NTT, Inc. ($9432)

Thank you very much for joining us in spite of your busy schedule. We would now like to start the briefing of financial results for the fiscal year ended March 2026 and financial forecast for the fiscal year ending March 2027 for NTT Holdings. I am Akaishi from IR office, serving as your facilitator today. Let me introduce today's speakers. Akira Shimada, Representative Director, President and CEO; Takashi Hiroi, Representative Director, Senior Executive Vice President and CFO; Toshihiko Nakamura, Senior Vice President and Head of Finance and Accounting; and Akitoshi Hattori, Senior Vice President, Head of Corporate Strategy Planning. These are the 4 speakers. Today's event is also broadcast live. The video of this event will be available on demand at a later date. Please refer to the presentation materials on our IR website. There is also a disclosure on partial revision of our medium-term financial targets. First, President Shimada will talk about the key points from the presentation material. The performance of the fiscal year and profit growth in the medium term. They will take your questions over to you, President.

This is President and CEO, Shimada speaking. Thank you very much for gathering today. So without further ado from my side, I would like to explain the financial results for the fiscal year ending March 31, 2026, and the financial forecast for the fiscal year ending March 31, 2027. And after that, I will explain the initiatives towards medium-term profit growth and the revision of financial targets. I would like to make it in a digest or a shorter version today. Page 5, please. Operating revenues, operating profit and profit year-on-year. Operating revenues reached new record highs. Operating revenue, driven by the expansion of enterprise business across group companies, growth in the Smart Life business and increased revenue resulting from transferring data centers into REIT rose by JPY 704.4 billion year-on-year to JPY 14,409.1 billion. As for the operating profit, although costs were incurred due to measures implemented by DOCOMO to strengthen its base and improved mobile network quality, increased profits from the expansion of enterprise business at group companies and the Smart Light business, combined with transferring data centers in 2 REITs. EBITDA was JPY 3,423.3 billion, up by JPY 184 billion year-on-year. Operating profit was JPY 1,706.2 billion, up by JPY 56.7 billion year-on-year. Profit was JPY 1,037 billion, up by JPY 37 billion year-on-year due to the increase in operating profit and others. Please go to Slide 8. As for the FY 2026 forecast, operating revenues, EBITDA, operating profit will increase year-on-year. Profit is planned to decrease. Operating revenue is planned to increase in all of the business segments and will aim for a new record high, led by the integrated ICT business and Global Solutions business. As for EBITDA and operating profit, though there is a continuous negative impact for the decrease in network revenues, we are planning an increase in operating profit year-on-year due to the expansion of the enterprise business and Smart Life business led by finance business, profit is planned decline year-on-year due to the increase in interest paid and others. Please go to Page 10. I will explain about the shareholder returns. At today's Board of Directors meeting, it was resolved that the year-end dividend per share for fiscal year 2025 is JPY 2.65. Furthermore, it was also resolved that the dividend forecast for fiscal year 2026, annual dividends per share is forecasted to be JPY 5.4, an increase of JPY 0.1 from FY 2025. This will increase for the 16th consecutive year since 2011. In addition, in order to further improve capital efficiency and enhance shareholders return, we will be conducting share buybacks up to an aggregate amount of JPY 200 billion. Next, I will explain about our initiatives towards medium-term profit growth. Please go to Slide 14. First, I will explain about the revision of medium-term financial targets of our medium-term profit growth. Regarding our status towards our current medium-term financial target of JPY 4 trillion in EBITDA for fiscal year 2027. Our growth areas are really increasing process through proactive investments and the realization of the returns. On the other hand, in our existing areas, profit declined due to a response to changes the business environment, such as strengthening our customer base and increasing traffic. As a result, consolidated EBITDA fell short of expectations, making it difficult to achieve our fiscal year 2027 target. In light of these changes in the business environment, we are renaming our growth area as value-added areas, and we'll focus on AI, which is expected to drive further business expansion with the aim of significantly increasing our profits. Furthermore, as an immediate priority for our existing area, we will retain our cash generation capabilities by stabilizing profits, we're renaming it the connectivity area and transitioning it into a IOWN, an AI-native infrastructure. Through just combined with our value area, we aim to achieve an EBITDA of JPY 4 trillion in fiscal year 2030. Furthermore, in areas, we're promising for the growth to achieve sustainable growth at, we will continue to make strategic upfront investments Next, we will promote these 7 initiatives under 3 categories: value-added areas, connectivity areas and strategic upfront investment to support continued growth aimed at achieving EBITDA of JPY 4 trillion in fiscal year 2030. Please refer to the following slides for further details. Please jump to Page 26. This is regarding the medium-term financial targets. Regarding EBITDA, we would like to target 2030 JPY 4 trillion, as explained. Also, our ROIC, excluding financial business target, is set to enhance capital efficiency. There are no changes to sustainability-related nonfinancial indicators. In terms of shareholder return, we'll maintain our policy with the basic policy to implement a steady increase in dividends, coupled with flexibly conducting share buybacks to improve capital efficiency. And due to increased financing needs, interest-bearing debt has risen in recent years. However, our policy is to ensure a certain level of financial soundness in medium term, we will expand cash generation capacity so that we reduce the interest-bearing liabilities to EBITDA, excluding the financial business to approximately 3.5x by 2030. Please go to Page 29. This is the EBITDA per business. And this concludes my presentation. Thank you very much.

Mr. Shimada, thank you very much. From now, we would like to open the floor for questions. [Operator Instructions] So we would like to take your questions. First of all, we would like to take the questions from this room. So right in front of me, please go ahead.

My name is Masuno from Nomura Securities. First of all, the new EBITDA medium-term target FY 2030, you said it at JPY 4 trillion. But this fiscal year's plan is already JPY 3,420 billion. So in 4 years, it's 16% to 17% growth. So annually converted, it's about -- around 4% growth per annum. Four years from now, I thought it could be a bit higher target. So of the overall picture, what are your thoughts on it? That's my first question. .

Shimada, will answer that question.

Thank you very much. Well, we did create it in a sort of a conservative way. That's the honest saying because we're not able to achieve this fiscal year's plan. So by 2030, we wanted to definitely achieve this target. And if possible, if we can achieve it in advance to that date, it will be great. If you total the numbers up, the disclosed number total is about exactly JPY 4 trillion. However, there are other segments. So when we think about those other areas, if possible, we're hoping that we can achieve that target before the planned date, we would like to put our efforts the management of the business. The integrated ICT global real estate, energy and others. That area, those are negative numbers within the breakdown of JPY 4 trillion. So I'm sure there are some advanced items that are included in those numbers, and you came up to this number. So not that each business segment, but maybe you have a buffer as stated. Well, honestly, you can think that we are placing a buffer there because with the current business base that we have JPY 120 billion -- about JPY 120 billion is the aggregated number. And we believe that, that is going to grow. So there is additional room that can grow and will surpass our stated figure, FY 27 JPY 4 trillion was the original target. So to make it easier to understand, we'll sit at a JPY 4 trillion. So if possible, we would like to achieve that number earlier than 2030. And FY 2030, we would like to have the pace that we can exceed that target set it for that year. Well, by the way, operating profit wise, if you convert it into operating profit, how much will it be? Do we have that?

This is Tahira speaking. EBITDA of JPY 4 trillion to achieve that number, operating profit size will have to be exceeding JPY 2 trillion. Therefore, that is going to be the level of the operating profit in terms of the size of it.

And then -- okay, I will ask another question and finish. But if I look at each business segment, I believe that they probably will be able to reach the numbers. And later, I'll ask this question for NTT DATA. But NTT DATA's overseas business data center business, honestly speaking, I think that is a bit aggressive, but I'm just wondering how you're going to achieve that number.

The NTT Data's overseas business part, we're not thinking of achieving those numbers purely with organic growth, including M&As and also including investment required for that is the base of our thinking. . So in that way, there are areas that's not organic. NTT Vista, we will utilize that to create AI business. And through M&A, we are going to expand our capabilities. So this JPY 200 billion part includes such elements. And with that, we would like to achieve the target. So the data centers, as you have explained before, the 3 gigawatt capacity is the base of these numbers? Is that correct? 3 gigawatt size, yes, is the base. But in addition to that, selling of the data centers. If you look at FY '25, there are data centers that were transferred into REIT. In FY '26, we are planning to have other data centers included in the REIT as well. So in that sense, in an advanced pace or in front-loaded pace, we will increase the profit. So for these numbers, the sales of the data centers is also included as well.

We would now like to take the next question. The gentleman hand up now.

I'm Kikuchi from SMBC Nikko. I have 2 questions. First is regarding the medium-term plan target. I also have a question on this. My impression was DOCOMO's consumer platform seems a bit weak. And my second question, I'm wondering how this can be achieved. East and West JPY 80 billion in profit increase. How do you plan to achieve this profit growth for NTT East and West? And for financial business, this may be to DOCOMO. But since Hiroi-san, I like to ask about the JPY 120 billion profit increase for financial business. That's a big jump up. Given the current portfolio, I think this could be quite difficult. So what is the -- what is possible with the current portfolio? And what will be the add-on from the new portfolio? And what is your vision to grow NTT and DOCOMO's financial business for the future? I'd like to ask your vision Mr. Hiroi. So those are my 2 questions. First question includes DOCOMO and East West.

Well, regarding NTT DOCOMO consumer business. given that the population in Japan will be declining, we have said that we would like to maintain the current level. But it's going to be difficult to maintain the number of handsets. So we need IoT and AI on service and robotics, mobile usage in these areas need to increase to maintain the handset number. But what is more important is the large data all plans are now accounting for 30% and above. And so we need to further expand the subscription to these large data plans. And for the human-to-human mobile, we would like to cover that as much as possible with the large data models so that we can maintain the similar level EBITDA for the consumer business. Of course, for DOCOMO, compared to competitors, we haven't increased our price. We just introduced a new plan, MAX. So given that the labor cost is going but other cost is inflating, as Maeda-san presented today, we have 20-or-so old plants that are still remaining, and we need to streamline the pricing plan as well. So there is a big challenge that DOCOMO needs to tackle in terms of improving efficiency. And at some time in the future, we do need to think about increasing prices. So higher level is probably possible. Now in terms of NTT East and West, corporate business, enterprise business is taking off quite in a robust manner. And as Shibutani-san from NDT mentioned network between data center that demand is growing very significantly. And this is not just connecting NTT data centers, but data centers that are being operated by other companies. So NTT share in Japan is about 15%, but remaining 85% other company's data centers also need to be connected. And this network business is emerging as a new business for NTT East and West. Therefore, it is more than enough to cover for the reduction in the legacy business, we believe. And also the there are profit being generated from its subsidiaries. And so there is room for further revenue increase from that. And in terms of the financial business and future growth at -- this time, I think it is fair to ask the question to DOCOMO given the current role that I have. But as the CFO of the NTT Holdings, which is my current role at this time, is the current portfolio enough? That was your question regarding the finance business. DOCOMO has the card, the payment and other payment type solutions as well as Sumishin SBI Net Bank and Monex and Goodix and the credit business we have a wide portfolio within NTT, and we would like to grow that portfolio. And it is possible, we believe, to realize the EBITDA target by growing these portfolio that we have. Of course, we need to grow from all of these elements, but I believe that we have the pieces that is necessary to reach the EBITDA target. In terms of deduction and the contents of the business, we would like to set up an opportunity to provide more detailed explanation at a later date. And please ask the strategy question to DOCOMO.

My second question, going into a bit of details is regarding the impairment of anode energy. In the midterm target, energy wasn't playing a large role, I believe. So how do you see the energy business going forward? And what is the reason for the impairment of Anode Energy? So I'm sure that you're looking into the changing environment, changing various systems and the profit structure. So I'd like to ask your strategy.

GPI construction cost is going up. So about JPY 50 billion of impairment was recorded. Regarding the development of GPI, we would like to continue to secure renewable energy which we believe is necessary. Therefore, we will continue to invest in accordance with our original plan. Therefore, we have -- we do have the plan to invest in However, last year and the year before, once the construction is completed, we off-balance the asset. Therefore, after the construction is complete, we would like to off-balance the assets to improve the capital efficiency. What we want is the energy from the renewable energy. It is a must to maintain the assets on our books. Well, we should -- I shouldn't say that there is no need, but what is more important is to secure renewable energy for our group. And so we would like to consider different ways, including of balancing the asset.

I'd like to take the next question, the person in the middle row.

Daiwa Securities. My name is Tokunaga. I have 2 questions. The question is regarding the medium-term management strategy. If I look at Page 15, consolidated EBITDA JPY 3.4 trillion to JPY 4 trillion, it's going to increase. According to this graph means it seems that it's going to continuously increase, but there is a possibility that it may not be that like. Maybe that is why it's not written that every year, there will be growth in profit. But on the other hand, the DOCOMO is turning around and NTT Data CapEx since to be using third-party capital, it seems that there's not that much of an increase CapEx either. So if it goes as planned, I have a feeling that you will be able to achieve a continuous growth in profit from JPY 3.4 trillion to JPY 4 trillion. So 8 years outlook, the advanced investment will be in here. And if you can share with us the ups and downs within this period.

What -- as you have commented within your question, when we think about the status of each business segment, with the increasing profit trend, we can bring it to JPY 4 trillion. But looking at the each fiscal year's breakdown, the image of it as explained to the question regarding data, entity data, through M&A, we're going to expand our scale. And so there is -- partially in organic growth. So we have a counterparty, so we cannot say in which fiscal year. So clearly stating the ups and downs of each fiscal year may be difficult to do is what I think.

Okay. Understood. The outlook of the CapEx is that going to be flat level of this fiscal year if you're going to do an M&A? Is it going to increase again? .

Well, regarding the CapEx -- from this fiscal year, the image that it's going to gradually decline. The level of CapEx, of course, we cannot rapidly decrease it. However, from this fiscal year's level, it will be slightly lower. We have no intention of increasing it.

My second question is regarding the financial targets for the medium term. It's regarding ROIC. From the current 5%, you're going to increase to 5.5%.So the operating profit is probably going to increase as your plan. JPY 200 billion every year, you're doing a share buyback and you have about JPY 1 trillion in 5 years, and the operating profit is going to increase. So if you -- the debt is not going to increase if you have JPY 2 trillion of operating profit, maybe that's the breakdown of this ROIC increasing. So within this target of ROIC, what is your profit image as a company? .

Sorry, what do you mean? What is -- what do you mean by profit target with inside the ROIC?

Well, the equity or the balance sheet balance or the operating profit of balance on asking something similar, but I would like to know the financial background of this ROIC number.

Well, as I have explained, EBITDA and operating profit, they will both grow. But on the other hand, we have quite an accumulation of a debt. And due to that, we have a certain amount of capital cost and also in the same way as right now, we will continue the increase in dividend, and we're going to conduct share buyback to a certain extent. So the image of the equity cost does exist as well. Therefore, when we think about all these factors, in a way, when we will have some room for the free cash flow is when we get closer to JPY 4 trillion. When we have that size on the EBITDA, we will have some more room in free cash flow. So the images that reaching that law, it will be ROIC of 5.5%. As a CFO, I want to set it at a higher target. But given the circumstances, currently, it is this target.

Third from the front row, please.

This is from Morgan Stanley Tsusaka. I have 1 question. From this fiscal year, looking at the growth during the medium-term plan, enterprise and global and finance these business domain seem to be driving the growth, the marginal growth coming from these business domains, seems separate from the telecom field. This year's business plan, of course, the DOCOMO Smart Life is going up, but it's not necessarily just organic because some of it is through the past acquisition. And the bulk of the growth is coming from NTT DATA. So in terms of the communication with the investors or with the capital market going forward, NTT DATA and IT service perhaps that should be placed at the forefront because it might be easier for investors to understand what is growing within NTT grip. For example, now, of course, as the holding company, you have to talk about the entire company, you have to talk about the capital allocation for the medium-term plan. But perhaps we don't need to talk about mobile here of NTT DOCOMO because here, we are not talking about NTT East and West either. Now there are so many business models -- and there are -- and investors have to search for the growth area. But if the communication is shifted to tell the investors that this is the area that we're going to grow. More clearly, I think it might be easier for investors to understand. This is my comment.

Thank you very much. The plan is, as you say, focused on those growth areas, but we discussed the data center business, and we have started to talk about AIOWN. And the data center business itself is going to be combined with AI networks are not going to be independent. It is all going to be connected to AI and the operation will need to be done through AI. And so that business opportunity I leave exists. So this is going to take some more time. But towards 2030, to be operating the infrastructure almost autonomously through AI, perhaps some different landscape will open up to us beyond 2030. So in terms of the short-term growth, yes, it is going to be almost totally focused on B2B and Smart Life that is going to be the center of the growth for the near term. But Infrastructure business, perhaps in the future, we can have some bright hopes. And that is why we have introduced new concepts at this time. So once we have made some progress, we would like to communicate to you on that end as well. And if I may ask additionally about the medium-term plan target, NTT DATA's overseas business. You said that some of this is from growth, but my mission is the business outside of data center, structural changes have been made almost every year. And well, it's hard to say. But it doesn't look like it's going that well, to be honest with you.

Regarding the overseas business, do you have anything that you have within your sights that you are confident that will drive profit growth? Or is it going to be through inorganic ways that you'll be able to make profit.

The current business model is going to be heavily impacted with the growth of AI. Therefore, we need to shift the business this year and next year is going to be a major transformation period. So the BPO type digital type investment, the legacy type business investment is not going to make sense because the world is changing. So how do we shift the structure of our business? How do we change with the times? It's going to be dependent on how we invest in AI. We need the AI consulting capability to customers and how we can secure that resources, including from external resources. So the system integration and BPO, those legacy service, we need to make different selections from that. Otherwise, it's not going to be successful. But please ask more detailed questions to NTT DATA later. Thank you

Then the third row from my side on the right-hand side.

Call from Marathon Asset. Listening to your explanation, and I was looking at the numbers and what I thought is that if my memory was wrong, I would like you to correct me, but I remember that it's very similar to the numbers that you have disclosed 3 years ago. And at that time, you said by FY 2027, the EBITDA is JPY 4 trillion, and you'll spend JPY 8 trillion to the growth area, and EBITDA will be growing by 20% was the plan. And that was the one set is my impression. And at the same time, the message at that time is very crystal clear. It is investment growth cash generation. So there was this design plan that was very clearly shown. However, maybe there was a bit of a timing difference towards going backwards. And maybe a lot of uncertainties have come up as uncertain factors, and that be an opportunity but also can become a difficulty. So from the position of providing equity it's not just that your business model became conservative, but rather, maybe the capital allocation that is the foundation of your plan maybe has changed at the start of FY 2023, like the collecting the investment or profit growth or capital efficiency, I think there was an assumption or base to come up with that. But what changed from that time? And what I would like to know is that what I feel that your plan is becoming unclear more is that your company's equity the capital itself, what is the design of it? And if that is not clear, well, continuing increase in dividend and share buyback, it's really good or we appreciate it. But is that really possible? Or are you in a situation that really you shouldn't be doing such a thing. So that is unclear. So this may be a discount factor from the equity side. So how should we look at it? Or what difficulties are you having because you don't have visibility of certain things? Or what do you have visibility on?

Well, maybe the major factor or the element is the mobile business. meaning that the mobile business of profitability, what we thought in 2022 has changed now. Of course, we came up with lower pricing is one factor. Looking from the current situation, I don't know at what timing. But it is a fact that the cost is increasing. So how are we going to offset that or absorb that is that the mobile business, how should we manage it moving forward was actually the trigger point of revisiting the medium-term plan because they're profitability, DOCOMO's profitability of the mobile business profitability declined. I think the current plan is created in quite a conservative way. And I think we can actually boost it up a bit more. We still have room for that. However, with the rise of AI, the conventional network composition is probably going to change within the next several years. So the next phase or the -- when we come to the next generation, the composition of the network led by AI, how can we change it to an AI-led infrastructure in an efficient way. We changed the name into the connectivity area. That is because AI, AI alone, robot, robot alone, AI agent alone. That's not the case. All 3 needs to be connected, meaning that the simple network business is not going to suffice. So how -- at what timing are we going to transform into that? And how are we going to provide consultation with AI, that's going to be the business area, but how are we going to provide this service to the customer? That's going to become the key. And that is right from this fiscal year towards next fiscal year. What is our response going to be towards AI? Is that going to become the key question or key point. Okay.

If the profitability of DOCOMO and others and the declining speed, if it was faster than what you have expected. Regarding that part, instead of looking at the capability of growth, but probably improving the efficiency. So from the capital efficiency, allocating the equity to those areas more strategy-wise, is that probably not correct, but it's how you can utilize the leverage. But as you said, in the AI area, if we look at the other investments, it seems that if we don't invest, we will lose. We don't know about how it's going to impact the profitability of the company, but we have to do that. It seems that there are some investments that are made because they're geared or they're threatened to do that. And that is the kind of the fear I have. And in order to win out from that, what kind of capital will be coming in or what kind of allocation of the capital will be done is the visibility I'm looking for. So what kind of impact did the capital allocation -- are you experiencing because of AI? .

Well, right now, the reason why we have a large amount of investment towards AI is creating building an AI data centers for AI's learning process. So that part is a large investment. But this learning process is going to hit its limits at some point. So are we going to invest towards that. Well, in our case, we're going to make investments or we should make investments in data centers for inference. So it's a distributed type and at the edge part, we will make making investments. Maybe it's not a GPU, but maybe CPU that we placed at the edge. We need to -- we are thinking of such of a composition. So like the gigantic 1 giga or 2 giga, that type of a scale, AI data center for the AI to learn to provide that scale, we're not thinking of investing in those. If there is a demand from the customers on an individual basis, we will provide the integration service. However, in a way, well, GPU as a service GPU as a service, we do have that, but that requires advanced investment. So making the investment in advance and create a foundation first, we are not thinking to make such an investment. Sorry. If I summarize it in a more total picture, DOCOMO as consumers profit EBITDA, it's about JPY 600 billion -- from JPY 600 billion to JPY 300 billion. So we do not expect that. And it had a high ROIC business, but it went down rapidly. So we had to provide financing to that. And that is the situation for the last several years. And that is -- well, we are kind of absorbing that through debt. And the area that we're making investments are like data centers, where the investment return comparatively speaking, is not that high. So as our and the finance side, that is quite heavy. So the duration of the return of the investment is all happening later. And that is why we are facing the situation that you have pointed out. However, moving forward, gradually, EBITDA's situation, profit and cash will be improved in towards fiscal year '23. If the free cash flow improves, then as usual, as I have explained before, it will become closer to the EBITA EBITDA multiple financially. -- and for investments and cash allocation, as Mr. Shimada said, led by AI, how are we going to replace the infrastructure, but it's not a large-scale investment. But in the last medium-term plan, we said JPY 8 trillion. But towards the 2030 growth investment is JPY 8 trillion. In total, we're imaging about JPY 12 trillion CapEx, but the size of the infrastructure will be replaced utilizing AI. So the -- it's a cash allocation design looking at the total picture. And within that design, we have right now the same level of dividend and cash -- share buyback is possible is what we have in mind.

Next, we would like to take questions from participants online. Okumura-san from Okasan Securities.

Okumura from Okasan. One question or one confirmation regarding the profit in the midterm plan. So you said about JPY 2 trillion in OP against the EBITDA target. EPS and what is the CAGR image for EPS or the bottom line? The guidance was profit down this year because of the higher interest payment. So in terms of the profit attributable to investors, how does that work out against EBITDA? And how aware of that bottom line are you?

Thank you for the question. This is Hiroi. In terms of profit, bottom line profit. As we have said time and again, toward 2030, profits and EBITDA will grow. And we will be repaying debt, and that is going to lead to improvement in profit toward 2030 about 20% to 30% improvement is what we expect.

And are there any further questions? So the last row in the room, please.

Mizuho Securities. My name is Fujishiro. One question regarding the passing through the cost. What are your thoughts on it? Within the previous briefing session, I believe that in the medium-term plan, you don't have a large amount that's incorporated in the plan in terms of passing through the cost increase. However, moving forward, the cost push inflation, we believe another wave of that may come. within NTT Group, the area that's easy to increase the price or the area that's difficult to do so. Listening to you today, it seems that the mobile business is difficult to increase the pricing. But on the other hand, for example, the fiber optics the MIC, it seems that the talks are towards having an easier increase or passing through the cost. So all those included within NTT Group, comparatively speaking, which areas are easier to increase the price. And the area that you would like to strongly push in terms of increasing the price, if you can share your thoughts, I appreciate it.

Well, the mobile business, it's not -- we don't think that we cannot increase the price. However, as the CEO of Mr. Madea DOCOMO has been saying, there are several legacy plans from the past. So how -- are we going to handle that is something that you need to think together with increasing the price. And I believe that discussions within DOCOMO are going on. It's not that we're not thinking about it. Our competitors have already increased the price. Therefore, which is the best timing. At this point, it's not difficult to share with you. However, we would like to give it a thorough thought. And also for the other areas, for example, the connection fee is basically in the direction of increasing. So not just the connection fee, but if the overall cost surrounding us goes up, I'm sure that there will be a timing that we will have to have the customers share that cost. So we would like to think of various initiatives. Within the medium-term plan this time, how much of passing through the cost increase is incorporated? -- entity, East and West with the connection fee, the areas that is clear that it's going to increase is incorporated, but the other price increase elements are not included.

Any final questions? If not, since we have.

May I make a final comment. This is Hiroi. So I will be stepping down from the CFO post this time. And I'd like to thank the investors and analysts for all your support. It's been about 17 years since I have been involved in this company's financials. And my dialogue with you has been extremely helpful, and I have reflected that back into the company's strategy and planning. The buyback of DOCOMO data the making 100% subsidiary, your feedback was instrumental in drafting this strategy, as always, looking forward to dialogue with you. I'd like to thank you so much. Of course, I'll remain in the group and will continue. I would like to ask for continued support. Thank you very much.

Thank you. And this concludes the NTT Holdings presentation. We will continue with the NTT DOCOMO's presentation next. Thank you. [Statements in English on this transcript were spoken by an interpreter present on the live call.]