	Operating revenues	441.3	454.0	+12.7
businesses	Operating profit	78.1	115.6	+37.5
Smart life	Operating revenues	889.5	997.7	+108.2
business and		147.3	148.1	+0.8
Other businesses	Operating profit

• Certain services that had been included in the smart life business were reclassified to other businesses to reflect the change in its internal organizational structure effective as of July 1,

2019. In connection with this realignment, segment information for the fiscal year ended Mar. 31, 2019 has been restated to conform to the presentation for the fiscal year ended	3
March 31, 2020.

Key Factors behind Changes

in Operating Profit

IFRS

				Excluding IFRS 16 impact:
(Billions of yen)				Up 41.9
					Excluding IFRS 16 impact:
		Other				Up 133.5
	Mobile	Selling
	operating	Selling
	communications	revenues:	revenues:
1,013.6	services revenues:	Up 83.0	Down 236.2	expenses:
Down 86.6			Down 205.6		Other operating
						expenses:
						Up 62.7	854.7
	Optical‐fiber broadband			Network‐related
	service revenues, etc. :			expenses
	Up 50.2		Selling revenues	(including optical‐
			and expenses:	fiber broadband
			service‐related
			Down 30.6
			expenses):
					Up 112.3
	Operating revenues		Operating expenses
		‐189.6			‐30.6

◆Selling expenses represent the sum of cost of equipment sold and commissions to agent resellers.	4
◆Network‐related expenses represent the sum of depreciation/amortization, loss on disposal of property, plant and equipment and intangible assets, and communication network charges.

"d POINT CLUB" Members

"d POINT CLUB" members	"d POINT CARD" registrants
(Million members) Topped 75 million	(Million)

75.09

70.15

Up 7%

43.26

33.72

Up 28%

FY18

FY19

FY18

FY19

◆"d POINT CARD" registrants indicate the no. of users who can earn and use "d POINTs" at participating stores by registering their personal information.

5

Telecommunications Business

Operational Performance (1)

Mobile telecommunications	Churn rate
service subscriptions

(Million subs)

Topped 80 million

78.45 80.33

Up 2%	0.57%	0.54%
0.47%
	Handset churn rate:
		0.44%

FY18	FY19	FY18	FY19
◆Handset churn rate indicates the combined churn rate for smartphones and feature phones.		6

Telecommunications Business

Operational Performance (2)

Total smartphone/	"docomo Hikari"
tablet users	optical‐fiber broadband subs
(Million)	(Million subs)

40.53	42.04	6.49

		Up 4％	5.76
			Up 13％

FY18

FY19

FY18

FY19

7

New Rate Plans

No. of applications: Topped 17 million

Mar. 31

16.51 mil

◆New rate plans represent "Gigaho," "5G Gigaho," "Gigalight," "5G Gigalight," "Keitai Plan," "Kids Keitai Plan," "Data Plus" and "5G Data Plus."	8
◆No. of new rate plan applications topped 17 million on Apr. 17, 2020.

ARPU

Mobile ARPU		docomo Hikari ARPU		Impact of discounts

(Yen)

4,770	4,770	4,740	4,710	4,760
510	530	550	570	580

5,240

5,250

5,140

4,970

4,890

(980)	(1,010)	(950)	(830)	（710）
FY18/4Q	FY19/1Q	FY19/2Q	FY19/3Q	FY19/4Q

◆For an explanation of ARPU, please see the Appendix.	9
◆Mobile ARPU and docomo Hikari ARPU exclude the impact of discounts.
◆The impact of discounts include those from "Monthly Support," "docomo with" and "docomo Hikari set discount."

Effective Network Speed

Delivered Japan's fastest speed for both downloads and uploads

for two straight years

(Mbps)	Download		Upload
600		100

300				50

229

33

【Legend】

136

Maximum value

123

19

17

Upper quartile

Median value

0

0

Lower quartile

Minimum value

ドコモ

au

ソフトバンク

DOCOMOドコモ

au

ソフトバンク

DOCOMO

SoftBank

SoftBank

• Measurements were performed in accordance with the "Effective Speed Measurement Method of Internet Connection Services Provided by Mobile Telecommunications Carriers" set forth by the Ministry of Internal Affairs and Communications. Data of other carriers were derived from their respective corporate web sites (as of Mar. 31, 2020). The values in the graphs represent the aggregated measurement results for Android and iOS devices.
• For details concerning the measurement method, including the dates and locations of measurement, please see the materials published by each carrier.10
• The expression "Japan's fastest" is based on the comparison of median values.

Cost Efficiency Improvement

(Billions of yen)

FY19 FY19 (target)Focus areas

			◆Marketing
	1‐3Q		Sales promotion measures,
		after‐sales support, etc.
	cumulative
		◆Network
	‐74.0
			Equipment integration,
	▲740		outsourcing cost, etc.
	4Q actual		◆Other
	‐56.0		R&D, information systems, etc.

‐130.0 ‐130.0

◆The amount of cost efficiency improvement above indicates the cost reduction compared to the previous fiscal year.	11

Smart Life Business & Other Businesses:

Operating Profit

(Billions of yen)

Principal services

147.3	148.1	160.0	Smart life business
	Content/Lifestyle
Up 1％
			Finance/Payment
			Other businesses
			Support services for
			customers' peace of mind
			Enterprise solutions
FY18	FY19	FY19 (target)

12

Finance/Payment Services

Finance/Payment Transactions handled

"d CARD" members

(Billions of yen) Topped ¥5 trillion

5,320.0

Up 36％

3,910.0

Up 32％	d CARD
	transactions
3,140.0	4,150.0

(Million members)

11.41

Up 14％

Up 30％

12.97

d CARD GOLD

FY18FY19

5.286.85

FY18FY19

• The amount of transactions handled represent the cumulative amount for FY2019, which includes the transactions handled with "d CARD", "iD," "d Payment" and proxy bill collection service, etc.

◆	The following changes have been made in association with the integration of "d CARD mini" into "d Payment" service on Nov. 19, 2019: (i) Transactions handled with "d CARD mini" were excluded from the amount of	13

transactions handled with "d CARD" and recorded as "d Payment" transactions; and (ii) "d CARD mini" members were excluded from "d CARD" members.

"d Payment"

Transactions processed	"d Payment" users	Locations where payment/
with "d Payment"		point service can be used
(Billions of yen)	(Millions)	(Million locations)

	399.0
124.0	ｄカードGOLD
3.2‐fold	685

FY18FY19

Topped 25 million

	25.26
12.40	2.0‐fold
FY18	FY19

1.71

1.05

Up 63％

FY18FY19

• The amount of transactions processed with "d Payment" represents the cumulative amount of payments made in FY2019 with "d Payment" (code and online payment) and "d Payment (iD)".
• The number of "d Payment" users represents the sum of total number of "d Payment" app downloads and "d Payment (iD)" members.

◆Locations where payment/point service can be used represent the combined no. of locations where "d POINT," "iD" and "d Payment" (code and online payment) services can be used.	14
The FY2019 data on the no. of locations where "iD" service can be used is based on the actual data as of Feb. 29, 2020.

"d POINT"

"d POINTs" used

"d POINT" partners

(Billion points)

199.8

162.7

Up 23％

	58％
	Points used at
76.8	partners'
stores, etc.

121.1

(Brands)

418

752

1.8‐fold

FY18FY19

FY18FY19

◆"d POINT" partners represent the total no. of brands/sites where users can earn or use "d POINTs."	15

Expansion of

partners

No. of

partners increased approx. 1.5‐fold

1,250

843

FY18

FY19

◆No. of "+d" partners: The no. of partners that have jointly created new value by integrating DOCOMO's business assets with their own assets.

16

Medium‐Term Strategy "Declaration beyond": Actions Taken (1)

Value & excitement to customers

Declaration 1

Market

leader

Declaration 2

Style

innovation

Declaration 3

Peace of mind and comfort support

Launched5G commercial service

Started operations in 150 locations (with 500 base stations) across Japan. （Service commenced on Mar. 25, 2020)

Concluded"Top Partner"agreement with T. LEAGUE

Aim to enhance official video quality and maximize viewing experience by employing state‐of‐the‐art technologies that leverage 5G. Promote digital marketing through federation of T.LEAGUE member ID and "d Account". （Announced Mar. 18, 2020)

Reinforced disaster preparedness of docomo Shops

Rolled out photovoltaic power generation systems in 245 stores (as of Mar. 31, 2020), with a plan to further increase installations to approx. 500 stores within FY2020. Deployed anti‐inundation sandbags at all docomo Shops in Japan.

17

Medium‐Term Strategy "Declaration beyond": Actions Taken (2)

Value co‐creation with partners

Declaration 4

Industry creation

Declaration 5

Solution

co‐creation

Declaration 6

Partner business

expansion

Started providing"docomo Open Innovation Cloud (dOIC)"

Cloud service that offers the benefits of MEC (Multi‐access Edge Computing) such as low latency and high security, etc. （Commenced on Mar. 25, 2020)

Joint creation ofa wide variety of 5G‐enabled solutions with partners

Started receiving applications for 22 co‐creation solutions (Mar. 25, 2020)

Started collaborationwith Cisco for a cloud‐based telephone system

Help realize diverse workstyles through coordination of "Cisco Webex Calling" and DOCOMO's cloud‐based telephone solution （Launched Mar. 2, 2020)

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Principal Actions Undertaken in FY2019

Steadily executed various initiatives after unveiling "Declaration beyond"

Declaration 1

Market

leader

Declaration 2

Style

innovation

Declaration 3

Peace of mind and comfort support

Declaration 4

Industry creation

Declaration 5

Solution

co‐creation

Declaration 6

Partner business

expansion

1Q

New rate plans "Gigaho" "Gigalight"

• Message functional enhancement

FACE LOG

Touch‐de‐Kaiwa

docomo IoT

Production Line Analysis

d Point

Fan Connect SP

2Q

d Payment Wallet

d Meal Kit

Anshin Pack Mobile

Anshin Pack Home

5G service launch in Guam

Oshaberi Annaiban

Lending platform

3Q

Amazon Prime comes with DOCOMO's plan

Disney DELUXE Set Wari

Joint business for embot

Free‐of‐charge data transfer, initial handset setting at docomo Shops

Real‐time population survey (domestic)

OMNI edge

Capital and business alliance with Showcase Gig

4Q

5G service launch

Gigaho 60GB Zouryou Campaign

Top Partner agreement with

T.LEAGUE

7 5G‐enabled services

d Wi‐Fi

Stepped up disaster preparedness measures at docomo Shops

22 5G‐enabled solutions

dOIC

Nikko FROGGY+ docomo

19

ESG Evaluations

Nikkei Smart Work Management Survey

Awarded the highest 5‐star rating

for the third straight year

Won Nikkei Smart Work Grand Prize 2020

"Technology Utilization Award"

Awarded to leading companies tackling productivity revolution

through workstyle reform

2020 Health & Productivity Management		PRIDE Index 2019

Certified as a

Awarded "Gold" rating for

"White 500" company for

the fourth straight year

the fourth straight year

◆Nikkei Smart Work Management Survey: Ranking on companies based on four elements of human resource utilization, innovation capability, market development capability and management foundation.

◆2020 Certified Health & Productivity Management Outstanding Organizations Recognition Program: A Ministry of Economy, Trade and Industry program that recognizes enterprises taking strategic actions for the

promotion of employees' health from a business management perspective.	20
◆PRIDE Index: An index established by work with Price, an independent organization that assesses the workplace initiatives for LGBT and other sexual minorities.

Share Repurchase & Cancellation

Completed repurchase of shares worth ¥300 billion

and cancelled all shares repurchased.

	Result of execution	Authorization	Execution rate
Aggregate price of	¥300 billion	¥300 billion	100%
shares repurchased:
Aggregate no. of	106.6 million shares	128.3 million shares	83%
shares repurchased:
No. of shares	106.6 million shares	‐
cancelled:

(Proportion to total issued shares before cancellation: 3.20%)

• The aggregate no. of shares repurchased described above represents the cumulative number of shares repurchased pursuant to the resolution approved at the Board of Directors meeting held on

Apr. 26, 2019. (Repurchase period: May 7, 2019 - March 9, 2020)	(Counted on trade basis).	21
◆Cancellation of treasury shares was executed on Apr. 2, 2020.

Medium‐Term Operational Indicators: Progress

	FY2018	FY2019	Target (FY2021)
"d POINT CLUB" members	70.15 million	75.09 million	78.00 million
Enterprise partners	2,487	3,400	5,000
Locations where payment/point	1.05 million	1.71 million	2 million
service can be used
Transactions handled by	¥3.9 trillion	¥5.3 trillion	¥6 trillion
Finance/Payment business
Enterprise solution revenues	¥73 billion	¥89 billion	¥120 billion

	FY2018	FY2019	Target (FY2019)
Wait time + attendance time	Average	65 minutes	Approx. half of FY2018 level
over 2 hours

FY2018

FY2019

Target (FY2019‐23 cumulative)

Investment for 5G infrastructure	‐	¥52.0 billion	¥1 trillion
buildout, etc.
			22
◆Locations where payment/point service can be used represent the combined no. of locations where "d POINT," "iD" and "d Payment" (code and online payment) services can be used.
The FY2019 data on the no. of locations where "iD" service can be used is based on the actual data as of Feb. 29, 2020.

FY2019 Summary

Recorded ¥854.7 billion in operating profit achieving full‐year guidance.

Launched 5G commercial service to create new value and contribute to solving social issues.

New rate plans garnered 16.51 million applications. Further reinforced customer base.

No. of "d POINT CLUB" members topped 75 million. No. of participating stores and point usage also continued to expand at a favorable pace.

Delivered Japan's fastest effective network speed both for downloads and uploads for two consecutive years.

Total amount of finance/payment transactions reached ¥5.32 trillion. "d Payment" transactions also recorded a significant increase.

Achieved cost efficiency improvement of ¥130 billion delivering on full‐year target.

Executed share repurchase worth ¥ 300 billion. Driving business considering capital efficiency.

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１．FY2019 Results Highlights

２．FY2020 Principal Actions

24

FY2020 Principal Actions (1)

The Start Year for Growth in a New Era

Further reinforcement	Full‐scale execution of
a business foundation	New value creation
of customer base	centered on our	for the 5G era
			membership base

Structural reform underpinning the new era

25

FY2020 Principal Actions (2)

Further reinforcement

of customer base

Full‐scale execution of a business foundation centered on our membership base

New value creation for the 5G era

Structural reform

underpinning the new era

• Further refine customers' experience at shopfront and online, and enhance the attractiveness of "d POINT" program.
• Compelling rate plans and early roll out of 5G coverage.
• Build strong customer touchpoints for members and advance digital marketing.
• Reinforce growth areas, e.g., finance/payment, marketing solutions, etc.
• Full‐scale deployment of new solutions through co‐creation with partners.
• Deliver new sensory services and experiences primarily through video.
• Improve efficiency of operational processes through DX and reallocate resources to growth areas.
• Streamline business operations by stepping up efforts for 3G subscriber migration.

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5G Service (1)

Create new value and promote solution of social issues

Network

Device

Service

Solution

Launched March 25, 2020

Started in 150 locations across Japan with 500 base stations

Total 7 models

(6 smartphones, 1 data device)

Started offering 7 services

that take advantage of 5G's unique properties

Started offering "22 solutions" and "docomo Open Innovation Cloud"

Planned actions for FY20

Promotion of O‐RAN

Deployment of millimeter wave

Increase variety of compatible devices

(Rollout of standard models)

Pursuit of new experience and sensory services,

e.g., music, gaming, video, sports, etc.

Value creation suited to remote‐work society

(medical/education/manufacturing, etc.)

◆O‐RAN Alliance (Open Radio Access Network Alliance): An international standardization organization established with the goal of making 5G and other next‐generation radio access networks	27
more scalable, open and intelligent.

5G Service (2)

Subscriber growth (illustrative)	5G Area Construction (illustrative)
Aim to acquire 20 mil subs	Aggressive buildout of 5G coverage
before end of FY2023

(Subscriptions)			20 mil					20,000
								base
								stations
							10,000
						500cities	base
						stations
					47	including all
				150	government‐
				prefectures	designated
				locations
				across Japan		cities
0.014 mil				500
			base stations
FY19	FY20	・・・	FY23	Mar. 2020	Jun. 2020	Mar. 2021	Jun. 2021	Mar. 2022

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Response to COVID‐19

Extension of payment due for mobile phone charges, etc.

Re‐grant of expired "d POINTs"

Support measures for users under

25 years old

Free online health consultation

through "d Healthcare" app

Telework realization support

Provision of population dynamics

analysis using

"Mobile Spatial Statistics®"

Deferred payment deadline of phone charges originally due on and after Feb. 29 to May 31 for customers who filed an application for extension.

Re‐grant "d POINTs" expired in March and April 2020.

Free‐of‐charge provision of "Additional 1GB Option" and "Speed Mode" for up to 50GB to users under 25 years old during the period between April and June 2020.

(Extension of program period to June 30 announced today)

Limited‐time provision to "d Account" users of a free 24‐hour chat service with medical doctors for consultation of COVID19‐ related and other anxieties or health concerns.

Provision of communications means for teleworking/work‐ from‐home as well as other services that help smooth information sharing between distant locations.

Ongoing analysis of demographic changes in principal areas
before and after the declaration of state of emergency using
"Mobile Spatial Statistics" and provision of analysis results to
national and local governments, media, etc.	29

Principal Impacts from COVID‐19

	Element	Impact	Causes
		Voice	Up	Increase in voice calls resulting from reduced opportunities for
		face‐to‐face communication
Mobile			Slightly	Internet usage is considered to have increased due to a rise in the
	Data	number of people staying at home, but the impact on mobile data
communication	up
	communication has been limited
traffic
	International	Significantly	Decrease in the no. of outbound and inbound travelers
		roaming	down
				Decrease in the no. of shop visitors due to shortened store hours
Device and service sales	Down	Delay in supply of handsets and other products
				Deceleration in pace of subscriber migration to 4G and 5G
			Slightly up	Increased usage due to heightened demand from users staying at
		Content/lifestyle	home
		Slightly	Lower user acquisition resulting from reduced sales at shops
Smart life			down
			Decline of new user acquisition
		Finance/payment	Down	Decrease in finance/payment transactions processed resulting
				from voluntary restraint from going out and dampened
				consumption
Capital expenditures	Down	Slower progress of capital investments due to delay in supply of
network equipment, construction schedule

◆The table above summarizes the key elements that have already affected our business and are likely to continue in to the future together with their respective degrees of impact and causes. The actual business	30
impact from COVID‐19, however, may not be limited to the descriptions above. The degrees of impact are not necessarily indicative of any future changes in revenues and/or profit.

FY2020 Guidance

■ Guidance for FY2020 will not be disclosed at this juncture given the difficulty of making a reasonable estimate on our financial results due to the COVID‐19 outbreak.

■ FY2020 guidance will be provided promptly once it becomes possible to perform a reasonable estimate following a careful determination of its future financial impact.

■ Annual cash dividends per share for FY2020 is planned to be kept unchanged from the previous fiscal year at ¥120.

31

Always chosen

to sustain connections

as your robust ICT service partner

32

The new of today, the norm of tomorrow

33

Appendix

34

Principal Services, etc., Included in

Each Reportable Segment

Telecommunications business

Mobile communications services

• 5G services・LTE (Xi) services ・FOMA services (3G) ・International services ・Sales of handset/equipment for each service etc.

Optical fiber broadband service and other telecommunications services

・Optical‐fiber broadband services

・Satellite communications services

etc.

Smart life business

Content/ Lifestyle services

• "dTV" "d hits" "d shopping" "d fashion" "d travel" "d magazine" "d photo" "d healthcare"

・DAZN for docomoNTT Plala Inc. ・Oak Lawn Marketing, Inc. ・Tower Records Japan Inc. etc.

Finance/Payment services

・d CARD	・d CARD GOLD	・iD	・d Payment	・Proxy bill collection etc.

Other businesses

Support services for customers peace of mind

・"Mobile Device Protection Service" ・"Anshin Remote Support" etc.

Enterprise solutions

・Enterprise IoT solutions

・System development/sales/maintenance services

etc.

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Definition and Calculation Methods

of ARPU

i. Definition of ARPU

ARPU (Average monthly Revenue Per Unit):

Average monthly revenue per unit, or ARPU, is used to measure average monthly operating revenues attributable to designated services on a per user basis. ARPU is calculated by dividing telecommunications services revenues (excluding certain revenues) by the number of active users of our wireless services in the relevant periods, as shown below "ARPU Calculation Method." We believe that our ARPU figures provide useful information to analyze the average usage per user and the impacts of changes in our billing arrangements.

ii. ARPU Calculation Methods

Aggregate ARPU = Mobile ARPU + "docomo Hikari" ARPU

‐ Mobile ARPU

: Mobile ARPU Related Revenues (basic monthly charges, voice charges, communication charges) / No. of active users

1. • "docomo Hikari" ARPU : "docomo Hikari"‐related revenues (basic monthly charges, voice communication charges) / No. of active users *ARPU excluding the impact of discounts are calculated without including the amounts of discounts applied in the relevant revenues.
2. Active Users Calculation Method

Sum of No. of active users for each month ((No. of users at the end of previous month + No. of users at the end of current month) / 2) during the relevant period

iv.

1. The number of "users" used to calculate ARPU is the total number of subscriptions, excluding the subscriptions listed below:
2. 1. Subscriptions of communication modules services, "Phone Number Storage," "Mail Address Storage," "docomo Business Transceiver" and wholesale telecommunications services and interconnecting telecommunications facilities that are provided to Mobile Virtual Network Operators (MVNOs); and
   2. Data Plan subscriptions in the case where the customer contracting for such subscription in his/her name also has a subscription for "5G," "Xi" or "FOMA" services in his/her name.
3. Revenues from communication module services, "Phone Number Storage," "Mail Address Storage," "docomo Business Transceiver" and wholesale telecommunications services and interconnecting telecommunications facilities that are provided to Mobile Virtual Network Operators (MVNOs) , and impact on revenues from "d POINT" program, etc.,are not included in the ARPU calculation.

36

Special Note Regarding Forward‐Looking Statements

All forward‐looking statements that are not historical facts are based on management's current plans, expectations, assumptions and estimates based on the information available as of the filing date of this document. Some of the projected numbers in this report were derived using certain assumptions that were indispensable for making such projections in addition to historical facts. These forward‐looking statements are subject to various known and unknown risks, uncertainties and other factors that could cause our actual results to differ materially from those contained in or suggested by any forward‐looking statement. With regard to various known and unknown risks, uncertainties and other factors, please see our latest Annual Securities Report and Quarterly Securities Reports.

Names of companies, products, etc., contained in this presentation are the trademarks or registered trademarks of their respective organizations.

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