Makoto Takahashi: Thank you. Let me share with you the Financial Results for the Third Quarter of the Fiscal Year Ending March 2025. I will explain these four items today, as you can see. First, let me focus on the consolidated results. The third quarter cumulative consolidated results for the FY ending March 2025 enjoyed a good progress in line with the full year forecast. The left shows the operating revenue, which was ¥4,364.2 billion, up 2.3% year-on-year. Progress ratio was 75.6% versus the full year forecast. The center shows the operating income, which was ¥864.6 billion, up 2.0% year-on-year. The progress ratio was 77.9%. The right shows the net income with a progress ratio of 77.8%. Excluding a temporary impact due to reorganization of subsidiaries and affiliates, it was plus 0.6% year-on-year. Next, let me explain factors for change in the consolidated operating income. The consolidated operating income grew with a steady increases of communications ARPU revenues and main businesses, such as finance, energy and DX as well as brisk performance of Lawson. From the left Group MVNO and Rakuten roaming revenues were minus ¥12.2 billion year-on-year. Multi-brand communications ARPU revenues were up ¥3.5 billion. Financial business and energy business combined were plus ¥12.6 billion. Lawson's equity method accounted income was up ¥18.2 billion. DX and Business Services segment were plus ¥12.3 billion. The income increased ¥16.9 billion by absorbing technology costs and an increase in sales promotion and advertising costs. Next on Personal Services segment. First, on total ARPU revenues, both communications and value-added ARPU revenues increased. Communications ARPU revenues up to the third quarter were plus ¥3.5 billion year-on-year, value-added ARPU revenues was plus ¥27.9 billion year-on-year. As for the outlook for the fourth quarter communications ARPU revenue, we are forecasting an increase in revenue with new plants in UQ mobile and au. Next, on smartphone subscriptions and churn rates. Please look at the left, the number of smartphone subscriptions, which is a growth foundation for ARPU revenues, has been steadily increasing. The right shows an increased mobility due to intensifying competition. While the multi-brand churn rate has increased, au churn rate has been maintained low. Next is about momentum. Please look at the left. Last November and December, we introduced a competitive Komikomi Plan+ in UQ mobile and Money Activity Plan+ in au and the new topping in povo where virtually 30 gigabytes can be used per month at the least expensive price in the industry. Moving to the right with these new plans, monthly net addition of the multi-brand ID has recovered the momentum since November. Concerning the total ARPU, we are maintaining an increasing trend for both communications and value-added ARPU. Please look at the right, value-added ARPU increased mainly in finance and settlements helped also by Money Activity Plan. As for communications ARPU by brand, it was plus 2.1% year-on-year in au, plus 3.3% in UQ mobile, both are growing. The migration from UQ mobile to au was a steady increase of 1.5x year-on-year. To expand total ARPU, we will be exercising synergy of communications times finance. Please look at the left. We have updated well-accepted Money Activity Plan to be more attractive, making it easier to accumulate Ponta points. We aim to increase the ratio of unlimited plan and faster utilization of value-added services while increasing the number of subscriptions. Please look at the right. We know from the track record that compared with other unlimited plans, au Money Activity Plan is effective in increasing the frequency of each financial service usage. With more attractive au Money Activity Plan+, we intend to further expand our customer base, accelerating the growth of au Financial Group. Our collaborative initiatives with Lawson are also progressing. The left shows Ponta Pass, which has been well received. Since the launch in October, new acquisitions increased about 20% quarter-on-quarter. Customers using other carriers increasingly rolled as Ponta Pass members. Povo Data Oasis has also been well received. Total 100,000 people are using it at more than 90% of Lawson stores. We are planning to start eSIM sales at all Lawson stores soon. Please look at the right. These initiatives are working, and the number of visitors to Lawson has been rising, contributing to the expansion of Lawson daily sales, which is plus 3.4% year-on-year. Lawson has a target of 30% reduction of store operations by 2030. It has started thinking about a target for daily sales increase as well. We continue to strengthen collaborative initiatives for communications times convenience stores, realizing the growth of the two companies. We'll continue to strengthen the networks. Last year, we achieved number one in communication quality in user experience evaluation by Opensignal. Please look at the left to further increase the communication quality. We started offering 5G SAs service in all the Sub6 base stations areas, utilizing the highest number of Sub6 base stations in Japan. In addition, as you can see on the right, we obtained a commercial license approval for direct to cell service D2C with the satellite, completing preparation for service launch. From this spring, there will be more compatible devices. We aim to offer the service to about 2 million customers. Next is on financial business. Left side, the customer base for our financial business is withstanding steadily. au PAY Card exceeded 10 million members and au Jibun Bank's mortgage loan is also doing well, with cumulative loan amount exceeding ¥5 trillion, the fastest of any online bank. We are also working with Mitsubishi UFJ Financial Group to promote initiatives to utilize AI, as you see on the right side. In addition to developing finance specialized LLM and using it to propose financial services to customers, we will build a next-generation remote customer service platform that utilizes convenience stores and other facilities to expand customer touch points for financial services and promote service reform. Next is on Business Services segment. Business Services segment is expanding steadily, driven by growth area. Left side, year-to-date consolidated operating revenue for FY March 2025, reached ¥1,012 billion, driven by 19.9% year-on-year growth in the growth area. IoT-related services are showing particularly strong growth in the growth area. Right side, operating revenue was ¥122 billion, up 20.8% year-on-year, and the cumulative IoT connections were up 22.2% year-on-year, showing steady growth. Next, let me explain WAKON-CROSS, a business platform for the AI era. At WAKON-CROSS, we are refining our strength by adding operational and security values on our communication and AI infrastructure. We will leverage these strengths to promote scaling of industrial DX solutions and AI utilization. Next is enhancing strength of WAKON-CROSS. As shown on the left, we deployed connecting on a full scale in January 2025. By integrating communications into all products and services with our partners, we will expand WAKON-CROSS communications infrastructure and contribute to creating added-value for our customers with our operational strength. Right side, security becomes even more important in the era where communication and AI are integrated into all products and services. In order to strengthen our security business, we may lack a wholly-owned subsidiary to integrate communication and security. We will support our customers' digitalization through these initiatives. Industry solution use cases are also increasing. Left side, in facility solutions aimed at digitalizing offices, we provide comprehensive services from interior to ICT infrastructure with group cooperation and partnering. There is a strong demand for integrated solutions with communications and with inquiries from major e-commerce companies, our operating revenue for FY March 2025 is growing steadily, up over 50% year-on-year. In order to achieve further growth, we will use the opening of Takanawa Gateway City where our new headquarters will be relocated as an opportunity to expand digitalization beyond our office to include buildings and entire towns using our own initiatives as a model case. Next is on AI utilization. Tama data center on the left, begun operating GPUs and preparations to provide AI services are progressing steadily. In addition, to meet the growing demand for GPUs, we decided to introduce NVIDIA's latest GPU, which offers significantly higher performance than conventional GPUs at former Sakai plant site, which is scheduled to begin full-scale operation next fiscal year. We will make full use of this AI platform to accelerate our customers’ digitalization through WAKON-CROSS. Next is on enhancing the power to connect. We are committed to developing future talent towards a society in which anyone can make their dreams of reality which is our goal in KDDI VISION 2030. Specifically, we have held online instructions by professional soccer players face-to-face interactions and cashless school festivals at 100 schools to provide financial education to students. Furthermore, at the Osaka Kansai Expo – which will be held from April this year, Future City pavilion will provide visitors with experience of creating the future. Next is on MWC Barcelona 2025. Following on from last year, KDDI will exhibit from March 3 to 6. In addition to introducing our initiatives in communications and AI, retail tech and mobility, we will also give a keynote speech on the first day of MWC. So please look forward to it. Toward KDDI VISION 2030, we have many initiatives coming up this year, including our new HQ relocation, next-generation convenience stores and direct-to-sell service. We will further enhance the power to connect with AI to deliver exciting future vision. To realize the future society I have described so far, we need a high value-added economic circulation. As you know, thanks to various policies, pricing in Japan is considered to be among the lowest, among the developed countries globally. In addition, telecom carrier are striving to create an environment with high connectivity quality through friendly competition. As the use of AI becomes commonplace in the future, the ICT industry will support it by responding to further traffic increases, disasters and security measures. On the other hand, costs to partners who build facilities and operation-related costs are rising, and we are being asked to negotiate fair transaction prices and pricing pass-through. We believe it is necessary to promote a virtuous economic cycle where we provide valuable services, including value-added services to customers, receive payment in accordance with that value and use it to further invest. We want to contribute to a virtuous cycle of economy supported by co-creation with such partners and the realization of sustainable future society. Lastly, today’s summary. Consolidated results for the three quarters of FY March 2025 are progressing in line with the full year forecasts. In addition to steady growth in major businesses, Lawson, performs strongly. In Personal Services segment, total ARPU revenues increased steadily. New pricing plans are introduced for multi-brand and both communications and value-added ARPU revenues are expected to grow. We will promote initiatives of communications and value-added services such as financial services and Lawson to generate synergy. In Business Services segment, growth area is expanding steadily, driving growth. In addition, we will strengthen communications, AI infrastructure operations and security, which support WAKON-CROSS. We will strengthen our initiatives for the future to achieve sustainable growth and enhance the power to connect with our partners in order to realize a sustainable society. Thank you very much for your attention.

Ikuko Hongou: Ladies and gentlemen thank you so much for waiting. We would like to start the second part KDDI’s change in President and Representative Director, CEO and Executive Officer on this issue TSC timely disclosure press release has just been made is also posted on the KDDI’s website. Those of you who are at the venue, please refer to the handout. Let me introduce today’s attendees, President, Representative Director, CEO, Takahashi Makoto; Director Senior Executive Managing Executive Officer, Matsuda Hiromichi. The two attendees, CEO Mr. Takahashi and Matsuda, will also express comments. Then, Q&A and photo session will take place. Regarding online distribution, it will cover up to Q&A Session. Mr. Takahashi, the floor is yours.

Makoto Takahashi: Thank you. As you can see in the handout today, the Board meeting was held. KDDI’s Board meeting was held. And as of April 1, the current Managing Executive Officer, Matsuda Hiromichi, will become the CEO and Representative Director as April 1. Regarding Matsuda, who will be the new President, as you can see, currently, he is Director and Managing Executive Officer. He is also General Manager of Advancing Business Technology Strategy Division and overseeing Business Exploration and Development Division as well as Open Innovation Division. As you know, the environment surrounding the communications industry has been changing significantly. In the communications 5G as a core, it showed development centering of smartphones, but going forward, we are now in the era of AI and DX communication is penetrating on everything with that. It is now changing the environment with exorbitant speed. If you look at the environment surrounding our lives, it’s been said that the President of our company has been changing as the communication generation changes. With the growth of 5G, I served as the President for seven years. Now if you look at the world, beyond 5G, it’s not 6G. It will be the era of AI. So along that line, regarding the person who will be driving the companies, this person has to be extensively experienced in technology and some of who was not feeling hesitant vis-à-vis global partners and has to be able to build business. Now Mr. Matsuda is well versed in technology. He has also been very positive, active in cutting-edge technology. He also has deep connections with global partners, which is a requirement. He is 53 years old. He is 10 years younger than I am, and I believe that he will be taking up boldly new business areas. And in the era of AI, I believe he is really the optimum person to lead the company. He is very suited to be the next President. Since I became the President, about seven years have passed. I implemented two midterm management strategies. Now current midterm strategy, while there have been rapid changes in the environment, it’s been extended by one year. So, the next year will be the final year for the current midterm strategy. Mr. Matsuda, will be implementing steadily the final year of the current midterm management strategy. And starting from FY2026, the next midterm management strategy will be revised by him. Regarding the development of the next midterm strategy, I believe it’s important that it’s done so under the new management, that’s why this timing, I will pass the baton. I would like to thank you for your continued support for a long time, and I hope that you will give us your kind support to the new management system. Thank you very much.

Ikuko Hongou: Next, thank you very much, Mr. Matsuda if you could.

Hiromichi Matsuda: I am Matsuda, appointed as the President as of April 1. Thank you very much. I will receive the baton to manage the company from President Takahashi, I am humbled and motivated to take on this big responsibility. As shown in the introduction, I joined KDD in 1996 and I’ve been engaged in the telecommunication business as an engineer. The company changed to KDDI in the year 2000. I built my career in the technology development of high-speed mobile Internet and product development and fortunately, was involved in 3G, 4G, 5G system launch from network and product development standpoint. From 2021, under President Takahashi, I was in charge of new business and management strategy, I focused on understanding our portfolio, implementing satellite growth strategy and explored and co-created business with our partners, realizing partnership with Apple, Google, and Qualcomm and SpaceX, gave me a big confidence. As a promoter of cross-functional data-driven AI project, I worked on improving customers CX. Along with our internal system modernization, this was also an impressive moment. With the integration of communication and life design and satellite growth strategy promoted by President Takahashi, communication penetrated into the fundamentals of all industries, an initiative to add value and deliver them accelerated. The infrastructure for a virtual cycle that connects business growth and the resolution of social challenges was built. I will receive this baton and ensure sustainable growth. 5G is maturing and era to fully leverage AI is starting a rare and proprietary digital data asset will be the driver to create new value with cutting-edge AI. Through such integration, we will upgrade our power to connect to a new level and crystallize it to our business. That is my responsibility. Despite radical social changes, we will always be customer-oriented and deliver excitement that exceed expectation. And because we are in a volatile era, I will embrace KDDI philosophy and corporate philosophy as an unwavering value and keep progressing with challenger spirit. I ask you for your warm guidance and support. Thank you very much.

A - Ikuko Hongou: Now we would like to entertain your questions. We will be accepting questions both from the venue and Zoom webinar. [Operator Instructions] At the venue, D, the front line, please.

Unidentified Analyst: Nikkan Kogyo. My name is Mishima. Soft question. Mr. Matsuda. Your personality, I have a question about your personality, your strength, your weaknesses, how they are analyzed. Now Mr. Takahashi, about Mr. Matsuda's personality, what are the things that you appreciate about him? Second question Mr. Matsuda, any slogan that you cherish or sorry to say this, any hobbies did you enjoy?

Hiromichi Matsuda: Thank you for your questions. First of all, my personality. Since I joined the company, technology has been my core. I started as an engineer and then product planning, marketing. Around technology, I built my experience. I think that's something that can be described as my experiential value. That said, my strength and weaknesses. The ones that I like that I'm good at, including external partners with various partners having a good conversation and explore win-win points and being tenacious in those activities. I think that has been appreciated. Having said that, regarding what I'm not really good at, well, as a new member of the top management team, I would like to really work on that.

Makoto Takahashi: Personality is an engineer. He's pretty stoic in his efforts. I think that's one of his attitude, but he is an engineer, but when there's something new, he has pioneering spirit. Maybe it's not really about personality, but in terms of his attitude, that's something that I could really see. As I said, having a global perspective and with global partners, you have to communicate with those global partners. I mean as a company, that's something so important, and I really see that in him, and that's why I've decided this. And maximum slogan. Different people have different mottos, but including this kind of a meeting, you have to be thoroughly red, thoroughly prepared meticulous. And also you have to be preemptive, then you can win. I love all those words. And you have to be exhaustive in preparation because opportunities prefer people who are thoroughly prepared, you don't know what comes next, but you will always be fully prepared and then you can really enjoy opportunities. So this is something that I like.

Ikuko Hongou: Thank you very much. Next question, please. Line 3 front row, please, at the center.

Unidentified Analyst: Freewriter, Sano is my name. Thank you. I have two questions. So Mr. Matsuda, so there are new technologies, you've been engaging in new technologies, new – so what is your most interested technology? What is the area that you're most curious about? On the other hand, after 5G, it is AI, not 6G, but AI as President Takahashi said. So the communication is the core of the business. That's for sure. But the market competition is severe. So there are severe environments. So what is your view on communication?

Hiromichi Matsuda: Thank you very much for the question. I've been working on communication as an engineer all along. And so I have a strong passion on telecommunication. On that basis, which field are we going to venture out to. Our strength, our characteristic is, we go from basic research to applied research. We have this good cycle, positive cycle. So what we have now. We had the green shoot three, five years ago. And so identifying them, we have to look three to five years down the road in the research we are conducting now. So the radar of the technology is honed. Some come out of our own research, but also from co-creation with start-ups. So those are what we look at in technology. And second point, related to the first one. Technology communication. So following 5G will be AI. It's important to combine with AI. How 5G can evolve with AI? That is our key theme. So on the extension of that, it will evolve as a network.

Ikuko Hongou: Thank you. [Operator Instructions] At the Venue, B, frontline, closer to the MC, please.

Unidentified Analyst: Freelance, Koyama. You mentioned communications, but as a recent business collaboration with the settlements with financial businesses, and you described yourself as an engineer about financial settlement payments. What is your take on this?

Makoto Takahashi: Thank you. Satellite growth strategy that we have, the center, communication and then finance, energy, many things around that. And then you have to implant technology in everything. It can be our technology or technology from outside can be applied. So energy-related technology, finance-related technology. We have to closely monitor those. In that sense more recently, in some cases, we were early, but blockchain Web 3, those technology, how they will be connected to FinTech, we are closely monitoring that.

Ikuko Hongou: Next question, please. [Operator Instructions] Venue B, at the very back, please.

Unidentified Analyst: Diamond Murai is my name. Earlier, President Takahashi said, the reason of choosing Mr. Matsuda about his skills and technology. But in the next era of AI, the power to build relationship with partners, you mentioned. So if you could elaborate on that, in Matsuda-san's track record, what kind of track record does he have with the global partners like Apple and Google and SpaceX? So, what part did you think was – did you appreciate? Apple and Google, I think it’s after the smartphone era. So in partner relationship building, do you have any particular event or thing you can share with us?

Makoto Takahashi: So KDDI’s global partner, as you said, Google and Apple, Qualcomm, Starlink. These discussions were mostly done by Matsuda-san, so that is a good strong track record, recently, Starlink. The first I did do some initial exploration, but he did most of the rest of the process. He is affluent in language and talking with the AI people, they’re all young, Sam Altman, he is 39 years old. I’m 63 and I’m studying hard on AI. Sam-san is a different animal or a different person. He is in a whole different world, but hyperscalers to work with hyperscalers, you need to be young and have global skills and sense and I think Matsuda-san is strong in that. And I thought he was the most appropriate. My recent impression of him is Starlink. That was a big contribution, please. So before entering the smartphone era, the international standardization was important. It’s still important, but the spectrum frequency where to compromise the key point, focus of the negotiation was something I learned. And now we enter the smartphone era. The most impressive point is iPhone 4S introduction and the LTE initial model, first LTE model, iPhone 5. We struggled with frequency, the negotiation with the counterpart and internal work, we had to work as one team to follow through, and this is what I felt strongly as I negotiated with external partners and also collaborative with the internal members, internal team.

Unidentified Analyst: One more point. So President is changing. So people person chooses person. And so I’m asking a pretty deep question. But Matsuda-san, so President Takahashi, when did you start thinking of and decided to choose Matsuda-san? And when did you convey the message to Matsuda-san, if you could give me some history.

Makoto Takahashi: When we thought of the succession plan as of last year, there were multiple candidates in my mind and discussed with the outside directors, discussed with the outside directors and had a good thorough study for one year. And around the fall, we narrowed down and went to the Nomination Committee. And at the end of the year, we made the rough decision and official decision today. So to Matsuda-san, it had to be finally decided in the Nomination Advisory Committee, but I – in November, I think, I told Matsuda-san that it will be you if the Nomination Advisory Committee approvals.

Unidentified Analyst: Matsuda-san, how did you receive that message? What do you feel?

Hiromichi Matsuda: I remember very well. I was called into the President’s office and the pending was AI data center progress, that was the pending issue. And so I thought that, that will be the question. And so that’s what I thought entering the room and heard that I was going to be nominated to the Nomination Advisory Committee.

Unidentified Analyst: How did you feel?

Hiromichi Matsuda: Honestly, I was petrified. I could not react really.

Operator: Thank you. [Operator Instructions] A, the second from the front, please.

Unidentified Analyst: Nikkei Business, Sugiyama is my name. First question, communication quality concerning the efforts. Beyond 5G, this is going to be era of AI. But on the one hand, you have been working on communication quality Opensignal, other companies are trying to get better score and regarding your confidence or solidly prepared and you have been so careful in all the preparation? What’s your comment?

Hiromichi Matsuda: Thank you. Concerning the communication quality, Opensignal, that’s one indicator that we look at a kind of yardstick or KPI. But in principle, high-quality communication must be delivered to customers. That has been an essential attitude regarding our confidence we have the spectrum frequency. How are we going to combine them and to use them or a new technology for spectrum? Including that, how are we going to use this? And just like this time, what we’re doing, how to use is the satellite the integrated one, how to offer this service, that’s very important for spending a long time. We have been strategically developing them, and they are working out pretty well. As you heard, D2C is something we’re going to see going forward, and we want to be preemptive. We want to be ahead of peers. Not 6G, but the next will be the era of AI. Maybe you are adhering to that, but we had meeting amongst executive officers. In the past, download speed of communication latency. Those are the things we are concerned about. But going forward, assuming the AI utilization, then what’s the latency. That’s important, not just communication beyond that, obviously, AI LLM, then the latency, including using all those services. So you can’t just focus on communication, including usage of AI, comprehensive quality matters. So in that sense, I meant to say that next will be the era of AI. I just would like to apologize if my explanation hasn’t been really enough.

Unidentified Analyst: May I ask you the second question. AI data center was mentioned before. Matsuda-san, you have been engaged in the cutting-edge technology combination of AI and communication is something that you have talked about already, but software. So sorry to talk about the different company is AI and base stations, integrating them. It’s easy to see. But as KDDI communications times AI, regarding that integration, specifically, what are the things that you envisage or data – AI data centers, how are you going to utilize them?

Hiromichi Matsuda: Thank you. Communication AI integration, how to go about them. There are several ways to look at this. On our part, communication operation that we have been doing, enhancing it with AI, that’s one thing. And teleco AI is something that we have to do thoroughly. Now for AI or when AI is inevitable using resources, communication and in other things, how we are going to apply them. In parallel, we are looking at this. Now AI data center is another thing. Linking them to business is something that I said because digital data, as since we have digital data, generative AI can be fully utilized, so to do that AI data center. It’s something that we want to have as a foundation.

Ikuko Hongou: Next question, please.

Operator: So row D, second from the front, please.

Unidentified Analyst: Nikkei Newspaper, Sakurai is my name. Thank you. I have two questions. First is a question to Matsuda-san. From the beginning of KDDI, it’s been 25 years. So what kind of company do you want to make KDDI into that, Mr. Matsuda?

Hiromichi Matsuda: Thank you for the question. As I said earlier, I joined the company in 1996 and became KDDI in year 2000, and it’s been 25 years. Our vision is 2030, Vision 2030. So, Power to Connect, we are connecting with many things. We want to focus on connecting. So, we want to enhance the power to connect and so that anyone can realize their dreams. When I talk with the outside overseas counterpart, I feel that Japan is respected quite a bit. We talked about societal challenges. We are the advanced country in social issues. And therefore, we have our KDDI specific value creation and resolution and solutions. And in the future, we want to use the use cases to contribute to the overseas side. We are the advanced nation of social challenges. So we want to create value and solutions and contribute to the world going forward.

Unidentified Analyst: Thank you very much. My second question is also to Matsuda-san. So you've been an engineer for a very long time. So what was the trigger that led you to be interested in engineering any -- I often hear about the Expo. What did you see? What were you impressed?

Hiromichi Matsuda: Thank you. I think you remember me talking about this one. When I was in junior high school, Scuba Science expo was held. And I was in Yamaguchi. I talked typically blue train and came all the way to Scuba. And the view I saw there was I went to the Japanese company's booth. And I still remember -- I had this at home, CNC pavilion this plan model and I talked with [indiscernible] They have this mysterious science kit. Marvelous science kit, it was this shape memory alloy, they delivered the samples. And I got that, and that's what led me to be interested in science and technology. This year, Osaka Kansai Expo is held, and we are working with Hitachi and we'll do an exhibition. I hope the children, the future talent will come and become interested in science from my own experience. Thank you.

Ikuko Hongou: [Operator Instructions] B front line, around the center, please.

Unidentified Analyst: Freelance [indiscernible] first Mr. Takahashi-san, I have one question for you. Looking back to seven years, anything that you really feel proud about yourself?

Makoto Takahashi: Seven years. I mean, just time flew. So many things have happened. So many, many things have happened. When I became President, Hokkaido Brioche, there was that earthquake in Hokkaido last year and Noto earthquake, there are many disasters, and we were hit by COVID-19. We experienced so many things. What impressed me most, let's see that communication failure that lasted for quite a long time. We caused so much trouble. We felt sorry. And with our group of engineers, we want to be number one in our network service at OpenSignal, we were able to achieve number one and engineers have worked so hard that was really gratifying 2030 Vision, as Matsuda-san mentioned too, this evolution of the power to connect. That's something that we would like to continue, and I was able to sort of create a base which was good. In addition, life design. Integration of life design with communication. We launched that population is decreasing. Communication will be penetrating everything with that assumption on various industries expanding the business. I believe that I was able to build that foundation, we need to enter into many industries I contributed to creating that foundation.

Unidentified Analyst: Matsuda-san, another question. Looking back, Apple, Google events as I interviewed them, you were standing right next to Mr. Takahashi. As I look back in doing the work together with partners. How are you planning to present to KDDI from Apple, there are four carriers in Japan KDDI is one of them, but to Apple. How to sort of ingratiate yourself with Apple in terms, how to build such good relations with partners?

Hiromichi Matsuda: Thank you. To a certain extent, it's case by case, but you just decided Apple as an example. In principle, we are standing on the same arena is like a beauty pageant, how can we present our contributions. But in areas where we're not really standing in the same field, here in Japan, we have assets. With new technology, what those partners have, how we can enhance them, how we can evolve them. And in that area, they can acknowledge, appreciate our values, we can find we win. So there are two ways depending on the time access, it will be different, but I would to be mindful of that, together with new partners, I would like to build relationships with them.

Ikuko Hongou: Thank you very much. Next questioner, please. Row C, second from the front, closer to the moderator.

Unidentified Analyst: Yes, Freelance, Ishino is my name. First question is to Matsuda-san. So now in the communication, the customer acquisition is now becoming more severe. Data volume is raised and the price is reduced. How do you see this? And what is your plan going forward? Are you focusing on net additions? Or are you broadening the competition framework, the arena?

Hiromichi Matsuda: Thank you very much. Of course, we need to first address the current competition and think of what -- how I want to bring this going forward. So two perspectives. We should not just focus on ID number of IDs, but it's important to have this being used by our customers. But at the same time, we need -- we have the competition to raise the momentum. So I need to think of this in two axis.

Unidentified Analyst: Second question is to Mr. Takahashi. You will become the Chairman. What is your plan as a Chairman?

Makoto Takahashi: Next fiscal year is the final year of the current MTMP medium-term plan. And so this will be in the hands of Mr. Matsuda and his team. I will support that. So I will thoroughly support that. Unfortunately, NTT law is now settling. So the government and the business circle discussion is another area that I will keep being involved in, and we've been working on start-ups. So I want to also be involved in that. I want to energize Japan and so I hope I can support externally and internally.

Ikuko Hongou: Next, from online, participants, we would like to entertain your questions. Nishida-san? Unmute yourself. Please express your question.

Unidentified Analyst: My name is Nishida. Can you hear me?

Makoto Takahashi: Yes.

Unidentified Analyst: Yes. First question to Masuda-san. Being thoroughly prepared, you like that expression. To be thoroughly prepared, any particular areas that you would like to look at, of course, communication in AI, but areas that you must really work on, what are the areas you feel that you must address? Thank you.

Hiromichi Matsuda: That's a very difficult question. In terms of technology, we need to be discerning, for instance, amongst the technology we have, something like paradigm shift IT devices, the generalized ones are now available. That's the kind of year we find ourselves in. So regard engineering resources or engineering skills, what kind of skills will actually work out looking at the next future? We need to really look at the tide change in the tide in technology and sales being thoroughly prepared, it's a package we've been preemptive. You have to have foresight changes and disruption, how they will take place. We have to really be monitoring that.

Unidentified Analyst: Thank you. Second question, Takahashi-san. Since you are mindful of succession, what are the things that you regarded as kind of issues? What are the things that you wanted to left behind?

Makoto Takahashi: Well, as I said before, let’s see. 54 years old, who became the Chairman and I was 56. But now I wanted to make the next present much younger than those. Regarding the company itself, I would like to rejuvenate the company. So again, from your perspective, especially consumers, persons in charge of consumers, they have become younger. So based on that assumption, I came up with the succession planning. Satellite Growth Strategy is something we have been working on. The strategy itself is a driver for a sustainable growth of KDDI as Matsuda-san mentioned, we have to be insightful. We need to have foresight so that we can take up new challenges here and I have been talking about this all a while. So with that as kind of something that I leave behind. I hope that he will make a contribution for sustainable growth of KDDI. I hope I answered your question.

Ikuko Hongou: Thank you. Time is coming up. So we will take one more question from this venue. Please raise your hand if you have any questions. Row C, first person, please.

Unidentified Analyst: [indiscernible] Sekiguchi is my name. Thank you. I have a question to you, President Takahashi. So you did some look back. So if you focus on 5G, you said that the communication failure, the outage was impressive, and this led to your current achievement in Opensignal. At KDDI, in terms of 5G, you handled this well and you came this far. So KDDI’s perspective and the 5G status in Japan, if you look at these two, in your term as President, what do you see? How do you summarize?

Makoto Takahashi: The telecom operators are all working very hard. As I said earlier, the pricing have been reduced. We are now around 50%, half of the U.S. And the other countries are now raising prices. And under such circumstances, we are trying to improve the facility efficiency and invest it in 5G. So we are competing harshly under Opensignal, SoftBank and Docomo and us we are trying to look at the specification to improve 5G. So we have a great, magnificent achievement in 5G. Some say that we do not have enough use cases in 5G. That is not the case at all. Traffic is growing at a rapid speed, even at the interest level. So it’s 10% to 20% growth every year. Starting this April centering on YouTube, we’re seeing an enormous speed. So now use cases becoming evident. Latency and SA will become more important. And in the AI era, we need to convey this to the AI and I think the 5G foundation is now well built. So this will be succeeded by Mr. Matsuda. And I think friendly rivalry in this 5G industry will lead to good results in 5G and 6G. So I think this is something I can be proud of. We did well.

Unidentified Analyst: Thank you. Second question may be a difficult one to Mr. Matsuda. In your future business, especially in consumer business, what is your plan? We have the economic zone and 5G smartphone initiatives. So I know it’s a difficult question, but how will consumer and KDDI be involved with each other? And how do you plan to grow this area going forward? Thank you.

Hiromichi Matsuda: Consumer Personal Services segment, I was there last year. So I understand the structure. Going forward, in our medium-term management plan, we have a plan under our strategy. So following through with that, we’ll lead to the expansion of the economic zone and the enhancement of the communications. Now beyond that the consumers – general consumers, we need to research and understand them. It’s a very important element in our next medium-term plan. So I would like to have another opportunity to talk about that soon. At the beginning of April, you will do the inaugural speech, talk about his plan. So please look forward to that.

Ikuko Hongou: Since it’s time, we would like to conclude the questions-and-answer session. Concerning the online and distribution, again, we would like to conclude the session. Mr. Takahashi, Mr. Matsuda, please stand up. Despite the last minutes changed, thank you so much for joining us, both virtually and physically. We appreciate your kind participation.

Junichi Miyakawa: Thank you for waiting. We now like to start a meeting on KDDI financial results of the third quarter for the fiscal year ending March 2025 followed by the Q&A session. Thank you for joining us out of your busy schedules. So at the 11th hour the starting time has been changed. We would like to apologize for that. I’m Junichi Miyakawa from IR department. This meeting is broadcast live on the internet with Japanese and English simultaneous translation. Please be advised that the meeting will be later made available on our IR website for on-demand distribution. Let me introduce today’s attendees. Senior Managing Executive Officer, Executive Director, Business Solutions Sector, Kuwahara; Managing Executive Officer, Director, CDO, Executive Director, Advanced Business Technology Sector, Matsuda; Managing Executive Officer, CFO, Executive Director, Corporate Sector, Saishoji; Managing Executive Officer, Executive Director, Personal Business Sector, Takezawa; Executive Officer, Executive Director, Corporate Management Division, Corporate Sector, Aketa. Five items uploaded on our IR website, three related business results, presentation, detailed materials. Please read the disclaimer in each document about what is listed in the material, our performance including what will be shared during the questions-and-answers and subscription targets. Managing Executive Director, Saishoji will brief you on the summary of the business results followed by the questions-and-answer session. The floor is yours.

Nanae Saishoji: Thank you for viewing the business results meeting out of your busy schedules. Let me explain main points of the business results of the third quarter for the fiscal year ending in March 2025 before the Q&A session. The third quarter cumulative consolidated results for the fiscal year ending in March 2025 enjoyed a good progress in line with full year forecast. The left shows the operating revenue which was ¥4,364.2 billion up 2.3% year-on-year. The progress ratio versus the full year forecast was 75.6%. The center shows the operating income which was ¥864.6 billion up 2.0% year-on-year. The progress ratio was 77.9%. The right shows the net income with a progress ratio of 77.8%, excluding a temporary impact due to reorganization of subsidiaries and affiliates. It was plus 0.6% year-on-year. Next, let me explain factors for change in the consolidated operating income. The consolidated operating income grew with steady increases of communications ARPU revenues and main businesses such as finance, energy and DX as well as brisk performance of Lawson. From the left Group MVNO and Rakuten roaming revenues were minus ¥12.2 billion year-on-year. Multi-brand communications upper revenues were up ¥3.5 billion. Financial business and energy business combined were plus ¥12.6 billion. Lawson’s equity method accounted income was up ¥18.2 billion. DX and Business Services segment were plus ¥12.3 billion. The income increased ¥16.9 billion by absorbing technology cost and an increase in sales promotion advertising costs. On total ARPU revenues, both communications and value-added ARPU revenues increased. Communications ARPU revenues up to the third quarter were plus ¥3.5 billion year-on-year. Value-added ARPU revenues was plus ¥27.9 billion year-on-year. As for the outlook for the fourth quarter communications ARPU revenue, we are forecasting an increase in revenue with new plants in UQ mobile and au. Next, is about momentum. Please look at the left last November and December, we introduced a competitive [indiscernible] plan plus in UQ Mobile and money activity plan plus in au and the new topping in povo where 30 gigabytes can be used per month at the least expensive price in the industry. Moving to the right with new plans, monthly net addition of the multi-brand ID has recovered the momentum since November. In total ARPU both communication and value-added ARPU are maintaining an uptrend. Value-added ARPU on the right grew mainly in settlement and loans thanks in part to the effect of the Money Activity Plan. Communications ARPU by brand was up 2.1% year-on-year for au and up 3.3% for UQ mobile. Both brands are growing. In addition, the number of migration from UQ mobile to au is increasing steadily by 1.5 times year-on-year. Our collaboration with Lawson is also progressing. As shown on the left, Ponta Pass has been well received with new acquisitions increasing by about 20% quarter-on-quarter since its launch in October and enrollments from users of other carriers are also increasing. povo Data Oasis is also popular, used by 100,000 people in total at over 90% of Lawson stores. eSIM sales are scheduled to start soon at all Lawson stores. Right side these successful initiatives are leading to the increase in number of customers visiting Lawson stores and contributing to Lawson's daily sales increase by 3.4% year-on-year. Lawson is considering a goal of 30% reduction in store operations by 2030 and increase in daily sales. We will continue to promote collaborative initiatives between communications and convenience stores to achieve growth for both KDDI and Lawson. Next is on Business Services segment. Business Services segment is expanding steadily, driven by growth area. Left side, year-to-date consolidated operating revenue for FY March 2025, reached ¥1,012 billion, driven by 19.9% year-on-year growth in the growth area. IoT-related services are showing particularly strong growth in the growth area. Right side, operating revenue was ¥122 billion, up 20.8% year-on-year, and the cumulative IoT connections were up 22.2% year-on-year, showing steady growth. Next is on AI utilization. Tama Data Center on the left, begun operating GPUs and preparations to provide AI services are progressing steadily. In addition, to meet the growing demand for GPUs, we decided to introduce NVIDIA's latest GPU, which offers significantly higher performance than conventional GPUs at former Sakai plant site, which is scheduled to begin full-scale operations next fiscal year. We will make full use of this AI platform to accelerate our customers' digitalization through WAKON-CROSS. Lastly, today's summary. Consolidated results for the three quarters of FY March 2025 are progressing in line with the full year forecasts. In Personal Services segment, total ARPU revenues increased steadily. New pricing plans are introduced for multi-brand and both communications and value-added ARPU revenues are expected to grow. We will promote initiatives of communications and value-added services such as Financial Services and Lawson to generate synergy. In Business Services segment, growth area is expanding steadily, driving growth. In addition, we will strengthen communications, AI infrastructure operations and security, which support WAKON-CROSS. We will strengthen our initiatives for the future to achieve sustainable growth and enhance the power to connect with our partners in order to realize a sustainable society. Thank you very much for your attention.

Ikuko Hongou: Thank you. We will have a Q&A session.

Operator: Ms. Saishoji, thank you. [Operator Instructions] Daiwa Securities, Tokunaga-san. Please unmute yourself.

Unidentified Analyst: Can you hear me? Tokunaga from Daiwa Securities.

Ikuko Hongou: Mr. Tokunaga, connection is a little bad.

Unidentified Analyst: To Mr. Matsuda, the new CEO. Two questions. First, twice the era of AI about efforts in the press conference, the preparation for the new era with AI, you mentioned that on AI in terms of absolute amount of investment compared with other two carriers is relatively low. So towards the era of AI, Sakai will be operating. So are you planning to really step on the accelerator or on the conventional rather than investment, are you thinking of efficient investment regarding efforts towards the era of AI, please.

Ikuko Hongou: Thank you for your question. Regarding our efforts towards the era of AI, Matsuda will answer your question.

Hiromichi Matsuda: Thank you for your question. ¥100 billion spending ¥100 billion. Large scale computational resources will be built. We already made that announcement. Regarding the scale of this, you might be questioning that. Regarding the future of AI using AI, utilizing AI and including operation, without doubt it will be utilized. But to what extent do we want to do so? We haven't changed our thinking. You might call us cautious or I mean, various kinds of new AI technology are emerging. So we would like to first look at them carefully and then decide to make an investment. So first AI data centers are being built. And was that end do we have been making efforts?

Unidentified Analyst: Thank you. Second question. About the Life Design. About communication into the Life Design under the new top management system focal areas in the Life Design, what will be banking, energy. You have strength, are you planning to improve upon them? Or will it be more or less focusing on what you are lacking? AI investment, Life Design investment regarding the balance between the two, could you share that with us?

Ikuko Hongou: Thank you for your question. Life Design. Going forward, what would be our direction? Again, Matsuda will answer your question.

Hiromichi Matsuda: Thank you for your question. In principle, regarding our line of thinking, First midterm management strategy. I mean the current plan, we want to really implement the current plan in the next term without many changes as Orbit 1, finance, energy and DX will be focusing on these. And beyond that, concerning the next midterm management plan. With the new management system, we would like to study them. Where can we find the green shoots of the new businesses? We would like to look at them and then devise the plan.

Unidentified Analyst: Thank you.

Ikuko Hongou: Thank you very much, Mr. Tokunaga. We will take the next question. Please use the raise hand button of Zoom. SMBC Nikko Securities, Kikuchi san, please tap the mute – unmute button.

Satoru Kikuchi: This is Kikuchi speaking. Thank you very much for today. I have two questions. First is on the Q3 financial results. Lawson profit is growing significantly. So from your perspective, where do we stand and what do you think it will happen from Q4 onward? And in others of the waterfall chart, SG&A and advertisement and promotion, I don't know if the same diminution can be applied. But Q3 – compared to Q1 and Q2, Q3 is higher as a cost expenses. Any extraordinary items? What will happen from Q4 onward? I'm sorry, I have two questions in my first question. So Q3 financial results. That's my first question.

Ikuko Hongou: Thank you for the question. So including Lawson, Personal Services segment is the question. So Takezawa will answer the question.

Hiroshi Takezawa: Thank you for the question. So first a status of Lawson. So as we announced this time, it is very strong. The other day, Lawson talked about their financial results year-to-date, three quarter results, which they say is trending very strongly. And related to that, the SG&A and advertisement promotion is growing. It's because when we joined hands with Lawson, Ponta Pass and the money activity plant, a preferential point, we pursued these simultaneously. And so with that backup, as mentioned at the presentation, the customer referral to Lawson and the increase in daily sales were realized, and that is leading to strong results in Lawson and an increased cost on our part. In addition, in Q3, the competition intensified with our competitors and so our UQ, Comi Comi+ and Money Activity Plan+ to launch these plans, we had to increase our sales promotion cost to ramp up the launch. From Q4 onward and towards Q4 in order to secure our momentum, we will continue making necessary investments. But this will be the end of the fiscal year. So we will try to avoid excessive investment and control well. Thank you very much.

Satoru Kikuchi: Thank you. And as the related question, under the new telecom business law, I don't think he will take the lead in introducing the trial discount. But of course no impact on Q3 and the impact on Q4 is also unlikely. Thank you very much.

Hiroshi Takezawa: So the trial discount, the carriers have not made any move and in Q4, even if that happens, we will watch the other competitors move and the impact thereof and study the implementation of this discount. But at the same time, towards the end of the fiscal year, the carriers are now launching various campaigns including ourselves. And so the return to our users are included in the campaign. So rather than trial discount, we are focusing on implementing the measures thoroughly. Thank you very much.

Satoru Kikuchi: Thank you. Sorry, I asked you many questions. My second question is maybe this is – cannot be answered yet. But Matsuda-san, so technological aspects information have been provided to us from the past. So business management or finance matters have – we've not heard from you much. It's not the plan going forward. But we want to know what kind of financial view you have. The shareholder return is maintained by an entity [ph] and SoftBank, OpenAI, maybe they have to fill the losses. So maybe they have to use money. In your case, you have a well-balanced stance. You will not push yourself too much in financing and not too much debt, not much leverage and the shareholder return will be reasonable. So which direction are you trying to move into? We – in this stock market is trying to watch you closely. So Matsuda-san, in terms of investment, will you do some upfront investment for the future growth in the AI era? So you will expand the investment or have a well-balanced manner or shareholder return oriented? It's okay if you change your mind six months down the road, what do you think at this point in time?

Ikuko Hongou: So Matsuda-san will answer. Thank you very much.

Hiromichi Matsuda: So in leading the company going forward, we marked a new business include new seeds for improve business, include them as an engine in the business and scale up. So the growth investment for new business yield will be pursued. But we need to have discerning eyes, we have to ascertain well. So we may seem cautious, but we will focus on new things, but of course, in a well-balanced manner. So we will try to strike the right balance as we move forward. So of course, we will focus on the new areas to build our business for the future.

Ikuko Hongou: Thank you very much.

Satoru Kikuchi: So you are younger than President Maeda of DOCOMO. So I have high expectations for you. Thank you very much.

Ikuko Hongou: Mr. Kikuchi, thank you. Next question, please. If you have a question, please tap the raise hand button on the Zoom. Next question, Nomura Securities, Mr. Masuno, please unmute yourself.

Daisaku Masuno: First question to you, Mr. Matsuda. 2,000 KDDI was borrowing ¥2 trillion. Matsuda-san, from KDD to KDDI, you joined the company, you perhaps were concerned. But then there came to 3G and then fixed price system was introduced. KDDI enjoyed such a great leap. And now you're aware you look back five years, ¥500 billion sales increase you can say that it was as much as ¥500 billion or just only ¥500 billion. Now in the next five years, unless the revenues go up, company cannot really grow. So ¥500 billion to increase the sales by that much. Just like the past, I think that will be the very minimum you will be doing. Organic, non-organic, both included going beyond ¥500 billion would be rather difficult. Business-wise, engineering-wise, financing-wise, including all these things, what do we the scale of expansion of company, expansion of sales, what kind of image do you have?

Ikuko Hongou: Thank you for your question. Sales growth related question. Matsuda will answer your question.

Hiromichi Matsuda: Thank you. At this moment, as a company, it's not really what company wants to do. I think you asked me what I would like to do. Naturally, top line needs to be increased. Regarding where? That's the question. If you look back, could have been the new technology, new trend and there are new changes with smartphone ARPU increased, that's one. We have to look at where the tide goes and then have to incorporate that. And that's where we will be focusing on. As for the next step, for the next growth, where do we want to find that? Obviously, sometimes we believe we are stronger in this area or that area, but as we have communication with extra people from external area, then perhaps objectively we can find out where we are strong. Just as an example, with Lawson, we are now working with an increase of touch points for instance, and data generated from the increased touch points. Those are really huge, full utilization of generative AI. It's something that I talked about towards that end. We still have a lot of room for further growth. So objectively, looking at us where our strengths are, combining that with new technology AI and commercialize those businesses, and then we would like to make sure that we can grow our top line.

Daisaku Masuno: Thank you. Second question. Business results. Corporate, Kuwahara-san, I have a question. When you look at the quarter-on-quarter results, data center sales, more or less flat. Now if I look at BPO quarter-on-quarter compared with one-year, it's flat and follow on year. Under the fourth quarter you would have to really work hard to achieve the full year results. What's the background? Perhaps I'm sure that you came up with some measures from the last year, but what are the recovery measures you are implementing now? Could you elaborate on those?

Ikuko Hongou: Thank you for your question. Business Services, performance [ph] current situation and background; Kuwahara will address your question.

Yasuaki Kuwahara: Thank you for your question. First of all, third quarter growth was not very powerful. You are right in pointing that out. DX market, what's happening in the market? Let me share that with you. Including bonus, the DX market is decreasing or the demand is becoming weak. No, that's not the case. DX and also the one-time payment type of projects, they have been increasing. If you look at the number of projects that's increased by 1.7 times in terms of amount, it has increased by 1.3 times. The growth was lacking strength, where we misinterpreted was the following: this term, we were focusing on buildings facilities solutions. Within the building, for instance, RAM, Wi-Fi, security or interior furniture, we take the kind of a packaged business. There is a high demand if you look at the number of such cases and also demand growth. Quite a lot of weight comes from those services. Building is of course, it's related to building. If you look at the delivery time, this lead time is much longer and that's sometimes that's why that the result is supposed to be postponed. And there are having so much increase in the projects. A lot of operation is needed and that was rather unexpected. So that was another major factor. As Matsuda-san said, data center, flat BPO is actually deteriorating. Regarding those, let me address those concerning BPO. When we devised a plan at the time such a huge growth innovation of AI was not incorporated in our plan. For existing customers, call centers for instance, something like chatbot, they increasing digitally and no operators are necessary and that's really moving far ahead of expected BPO digitalization. Those are the things that we said and we've been working these existing users to promoting digitalization in principle. It might go down a little, but new customers in this digital business by acquiring them, we wanted to expand them. But the sales expansion progress has been rather lagging behind, concerning BPO other than call centers related corporate businesses. BPO that's really outsourcing, to do such businesses where that's what we had in mind but again they are not progressing so smoothly, partly because of those BPO is not really growing, it's actually in the negative territory. AI impact is significant, of course, but using Altius ONE, we have come up with certain measures. We believe that we can grow this further. As for data centers, there's a kind of individual situation circumstances in terms of sales, third quarter in the previous year because fuel became so expensive in the data centers, electricity price was also included and we received that cost from customers. But regarding that portion, fuel – because of the soaring fuel that effect became sort of relaxed because power prices have come down. And then we were also affected by those changes including power, we used to build them, including the electricity price but going forward so that we would not be affected, we would like to bill them separately for electricity. And so we are now billing in a different way and that's why the sales growth has been rather sluggish. Now concerning data center profits, again it's not that dramatically strong, but to a certain extent it's been steadily growing. While it was lackluster, cost, we try to work on improving the floor areas and we've spent cost, that's why the profit growth was lackluster. Anyway, growth areas, DX market mentioned – was mentioned the number of cases, projects are increasing, so we don't believe that situation is bad. We believe we can recover them. Every year, fourth quarter is a very important quarter, so we would like to make sure that we will do a good job. And security and connecting regarding the new business models, we see those emerging and we would like to be fully prepared so that we can roll it out in the next term.

Daisaku Masuno: Just for clarification, so the number of projects cases are increasing, so then towards the next term, looking at overall environment, your initiatives saw service lineup, we don't have to be concerned any modification change is necessary. That's not what you have in your mind. No change is necessary in your mind.

Yasuaki Kuwahara: Thank you for your question. As I said before concerning BPO, say sluggish sales or with Altius ONE, we are trying to work on the further digitalization. There has been a little bit of delay. We could catch up in these areas? I think we can do better in the next term.

Daisaku Masuno: Thank you. That's all.

Operator: Thank you, Masuno-san. We will take the next question. [Operator Instructions] So next question comes from Okasan Securities, Okumura-san. Please unmute yourself. Okumura from Okasan Securities. Thank you very much. Can you hear me?

Operator: Yes.

Yusuke Okumura: Thank you. I have two questions. First, is the large shareholders trend the shareholder return policy based on the movement of large shareholders trend? This time Kyocera is reviewing revisiting from ¥100 billion to ¥250 billion sales of the shareholding. So if next year Toyota sells their shares in total return ratio, total payout ratio may exceed 100%. If that happens or if that is expected, what is your thinking on your current shareholder return policy?

Ikuko Hongou: Thank you for the question. So if large shareholders sell their shareholding, I would like to answer that question. First Kyocera, when they announced their results in October last year, they said that over five years they will sell about one-third of their shareholdings and also continue reducing their shareholding there onward. But two days ago when they announced their results, they said that the period will be two years and beyond March 28th they will reduce down to 20%. So Kyocera is the founding company and we want them to stay as a long-term shareholder but we understand their standpoint as well. So, the amount per year and the financial position at that point in time will be taken into account and make the right decision. But our cash allocation until next year will be considered in the medium-term management plan. So, no change from the cash allocation plan in the current MTMP so total payout ratio 100% will be the ceiling within that scope, we think we can manage and absorb. Now our measures after the year ending March 27, we will continue considering including the next MTMP and share with you our thinking at the right timing. Thank you very much.

Yusuke Okumura: Thank you. My second question is to Matsuda San. This overlaps with the question to so this year and next year, which is the final year of the current MTMP, the total payout ratio and the shareholder return and growth investment the balance between the two do you think is reasonable? And in the current MTMP EPS is pursued. So what is your thinking on that and what is the view of Mr. Matsuda. Thank you very much. That's my second question.

Ikuko Hongou: So in the next MTMP, what is our thinking? So Matsuda-san would like to respond. Thank you for the question.

Hiromichi Matsuda: So in FY’22, I was involved in the management strategy so the current EPS goal and the cash allocation policy I understand them well and we want to move solidly towards next term. So we will maintain the current policy into next fiscal year.

Yusuke Okumura: And same for EPS?

Hiromichi Matsuda: Yes, first of all, next year, the final year of our current MTMP we will focus to achieve our EPS goal. Thank you very much.

Ikuko Hongou: I'm sorry, that was a rather early quick question. Thank you.

Operator: Okumura-san, thank you very much. We are running out of time so the next question will be the final question. Please tap the raised hand button of zoom if you have a question. Next question Daiwa Securities, Tokunaga-San Please unmute yourself and ask a question.

Kazuki Tokunaga: Sorry for the second time Just one thing about the impact of the new plans October, December multi-brands ID Monthly Net Edition the momentum is now recovering of the new plants which plan contributed. Is this going to continue? And then Money Activity Plan+ the point return has been strengthened about this points of return in a way outside of the communications up. Will it have an impact on that or will that trend actually be accelerated momentum and impact on the P& L that's all from me.

Ikuko Hongou: Thank you for your questions. New plans effect and future outlook on this Takezawa will address your questions.

Hiroshi Takezawa: Thank you for your questions. First about momentum and the new plans relation between the two. First of all the mid capacity area competition is intensifying. It's a fact to respond to that Komikomi Plan+ and EQ we introduced that plan our response capability, acquisition capability the momentum can be expected to strengthen in the third quarter. Certain effect versus fears were felt and that's shown in the number of IDs and Money Activity Plan au came up with this Money Activity Plan+. From our perspective we give points, so that overall ARPU impact can be well blended or mixed but regarding the major points immediately these points are not something that consumers use but in principle Lawson and many places point through payments if they could use them for our entire economic zone, it's likely to have a positive effect. We are now enhancing the point regents and Ponta Pass is also deployed, so that to Lawson about the impact on Lawson at the moment it has a positive impact on Lawson. In the long-term enhancing fundamentals, we believe that it is it contributes to that. Thank you. Short term communication ARPU revenues other south side of that those revenues may actually go down as an appearance in the short term third quarter standalone I think you could discuss that but partially UQ Komikomi Plan+ by strengthening this Komikomi Plan+ transientry from AU to UQ there's a migration that's increasing as a result partly there's an impact on revenues but mainly concerning this part in the previous term. Communications ARPU revenues what should be reflected in the it's been retroactively modified for the third quarter next term so there was an a bit increase because of that operation from UQ to AU migration. Again as was mentioned in the presentation the number has been increased increasing so short term partly there is an impact While it's a fact going forward towards the fourth quarter revenues we would like to increase that as well. Thank you.

Kazuki Tokunaga: Thank you.

Hiromichi Matsuda: Thank you, Mr. Tokunaga. So it is time, with that we'd like to close fiscal year ending March 31, 2025 Q3 Financial Results of KDDI Corporation. Thank you very much.