We would like to start the press conference on the financial results for the three months ended June 30th, 2026 of NTT Inc. Thank you very much for gathering despite your very busy schedule. I will be serving as emcee from Public Relations Department, NTT Inc. My name is Ichihashi. Let me introduce the attendees today at the beginning. President and Chief Executive Officer, Representative Member of the Board, Akira Shimada. Senior Vice President, Head of Finance and Accounting, Toshihiko Nakamura. Senior Vice President, Head of Corporate Strategy Planning, Akitoshi Hattori. These are the three members. As for the materials for today, they are uploaded on our official website at 1:30 P.M. We will start the conference. Shimada-san, the floor is yours.
Thank you very much for sparing your precious time out of your busy schedule to attend this meeting. This is for Shimada, President. First and foremost, our deepest sympathies go out to everyone affected by the recent Kumamoto earthquake and their families. We are fully committed to restoring services and supporting recovery efforts as quickly as possible, working in close cooperation with telecom companies and local governments to restore communication infrastructure and assist affected areas. Although mobile services were disrupted in two municipalities, they were restored within approximately two days. During this period, we worked to maintain connectivity through measures such as the rapid implementation of JAPAN Roaming. We are also continuing to provide support at evacuation shelters through the Tsunagu Kakeru project, collaborating with telecom companies and battery manufacturers. We remain dedicated to contributing to the earliest possible recovery and reconstruction.
I will proceed with the explanation of our financial results of the first quarter of this fiscal year. Overview of consolidated financial results. Increase in both revenues and income year-over-year. Operating revenues reached new record high levels. Operating revenues increased by JPY 355.7 billion to JPY 3,617.7 billion, driven by the data group overseas, the domestic business group, as well as the Smart Life business for increase, centering around the finance of NTT Docomo. Out of this increase, foreign currency impact positive JPY 75 billion. Profit, despite the cost related to NTT Docomo's customer base enhancement and network quality improvement, growth in Smart Life business profit and business growth of data group, it increased. EBITDA increased by JPY 34.8 billion- JPY 836.2 billion. Operating profit was up JPY 20 billion year-over-year and was JPY 425.1 billion.
To achieve full-year plan, we are committed to work to expand enterprise business both at home and abroad and expand Smart Life business. Net profit was driven by the increase in operating profit and others, and JPY 274.8 billion, up JPY 15.1 billion. By segment, in all of these segments, a deliberate growth both in revenues and profit. Integrated ICT Business segment, despite the cost spent for reinforcing customer base and improving network quality, as a result of customer base enhancement initiatives and others, while Smart Life business expansion resulted in increase in revenues and profits year-over-year. As a result of customer base enhancement initiative, MNP performed strongly and improved from the previous year. Docomo MAX was selling well and resulted in ARPU improvement, and the rate of decline in mobile communication services revenue decreased steadily against the previous year.
We aim for the turnaround to increase revenue year-on-year. Global Solutions Business Segment. In addition to business growth in Japan and overseas, increased due to foreign exchange impact, both revenues and profit increased year-over-year. Regional Communications Segment. Though legacy business revenues declined, increase in Hikari business revenues resulted in increase in revenue year-over-year, and profit remained at almost the same level as that of last year. Net increase in Hikari service was almost at the same level as that of the previous year. Others, real estate and energy. Growth in real estate business of urban solutions led to increase in revenue and profit year-on-year.
I would like to move on to explain four topics. Starting from the global expansion of IOWN. To further drive IOWN business, with the support of government, we accelerate service deployment globally in Chile. Survey and demonstration to advance remote operations of heavy machinery through IOWN APN has begun at Codelco-operated copper mines to solve issues such as working environment improvement. In India, a feasibility study aimed at improving energy efficiency of data centers in India through the deployment of switches incorporating photonics electronic convergence devices, spec 2, has begun to achieve power-saving, large-scale distributed processing with financial institutions and other partners. We will continue to expand use cases in various countries and industries, visibly promoting steps to social implementation of photonics electronic conversion devices, and accelerate global expansion. I will explain launch of distributed GPU demonstration environment using IOWN APN.
We launched the GPU over APN Testbed, a nationwide distributed GPU demonstration environment using IOWN APN in July, enabling customers to experience the use of distributed GPU resources. Low latency, high volume connectivity, and distributed GPU resources across eight nationwide locations enable verification of advanced AI load, including distributed AI training, distributed AI inference, and high volume data transfer between sites. Through provision of real-world environment, we will accelerate the realization of AI-IOWN through customer co-creation, generating new use cases and practical expertise. Thirdly, I will explain the initiatives for sustainable operation of social infrastructure. In social infrastructure, including water, wastewater, and waste management, aging infrastructure and labor shortages are getting serious, and new mechanisms for sustainable operation is expected. To solve this issue, NTT will promote operational efficiency through DX at water and wastewater treatment plants through business alliance with Metawater.
At this juncture, we acquired Metawater shares to build long-term collaborative relationships. Building on this initiative, we will aim for the achievement of cross-sector, wide area social infrastructure management services through deployment in areas such as renewable energy, road, and disaster resilience, and contribute to building sustainable social infrastructure along with the municipalities and communities. The progress under medium-term management strategy since May is as shown here. That concludes my explanation. Thank you very much for your attention.
We'd now like to take questions from the members of the press. First of all, we would like to start by inviting questions from the reporters present here at the venue. If you have a question, please raise your hand. Our staff member will bring a microphone to you. Please state your company name, media, and your own name before asking your question. Due to time constraints, we ask that you limit your questions to two per person. If you have two questions, please state them both at the same time. We now like to take questions. From me, on the left-hand side in the second row, and the reporter in gray suit. Kobayashi from Shimbun.
DOCOMO Financial Group, it was launched in July, and in this particular quarter, financial results and DOCOMO finances have really greatly contributed to the business performance. What is the expectation to this particular service?
Thank you for the question. As Kobayashi-san has just mentioned, as of July 1st, NTT Docomo Financial Group was launched. Banking, securities, loans, insurance, all these, the so-called across the financial sector comprehensive services are now being available. With this, making it a very big starting point, d POINT could also be combined together and to really offer a very robust and strong financial services. We have come to a stage whereby we will be able to build even a more reinforced disciplinary national platform. The major one is the banking arm. DOCOMO, well, SMBC is the sort of the name, but it is named under the DOCOMO, and this banking function is drawing much attention and expectation. There are approximately 2,000 docomo shops.
Currently, as of the end of August, there are 200 shops who will be able to really provide support to the opening of the bank accounts as well as securities. Other than the docomo shops, we will have 80 e-shops, which would be able to really offer the support. By the end of this year, we would like to really have the facilities amounting to 1,000 to really provide the various support for these financial sort of functions. Then, we are really going to have 50% of them to be able to provide the support from demand outlets. That is what we would like to really see achieved by the end of this fiscal year. Thank you.
The next question, please. The person at the back. Katsutoshi Takagi from Sankei Shimbun.
I have two questions related to the response to Kumamoto earthquake. As for the damage in fixed line in east and west, there seems to be some damage in the Docomo business, also in the mobile phone business. Compared to the past, it was a rather minor damage. It is not possible to have the simple comparison, but what was the factor for mitigating the disaster impact? Collaborating with the four companies, I believe you had a good benefit over JAPAN Roaming. What went smooth and did you have any challenges?
Thank you for the question. This was seismic scale of seven, and with respect to DOCOMO, there were impacts in two cities. We partially used Starlink, and over two days, we were able to recover at an early stage, just spending two days. Also, in intra-prefectural network and extra-prefectural network, we have operations, and that is related to the cables on the bridges. The bridge was damaged, and as a result of that, the connection was cut. Now we are diverting to ensure the connectivity. In terms of the communications, we do not have any issue on the fixed line. From that perspective, at an early stage, we were able to provide services. Compared to Noto Peninsula earthquake, it was a peninsula, so in order to recover, to secure the route for recovery, there were challenges.
This time, in order to recover and restore the environment, the conditions were better. Along with that, JAPAN Roaming. Each company is using JAPAN Roaming. We were able to extend support, and with the connectivity project, we did coordinate which areas to support. We have divided the responsibilities amongst the four companies, which ensure the efficient support. Along with that, mobile battery. With the support of the battery manufacturers at an early stage, we were able to provide mobile batteries. From that perspective, broad area support structure was ensured, which was good for the company. This should work well, and this earthquake, we would like to reflect, and we would like to prepare for the other earthquake that may arise in the future. We would like to move on.
Just in front of us. Kosuke Shimizu from Nikkei.
In July, you are really going to have the issuance of the foreign currency nominated bonds at JPY 1.6 trillion. I think when I met in May, we had this downgrade in our S&P and also in terms of your business strategy, what would be the potential impact from the rate hike?
S&P downgrade. As for that, originally making NTT DATA, a wholly owned subsidiary company, we were expecting this. It's not that we were taken by surprise, Moody's and two rating agencies in Japan, they are maintaining the same rating, virtually or substantially, there's not much of the impact. The interest rate, 0.1% or so. It's not really up to 0.1%. That is the level of the impact. Very moderate impact. Basically speaking, we can say that we are free from the raw impact. Triple B, even with that, because the outlook is stable. Going forward for the CapEx in our businesses in the future and also the equity participation or the investment, there is no particular issues related to this in this context. Did it answer your question?
Thank you. NHK. Tomoka Miyoshi from NHK.
I have two questions. The first question is mobile communication service revenues. You were able to shorten the level of decrease in revenue, you have announced a new plan. With respect to the rate plan, a revision of the existing plan, are you planning to have any plan for a revenue increase? That is the first question.
Mobile communication service revenue, thanks to your support, consumer communications last year was roughly JPY 14 billion+ reduction in revenue. This year, this will be explained by DOCOMO, it was JPY 1.4 billion decrease in revenue, about one tenth. We believe that this has bottomed. From that perspective, ARPU is increasing, this time we saw the increase by JPY 70, MNP is also working positively. With 3G suspension, this is impacting, overall, we are seeing the recovery. On the other hand, as you said, labor cost and expenses, they are increasing overall. At DOCOMO, at certain timing, cost should be borne. Also, there is still 20% increase, there is a decrease of the capital expenditure for traffic.
We just need to make sure to cover that should be reviewed further by DOCOMO. ahamo, 30 GB, there is addition of 10 GB to 30 GB. This is from marketing perspective, since there is a heightened need from the perspective of the customers, once they use, we wanted to wait and see what the reactions are from the customers. We would like to make sure to see that in the future.
Thank you. I have another question. I'm sorry to ask about the competitors. SoftBank will make the investment to 7&I and PayPay, ID integration will be promoted. With respect to telecommunication operators, points, payment, strengthening of the collaboration is in progress. Once again, for you to differentiate, what are your strengths? You mentioned about DOCOMO Financial Group, but once again, what will be the uniqueness or the differences in order to expand your ecosystem?
With respect to the convenience stores, we are, in principle, open to them. With 7&I, we have a close collaboration to do business. From that perspective, for example, Lawson, when KDDI made the investment, this was the case. If you think about the convenience of the customers, all of a sudden unable to pay in may not be good for the stores. Up to now, 7&I, d POINT, and Lawson and FamilyMart, it's possible to accumulate and also use d POINTS, but that was not the case for 7-Eleven.
With the capital partnership with SoftBank, from customers' perspective, it will be helpful if d POINT can continue to be used from the perspective of the customers. From ID and a marketing perspective, DOCOMO itself has alignment with customers and a marketing company called Carta. 7&I collaboration would be SoftBank, PayPay, and other than that, there is even more extensive collaboration. I don't find any impact.
Thank you.
Next, at this point in time, we would like to take questions from journalists participating online. You can submit your questions via voice or chat. For voice question, please press the Ask a Question by Voice button on the right side of the screen and select your microphone device and then press the Raise Hand button and wait, and we will call on you. Please speak when available to ask a question is displayed. For chat questions, please press the chat button on the right side of the screen, type in your question and press the send button. Are there any questions? At this juncture, we don't seem to have questions from journalists participating online, so we would like to go back to the venue and those of the media reporters at the venue. If you have any questions, please.
Nakao from Kyodo News. Thank you very much for your explanation. I have two questions. The first question, a very detailed question. Earlier, Shimada-san, at the outset, DOCOMO Financial Group. The docomo shop, which are going to be able to really support the financial, are you really going to increase this number up to 1,000 by the end of this year or fiscal year? By the end of fiscal year. Also, I think you are really going to accelerate achievement of this kind of target number. Are there any background factors to support that? Also, what's the sort of leadership being played by the holding side? That is the very first question.
I'd like to really respond to this part. Docomo, well, they were not really saying that they are really going to move slowly in any way, but in the press conference, which made for this NTT Docomo Financial Group, they were really talking about what they would like to really achieve. It is not that we have pushed them to really work faster, but that was really being the case.
Sorry, I was not really confirming very well in the front. On a different note, an economic policy promoted by Sanae administration, this time around, in terms of the growth strategy and basic policy, all these government-related policies have been formulated. AI and IT and space, very well proactive investment is going to be made. That was really decided by the government. I think it is expansionary monetary sort of policy, it will be adopted, we have seen quite a big sort of movement in terms of the weaker yen. That is the sort of the movement in the market. Vis-à-vis the general policy of the administration, what is your take on that? In addition to that, because of the rate hike, well, probably, the funding might become more difficult. As for the interest rate, any request or demand that you have for the current administration?
First of all, w hat is being promoted by the Sanae administration, the 17 core areas, we are to be really engaged because once again, in order for Japan to really revive, I think these are really essential in our view. In that context, we are really well called, we have given the opportunity to really explain on our part. Mainly AI was the main topic, the network to really well connect this AI through APN and to really well support that. Well, you may need to have the distributed sort of power supply. Well, on the other hand, in terms of economic security perspective and marine cables, both in Japan and also overseas, we may have to really pay attention and make efforts to that. These are the challenges.
We hope that the government is going to take the leadership, we, on our part, would like to be engaged in a sufficient manner. First of all the way, we have the APN also between data centers, we do have all these installed. All the way into the outside of Tokyo, in the outlying regions, we may really have to have all these being installed. I think something that should be really looked at from the legal perspective, we have to take care of that. To really provide the sort of system or organization whereby we will be able to provide the adequate support, I think that will serve as the platform and foundation for further growth. In terms of the industrial policy, well, I think it is really important for the infrastructure to be developed.
Now, as for the monetary policy, I am not in a position to say anything about that, but if the inflation issue be well controlled, it is a common sense that the rates should be hiked. For a private company, it is better to see lower interest, but inflation is even more scary. We would leave the judgment to be made by the regulator, that inflation would not be accelerated. The foreign currency exchange rates will hopefully to be stabilized. It would not really be volatile and fluctuating too much. Did it answer your question? Any other question, please.
The person to the left, the third row.
My name is Suzuki, this is a question about the Docomo FG. When I heard from President Hiroe, securing deposit was difficult, after acquiring Net Bank, enterprise sales was required, group assets was required. For example, group employees and sales resources of the group to be utilized. Can you speak about the progress around those topics?
Yes. Competition over deposit. Now we are in the world with interest rates, not just Net Banks, but mega banks and other banks are competing amongst each other to secure deposit. Given the circumstances, Docomo is trying to secure deposit in this competition so that there will be another business growth. To all the group employees, we can ask to join this financial group, but we cannot mandatorily ask them to open the accounts. We need to make sure to have our cohesiveness in order to advertise this financial group, if they can open an account, if they can open account for securities, that will be helpful. Thank you. Any other questions?
We have received a question in chat, I would like to read a question out. Mitsushima-san from Nikkan Kogyo. In semiconductor procurement, it will take longer, what is your view as to the soaring price of semiconductor?
We are not directly procuring semiconductor. As to parts and components of devices, semiconductor is being used. From the device vendors, from the earlier stage, there is some request for the potential procurement. An innovative device might see some impact in optical-related parts and components, they are really asking us to really place orders early on. We are aware of that, so that we will not really cause any inconveniences to our customers, to not to lower the quality of services. There are some cases whereby we are really well as start placing orders and procuring earlier. The prolonged state of the situation, we are going to respond to that. As for the soaring prices, it will depends of the market, we will be procuring at the market price. Thank you.
Thank you. Kobayashi first, please.
I'm sorry to ask for the second time. When you talked about the financial results at the beginning, you mentioned that there was increase of revenue due to the exchange rate. From your management perspective, depreciation or appreciation of the yen by one JPY, what is the impact to the management of the company? That's the first question, I should have asked this question earlier. Docomo's domestic share is now 33% or so, and you mentioned that the mobile revenue of Docomo is now bottoming. What is your expectation for Docomo?
Yes. For the exchange rate impact, I would like to ask the finance responsible person to respond. Speaking about market share, we mentioned 35% as the target. That was the message for not going any further down. In other words, we want to increase, if possible. We said 35 last time, so we hope it will increase. On the other hand, if we include MVNO, we have been able to secure to certain levels, so we should be able to keep that. With respect to domestic share, we do not want to go any further down, so we would like to make sure to halt. Please convey this to Maeda-san, the next speaker. If I may add on the impact of the exchange rate. Now with NTT Group, overseas revenue is roughly JPY 3 trillion per annum.
For example, the exchange rate is between JPY 150-JPY 160. With a JPY 1 fluctuation, there will be roughly JPY 20 billion impact, and the profit is roughly one tenth of that amount. That is all from me.
The person in white shirt.
Kawashima from Kyodo Tsushin. I'd like to read, well, ask questions related to Kumamoto. There has been much of the impact, and also are you really going to review the BCP? As for the unwinding of metal. If there are any possible postponement?
As for the metal, I don't think there is going to be an impact. As for the BCP, whether we are really going to revisit BCP or not, constantly, we are reviewing. This time, those affected, were in shortage because of the Kumamoto earthquake. At this point in time, we have not yet really reflect the lesson on ourselves yet. This is something we do well every time, constantly, if there is any disaster and if there is any incident, every time we are revisiting the plan. That's what we have been doing.
Thank you.
In the interest of time, the next question will be the last question. If you have any questions, please raise your hand. Since there is no further question, with this, we would like to conclude the press conference of NTT, Inc. We would like to move on to NTT DOCOMO Group press conference. Please wait while being seated. Thank you .
Thank you for waiting. From now, we would like to start the press conference on the financial results for the three months ended June 30, 2026 of NTT Docomo Group. Let me introduce attendees. President and Chief Executive Officer, Representative Member of the Board, Yoshiaki Maeda. NTT Docomo Executive Vice President, General Manager of Corporate Strategy and Planning Department, Shuji Sakamoto. NTT Docomo Senior Vice President, General Manager of Accounts and Finance Department, Jun Fujioka. These are the three members. From President Maeda, overview of the financial results will be explained and entertain questions from those who are on-site and online. The floor is yours, President.
[Break]
This is Maeda speaking. First of all, we would like to extend our heartfelt sympathies to everyone affected by the Kumamoto earthquake and their families. As the Docomo Group, we will continue to work toward providing support to the affected areas and ensuring the stable operation of our communication services. Now, I will explain the financial results for the first quarter. Here are the results of highlights. We achieved increase in both revenues and profit for the first quarter, marking a strong start to the mid- to long-term growth. Although the increase in earnings is modest, the results of the transformation initiatives we've been implementing are steadily emerging. Progress against the full year plan is proceeding smoothly, we remain committed to achieving our targets.
In the consumer communications business, we have seen improvements in customer base and earnings, while the Smart Life business has grown mainly driven by finance offerings. The enterprise business is also capturing customer needs for the AI era, expanding its area of growth. I will explain the status of each segment in the following slides. First, the overview of the financial results. Operating revenues increased by JPY 126.9 billion- JPY 1,617 billion. Operating profit grew by JPY 6.5 billion- JPY 246.2 billion, resulted in increase in both revenue and profit. Operating revenues were driven by Smart Life and enterprise businesses, increased over JPY 100 billion. Smart Life grew in its existing business. In addition to the consolidation effect of banking and enterprise business expanded in its growth areas.
Mobile communication services revenues saw a smaller scale of decline from JPY 14.1 billion the previous year to JPY 1.4 billion, performance is improving as planned, heading towards a bottoming out. Group-wide operating income increase was driven by the growth of Smart Life. Consumer communications still result in declining profit, the rate of drop is almost halved from the previous year and keeps improving. Sales promotion expenses stepped up from the previous year, while expanding in the number of port-ins, it's being controlled within the scope of our plan. For the full year, we plan to drive efficiencies and achieve year-on-year reduction. I will now start explaining core businesses, actions, and results. First, consumer communication business. MNP recorded net positive performance in three consecutive quarters and remains improving trend. We believe positive growth secured throughout the first quarter demonstrate the improved customer base has started to take root.
With enhanced sales capability and increasing the number of loyal users and lower short-term churn are leading to lower acquisition costs. In fiscal year 2026, not merely acquiring the number, we are trying to enhance engagement with our customers and build more robust customer base. The number of loyal users using Docomo Max, Finance, and Enaka services has steadily increased from 12.9 million last year to 15.3 million. The port out rate of loyal users has significantly lowered, those who are subscribing to two or more services, the rate is about approximately one-third of non-loyal users. We believe the customer base reinforcement to support mid to long-term growth is steadily progressing. We will keep committed to expand the loyal users. Docomo Max topped four million subscribers. Towards the year-end target of five million subscribers, the progress already marks 80%.
The number of applications for selectable benefits is expanding, value offered not just in terms of the rate, also including that of the content, is supported and appreciated by the customers. We will remain committed to achieve the year-end target of 5 million and aim even higher for further uplift. With the Docomo Max expansion, ARPU reached JPY 3,990, up JPY 70 year-on-year. We are making steady progress toward annual target of JPY 4,010, keep working towards improving ARPU. Mobile communication services revenues, despite the declining impact from lower utilization handsets, with the strong recovery ARPU, improvement momentum is continuing as it is progressing in line with the progress and with the plan, bottoming out is now visible. Today, we announced a new 15 plan to support child's smartphone debut and Docomo.
This is easy to use, adapting to the growth of a child and how it is used by the child. Monthly fee starts at JPY 780 for the first year, and discount is available for parents, too. We intend to be recognized, DOCOMO as a family brand, offering services easy to start by both parent and child, and they find easy to keep using. Next is Smart Life. The operating revenues increased from JPY 301.1 billion- JPY 418.4 billion, up 39% year-on-year. In addition to consolidation effect of the bank, existing areas including finance, entertainment and marketing have also increased.
Finance payment transactions increased over JPY 500 billion from last year with expanded use of d Card and t hrough daily payment, our contact with customers' daily monetary use is expanding. This is the solid strength of DOCOMO Group. Going forward, placing banks as origin, we will expand this daily point of contact even further. The nexus of the strengthening is DOCOMO setting DOCOMO as a payment account for d Card will increase reward rate of shopping. If it is paid in d Card, it is subject to cashback, and in the initial year, it will be the maximum of 3%, even by touch payment f urther, if securities or brokerage are combined, maximum will increase to 4.5%, depending on terms, even higher. The tripartite collaboration among NTT Docomo Financial Group, DOCOMO and Monex Securities enable this.
The foundation built by communications will expand from banks origin to payment and asset formation. To ensure use of financial services to more customers, reassuring support structure is essential. The nationwide docomo shop is our strength, and we will expand the support capabilities cultivated by smartphone classes to financial services. Already, some docomo shops support opening brokerage and NISA accounts. Also, support for bank accounts openings and initial settings will roll out shortly. We will expand the number of docomo shops capable of ushering and supporting financial services to 1,000 early to strengthen engagement with customers. Next is enterprise business. The growth area integration and platform grew 8.4%, driving increase in revenue. It also covers security demand of large enterprises and continues to accelerate the expansion of growth area. Our focus area, AI business, increased 12% in revenue year-on-year, driving growth of enterprise business.
Its core AI-Centric ICT Platform materializes AI-IOWN promoted by NTT Group and accelerates deployment as platform to achieve social implementation. Furthermore, security expected in the era of AI is strengthened, such as threat information sharing of DOCOMO business RINK, AI associate, NTT DATA aligned services are strengthened, and we will support customers' AI use and secure business operation together. The number of AI-Centric ICT Platform increased by fivefold. DOCOMO Business NAS, DOCOMO business RINK is expanding as a platform to provide enterprise network on demand and with flexibility. Going forward, we will enrich services catering to the needs of the customers and evolve as AI native infrastructure in the era of AI. Network. We will continue to build base stations at the same pace from the second half last year to improve network communication quality.
In Q1 fiscal year 2026, we built approximately 2,500 base stations, of which 1,500 are 5G base stations, which is the same level as the first half of fiscal year 2025. Establishment of base stations is making steady progress. Although we see annual increase in traffic, the average download throughput in the center of major cities nationwide is improving. To achieve more nationwide connectivity and offer comfortable communication environment to customers, we will further drive building of base stations. Further expansion of 5G area in subway stations is steadily making progress. As of July, 303 subway stations have been completed across Japan and over 70%, 206 subway stations, have been completed in metropolitan Tokyo. We will continue to promote this. Actions for further improvement to experience quality cannot be measured by the number of base stations. We started to introduce latest equipment. Let me share two points today.
Firstly, the commercial introduction of the latest base station equipment, first in Japan. The new Ericsson equipment has the full-time processing capacity compared to the existing equipment and 50% less power consumption, achieving both performance and environmental performance. Secondly, operation of the largest bandless tri-band massive MIMO by using three spectrum bands owned by DOCOMO together, 280 MHz band is used simultaneous, allowing maximum three-fold speed compared to conventional communication. Through the introduction of the latest equipment, we will ensure comfortable communication environment in areas with usage concentration of customers such as congested urban centers and event venues. DOCOMO Starlink Direct, launched on April 27, topped 6.5 million users within approximately three months. In September, we will launch international roaming and deliver reliable connectivity when sky is in sight. In addition, we are promoting demonstrations of balloon-type HAPS.
From September at MIC project, we plan for three demonstration in Noto, combination of air-to-ground communication and high-resolution image capture, primary industry labor saving and infrastructure monitoring, including dams, to be applied in grasping disaster situations, deliver the peace of mind of having reliable connectivity in mountains, on remote islands, and at sea in emergencies. Q1 started with increase in both revenues and profits. We will improve consumer communications, further promote growth in Smart Life and enterprise to steadfastly achieve full-year plan. Thank you for your attention.
We will now take questions from the members of the press on financial results overview. We would like to start by inviting questions from the reporters present here at the venue, then we would have the questions coming from those journalists joining online. Then, we would once again like to come back to the venue. As we wish to entertain questions from as many reporters as possible, please limit your questions to two per person. I will call on you, and when you are called, please state your company name and the media, and your own name. Please raise your hand. From me, on the left-hand side in the second row.
Sano, a freelance writer. Two questions. Firstly, this is not directly related to financial results, but there has been some failures in the Docomo Bike Share . What are the sort of reasons, how long will it take to really restore these services?
Well, sorry for causing inconveniences. The system is worth switching over to a new system. Then there seems to be some troubles coming from that, while they switch. Limited to Nara City in Nara, we are working on restoration of the services, and there are no issues as so will be tomorrow, in total and outside of Tokyo eventually. Very sorry for inconveniences we have been causing. Have you identified the specific causes? This is the sort of the shift or switching over to the new system, and the issues were caused by that.
Second question, related to HAPS in your company, you have been engaged in the H type. At this time, you are really going to use the balloon type. LTA type of SoftBank, is it similar or is there any difference, why are you going to use this for balloon type HAPS? What is the sort of rationale behind choosing this?
We have been using the conventional type, but this balloon type, from a little before we started, we were considering the use of it. Balloon type, compared to that of SoftBank, it is smaller in its scale, relatively speaking. You can really fly that from within the sites in Japan. I think it has more flexibility. With the winged ones, you have to make the device or aircraft, sort of your body lighter. But as you have said, cameras with sensors could be installed on this balloon type. It is more suitable to really install these devices.
Of course, we are really working with this for Starlink. In order to have wider coverage, but vis-à-vis different industrial sectors, we would like to really offer more solutions. At the time of the disaster, many people might use the communication from the air. If we have diversified the sort of methods, that would be more preferable. We would like to really expand these types of possibilities.
Thank you.
Moving on to the next question. The person in the second row to the left. Left.
Takagi from Sankei Shimbun. The first question is related to Kumamoto earthquake. In terms of the status of use of Starlink, do you have any case of using communication through Starlink?
At the time of Kumamoto earthquake, I do not have any material over how many people accessed. As soon as we know, we would like to inform you.
The second one is SyncMe. You mentioned that you're going to have a full scale in summer, and it's getting hotter now. It is in the demonstration, what is the potential in the future?
Yes. This is being used by quite a number of people, we did mention that it is planned for summer, we would like to improve further functionality, we would like to enhance the capabilities. We would like to now shift the timing, and are now adjusting for fall for SyncMe. From the past, we heard your reactions, we would like to use data to provide AI services. Even without entering, you will be able to obtain enormous information, we have seen positive reactions. We will add further functionalities to make it even more convenient.
Thank you.
The very front row, on the right-hand side, Ishikawa, Freelance Writer.
40 Giga, well, campaign started in August. When I really go to ahamo site, there's so much of the information, 30 Giga, there is not much of the sort of strong promotion or appetite. At the previous financial results briefing, if you could update us as to how you are really thinking about the rates.
Data capacity, as Shimada-san mentioned earlier, basically speaking, the way our dear customers are using. We would like to really look at how this is being used. The traffic volume is increasing over 20% every year, that's what we have been sharing with you in ahamo. There were so many opinions, we have been offering 30 GB from two years ago or so. Per session, data volume is increasing. Data volume itself of the content is increasing, this is not something the customers can control.
In this way, the environment in which the customers are using is really changing. At what level should we really offer services? In their daily life, if they are thinking that they are short of the capacity, even if there is a sort of limit imposed, that might not be so good for the customer. If we really would like to really increase this capacity and then to verifiscal year how this could be used. We would be trying to really understand the actual usage. That's about the sort of data capacity. As for the rate plan change, our peers are constantly changing, but various cost is soaring in various ways.
Having said that, the traffic is increasing, making investment and to really provide the higher quality service to the customers, if that is really essential, then we have to secure the fund. We are in the same situation as our competitors. In what way should we do that? We need to really well consider, nothing has been decided, but we are really having that kind of perspective.
Thank you. The person to the right behind.
Yosuke from Keizai Watch.
This is a follow-up. ahamo is now increasing, and this is just for verification, but if you think about it, this is a substantive reduction of price. To you, it is not leading to upsell. According to what was explained, there is an increase in cost. It seems like there is inconsistency in your explanation, but can you elaborate on that?
Yes. As I said, in principle, what we do as an increase of Gigabytes is just for demonstration purpose, and rate is separate. We are not trying to make sure that this is going to be the permanent plan as a service plan. If you connect all of those factors, it may seem inconsistent, but we are considering this as something independent. As for the rate to customers, we will balance service level and cost.
Thank you. I have one more question on communication quality. At the end of the presentation, you talked about base station construction, and you mentioned that the throughput is also improving. This kind of outcome, it's very difficult to provide numerical indicators, but to which level are you reaching compared to the goal you have? What is the progress so far?
Well, I might have mentioned that this is quite favorable against our plan, but we will implement what we are supposed to do to ensure high quality communication to our customers, and that is the background of building base stations. As we have been explaining, this fiscal year, we would like to make sure to have 10,000 more base stations for 5G. If you ask whether this is sufficient, that is not necessarily the case. There are causes. We had a shortage of components, and we are slightly behind our schedule on a nationwide basis, but including 23 wards where the population is concentrated, we are prioritizing. Versus our plan, it is overachieving our plan at the moment. As to which level and which step are we reaching, it's difficult to say, but as I said, we need to expand the number of base stations.
We also need to do the tuning as well. As a result, we are trying to enhance our quality. We are still halfway through in our process until we fill the gap. We are cognizant, and we are trying to enhance our quality with speed.
Thank you.
Next, dressed in yellow, after that, we would like to take questions from online. Tanaka from [inaudible. SyncMe, and also the cross-use in finance. You are really talking about the collaboration with data group, but the other competitors are trying to really combine the purchase data and various other data. Are you really going to really have the sort of your common ID and individual ID with others by partnering with somebody else?
An ID. We do have 100 million IDs, and we cannot really increase to that number just by us on our own. We have really worked together with our partners and reached this far. dPoint merchants and payment merchants, and we have worked together with them, not just in terms of the number of members, but the data, related to understand how the customers are using this, is being available, and also the payment itself, as I have really shared with you on slide earlier. Just in this first quarter already, almost JPY 5 trillion, the transaction amount was achieved, and also the payment amount of JPY 19 trillion is being aimed at. Our strength in dPoint itself has dPoint merchants, and then we have been working together with them. We have more than 700 companies inclusive of them.
What are the payment transactions? What would be the potential growth in its further transaction volume? Not just limited to dCard, but the dPoint, and I think annually, we have more than 23 million worth of it. The lifestyle of customers should be understood very well. On top of that, we are going to make use of the data related to customers. By utilizing various different types of data, we are really going to create more of the offerings. I think the relationship with the partners are really supporting this. Amongst the partners, and by the linkage of ID, have already been established with some of the partners. Over 10 million IDs have been linked together with some of the partners already.
With those other partners' ID and data, also, where exactly this is where AI comes in. With the AI, we are to really have the better understanding of the customers trying to really improve our corporate value. As one way of achieving that, we have finance on the same platform as finance. To support the daily life of customers, we are to really offer ThinkMe as well. We believe that we are able to burden this area. That's something we would like to further pursue. Thank you.
Next is a question from online. You may speak up, or you may enter through chat. If you would like to speak up, please use the raise hand function. If you would like to submit your question through chat, please enter in the chat and send button. If you have any questions, please. We have a question in chat. Mizushima from Nikkan Kogyo Shimbun. MIC has demonstrated a policy to have the split for the maximum of one year as a benefit for switchover, for hopping, a measure. What is your view?
From last year, this is becoming a challenge, not for only us, but other operators as well. In order to have the countermeasures against the hopping, the view in the last council meeting, is that there is a progress, which we welcome. By implementing measures, we will ensure measures against hopping to secure customers with high quality. In the presentation, I did mention, how to increase loyal user and spending promotional expenses, how are we going to ensure efficiency? In order to do that, we need to suppress the number of churned customers.
We would like to implement our measures. Once again, how to control our handset price. We were taking measures that not so many customers will be included. If we have application of numerous or multiple benefits to customers, we are trying to prevent that so that the customers will not churn at an early stage. We would like to ensure to have such measures. Thank you.
One more question we received in chat.
Kaneko of ITmedia. ahamo 10 GB is being offered and also SNS. While there are some complaints with respect to the communication qualities vis-à-vis users, when will the communication quality could be improved, and also what are the issues that you need to really address at this point in time?
As I said earlier, still it's been improving, but we are still on our journey. Particularly while the densely populated areas, we really have to do more. From the user's perspective, of course, for inclusive SNS, we are tracking the customer's voices and also vis-à-vis these were challenges, how we will be able to implement measures as quickly as possible. Just while this boils down to that, in terms of the progress, we hope that we will be able to share with you the progress made to that point in time.
Once again, we would like to go back to the venue and in the middle and the front row, the blue shirt.
On ahamo questions. In June, JAL Mobile, powered by ahamo, started. What is the reaction? What is your plan going forward?
From President Maeda, we do have positive reaction. Those customers who are fans of JAL, many of them are travelers. When they go overseas, they can be assured to use a data volume. It is a service that provides assurance. We are catering to such needs, and the sales are in progress according to plan. As I explained, this is a kind of ecosystem, and we are providing functionalities. Of course, to such partners, it will be useful. From our perspective, we are able to capture new customers, not only limited to JAL but to other customers. We would like to continue with our efforts.
Understood. My second question is what you announced today, this parent and child discount. For parent, there will be a one-year discount, and ahamo will be significantly low in terms of rate. I think this is opposite to your plan of increasing rate. Originally, we had a strong image that the family equals a Docomo. Do you think that this image is weakening?
Yes. In the past, there was impression that the family is Docomo, but now this perception is getting lower. This is what we recognize as a challenge. Of course, depending on services, we are expecting that the payment will be made. At the same time, we would like to have our customers with a long-term use. Not only about the MNP, but the net increase of handset is also important. We also consider this important. In the past, because the share was very high, those in senior population, when they die, they churn, and against that, there are customers who use smartphones newly. We need to make sure to have good structure of our business. As the aim of our business, we find the importance there. This kind of initiative is something that we are relaunching.
Thank you.
Thank you. On my left, the person in the first row, please.
Football World Cup and DAZN had broadcasted the games, so it was monopolized by the Zoom. Because of that, DOCOMO MAX the subscription, was there any positive impact from that? That's the very first part of my question. Just the other day, it has been auctioned and you won that spectrum. How are you going to make use of it?
I think there was a positive impact from the World Cup. As for the customer acquisition, it contributed to a certain level of the customer acquisition. Since springtime, World Baseball Classic, there were other sports events. There are quite large number of sports events. From the end of the year to the first quarter, I think that was one of the factors of the increase in the number of an increase in subscription. I think it was really conducive to activate the market and particularly, June, July, and the active usage of Zoom, it was really high.
I think there have been a positive impact in different ways. The millimeter wave and the 25 Giga. It's not that we would be able to really install these base stations in a short period of time, but as we are seeing a such growth in the data volume and also the way the code that is being consumed, and also with the AI. From IoT devices as well, also other traffic increase, which will be caused by the use of AI, while we can't really anticipate a such volume increase. We would like to make sure that we will be able to take advantage of the millimeter wave 28 Giga.
Also we have the other the millimeter wave. We would like to take advantage of our strength so that we will be able to really offer higher quality service to a customer. We would like to really well get ready for a such upcoming trend.
The person in the middle row and at the front. Koyama from Freelance.
It's been just one month with DOCOMO FG, is there any trend of the users? Is there activation or is there outflow? Is there any unique activity of the users, although it has just begun?
Yes, we have just begun this service. As we explained, the first major initiative is the collaborative campaign with the bank. We would like to have a good reputation so that we can acquire more customers. In order to promote financial services, it is important to have increasing number of bank accounts and deposit in order to improve our profitability. The biggest scale is d Card, we hope that this will be used for the accounts for payment of d Card. That will be one of the measure to expand our sales.
We would like to start from there, and if possible, we would like to expand to other financial services. The second question is exchange rate, you have the strength in enterprise business. Have you seen any progress? To be specific, with the sales trend of enterprise business, there isn't anything that we can explain, but there are inquiries as far as I know. This is more related to financial group. We have some projects with Tyme, once again, there are needs for these services for growth, and if possible, we would like to strengthen this. In this ecosystem, this is a novel service. This is becoming one of the weapons for our differentiation. Thank you.
In each of time, we have three journalists who are raising their hands, we would like to really take their questions. The person at the very back of this room.
Kawashima from Kyodo Tsushin. Going back to HAPS, by the end of this fiscal year 2026, you are to start the service. Is it going to be just on a trial basis? How many HAPS are you going to have? For the disaster prevention and also some usage in industry, what are the possible application? If you really have some plans for it in Noto.
Commercialization by the end of fiscal year 2026, we have not made any firm decisions yet. The reason why we have shared this, because we get confirmed this kind of needs. The needs for the companies as well as the municipalities, rather than the individual. Relatively speaking, within these smaller areas, if this kind of solutions can be offered, I think that could be possible. What kind of HAPS will be required? By having this demonstration, while the attempt, we would like to really confirm the specific needs. Approximately, we are going to do this until the end of September.
Thank you.
The person at the front, Eguchi from The Asahi Shimbun.
Again, on HAPS question. This is demonstration, why was Noto area selected?
Yes. Originally, we had collaborative agreement with Ishikawa Prefecture two years ago, using HAPS. What kind of a solution could be possible? That is what we have worked together. We are now demonstrating and coming to this stage. Thank you. Another question is about competitor. SoftBank has said and made announcement that this will be after August. In the industry, this kind of development is becoming quite competitive. What is your take on that? Yes. Rather than competition, what could be the possible approaches and what can be delivered as value through social implementation, that is still at the exploration stage. There are different technologies and there are different choices, and for them to become the real value, it is important. Not only us, but the other players to address this will be good for the society. Thank you. The last question.
The reporter in the middle. Ishii, freelance journalist.
As for the acquisition of the smartphone handset, I think this was also mentioned as being critical. The smartphone price is rising, Miyakawa of SoftBank Group. High-end world handset model price is going to increase. What is your view from the NTT DOCOMO? How you're really going to acquire the handset sales. What will be the sales price trend for the handset we are going to deal with?
Generally speaking, in terms of the memory prices, generally speaking, there is an upward trend. I think that is indeed true. What we can do is to really collaborate with the manufacturers and to secure the things that we need early on and to really offer those needed devices, and visit with the customers. We hope that we would be aiming for the affordable price. However, it will tend to be higher and to reactivate the secondhand device market. Also, we are to really upgrade the programs. To the extent possible, we would like to really lower the burden placed on the customers. There are different ways that we need to really explore.
In order for the customers to use it for longer term, and also if they are to really buy a new handset and come to us, we need to really make sure that we will take the adequate and appropriate approach. That might be very important. Lastly, if I can just supplement. Earlier, as for the Kumamoto earthquake 2026, also there was this usage of Starlink. On the same day, the previous week and the usage was increased by threefold or three times.
With this, the financial results briefing of NTT Docomo is concluded. We are really going to have the press conference of NTT DATA Group for financial results briefing. Thank you very much for your attendance and you are requested to remain in your seats for a short period of time.
[Break]
Thank you for waiting. Thank you for your attendance despite your very busy schedule. From now, we would like to start the press conference on the financial results for the three months ending June 30th, 2026, of NTT DATA Group. Let me introduce the speakers today. Representative Director, President, and Chief Executive Officer, Kazuhiko Nakayama. Senior Vice President, Head of Corporate Strategy Office, Corporate Planning General Headquarters, Eiji Yoshida. Senior Vice President, Head of Finance Headquarters, Keisuke Kusakabe. These are the speakers. The emcee is Tasaki from Public Relations. As for the presentation materials, we only have the materials for financial results. The materials are uploaded on IR information of our official website. Please download as necessary. Nakayama will provide explanation on the financial results for first quarter of 2026.
I'm Nakayama, NTT DATA Group. Thank you for taking the time out of your busy schedule to attend today's financial results briefing. Before I begin my presentation, I would like to express my heartfelt sympathies to all those affected by the Reiwa eight Kumamoto earthquake. I now will present the financial results for the first quarter of fiscal year 2026. This is today's agenda. First, I will explain the Q1 results of fiscal year 2026. Please turn to page four.
Here is a summary of our first quarter year-on-year changes. Net sales increased by JPY 174.6 billion year-on-year. Operating profit increased by JPY 5.7 billion year-on-year. Net income decreased by JPY 0.8 billion year-on-year. New orders received increased by JPY 334.6 billion year-on-year. This marks a solid start to the fiscal year in line with our earnings forecast. Please turn to page five. First, new orders received, as I said, increased by JPY 334.6 billion year-on-year.
In Japan segment, it increased by JPY 88.6 billion, driven mainly by large-scale projects won in Public and Social Infrastructures and Financial businesses. Overseas segment saw an overall increase of JPY 249.3 billion by data center business of GTSS and large-scale deals won in EMEA. In EMEA and APAC, where we aim for performance recovery, new orders received increased year-on-year.
Please turn to page six. Next, net sales increased by JPY 174.6 billion year-on-year. Japan segment grew in all the businesses by JPY 43.6 billion year-on-year in total. Overseas segment increased in all the units and segments, and segment total increased by JPY 136.9 billion. Just as we saw in new orders received, net sales was also very strong. Please turn to page seven. Operating profit rose overall by JPY 5.7 billion year-on-year. Japan segment posted an increase in all the businesses with year-on-year growth of JPY 9.8 billion in the total segment.
Overseas segment declined due to the JPY 4.7 billion impact from the absence of usage fee income of the data center sold to Singapore REIT in July 2025, which was included in the first quarter last year. In addition, non-recurring revenue in data center business decreased year-on-year. However, excluding these impacts, the profit recorded growth, and we believe operating profit was generally in line with the expectations as well. In the first quarter, no gain on sale of data center was recognized.
Please turn to page nine. This shows the breakdown of Japan segment results. In all three businesses, new orders received, net sales, and operating profit increased year-on-year. Public and Social Infrastructures increased in both net sales and profit, primarily due to favorable business for central government-related agencies. Financial increased both in net sales and profit, chiefly supported by insurance industry businesses and banking businesses. Enterprise increased both in net sales and profit, thanks to entertainment industry businesses, a steady start for the entire segment. Going forward, based on the recent solid order, we will strive to achieve our target. Please turn to page 10. I will explain the breakdown of Overseas segment results. In North America, the expansion of scale in network equipment-related business resulted in increase in both net sales and profit.
EMEA increased in both net sales and profit overall, driven by growth in IT services in Spain and Latin America, efficient operation in direct segments, and impact on transfer in some segments. APAC decreased in profit due to gross profit reduction in Australia, but it is strengthening consulting segment and others to recover performance. Global Solutions Business decreased profit on constant currency basis, barring impact from the earlier mentioned data center business. It is viewed as effective increase in profit. We will continue our efforts to improve profitability and aim for the achievement of the overall performance target of the overseas segment. Please turn to page 11. This shows the status of the data center business. I will skip the details, but the investments are growing steadily, and the total power capacity and operating results are in line with our plan. Please turn to page 13.
From here, let me share key business topics to achieve quality growth strategy. We aim to advance AI-driven client value creation and reliability enhancement in two focus areas: AI-empowered new value and productivity, and next-gen infrastructure. In addition, we are strengthening our capability to implement and deploy AI solutions in Japan and abroad through collaboration with NTT Group companies and M&A. From the next page onward, I will talk about each initiative. Please turn to page 14. First, AI-driven client value creation and reliability enhancement. NTT DATA AIVista has launched core AI platform to achieve industry-specific AI. It has proven high-level accuracy in early adoption for insurance BPO business and won orders in Europe and the U.S. Domestically, we promote deployment in the banking and insurance industries. Furthermore, leveraging Frontier AI, we launched comprehensive cyber risk management service supporting vulnerability detection, recovery, and continuous response.
Based on our development capabilities and experience in critical system operation, and by combining NTT DOCOMO Business network area security expertise, we will contribute to the achievement of secure digital society. Please turn to page 15. Let me now turn to the enhancement of capability to drive client business transformation with AI. In Japan, NTT Marketing Act ProCX will become joint venture between NTT West targeting October 2026, placing our AI platform, Neutron, as a core and integrating the strength of the two companies. The related business, including contact center, will evolve to next-generation BPS business and aim for JPY 100 billion in fiscal year 2030. In overseas, we acquired over 1,000 Microsoft Azure and AI specialized talent from the acquisition of WinWire Technologies.
By combining companies' AI data and cloud implementation capabilities and our industry knowledge and customer base, we will accelerate our AI business growth primarily in North America. That concludes my explanation. Thank you.
We will now take questions from the members of the press in the venue. If you have a question, please raise your hand. To my right, and the reporter in the second row.
I'd like to ask questions related to external environment and Big Tech AI investment outlook and hyperscalers. What have been increasing issuance of the corporate bond. They are really doubling all this and going forward. The growth of the investment, if there is any potential risk of the declining investment going forward, if you could give us your outlook. For the other next question, it is related to Chinese AI model. Moonshot AI model is emerging, and it is almost becoming equivalent to that of others in the system area of your company. You are focusing on the Europe and the U.S. models, you have more of the data centers in those regions. As you see the emergence of these AI models in China, what could be the potential impact on your business?
The first question, Big Tech issuance of the corporate bonds is being done in a very active manner. They are increasing their investment size and going forward, depending on the circumstances, if they are not able to recover the investment, could be possible that they may withdraw from the sector. Well, got it. First of all, AI, Big Tech, in the financial market, they are really issuing the corporate bonds in a massive manner. The equity-wise, IPO is ongoing and AI related, as well as data center-related areas. There are a restorative circulation of the investment amount. There is further increase in terms of the demand. On our part, data center business is one, in order to really well either capture such a demand.
What we can do with our own fund or own money at hand, in order to secure the future cash flow, we are to establish bid. Wherever we have the increased demand, in order to address that, development type joint venture is going to be well established during the course of this year, to really capture the very robust demand. Big Tech and other funds are allocating much fund into this. We would like to really well make use of such fund so that we will not be losing against the others in the competition. As you have just said, it's too much of the money and going forward, if there are any changes such as the changes in technology, there could be some risk of not recovering investment.
Whatever we do in terms of the business, in case of data centers, a 10-year or 15-year contracts are being signed with the customers. Lately, only after receiving orders, we are to really well build. In the immediate future, there is no such risks. Lately, everything is becoming data-driven. It's not that we are preempting the market demand early on, but we are trying to really well catch up with the demand. Even if there are any event in the future, we would be able to really manage by controlling the adequate size of the business. The next question is Chinese LLM are emerging and how are we going to really respond and address such emergence? As we have explained earlier today, LLM and others. Not really we're deciding on which of the model we are going to use.
We are trying to figure out what should be the best depending on each circumstances and not just limited to Japan, but overseas APAC region particularly. They are really affected more strongly by the Chinese players. If there is any request from the customers to use them, then we would like to be forthcoming in trying to accommodate their risk. Depending on the circumstances prevailing in each of the countries and what models should be chosen as the best choice, it differs from one country to another. We would like to really well make the adequate choices depending on the situation. Thank you.
We are taking the questions from the venue first, then we will take questions from the journalists who are joining online. If you have any questions, please raise your hand. The person who is second from my view.
My name is Takagi from Sankei Shimbun. You mentioned about using patch for security, and that is done as one-stop service. SoftBank is also appearing on that, and they are quite aggressive in their sales activities. This service business, what kind of competitive landscape are you expecting and where is the strength of the NTT DATA?
Thank you for the question. This service, on July 7th, we announced that we will implement, and this will start from the end of July, and it has been just a while since we started. We need to have more services. Now we have inquiries from over 50 companies.
To your question, we have been managing system operation of many important customers, and as to how to promote cyber risk response, we do have the know-how. Internally, technology supporting team is existing and so-called the Frontier AI. On the Frontier AI, we have LLMs from many players, and there is a team that is researching and also analyzing such LLMs. We do have the know-how, and we have the team. From the customer's perspective, there are only limited number of customers who are able to respond to this internally. Through the system building and our expertise, and there is a team to oversee this development. I don't know how I can compare this team with the others, but I think we have the strength. Another point is related to the entire NTT Group.
After TOB, especially collaboration with DOCOMO business is progressing and from the maintenance of network perspective, they have the knowledge, and they have the know-how, which is the unique strength of us, and we would like to focus on that.
Thank you. As a follow-up, within the patching service, you have mentioned the use of multiple Frontier AI. With the access right issue, is it possible to continue to use the latest model? We do have concerns looking from outside. How are you going to do the relationship with big tech? What is your view on that?
The so-called big tech, with them, and not only limited to Frontier AI, but more broadly, we are collaborating and especially data group is now having a certain level of scale. We are able to have direct communication with the top management of such players, which is good for us.
As you pointed out, the latest model, for example, some can be received with our offer or sometimes it is regulated, and it is not possible for us to use. We need to respond steadfastly. On the other hand, although there are ones that we are able to use, some have higher levels of attacks, and there are several of them. We are trying to combine and we are trying to adapt as much as we can. We would like to look at this more comprehensively. Thank you.
From me, the woman reporter in the very first row, please.
Hisatomi from Nikkei . I have two questions. First question, related to FDE. Overseas particularly we're centering well in the U.S. where there is a need for the upgrading of the FDE and how are you looking into that and also the changes in organization and also related to that Well, how many talent do you need to secure? If you have any concrete information, well please, let us know. Also, the EBITDA, there is this target to increase by 50% in five years. What is your outlook of achieving this?
Firstly, I'd like to respond to the question related to FDE. Seto-san. I was expecting that you were really going to ask how many people, but well, today, I am afraid I will not be able to really well answer your question. How to define FDE and also, well, those of the employees who are resident and customers, and also ask for the big tech, how they are going to really introduce AI and how to take the lead in introducing AI and also the actual implementation of AI. That is how we should define them.
In the first place, they do own services and to deploy the AI related services. Actually, well, the implementing them, they are to really upgrade or reinforce FDE. Also, in domestic business of ours, we do have a long-standing relationship with customers. On the customer site, we have this decent number of resident engineers. As for the legacy type of businesses, they are really well, the resident engineers, were in the customer site, then they would pick up the customer's wants and needs and then address that. But in the last few years, that will not be sufficient enough. The consulting type or the SI should be promoted and to really have the good understanding of the customer's business and from us, to really offer proposals for their business transformation and what kind of systems need to be introduced.
In terms of the direction, FDE definition and consulting type of the services will be offered to promote the implementation on the part of the customer. We have been doing it. How to really combine AI internally, this so-called FDE, and how many employees are qualified for that. We need to really start defining adequately and start counting them. In the career development, very recently, starting from this fiscal year, we have included this for FDE to really start certifiscal yearing some of our employees to really promote their jobs. The U.S. big tech, if you want to apply the same line of thinking, in December last year, we have set up our AI business on the West Coast of the U.S.
As we have explained it a little bit, a core AI platform is to be built, by utilizing this, there is going to be the switchover shift of the system on the customer's side. We are to really offer proposals for doing that. Which page was it? In the information deck, on the left-hand side, you find that first of all, the U.S. and European type, also we are promoting this in Japan as well, deploying this on the customer's premise. We are to really modifiscal year the core system to the customer's system. That kind of job could be done by the personnel who could be classified as FDE, which is very similar to FDE. We would like to increase the number of such talent.
Rather than recurring business, we would like to increase the proportion of the recurring type of business. In that sense, we hope that we will be able to promote while introducing this FDE type of DE personnel. EBITDA related question, when we announced the financial results in May, as a company in 2030, EBITDA and JPY 800 billion of EBITDA in 2025, it will be increased to JPY 1.2 trillion, which is the increase we aim for. As to the feasibility, we have just begun this, quantitatively, I have nothing to share with you at this point. We have this five-year plan, we are to really execute the annual plan that we will be able to achieve this. This, well, the 50% increase.
50% increase in five years, 10% growth per annum. The profit level needs to be increased 10% in revenue and profit. Well, I think that this is the industry standard for the industry in which we are operating. The midterm, the growth target of the similar size is being indicated in Japan as well as in overseas markets. As for the data center business growth rate, we have been saying that the growth rate ranges between 15%-20% also for 25% per annum growth is sometimes indicated. Though it is challenging, but in terms of feasibility, well, we believe it is quite achievable, but qualitatively. A man-month type of business.
If we are just depending on that, it could be quite challenging to achieve because, we have to increase the headcount by 50%. IT service in our domestic market, we have to really compete to really secure talent and 50% increase might be very difficult. The evolution of IT by the use of AI. Quite a large part of the jobs will be seeing the labor saving achieved. Per project, in terms of the volume, we are not so much concerned, but AI Vista and asset type or the recurring type business, should be increased in its proportion. We are oftentimes talking about full stack model. You have data center on top of that GPU service and also on top of that cloud and sovereign cloud could be put up. Then we have the AI application.
I have referred to this in our strategy and also, where the AI empowered something. This, the lower layer is more of the asset-based business. To make the adequate investment and the time horizon is five years. We are to really increase the profit-generating capability. That's it from me. Thank you.
The two persons who have raised your hand, then we will go to the online journalists.
The person in blue shirt to my right, please.
My name is Murai from Diamond. I have two questions. The first question is the full stack business you pointed out. With respect to that business, asset type business is something you would like to increase. On that point, as a full stack layers, there are data centers and a GPU-as-a-service. For the data center plan, you have a five-year plan. This fiscal year, JPY 100 billion+ investment is now on track. For GPU-as-a-service, the investment to GPU is still unclear as a policy. If you are going to work on GPU-as-a-service, will there be investment required for GPU or even without investment to GPU, would it be possible to have lighter asset? Can you talk about the investment policy for GPU?
Yes. Thank you. For data center business, this fiscal year, JPY 500 billion as an investment, last year, the actual was JPY 400 billion, in the upcoming five years, roughly JPY 400 billion-JPY 500 billion per annum. In total, roughly JPY 2 trillion or above that amount. On the other hand, GPU-as-a-service, what is the level of investment? At this point in time, it's not clear to indicate what is the level of investment and how we plan to invest. Having said that, for us to grow over the next five years, if you take a look at the total cash flow, considerable amount of investment will be invested, that is our plan. This is what we are going to consider looking at the total budget. We do not have the specific figures, but if we make the investment, if it is high amount, if we buy one unit, it can be above JPY 10 billion.
From our financial position, we are in a position to be able to buy that scale and making the investment, and we need to move forward, and that is something that is required. As an answer to your question, we do not have any plan of how much that will be, and we will not be able to respond today. Even if there is a scale of JPY 10 billion level investment, we should be able to manage that within our budget. That is the only point I want to explain.
If I may ask further, the latest GPU system, are you planning to access to the latest GPU system of NVIDIA? Yes. The more recent and the latest it is, it has a higher performance. To what is it going to be used? For inference, or also for training?
It really depends on the application, from our perspective, what will be the case if we introduce the latest ones? That is what we are studying. If there is a need, it's worth introduction. Thank you.
There is one more question. Cyber risk response service. Maybe I'm not understanding the explanation, but to be specific, Frontier AI, the latest one. If you are to introduce the latest one, OpenAI or Anthropic will respond to that model, but are you in a position to introduce the latest versions?
Yes. As I explained earlier, there are cases where we can use the latest versions and not. Do we need to have the latest versions in order to respond? I don't think that is the case. If it is a decent level, there are some products which are at that level. We are now trying to combine them in order to provide the services to our customers. If we are able to use the latest versions, of course, we will include that in order to proceed.
What can be used and what cannot be used. If possible, we would like to have the latest versions, and that would be best, but we will respond with the best possible combination we have, and we should be able to deliver a certain level of results.
Do you have any target as to how many companies you're going to introduce this service?
This is Yoshida speaking. No, we have not set any target as a figure. As was mentioned, we have inquiries of over 500, and since the start of the service, it has increased with momentum. We would like to consider that going forward. Thank you.
The last question.
Yes, the person in white shirt.
I'd like to ask questions related to really what AIVista . Currently, both in domestic market and overseas, you are really trying to consider how you really move that. What is the progress you've made, you are in the process of promoting that. In terms of BPO, you are to really refine the solution so that it could be offered to the market. What is the current status of this particular service?
In December last year, we have established the company, and then we are gathering the personnel, and it's just about 20 headcounts- 30 headcounts. In this universe, the critical key is speed. In around June, July, first of all, as shown here, insurance related core AI platform was already established. Whilst having the interaction with the customers, we are to introduce it into the customers. In terms of the number of the customers, it says for several customers in the U.S. or Europe. As for the starting point, the number itself is not that big, and so just multiple within this one single handful of the customers in other areas, meaning that the manufacturing sector
Here again, we have some visibility and control and management of supply chain, and that is the area of the application of this. As shown here in the domestic, in Japan, and we are promoting the deployment in the banking and insurance industries. It's not that how we are going to change the business processes of the customers with AI. That's not the concept we are going to apply. We are to really start from the very scratch how to really establish the flow of the jobs for a certain business process. For example, in case of the insurance product, terms and conditions and also the policy clauses. They are very complicated on the system. So far, there has been a much dependence on the paperwork or the document.
We are going to use the agent to automate all these processes and to really reduce the human intervention. If you use the typical LLM, accuracy is just about 50%-60%, and the remaining part should be adjusted by the human beings. What we are trying to achieve is to really have the higher accuracy rate, the ones with 90% or higher. The proportion will not require the human intervention. On top of that, higher efficiency as well as a new product offering could be achieved. The new services could be launched more easily. That's what we are really promoting. In terms of the number of the customers we are working with together, it's not that big, but this is quite a scalable business. Initially, we are to really do it very carefully and then to really establish the track record and to deploy it more widely.
The last question, when we will have the discussion with the NTT Group people, AI Vista is often talked about. If I am wrong, please forgive me, but within the group, are you going to deploy AI Vista more widely?
Well, what I have explained today, this is something we are to deploy vis-à-vis our customers. Of course, within NTT Group, the use of AI Vista is within our vision.
In terms of the timeline, do you have any specific timeline for this to be used in the group companies?
We have not explicitly decided on the timeline. This kind of activities, unlike the conventional systems, which would be based upon the two-year to three-year or five- year plans, we will be able to do it more quickly compared to the more conventional system. We hope that we will be able to promote that within the shorter timeframe.
We would like to take questions from online. If you would like to state your opinions, please select a microphone and please use the raise hand function. When you're identified, please speak up when it is shown that you can ask questions. In case of chat, please use the send button after entering your question. Any questions? From Nikkan Kogyo Shimbun, we have a question in the chat from Mr. Mizushima. I will read this. There are two questions. The first one is NTT DATA AIVista for AI platform provision. Is there any reaction and what are being evaluated from the customers and what is the development going forward?
Yes. Let me go one by one. Starting from AIVista, personally, with Bratin Saha, who is the top person for AIVista, I have a regular contact once a month. He comes to Japan every two months. Due to various reasons, I go to the U.S. Last week I was in the States and I had half day discussion with the members. In terms of the reaction from the users against the original schedule that was planned, it is on track. The method that they are deploying, how can it be introduced to Japan? That was one of the discussion points. The others would include, it is fine to promote business
What kind of impact would that pose to the enterprise value? We did have a quite extensive discussion on that topic as well. This was set up in December, and it is about six months plus old, but it is on track with our plan. We are also in a position to discuss the outlook. I think we have sufficient level of reaction. As for the response to customers, we are still premature to state clearly at this phase. We create systems, and we show the system, and as I explained, the accuracy is improving, and there is possibility for deploying new business. For those customers who have placed the orders, they are now quite satisfied with the current status. Did I answer your question? Did that answer your question?
Thank you very much for sending many questions and asking many questions today. With this, we would like to conclude the press conference on Q1 fiscal year 2026 briefing. Thank you very much for your attendance.