I would now like to start the presentation of the financial results for NTT for the 3-month ending June 2023. Thank you for joining us despite your busy and demanding schedule. We appreciate your attendance. My name is Sekine, with the NTT Communications Department. I'll be serving as the master of the ceremony. I'd like to introduce our attendees. President and CEO, Mr. Akira Shimada. Senior Vice President and Head of Finance and Accounting, Mr. Toshihiko Nakamura. Senior Vice President and Head of Corporate Strategy and Planning, Mr. Akitoshi Hattori. These are the attendees from the NTT side. The percentage materials has been uploaded on the NTT website as of 14:00 Japan time. Please refer to the materials available on the website. Let us start the press conference. Mr. Shimada, the floor is yours. First and foremost, thank you for joining us today. We appreciate your kind attendance.
My name is Shimada, the President of NTT Holding Company. I'd like to present the financial results for the 3 months ending June 2023. Please turn to page 4 of the material. This shows the status of the consolidated results for the first quarter. Operating revenues increased, operating profit decreased, and profit increased year-on-year. Operating revenue and profit reached new record high levels as the first quarter. Operating revenue increased JPY 42.2 billion year-on-year, and reached JPY 3,111.1 billion, due to increase in revenue in Integrated ICT Business segment, as well as Global Solutions Business segment. Now, of this amount, currency or foreign exchange accounted for roughly JPY 40 billion of this increase. Turning now to operating profit.
Operating profit decreased by JPY 28.7 billion year-on-year, down to JPY 474.7 billion, due to increased upfront costs related to operational efficiency and reinforced security in Regional Communications Business segment, as well as increase in electricity cost. Although we did not disclose our first quarter plans per se, both operating revenue and profit are progressing in line with our expectations and projections. We will work to achieve the consolidated guidance aiming at increased profit on a full-year basis at the end of the day. Profit increased by JPY 7.2 billion year-on-year, and reached JPY 375.8 billion, as decline in operating profit and increased interest expenses was covered by the proceeds from the sales of shares.
As for EBITDA, this decreased JPY 18.9 billion year-on-year, reaching JPY 838.5 billion, due to decline in the operating profit. Please turn to page 5. This shows the contributing factors by segment, starting with Integrated ICT Business segment. Revenue increased year-on-year due to increase in enterprise and Smart Life business. While operating profit declined in part due to accelerated growth investment in Smart Life business, operating profit in enterprise business grew from increased revenue, as well as the improved cost efficiency in the Consumer Communications Business segment. As for Regional Communications Business segment, both first quarter operating revenue and operating profit declined due to drop in fixed-line voice service revenue, as well as demand for working from home having run its course.
There was also the impact of increase in upfront cost for operational efficiency due to the upgrade of the facilities, as well as reinforced security, as well as increased electricity costs. Both operating revenue and profit are progressing in line with our plans, and we will work to achieve our full-year plan, which aims at increase in both revenue and profit. Let me now turn to the Global Solutions Business segment. Revenue grew year-on-year from growth in domestic business, such as public and enterprise segment, as well as impact of the currency. While increased revenue led to increased profit, operating profit declined year-on-year due to increase in integration-related costs in global business, as well as increase in investment for growth. We believe we are in line with the full-year annual plan.
As for real estate and energy and the others business, operating revenue, operating revenue and operating profit declined year-on-year due to drop in revenue from exclusive business at Ennet. Please turn to page 6. I'd like to cover 3 topics, if I may. Please turn to page 7. First, I believe this is, this was already announced. I'd like to talk about the establishment of new companies for the creation of new value. As an initiative to deliver the new medium-term management strategy, which was announced the other day, we established NTT Innovative Devices Corporation, which will develop, manufacture, and sell photonics-electronics convergence devices. We also established NTT Green and Food Incorporated, which will produce and sell seafood farmed by land-based aquaculture systems. Also, we integrated NTT Business Associe and NTT Learning Systems to operate as a strategic company in the human capital field....
This will become NTT DX partner corporation. Through these, through these activities, we will deliver creation of new value. Please turn to page 8. Next, I will explain our shareholder return policy. In order to improve capital efficiency and enhance shareholder returns, the board of directors today resolved to buy an aggregate of up to JPY 200 billion. Please turn to page 9. This slide shows the past share buybacks for your reference. Started from 1999, and this JPY 2 billion. In 24 years, JPY 5.5 trillion share has been bought back, with the increase in EPS, so we've been increasing the amount. Next, page 10, please. This is also for your reference. Let me touch on the number of shareholders.
Since there's been a lot of interest in the recently announced stock split, let me report on the number of shareholders as of the end of June. The graph compares the number of shareholders at the end of the previous fiscal year with the number of shareholders as of the end of June. The increase that had been mild in the past turned to a substantial increase of 18%. We believe that the stock split has triggered interest in investing in NTT stock. Since the number of shareholders is calculated on a quarterly basis, the situation after the effective date of July first will be reported again at the time of the announcement of the second quarter financial results. Please turn to page 11. The progress of our initiatives since May, under the new medium-term management strategy announced recently, is shown here. That is all from me.
Thank you very much. We'd like to take questions from the media at this juncture. We'd like to take questions from the media representatives who are here on site. If you have any questions, please raise your hand and wait for the microphone to be brought over to you. Please state your name and affiliation, and ask your question. We'd like to take questions. Let's start with the first questioner. Miyajima from Nihon Keizai Shimbun. Thank you so much.
The government-owned NTT shares, I'd like to ask about the sales of NTT shares. It seems the LDP has begun a deliberation of a possible full privatization of NTT. The Secretary General, who will be heading this project team discussion in the television program, said that in order to avoid impact on stock prices, any sales of NTT government-owned shares should be done in a gradual manner.
Mr. Shimada, you mentioned that the sales should be done in a manner which will not affect our stock price when you took part in the general annual shareholders meeting. What are your views about the long-term scheme to sell off government-owned shares? I would appreciate your views. Thank you.
Thank you, Ms. Miyajima. Thank you, Miyajima-san, for your question. I did mention this at the time of the annual general shareholders meeting. With regard to the valuation of government, sale of government-owned shares, our position remains neutral. It would be fine if the government decides to sell off the shares or maintain them. It would be okay either way. As you mentioned, we do have, we do have a shareholder base which we must give consideration to.
If the sales take off, if the sales are conducted in a virtual period of time, this could significantly affect the stock price. We hope that this will be done in a manner which will not affect the stock price, and that is the consideration which I would appreciate, and we've made this request repeatedly. This time around, it seems that they have a project team to address NTT Law, and understand that the chairperson of this committee has been decided. We're aware of the comment made by Mr. Amari. He mentioned that any sales of government-owned NTT shares should be done over the long term, because that will minimize the effect on stock price. His comment, this chairperson's comment, I think, indicates that the LDP is giving great matter, great consideration to this stock, and we appreciate that consideration.
As far as we're concerned, we appreciate such a comment from the LDP official, and we'd like to monitor and watch closely what to do, what the, what type of evolution that will face discussion. In any event, we have to be mindful about the shareholders. It has to be done in a manner which will not affect our shareholders. You know, I would appreciate consideration of such policies. That is our view. Thank you. Thank you. One other question, if I may ask: It seems that there are a lot of regulations under the NTT law. The disclosure of R&D is an obligation set forth under the NTT law. Right now, R&D is ongoing in the IOWN project. Going forward, under...
if we assume that the current NTT law were changed, when you consider economic security issues, will this have an impact on the activities of IOWN? I would appreciate your thoughts on this matter. Thank you for the question. Earlier, whether or not the government decides to sell off the government-owned shares of NTT should be decided, will be decided by the government. With regard to NTT law, if I were to comment on NTT law. When we take a look at the present circumstances, and when we, when we look to the future, there are items which I believe would warrant change going forward. As you mentioned, as you mentioned, Miyajima-san, for example, this obligation for the disclosure of R&D is set forth.
This is due to the fact that these are provisions set forth when the telephony business was the mainstay of the business, and also NTT had the monopoly of telephony business at that time. That is the backdrop of the establishment of such provisions. These days, when we consider the challenges presenting the economic security, and also when we consider that globally, we are engaged in very intense competition, as we are in such an era and age, then those provisions that I, that I referred to earlier, could become a challenge. With regard to fixed telephony services, we had 13.5 million customer base in the previous year, but then every year, we're losing about 700,000 telephony subscribers every single year.
In the next couple of years, it could be that the telephony of, fixed-line telephony service customer base could go below 10 million JPY. 10 million, correction. This is not a profit-generating sector, which means this will lead to increased burden for the company going forward. Also, what will be, what will be the situation presented, the fixed-line telephony situation in the future? I think we are, as example, we need to give consideration to the, the fixed-line telephony business in the future. I think the fact that various discussions will be taking part is welcoming. Of course, I think we had, with regard to the fixed-line telephony services, we have to be mindful of the universal service obligations. I think, we've come to a, we've come to a time when these issues need to be discussed.
The fact that such deliberations will be taking place is, I believe, very meaningful and important.
Thank you very much for your response. We will take the next question. The person at the very back, please.
NHK, Yamane is my name. Thank you very much. This is related to the earlier question. First, I may be repetitive, but government, LDP, in the ruling party, NTT law, Article 4, the discussion is about to start. What is your impression on that? The government, not just the sales of government shares, but it needs to be aligned with the NTT law has to meet the change of the times. What do you expect out of this discussion?
This discussion, the defense budget, as a source of defense budget, this point was raised in the discussion in LDP. I understand that this is a source of finance. What to do with the source is to be discussed by the ruling party and the government. In relation to that, the full privatization of NTT is also being brought up as one topic. As I just said, NTT Law, it's been a while since this law was established. It has to meet the needs and the circumstances of the times, but there are some misalignments nowadays. I think this discussion need to take place, and I think this will be a good opportunity for that.
Next question, please.
Yamada from The Tokyo Shimbun. I'd like to follow up on the previous question, if I may. Full privatization of NTT is not to be deliberated within LDP. One advantage of this is that you'll be able to reinforce your global competitiveness for NTT. That's been raised as one possible benefit from the full privatization. As you mentioned, Mr. Shimada, are there elements where NTT, NTT Law impedes your competitiveness? Also, at the same time, though, the fact the government... Are there cases where the, because the Japanese government is a shareholder, this has impeded your competitiveness? Well, let me respond to your question. We have our competition and competitors. If we take a look at the competitors, correction, there aren't that many that have government-owned shares or that are owned by the government.
Are there challenges because of the fact that part of NTT is owned by the government? I think one thing is that we are perceived as a company that is affiliated with the Japanese government. Has that a significant impact or concrete impact? We have not had any, we have not experienced such impact. Having said that, though, we are perceived as a company that is not working under the same set of conditions as our competition. That is true. Also, there's one other element. We are engaged in international and global competition. Against that backdrop, we also have to be mindful about the economic security aspects. Many players are now more mindful about the economic security aspects as they engage in global competition.
In the past, we were primarily involved in telephony business, mainly in our domestic business, and we were obliged to disclose our activities in the domestic telephony business. That requirement has been set under law. The thing is, there might be cases where we non-disclosure of the information was more beneficial, but if we have to disclose our business performance in relation to global competition, then this could actually be challenging in terms of our global, our taking part in global competition.
Thank you very much for that response. If I could follow up. It's not, so the challenge is, it's not so much that the government is a shareholder, but more, more relating to the provisions under the law?
Well, I think the fact that the government is a direct shareholder, has that directly affected our global competition? That is very difficult to say. As I mentioned earlier, I think this is the situation: very few companies have a structure like ours. I think we're perceived as something close to state-owned enterprise, although we're not a state-owned enterprise. The fact that the government owns shares in our company, that type of structure is very rare these days, especially in the ICT business sector. It's a very rare situation. That is true.
Thank you.
We will take the next question. Yes, at the back, please. Sato is my name.
Thank you very much. This is also related to the earlier question. Since it's been 40 years since telecom has been liberalized, I think it's NTT, JT, JT, and Japan Post that are bound by the law. What do you think about binding a company with law in the first place?
Basically, we are doing business in a free competition. Laws that restrict companies, it's better if we don't have any of those. Economic security and other matters, it's not just about NTT, telecom carriers or electric power companies. These companies that support the infrastructure of the economy, what the economic security of, in this situation, has to be considered. Recently, the international trend is changing and is volatile, so we have to seriously think about this matter. In that sense, it's not so much the regulation on the individual company, it's more companies that support the infrastructure. What rules need to be put in place for the companies that support the infrastructure? I think we need to discuss that.
Next question, please. Let us take the next question.
Tajima from Yomiuri Shimbun, Yomiuri Shimbun, excuse me. I'd like to ask this question. You talked about R&D. It's about the disclosure of R&D activities. NTT law provisions are quite ambiguous, I believe. I'm not sure in specifically how you are required under NTT law to disclose R&D, and what impediments do you expect under these provisions? Can you explain more specifically?
Thank you for the question. Yes, there are many such examples. Well, these days, these days, carrying out R&D independently on your own is not that common. You pursue joint development. That is the requirement. Joint development is more required these days. It's not so much NTT independently developing something new. It's more about working, NTT working with partners to develop something new.
It doesn't have to be 100% all the time, NTT is obliged to disclose our R&D activities. Our partners, potential partners might be concerned whether or not they're comfortable with such provision. In some cases, these partners may reject our working together. Some potential partners reject working together because of those requirements. Now, we do have partners that we work with. If we can have a clear distinction in relationship, in relation to the intellectual property, then we'll be able to disclose our R&D activities. I think the relations between various partners will vary from project to project. Generally speaking, I believe the situation is that the obligation, it would be better if we don't have the obligation to disclose the R&D, because this will benefit our competitiveness.
That is true. Thank you.
My second question: you talked about the obligation for universal service, and you mentioned that we have come to an end to revisit the fixed-line telephony business in the light of the universal service obligations. This may not arrive over the short term, but can you talk about the mid to long-term projections on this matter?
Yes, on this matter, on this point, let me respond. Our customer base could eventually go below 10 million at the end of the day. Every year, every year, we are losing about 150,000 customers every year. Now, of course, it's not that we're going to see 0 subscriber base for fixed-line telephony service.
Fixed-line telephony service is not going to disappear, but that, this is a matter which is not too distant in the future. In terms of the management of the facilities, and also we need to maintain these facilities, we also going to need to consider various equipments to be utilized. When we consider all these matters, I think at some time down the road, we need to consider some alternative, alternatives, and we need to switch to something new eventually. For example, we could be switching to IP telephony service perhaps, or we could also be switching to a wireless fixed-line telephony service, or why not else using Wi-Fi, for example? By having discussions on these points, then we'll be able to go forward.
Up until now, PSTN was introduced throughout Japan. As a result of having PSTN system in place, we have very heavy investment for actually in relation to various connection points. If we're able to eliminate these burdensome investments, then we'll be able to refocus primarily on development of regional communication or regional markets. How do we migrate from PSTN? This is a matter which requires discussion, I believe. Also, in major, when you consider major urban centers, redevelopment projects are very long-term in nature, so we have to be mindful of that situation. If we are to consider those requirements, then we need to start the discussions at this point. Thank you.
We will take the next question. Yes, front row, please.
TV Tokyo, Abe my name. The sale of government shares is my question. NTT subscribes from the government. Today, the share buyback of JPY 200 billion was announced. Through this share buyback, you will acquire from the government over time. Is that the method, a realistic method for share buyback?
Well, what method we use, or what method government uses to sell its shares is something government will need to think about. As I mentioned earlier, until now, for the past, this 200 billion JPY this time, including 200 billion, we have been doing 5.5 trillion JPY of share buyback over 24 years. That is one option. In other words, if government will take quite a while to sell, then from shareholders' standpoint, the supply pressure will decline. Whether we'll go to the market or not, it's a, it's a discussion point. From the shareholders' standpoint, they will feel more comfortable if government uses this method. If it's sold in the market at one bulk, the share price goes down. To avoid that... Yes.
Once discussion progresses, we don't know what it will turn out to be like. Within our capability, we want to collaborate as much as we can. Thank you.
Next question, please. Any question? Yes, please go ahead.
Takano from Toyo Keizai journal. I'd like to ask about the NTT Law. One question about the NTT Law. If we assume that the NTT Law is to be amended, let's based on this premise, will that lead to possible reorganization of your group? I think that's one option possible under the changes in NTT Law. Your NTT East, West, Docomo, and Data, these group core companies, is there a possibility that you could have a reorganization of the group that could actually affect these core companies? I suppose it depends on the discussion, but can you share with us your thoughts about the possibility of reorganization of the group should the NTT Law be amended? Thank you. Well, thank you. Yes, I think you're primarily interested in NTT East and West.
As for NTT East and West, they have the access network, they have the access-related assets. That means that it's a matter that not just related to NTT group, this involves various users. Because many users utilize NTT East and West, various access facilities. That being the case, with regard to various rules that relate to NTT East and West, these are rules to maintain such market structure. That being the case, well, I do not anticipate such provisions to be changed in the course of the discussions that we're talking about at this moment. In terms of the structure of NTT East and West, the scope of work by NTT East and West is set forth under the NTT law. Yes, in, with regard to this aspect, there may be some advances in the discussion.
Having said that, with regard to the rules per se. We do not expect significant changes to take place as a result of this discussion, because that could be very challenging. That is my view. Okay, thank you. For example, possible unification of NTT East and West, is that type of restructuring? What, what about the possibility of that? Well, in the unification of NTT East and West, we consider infrastructure for ICT and telecommunications. I suppose the unified company would be more cost efficient, that is true. Also, this is probably positive, and it's because a positive for the public welfare. If all people recognize that, then that's the only solution we could derive that.
To the contrary, there could be people who want to see NTT East and West remaining separate, to become, compete with the, with, with, with each other, so the costs could come down. There are going to be some people who believe that, their square public interest from having NTT East and West being separate. I think it all depends on the discussion that will ensue. I think these two options need to be compared. Thank you very much for your response. Appreciate it.
To the left or the back person, please.
Nikkei BP, Horikoshi is my name. I have two questions. First, is on NTT Law, revision of the law. NTT, for the equity affiliate companies, it says that the foreigners cannot become director, and so there's foreign capital restriction in the law. This can be covered by the Foreign Exchange and Foreign Trade Act. What do you think, President Shimada, on this point?
Foreign nationals cannot become director or auditor right now under the current NTT law. When we think of our global business, of course, we need the foreign nationals' expertise and knowledge. If this NTT law, the revisionist, this clause of limiting to Japanese national, we hope will be discussed towards revision. The foreign capital restriction, as you rightly mentioned, is currently covered under the Foreign Exchange Act. As you, as I said, this is not just about NTT. This is also for companies that support the infrastructure in Japan under economic security, under the current environment. From that perspective, this need to be discussed on a more broad basis.
Thank you very much. My next question is universal service and the fixed line phone service. universal service and fixed line, if this leads to migration, then it will be a lot of work. Looking 10 years down the road, IOWN 2.0, 3.0, these may cost, require investment. If they collide at the same timing, it may require a lot of cash. In the medium to long term, what is the possible scenario, as much as you can tell us?
Thank you very much. Well, with migration, how much cost it will incur? We have not made a calculation yet. This is half joke, but I think this will be copper. Especially in the urban areas, new, there will be real estate where we can newly develop. Including all that, we will think holistically, comprehensively on how we finance ourselves, how we generate cash. The migration may lead to new business creation. We hope we can move in that direction.
Thank you.
Next question, please.
Ishikawa, a freelance journalist. Thank you. I don't want to ask about stock. I apologize. From July, NTT DOCOMO has introduced a new plan. What about the impact on your revenue down the road? Can you talk about the new business, new billing plans?
Yes, from July first, eximo and irumo, these new plans were introduced by Docomo. That is true. I think we need to monitor the situation a little bit longer before we can make any assessment. In terms of the feedback from Docomo, they have mentioned that the outflow impact on the outflow of customers has been halted. There's positive impact from the introduction of these new business plans. With regard to irumo, for example, for those of us who are involved in the management of the business, irumo will allow us to compete with the second brand of our competition. What has been the effect in terms of competing with the second brands of our competition? That's something that we would like to monitor very closely going forward.
We'd like to spend the next month or 2 and try to monitor what will happen in the month of July and August, and hope, hope, hope we'll be able to respond to you at a subsequent opportunity. I'm hopeful that we'll be able to share really positive outcome, or even more, at that chapter.
Okay, thank you very much. The very, very front row, please.
Hello, Freelance Ishino is my name. Related to the earlier question, irumo, price-wise, it is affordable, and as you mentioned, Mr. Shimada, it is to compete with the second brands. It reduces ARPU, and then telecom charges will decline, and will this move into a price decline direction or no?
We have to watch closely. Of course, the Gigaho and other conventional scheme. Looking at how users use the service, they watch video, much more, many more customers use video service. Small data volume may be enough for some users, which, where irumo is a good service, good plan. In some, free time outside, users use video, not at home, but outside, and that seems to be common now. eximo and ahamo, I think will be selected by many users. It's not going to reduce ARPU. We think large volume, users will move to large data bucket. I do not think ARPU will decline that much.
In the financial results briefing, I say this, in the first quarter, 3,990 JPY, it was slightly lower than 4,000 JPY. We think this year will be slightly over 4,000 JPY. I'm not concerned about that.
Yes, we'll go to the next question, please.
Sekiguchi from Impress Magazine. Thank you for this opportunity. I want to ask about DOCOMO's financial results, which are presented at the same time. If you take a look at the segment, Smart Life business. This is one of the major drivers. This time around, Smart Life business is now in the negative territory when it comes to their performance. What are the reasons why? What are your views about the negative performance of Smart Life? I'd like to go into that question after you respond to my first question. Yes, with regard to the Smart Life business, in terms of annual guidance, yes, we are aiming for increase in both operating revenue and operating profit.
As far as the first quarter results are concerned, in principle, there was system burden related to d CARD system and also Konoki related cost. We've had to have, we had some anticipatory investments in relation to these items, as well as with regard to video services. That indicates from the second quarter onwards and beyond, we'll be able to more, we'll be able to amply make a recovery. Although it's not disclosed our first quarter numbers, I do apologize, but this, this is very much in line, is in line with our plan and expectations. In the second quarter and second half onwards, we'll be able to make a recovery in Smart Life business segment. Thank you for that. I have to ask a second question. I would appreciate your advice.
It's not so much a question, I would appreciate your insight. You talked about discussions pertaining to NTT Law. I know that it's not yet even on the table right now, but compared to the past, major difference is that DOCOMO is now a wholly-owned subsidiary firm of NTT holding company, and their share is around 43%. Does that represent a strong number or weak number? That's of course a case for discussion. With irumo, we've been able to stop the outflow of customers. There's, and ahamo is also very popular. These are the circumstances. That being the case, as you discuss NTT Law, what is going to be the positioning of DOCOMO?
DOCOMO is not the subject of regulation apart from now, How, how do you intend to deal with DOCOMO in the context of discussion of NTT Law? Thank you for your question. As you pointed out, DOCOMO's share is as you mentioned in your question. Which means that now the environment for DOCOMO is not that different for the competition. Which means that DOCOMO should be competing equally with the other competition in the marketplace. The thing is, as far as the main brand is concerned, we're actually doing very, we're competing very well with, in terms of the main brand, but we are not we are losing out in the competition in relation to the second brand or the sub-brand.
For a very long time, DOCOMO had this, had actually seen their market share fall, especially in relation to the second brand. With the launch of ahamo, we've been able to actually begin the counteroffensive. That being the case, the launch of irumo, I believe, is the second version of our counteroffensive, if, if you will. We need to restore our market share. It's important that DOCOMO be in a position to restore their market share. The continuous, continuous defeat in the market is not, is not acceptable. With ahamo, we have 5 million subscribers, and irumo will be a counteroffensive against the second brand of our, our competition.
I do hope that DOCOMO will be able to show very robust growth as a result of these projects, and, and the holding company would like to render its all-out support to DOCOMO in their endeavors. Okay, thank you for that. If I could ask, with regard to the mobile market, the, the networks that support, that support base stations, they were all provided by NTT East and NTT West Corporation. Will this be affected by the NTT Law discussions? No, I do not believe that this will be affected by any discussions of NTT Law. The reason why I say, the reason why I say this as follows: We've been offering our network services both to DOCOMO as well as to our competition. For example, Rakuten Mobile, Inc., we've been offering the network to Rakuten Mobile, Inc., and these two have been provided.
NTT East and West have been providing the access network on an equal footing across all the players. We're not sure what type of discussion will ensue with, with regard to NTT Law, but I do not think that this matter, this particular aspects will change over that much as a result of this discussion. This is an aspect which should not be changed, despite the discussions that would ensue. I think it is important that we provide equal environment for all the players involved. It is important that we try to engender the Japanese overall mobile market growth. It is important that we offer equal services across all the players, so that the Japanese mobile market could grow. Also, the point that we offer high-quality services as well.
That is the obligation on the part of NTT East and West. That is my view. Thank you.
Next, we will take questions from online. Please use the Raise Hand button and wait. We will appoint you, so please press the microphone button before you speak. Are we okay? Okay, we do not see any questions online. Once again, if any other questions, from this venue, please.
Writer Sano is my name. Thank you. Earlier, you talked about Konkyū. Metaverse Web 3, you said you will aggressively invest. After generative AI is now coming to the fore, you are focusing on that. I think you're taking various initiatives for generative AI. Web 3 metaverse investment will continue?
Metaverse and Web 3... Yes, we will continue. We also have to work on AI, so we will do that, too. When it comes to metaverse, the expo virtual part, Docomo and QONOQ will handle. We will offer experience to new customers. We think that is our duty. We will enhance and work on metaverse. Web 3, Docomo has announced their results this year or next fiscal year. Platforms will be developed in succession, so this will also continue. AI. The overseas side, especially, this is Microsoft's Azure AI, Microsoft Azure, pharmaceutical companies or, or wind power generation companies or cosmetics, L'Oréal. The service is already provided to these companies, customers. In Japan, data is handled mainly by Docomo, to start a PoC, a proof of concept, with new customers.
If possible, at the end of October or beginning of November, we want NTT's unique LLM, announce our unique, distinctive LLM. As we've said from before, this will be the service for corporates, for enterprise. The voice recognition, and other AI with LLM function. So that is what we want to announce and introduce, so I hope you could continue watching us.
Next question, please. Sato from Nihon Keizai Shimbun Newspaper. I want to ask about the quality of services at Docomo. Do you believe that the quality issue has led to a situation where the subscriber base increase is lackluster? That's my first question. When you look at the first, the network problem, quality issues affect your performance in the first quarter. Could this have an impact beyond the second quarter onwards?
Thank you for your question.
Yes, with regard to the quality issue, communication quality issue, I know that this has become the topic of discussion in a very broad spectrum, and we do apologize for this. As we announced on July 28th, the thing is, the seven locations in Tokyo, with regard to the seven points or seven locations in Tokyo, excluding the Shibuya railway station, we've, we announced that we've already made improvements. By September, the platform for Shibuya station, we now have the possibility of introducing the necessary antenna, which is, we will be able to make the necessary restorations and recovery. Now, the quality part, the quality issue that arose is due to one thing. For one, for one thing, the video-related traffic has increased so much due to COVID-19 and after COVID-19.
People have, and people come, do not come back to the offices. The, the way they consume video has really changed after COVID, and I think we were somewhat lax in our forecast as to how much people will take up the video services. Now, around nationwide, in 2,000 different locations, we are now very carefully checking whether or not we have the necessary speed. Through these 2,000 locations, we're carrying out very rigorous monitoring of the quality of the services. Now, when, when we need to change the antennas when new services are being launched, in certain cases, in particular, a place like Shibuya is a case in point. You have a lot of buildings, and you have, you have many generic changes in the structure of the city, and you need to make adjustments when there are changes in the city.
It's important that we respond to inquiries from the customer, customers, and respond to them in a very robust fashion. It's important that we present quality, improve quality in line with the customer journey expectation. It's important that we need to improve our CX, our customer experience. The biggest selling point of NTT DOCOMO is that they have the highest quality network. It's important that we maintain and sustain the strong point of DOCOMO, which is the quality in the network. We need to sustain that in a very strong fashion. For this fiscal year, we have had many challenges. It's important that we fully respond, and next year, it's important that we carry out the sufficient investment as well. I look forward to your kind understanding and support. Thank you.
What was the impact on your performance? No, very little impact on the performance and financial results. Actually, to the contrary, I think it's seen as an encouragement for DOCOMO to do a better job. It's important that we do a good job. Thank you.
Any other questions? With that, we will close this briefing. Thank you very much again for your attendance. Thank you.