Thank you very much for taking the time to join us today despite your busy schedule. We will now begin NTT, Inc. financial results briefing for the six months ended September 30th, 2026. I am Akaishi from the IR office, and I will moderate today's session. First, let me introduce today's speakers. Shimada, Representative Member of the Board, President, and CEO. Sasaki, Representative Member of the Board, Senior Executive Vice President, and CFO. Nakamura, a Senior Vice President, Head of Finance and Accounting. Hattori, Senior Vice President, Head of Corporate Strategy Planning. These are the four speakers for today. Please note that this briefing is being live-streamed. An on-demand webcast will be available at a later date. For materials related to the financial results, please refer to the presentation materials on our IR website. We will now move on to the Q&A session.
We will mainly have a Q&A session today. We will take questions from participants in the room and from pre-registered participants connected through the web conferencing system. If you are attending in person and have a question, please raise your hand. Our staff will bring you a microphone. If you are joining online, please click the raise hand button in the web conferencing system. If you wish to cancel your question, please click the raise hand button again. When we call on you, we will announce your company name and your name. When we ask you to unmute, please unmute yourself in the web conferencing system. After asking your question, please remain unmuted until we have finished answering. We will now take your questions. We will start with a question from the room. At the front row, on the right-hand side, please go ahead.
Nomura Securities, my name is Masuno. I have two main questions. The first, the financial results number, will each operating company. The first, the financial results number, will each operating company is here. As the NTT Group overall, what are your thoughts regarding the AI strategy? By layer, the data center, NTT DATA will put their efforts in. From the outside, physical AI, it seems that DOCOMO will have a strength in this business. Recently, as SAP announced, the sovereign cloud will be a holdings company taking the lead. Such a topic is raised. In various areas, physical AI, sovereign cloud, and the service rollout related to AI, overall AI, what are you planning to do? I would like you to elaborate on that.
Thank you very much. Masuno-san, close to your thoughts is the honest response to your question. Sovereign AI cloud or the frontier AI, I think we will have to bring it to Japan from the national security perspective. I did briefly mention this at the press conference as well. The thing is, if we're going to bring frontier AI to Japan as a project, it's going to be a large-scale project. Of course, it will require data center, and also we will need to comprise the inside of the center, and they will need the backhaul facilities to connect the data center. Of course, with the United States, but also with countries other than United States, we need the submarine cable to connect to those other countries as well.
So as the overall project, basically, NTT DATA, because of the data centers and the submarine cables, they will be taking the lead. But for the other operating companies, NTT EAST and WEST will be involved, DOCOMO Business will be involved. So in that sense, as the whole group, we will have to move this forward. So in that sense, of course, the leader will I'm thinking of having NTT DATA become the leader, but as a holding company, we have to coordinate the overall NTT Group. That is my understanding. So, it is not just for the sovereign-related items, but in domestic Japan, to operate a data center, I did not mention it, but for example, Anode Energy has to be involved for the power supply as well. Therefore, it is not a project that only one operating company can do it.
Multiple companies within the groups will be involved in it.
This is a request from my side, and as I have been saying conventionally, the individual operating companies will give the explanation. However, as for the whole NTT Group, how are you going to work on this business? If there is some sort of a briefing session regarding this, that would be very appreciative. So if there is such opportunity, I would like you to hold such a session. As an extension of that point, as the photonics electronics convergence device, PEC, at the press conference, you said that FY 2028 PEC 3 launch will be as scheduled. However, this part as well, PEC 2, NVIDIA is entering, but PEC 2, Marvell came in, and they made an acquisition, and they already announced the schedule.
Therefore, recently, the Lumentum's acquisition was also announced. So, within the commercialization phase, it seems that the United States players are strong. For the PEC 3, for the optical technology, you are taking the lead, but for the PEC 3, what kind of strategy are you planning to take?
It is not that we are doing things in order. It is like simultaneously, PEC 2, PEC 3 are already moving forward. Therefore, as the finished product that can commercialize will be around 2028, including the mass production phase, as for PEC 3. Towards the actual production, as recently announced with the partners that we have announced, we will be combining those members to do that. Through this, if we cannot have this proper partnership, the actual mass production will not be realized. Therefore, it is not that we are going to think about PEC 3 when PEC 2 is commercialized, but currently, PEC 3 is moving forward in parallel as PEC 2, is how I would like you to think about it. The thing is, the customers' individual actual names, of course, when the timing comes that I can actually disclose that, I will. But right now, it is not the timing to disclose them, so apologies for that. But technology-wise, for PEC 2, the competitors is superior. Such a thing is not the case.
And also, the customers that will have the delivery, they are not going to just receive the delivery from one manufacturer. At least two or three deliveries from three suppliers is unnecessary, because if they only have one supplier, it will be limiting their supply chain. So, there is a possibility they will think about the second or the third supplier. So, it is not a business that only one player will dominate everything. So, in that sense, of course, we want to become the number one share provider, but as a possibility, we may become the second or the third. However, within the selection of the customer side, we will always be in there.
Thank you. Lastly, just briefly, the Integrated ICT seems good, but the DATA business, excluding the data center, seems a bit lower, but DOCOMO is good. But towards the second half, what are your views?
Well, maybe I should ask the individual operating companies. Regarding this fiscal year, the third quarter, at such a timing, there will be more that I can share with you. But it is just that at this timing, at this juncture, I cannot share with you many things, and that is due to the relationships that we have with our customers. So, for the specific, probably around the third quarter timing, regarding the Global Solutions business segment, I will be able to share more information with you. Apologies for that. Sorry that it is kind of a vague way of expressing things. But just going back to what was said, regarding the overview of the AI strategy, Mr. Sasaki is taking the lead. Mr. Sasaki, the Senior Executive Vice President, is taking the lead, so I would like to hear from him as well.
Well, regarding the AI strategy, it is an extremely important business domain, is my understanding. As you have pointed out, as a whole group, in various ways, there are individual dissemination of information. So, as you have correctly pointed out, in a total perspective, what kind of strategy are we taking? It is difficult to see. We do understand that. So, in terms of the monetization of the business, well, there are three key points. The first is that as a customer, we will have the hyperscalers or LLM players. From them, we receive payment. And that is, for example, the data center business, or depending on the situation, it will be a submarine cable type of business. By each type of business or channel, we will receive money. The second point is that the so-called enterprise customers or corporate customers from DOCOMO, we receive money from the consumers or the end users.
We need to work on that point as well. And the third is as an infrastructure player, the AI infrastructure or platform, how are we going to build that? We will be receiving the subsidy in phases. So as an infrastructure, how should we work on that? There are three key point perspectives for this. For example, as I mentioned at the second point, receiving the payment or money from the end user. So for enterprise customers at DOCOMO Business, NTT DATA, for consumers, there is NTT DOCOMO . They can thoroughly do the business. And also towards the hyperscalers or LLM players, mainly NTT DATA will roll out the business globally, centering on the data center. And also, NTT EAST and NTT WEST will do their business as well. So towards the content, what kind of investment will be made? So it will be the allocation of the investments.
The cash that we have right now, though it is limited, that cash towards the future, at what timing will the business monetize? That scenario, and right now, where should we make the investment? We are working on actually linking these scenarios together. If you can give us a little bit more time, we will be able to give you the full picture.
Thank you very much. Please do so. NTT as a whole, towards the AI strategy, how much investment is going to be made? Everybody wants to know that information, so please do so. Thank you.
Thank you very much. Next, towards the left, the person wearing a blue shirt. Please go ahead.
SMBC Nikko Securities, Kikuchi. Thank you. I have two questions. There has been an upward revision, although the amount is small. Three years in a row, there has been a decline in performance, and it seems as though you are hitting bottom, and it seems as though there is an upturn, a turnaround. The JPY 200 billion profit decline is taking place. In May, by 2030, profit plan you announced, and five years is a long period of time, I thought at that time. But six months have passed, and it is only six months since May, but short- term, next fiscal year, what is going to happen?
I do hope for recovery next fiscal year, and in two years' time, not in five years' time, but in about two years' time, as soon as possible. It may be difficult to recover JPY 200 billion worth of profit, but we would like you to recover as soon as possible. It is only six months since May, and you may not have a clear picture, but towards next fiscal year, how do you intend to accumulate profit? That is the first question.
[Non-English content] I would like to call upon DOCOMO to explain later on in their session, but basically, consumer communications this fiscal year, we think this business is hitting bottom, and we are expecting a turnaround this fiscal year. That is what we expect, and towards next fiscal year. What specifically will be the plan? In the second half, competition, the competitive environment in the second half is going to be very important. The first half, MNP, there has been a net positive inflow. Is competition going to subside? Is there going to be more moderate competition? We are positive, and Rakuten, I think, is also positive, and there are some companies that have not been able to win. Those companies that are not winning, how will they respond in the second half? In other words, we have to wait and see how the market develops.
Last year, as we mentioned, we spent a lot on sales promotion. We spent a large amount of sales promotion expense. We do not think the situation will be much more than last year, but we have to monitor closely how the market develops in the second half, and based on that, we have to prepare our plan. Overall, we think there is an upward trend, and bearing this in mind, we would like to prepare our plan, factoring in an upward trend. Please. Maybe not as much as 10% profit increase, but we would like you to make your most effort.
My second question, the net profit, the bottom line, I am worried about that, and the stock market as a whole is worried that there is increase in the interest rate and the data center investment. There is going to be some data center investment continuing. When you announced your first quarter results, Mr. Sasaki announced a pipeline, and there might be some M&A moving. What is your financial strategy going forward?
Last year and the year before, when this point was discussed, you shifted balance from a variable interest rate to a fixed rate. Bearing in mind the current situation, one option might be capital recycling. You might try to find the best balance between variable interest rate and the fixed balance interest rate. There might be also funding in Japan as well as overseas. What is your financial strategy? You may not be able to commit to a specific amount, but how are you going to minimize the interest expense? Hopefully, I would like to hear a number as to how much interest expense you wish to minimize.
This is Nakamura, responsible for finance. I would like to respond. Market interest rate is increasing, and everyone in the stock market is concerned about this, and all companies in that sense have the same concern. Mr. Kikuchi, as you just mentioned, including overseas, in the case of NTT, when it comes to interest rate, we are gearing towards a fixed interest rate, 80% fixed interest rate versus variable interest rate. The current interest rate hike environment may not have an immediate impact on our company. Duration is 5- 10 years, and during this time, operating profit that we would like to increase as much as possible and respond to the current interest rate hike environment. We have to make sure and control so that there is no increase in interest-bearing debt.
As we mentioned our medium-term management strategy, our main business, we want to maximize the profit from our main business, and those assets that we think are necessary, we would like to dispose of. We have to revisit our business portfolio, and we have to control debt or liability control. By so doing, we want to control interest expense and prevent it from going up substantially. Interest rate hike is already factored into our plan. The current market is developing as expected, and this is factored into this current net profit situation. Next year as well as the year after the next, BOJ is increasing interest rate, and overseas as well, there might be a further increase in interest rate.
Even if that happens, we should be able to endure interest-bearing debt and EBITDA multiple we are committing to, and we are not intending to change that substantially. Please rest assured in that regard, and that is our current situation. Data center business. For that business, we need a large amount of cash. Basically, our own investment. We have a ceiling, maximum amount of our own investment that we intend to make. As we've been mentioning from a long time ago, about JPY 500 billion is the level we have in mind. Besides that, we started DevCo and third-party capital we want to deploy in initial stage projects. If we do too much of that, we will not be able to enjoy sufficient return.
Probably, AI data center, the current pace of AI data center development, are we really able to continue development of AI data centers in this pace? We have to thoroughly think about that part as well. At least, the hyperscalers with whom we've been doing business from before, over the long- term, they have a long-term plan. As a project, we have to be selective. In the bubble kind of environment, we should be able to enjoy stable growth by being selective.
As I mentioned before, M&A that we had in mind before, digital-related M&A that we had in mind before, we have frozen this plan at the moment because there's been a sea change in the current AI environment and resource allocation. Allocating resources to this kind of area, we have frozen this plan for the moment. By the end of this fiscal year, there is no M&A. Super large M&As, we will probably not have any.
Understood. Thank you. That's it.
Thank you very much. Next, from the center row, but center front row. Please go ahead.
Daiwa Securities. My name is Tokunaga. I have two questions. The first question is like a follow-up question to Masuno. It's related to group strategy towards AI. You have the Anode Energy, which is an energy company. Therefore, when other companies build or construct AI data centers, there's this issue of the grid for power supply. If you go right now, you'll be able to reduce the dependency on the grid, and I think it's possible to rapidly expand the data center construction. In that sense, Anode Energy and AI data centers relationship, or from what timing will you be utilizing Anode Energy in full scale? That's my first question. Thank you very much.
As you have mentioned right now, in the regional areas or rural areas, how are we going to bring data centers? I think that is extremely important because the hyperscalers basically, they want a 50 km or 60 km proximity of IX, the center. Bringing the data centers to a regional rural area, they do not have that in mind. Let us say that even though they relax that rule, maybe it is about 20 km. What is starting to change on the other hand is that the AI operators, like they will use APN All-Photonics Network, the delay or the latency can be reduced. They are starting to recognize that. Therefore, the new type of operators that are recognizing that we can actually disperse them into the regional areas. Because there are certain areas, they have a surplus of electricity supply.
Guiding them to there is one way of doing things. Anode's electricity resources, it is not that they have a large capacity of it or quantity of it. We are in the construction phase. From 2030 onwards, it seems that right now towards the renewable energy, the instability of renewable energy, there are voices as such. I think it is the combination of energy types, and I am sure there will be a revisit to the renewable energy utilization at some point. However, unfortunately, at this point, there are operators who withdrew from the wind power generation due to the hike of the material costs. From 2030 onwards, so that we will be able to fully utilize them. The effort up to that point, I think, is quite required. Therefore, it is not that right now.
Of course, at Aomori Prefecture, there is the Japan's largest windmill or wind power generation plants. There are multiple of them that is held, but that can immediately be connected to the data center operation. That is not the case. I think it is going to require some more time. I understood it very well. Thank you. The second question is the first half progress. It is an orthodox question. The upward revision is the recovery of the churn, and maybe in terms of the market, I think they are expecting more profit to be generated. The first half, NTT EAST and WEST and other operating companies mainly against the internal plan, how were their performances?
This is Hattori from Corporate Planning. The comparison to the internal plan overall, as you have assumed for NTT DOCOMO, they are strongly performing and progressing above the plan. Given that situation, with the revision of the pricing, we have reflected all those factors on the upward revision. As for the Global Solutions business, different from the other communication type of business, it is not that every time it is growing at the same ratio. The growth ratio will change by project. If we combine overseas and Japan domestic business overall, excluding the data center sales or transfer, they are within the range of the progress that is necessary to reach this year's target. For Regional Communications, year-on-year, they are in line with the prior year and against the internal plan. There is not much of a difference. For others, for the electricity prices, impact has occurred. At Anode Energy, compared to what we have forecasted at the beginning of fiscal year, there was a difference, so that is a negativity.
I thought that at this quarter, you will be able to have a bright type of explanation that you can give us. At the third quarter, there will be more bright news, especially for NTT DATA. The main bit will be NTT DATA, and it is already included in the plan, but the DevCo type of factor.
I believe that it is going to start to generate solid numbers. By that time, we will be able to just share with you regarding other projects. The main part will be led by NTT DATA. However, as Hattori mentioned right now, NTT DOCOMO, they are progressing above our plan. That is a fact.
Thank you very much.
The next question should be the last question because of time constraint. Those of you in the room as well as those people participating online, are there any questions? The person towards the right, the person in the second row, please.
Thank you. Mizuho Securities, Fujishiro. Mainly, I have two types of questions. First, is a question rather for confirmation. 2Q performance. Data center transfer gain is zero in your Q2 results. Is that the correct understanding?
Yes.
Thank you. Then in the second half, JPY 70 billion transfer gain is to be posted, and that plan remains unchanged?
Yes, that is how I understand the situation, and that is your correct understanding.
In relation to that point, overall financial strategy, next fiscal year onwards, data center transfer gain, how much do you intend to, or how much do you plan to constantly post in terms of data center transfer gain?
We do not have a detailed plan at the moment, but at least what we are doing this year and the REIT. We have to add REIT. Last year's REIT. Not as much transfer to the REIT as before last year, but at least this year's level, we hope to continue in terms of data center transfer to REIT. We do not have a specific plan, but that is our understanding.
Thank you. The second question is about next fiscal year's performance, shareholder return. It may be too early to ask this question, but DOCOMO price revision is likely to contribute to next year's performance, and the East and West cost reduction will hopefully make a contribution as well, which means that I personally expect a lot next fiscal year. Increase in dividend, JPY 0.1 dividend payment increase, that has been the case for the past few years. Share buyback about JPY 200 billion. Do you intend to accelerate the pace of increase of dividend payment or share buyback? Is there such a possibility at this point in time?
We have not thought about that yet. After new year, next year, we would like to start thinking about that.
Thank you. That is it.
[Non-English content] Thank you. With this, we would like to conclude today's briefing session. NTT DOCOMO will be holding their briefing session after this, so please wait till then. Thank you very much for today.
We will now begin NTT DOCOMO, INC. Financial Results Briefing for Q2 FY 2026. I am Wakui from IR Office. I will moderate the session today. First, let me introduce today's speakers. Maeda, NTT DOCOMO, President and CEO, Representative Member of the Board of Directors. Kojima, NTT DOCOMO Business, President and CEO, Representative Member of the Board. Hiroi, NTT DOCOMO Financial Group, President and CEO, Representative Member of the Board. Fujiki, NTT DOCOMO, Senior Executive Vice President, Representative Member of the Board of Directors. These are the four speakers for today.
Today, President Maeda will present a summary of our financial results, after which we will take your questions. The materials are available on our IR website. Please refer to them in addition to the briefing. President Maeda, please go ahead.
This is Maeda from NTT DOCOMO. I will now give a brief overview of FY 2026 second quarter financial results and our outlook going forward. On a consolidated basis, we recorded an increase in both revenue and profit for the second consecutive quarter. In addition to improvement momentum in consumer communications and the strong performance of the Smart Life business, we look into account the impact of the upcoming pricing revision. We are revising upward for full-year guidance for both operating revenue and operating profit by JPY 20 billion. In consumer communications, our consumer base has improved in both quality and quantity, and we have a firm sense that the recovery trend is taking a hold. DOCOMO MAX continues to perform well with both the number of subscribers and our pre-tracking of a plan.
Together with the upcoming price revisions, we now expect the revenue and turnaround in mobile communication services revenues to be achieved one year ahead of schedule. Sales promotion expenses in the first half increased year-on-year, but this was within our planned range, and we are managing operations with a view to achieving efficiency, improving for the full year our sales capabilities, steadily strengthening. In the second half, we will continue to closely monitor the competitive environment, take additional measures where needed, and further enhance sales efficiency. Base station rollout is currently progressing generally. In line with the plan, we have also increased our planned CapEx. We intend to prioritize the allocation of cash to network investment, accelerating measures to improve quality, and proactively addressing rising prices. In the Smart Life business, growth expanded across all areas: finance, marketing, solutions, entertainment.
The business is steadily gaining weight as a core earning pillar. Especially in finance, under NTT DOCOMO Financial Group, in addition to the growth of banking, payment, and brokerage services respectively, we are accelerating efforts to create group synergies. In banking, on matters such as leveraging DOCOMO shops and linked benefits, we are listening to the voices of customers and shop staff and making timely improvements as we work firmly to establish our operations. The number of accounts acquired is growing. Our aim is not simply to increase the numbers. We intend to provide high-quality services that customers actually use and to deepen our engagement with them. The enterprise business recorded a decrease in profit, which we recognize as an issue. While we are growing orders in the growth areas, we need to further strengthen our ability to convert them into profit.
Orders are currently building up, centered on AI and security. In the second half, we will be committed to steadily converting these into revenues and profit, and the aim to deliver on our full-year profit guidance. That concludes my explanation. Thank you.
We will now take your questions. If you are attending in person and have a question, please raise your hand. Our staff will bring you a microphone. If you are joining online, please click the raise hand button in the web conferencing system. We will start with a question from the room. The person in the right-hand side block, the person wearing a blue shirt, please.
[Non-English content ]. I have two questions. Although small, upward revision for the first time in a while, congratulations. Communication revenue is increasing, but there are two points I want to confirm about the cost expense. Network reinforcement expense is increasing, and that I think is factored in. There is increase in CapEx as well.
CapEx, towards next fiscal year, how is it going to trend, and what will be the impact on P&L? Sales promotion expense, there is an increase in Q2, and there has been an increase from the second half of last year on a year-on-year basis. Is it correct to understand that there is no further increase from Q3? Towards next fiscal year, what will be the trend? These are the two points I want to confirm.
Thank you for the question. First, network reinforcement expense. Policy-wise, intentionally, we are increasing this expense as well as CapEx. In order to increase quality, there are a number of initiatives we are taking, one of which is very important, and that is SA standalone. As much as possible, core network capacity, we want to enlarge. For that, we have to accelerate the speed of our investment.
Having said that, though, it is something that we have to do at some point in time. This fiscal year, we are going to rush to take this initiative, and we expect benefit from this next year. So we are investing in advance. In addition, there is a memory impact, and how much increase in memory prices there is going to be, that is a risk. We have to procure as much memory as possible at this juncture. So we are procuring memories. Next year, we expect to enjoy this benefit as well. However, as you mentioned, the next fiscal year onwards, our basic plan is to see a decrease. But memory price increase, how that trend is going forward is difficult to clearly forecast. We have to closely monitor how this market develops.
Overall, equipment we will renew, and in that sense, energy cost and operational cost, we expect this cost to decrease. As we were mentioning from before, equipment procurement will lead to a decline, and next fiscal year, we expect to enjoy benefit from these initiatives. The sales promotion cost, as you say, compared with the first half of last fiscal year and from the second half, there has been an increase in sales promotion cost. In actuality, if you take a look at the breakdown, we have been able to strengthen our sales capability, and we are taking measures to increase efficiency. We want to make sure we continue these initiatives in the second half, and compared with last fiscal year, we expect a decrease here as well.
T hank you. My second question is, Mr. Hiroi is here, and I have a question about DOCOMO Financial. On a consolidated basis, year- on- year, there is likely to be an increase in profit. The second half onwards, is there going to be an increase in profit or not? What will be the impact on performance? Housing loan business, there is an interest rate hike, and there is the balance between deposit and loan, SMTB, DOCOMO SMTB Net Bank, and other parts. Is there going to be an increase in profit or not in the second half? What kind of synergy are you expecting?
Thank you for your question. First half performance, or the most recent performance, is such that including bank-related business and securities, they are growing sharply, significantly, and card and the bank, they are enjoying a steady 10% or so growth. We are enjoying sound growth. Concerning this growth trend, if the current financial market situation continues, we should be able to maintain this growth trend. That is our underlying assumption. For banking business, as you just mentioned, housing loan is our main product. Mortgage or housing loan is our main product, and we are successfully expanding this business. The number of accounts for deposit, we are seeing an increase here as well. Relatively speaking, banking business is close to network business, and the past year accumulation tends to determine the performance in the following year onwards.
Under such circumstance, we are growing steadily. Card, as well as d- Barai, d Payment, we are seeing a double-digit growth in transactions, and these businesses are growing successfully as well. Securities business, first half, the market was very brisk. Second half onwards, the market may, so to speak, become a bit bumpier, and we may be impacted by this market situation in the second half. However, the NTT DOCOMO Group, we want to cooperate within the NTT DOCOMO Group. NISA, tax-exempt individual investment accounts, we want to expand. Stable revenue and profit foundation, we are seeing an increase here. Gradually, we think we will start to enjoy a stable growth. That is how we see the situation.
[Non-English content]
Thank you. Next, the front row to the far left person. Please go ahead. The microphone will be coming to you now.
[N on-English content] I have three segments questions. Regarding consumer communications, at the media press conference, the handset subscribers went down by 1.14 million. Breakdown is, the telephone is minus 610,000, and data is 530,000 down. That is due to termination of a large enterprise customer's contract. A part of that was included in the telephone side as well, meaning that the general public consumer subscribers number has gone down. It's not that they're experiencing a decline in 100,000s unit, and it doesn't have that much of an impact on the revenue itself. I wanted to confirm that.
That is exactly as you have pointed out. Yes. For the consumer sides, the net decline is around 100,000. That, of course, thinking from last fiscal year, it's the 3G service has terminated, and there's a negative impact of that as well. Excluding the 3G service termination, it's between 50,000 to 60,000. That's the consumer side. That's including all the MNP movements as well. But for other factors, it's all in the enterprise side. Really, the way of thinking of a pricing revision next fiscal year, it's at the upper several 10 billions of Yen impact is what you're saying. Compared to the other carriers, in terms of the number of subscribers, you have the largest.
In the price increase, the DOCOMO MAX is not included, or the mini is not included, but you'll do mini too? Per subscriber, I think the impact is about half of the other carriers. Maybe the other carriers are doing just more, but for your company, it's a well-balanced pricing revision. Is that your thoughts? Of course, it's how much of a revision you'll be making, but it seems that looking at the other carriers or this industry, you're the quietest one.
Well, I think there are various views on how you look at being the quietest one, but as I have been explaining, we have to continue the various investments. That is from that perspective, we are doing the pricing revision, but we also have to secure the revenue as well. For our company, DOCOMO MAX and mini and ahamo, these are, well, as the current running plan, we are providing the service through these plans and acquiring new subscribers. We would like to secure the competitiveness here. As an addition, we'd like to do the pricing revision.
As a result of that, we will have our competitiveness improve more, and the plans will be attractive for the customers, and they will select it, and the customer base will not be damaged, but it will be reinforced, and the revenue will be added to it, of course, from the other areas and communications as well.
The two segments, the operating profit for the enterprise side, it says a one-time impact, but it seems that as a growth rate, it is still low. Also, the breakdown of the segment profit, you said that there are some intertwining of the reclassification internally, and the sales promotion expense that you had, you are actually transferring that over to the group operating company. The actual sales promotion expenses for the finance business went into the finance business company. How should we build up our forecast? The finance business sales promotion expenses for the accounting management perspective, how should we read it?
From the enterprise, I would like to explain. Regarding the large-scale client's termination of contract on the enterprise side, sorry to cause you the concern. They stopped the service to their end customers, so it was about 1.2 million. It's that they have stopped the service provision, so it's not because of other causes. We are causing concerns regarding the profitability or the profit side. There are two factors to this. The year-on-year increase and decrease perspective for us this fiscal year, there's a DOCOMO Solutions coming into us, and there's some timing impact, so that was the impact. Last year, there was a 3G service termination, so that had an impact. Also, the Otemachi demolition had a large impact.
There's because of JPY 5 billion of a negativity in the business plan. As explained to you before, strategically, trying to grasp large-scale projects, we have some advanced spending to do that, and there's some overlap in projects, and that's about a JPY 4 billion negative number. These two are the large impacts. In terms of organic growth, it's not weakening at the same level as the top line. We are growing or even more than that. I would like you to look at it that way and evaluate it that way as well. Masuno-san, what is your purpose of your question? What would you like to know?
Sorry, I only could have come up with something like that. Within the Smart Life, this consumer communications or revenue use at the press conference for the media, you had an explanation that you reclassified things internally, so I just want to know what that means.
The classification up to now at NTT DOCOMO themselves, they were taking the burden, but we have spun out the company or the business, and there's expenses that the finance business should take care of, and we made that clear. At the finance side, that amount has increased, and that was reflected on the profit. I would like you to understand it in that way.
Okay, understood. The overall company's profitability has not changed, but which part is taking what expense or paying what expense? Moving forward, I should think this right now is the base.
If I may slightly add, as Mr. Masuno, you said that it's the expenses that should be taken care of by the finance business. Maybe consumer business was paying that, is what you said. Let me break it down. The conventional finance business and the financial result, the financial group numbers, there is a difference, and there are several factors to that. The first is that in the finance business, services inside the finance business, thinking about the characteristics of the business, there is a service that remained within DOCOMO. We did not bring it over to financial group side. On the surface, it seems that the profit has declined.
Also, maybe this is the point of a discussion, but the DOCOMO's company-wide common expenses, something that was paid by the consumer side because the company was going to spin out, the part of the expense was shifted over to financial group. That is not the sales promotion expenses, though. Specifically speaking, this is the receivables collection work that is consigned to NTT Finance, and NTT Finance was bearing that cost, but we have shifted part of that to financial group. Due to the establishment of the new company, the financing or funding cost, that is the non-operating cost, and that was how it's looked on a consolidated basis. Now it's a financial group that will be working on the finance. It is actually reclassified into the operating expenses. In that way, things were classified. I wanted to explain that.
If possible, if you can actually explain that on a written material, that would be very helpful. Thank you.
We would like to move on to the next question. The person in the front row to the left.
Daiwa Securities, Tokunaga. I also want to confirm some numbers, if I may. An upward revision this time is because JPY 20 billion improvement in mobile communication service revenue, and that is reflected in the profit, and that is how I interpreted the situation from the data set. From existing tariff, about JPY 40 billion increase in revenue I was expecting because of price waves from tariff. Taking a look at the tariff, I think a lot of people were expecting a bit more. In the press conference, you mentioned that in Q3, we want to take a look at how the churn will develop. In Q3, we will have a clearer understanding. There is intensified competition in Q3.
So JPY 20 billion upward revision might turn or there might be some other factors included in the guidance. What is the background behind this JPY 20 billion upward revision? What will be the underlying assumption? How do you perceive the competitive environment and other factors in coming up with a JPY 20 billion upward revision?
In detail, Fujiki will follow up, but basically, as you just mentioned, in our original plan, there were some points already factored in. In addition to that, we clearly conducted a revision this time, and we ultimately came up with the expected impact amount. Based on the consumer business, we came up with this upward revision. When it comes to details, we would like to refrain from disclosing, but please understand the situation this way.
Thank you. My second question is about your midterm plan. Midterm plan EBITDA, consumer communications, for the next five years, it is likely to be flat. This fiscal year, there is already an upside of JPY 20 billion. Next year, if on a full-year basis, there is furthermore. It seems that over a three-year period, it is likely to be JPY 60 billion. Maybe we can expect more from the price tariff revision. At the moment, what is the progress in your midterm plan? Towards 2030, how much more confident are you, and what prospect do you have towards 2030 in your midterm plan?
We made an upward revision this time, and there is a gap between this upward revision as well as the midterm plan we announced before. We understand that. In the second half of this fiscal year, we want to wait and see how things develop, and then we want to reflect that in our plan next fiscal year onwards. As much as possible, we want to come up with a high profit plan. Thank you.
[N on-English content] I would like to take the next question. For those of you who are participating remotely, if you have a question, please raise your hand. We see a hand in the room, so the right-hand side block, first row, please go ahead.
Yoneshima from Citigroup Securities. Related to the previous question, or there may be an overlap this time, you made an upward revision of JPY 20 billion, and within the materials and data sheet, you did revise the KPIs, but it seems that the ARPU is the only one that has been revised. The other KPIs, intentionally, did you maintain it, or towards the number of subscribers, can it go more, or what is your take on this?
As I have mentioned in the presentation, regarding the customer base, it is in line with the plan or slightly better than the plan. That is a fact. Due to the pricing revision, what kind of changes will we see in the customer movement? That is a key. The material costs are hiking, so how are we going to launch the handsets? How are we going to set the price on that? Within the competitive environment, each player, how are they going to play this situation? At this point, we do not have full visibility yet. Given that at the very end, how much increase will be there? That is why, as a planned figure, we are maintaining it as it is right now.
Understood. Thank you very much. The second question is kind of vague. Within the holding company's explanation, there is an explanation regarding the AI strategy, and there was a slight mentioning of your company. Towards the enterprise customers and towards the consumer customers, what kind of a strategy are you going to take in terms of AI? Of course, there is the cost side, but also there is the revenue side as well. Is there any direction that you would like to follow, or you like to proceed in the business by doing things? Can you elaborate on that?
Regarding the enterprise business, Kojima will explain later. However, towards the consumer services, what we consider extremely important is that the data based on the usage of the customers, I would like to combine that with AI, so to have a full grasp of the customers, and at the same time, support the lifestyle of the customers, consumer customers, and create something like an AI agent.
Right now, it is a monitor, a trial, a service period, and we like to provide this new service. We are receiving various feedback and requests during the monitoring period, and there are things that we have noticed as well. So we like to further improve the content of it. Maybe somewhere around the beginning to middle of November, I would like to share the content of this. The enterprise side, the platform of AI, it is not just for us, but the finance and entertainment business as well. Utilizing this platform, we would like to have an understanding of the customers, go a step ahead of the customers, and provide various services. We would like to make it to evolve to applications where various services can be provided.
This platform that we are going to build, we would like to provide it to the other companies or third parties. Of course, that is going to be in collaboration with DOCOMO Business, and if necessary, we will collaborate with NTT DATA as well. Details when the appropriate timing comes, I would like to provide you with the explanation. Kojima would like to add some explanation.
As I mentioned before in the holdings company's explanation, Sasaki said that they are rebuilding the AI strategy, and within that, providing data centers and submarine cables, and there is also the topic of providing solutions, and there is the AI infrastructure. Those three key points were mentioned. I would like to talk about the last point, the AI infrastructure. Last year, we had the AI ICT platform concept. We announced that. At the spring season, Shimada announced the AIOWN concept.
In order to realize that, this AI-Centric ICT Platform is the core of this. Within this, there is a computing GPU data center factor, and also there is a network, NaaS, which is a network that respond flexibly to the AI era, and also the AI and managed security, all of that included and implemented, that type of service. We are rapidly providing that to our customers. So in various ways, we will be implementing that into society. That is going to happen this fiscal year. We would like to provide the AI solution to the customer as well. As Maeda said, the SyncMe, the behind-the-scene system, we can build that up and also collaborate with AI operators. We would like to provide that in collaboration with them. So, drawing the line with the data as a business is a discussion point.
For the major customers, we will work on together, but our strength is that nationwide, we have office and we have employees. So providing the service thoroughly to the SMEs and mid-sized corporations is our mission. Not FD, but we have FD Lite. We did explain that we have about 1,000 of those. So in each region, we would like to provide the necessary service. So all these factories at the end being combined all together is going to be the overall AI strategy. That is the thought.
Thank you.
Are there any other questions from those of you in the room as well as those people participating online? Are there any more questions? If not, we now conclude the financial results briefing for the six months ended September 30th, 2026. Please wait. There will be the NTT DATA's financial briefing following up. Thank you.
We will now begin NTT DATA Group Corporation Q2 FY 2026 Financial Results Briefing. I will moderate today's session. I am Kawamura from Finance Headquarters. Thank you for your cooperation. First, let me introduce today's speakers. Nakayama, Representative Director, President and CEO. Umehara, Representative Director and Senior Executive Vice President. Yoshida, SVP, Head of Corporate Strategy Office at Corporate Planning General Headquarters. Kusakabe, SVP, Head of Finance Headquarters. These are the four speakers for today. Today, we will start from Q&A session.
For materials related to the financial results, please refer to the presentation materials on our IR website. If you are attending in person and have a question, our member of our staff will bring you a microphone. Please raise your hand. If you are joining online, please click the raise hand button in the web conferencing system. When we request you to unmute, please unmute yourself in the web conferencing system. We will start with a question from the room. For those of you who have a question, please raise your hand. The very front row person.
Nomura Securities, Masuno speaking. I am sure there are various temporary causes. However, just taking the overall look at you, dividing Japan and overseas, I would like your review on the business performance. At the media press conference, you said that regarding Japan business, for the full year, it is a high target, but you will be putting your efforts to achieve that. That was your comment. It is quite of a high level target. I thought that the Japan business will be able to achieve it, but I would like you to comment on your thoughts.
Okay, then from my side, I would like to respond to your question. On a year-on-year basis, please look at those numbers, and if you do look at them, it is within the breakdown number. On the profit basis, year on year, the number is increasing quite a bit, especially publics performing strongly, and the margin, all of the areas are increasing as well.
The annually is a JPY 35 billion increase, and it is JPY 18.4 billion. Business area-wise, the public finance and enterprise, if you look at each business's progress, it becomes these numbers. Why, what, where are we struggling? Last fiscal year, the second half numbers level was quite high. Compared to that year, trying to further increase the profit overall is a bit challenging, is how we look at it. For this fiscal year especially, overall, the data center transfer gains, if we exclude that, it will be increasing the profit by JPY 40 billion. Within that, the majority will be from the Japan business.
Therefore, overall, we are strongly performing, but achieving the full-year target, each business area, it is not that of an easy task for them. That is our current understanding. Towards the target achievement in the Japan business side as well, we are once again building up various measures and putting our efforts in it. Is there anything you would like to add?
No. Okay, understood. For the overseas business, excluding the data center, the actual profit level is the discussion I would like to have with you. The three months of the second quarter, just looking at that period, what you disclosed, not the adjusted EBITDA, but everything included reported operating profit. The final three months operating profit, if you look at that, with just these three months, is JPY 25.3 billion. With just the three months. Year-o n-y ear, last year, the same quarter was JPY 31.1 billion.
It is showing a decline. The adjusted EBITDA gap is large. The structural reform expense, I think, is coming out in the second quarter as well. Including that structural reform expenses, how are you looking at this progress in terms of the profit?
Compared to the Japan business, the overseas business, the expectations for the achievement of the goal, if you compare the two, it will be difficult for them. It will be a tough task for them, is how we look at it. This fiscal year, the integration expense, compared to the previous year, we are having an increase. This is the integration of the system. That is the majority of the cost increase. But other than that, the headcount, we wanted to improve the efficiency of the personnel, so that expense is coming out as well. The integration expense is something that is necessary.
Therefore, that will go out. When we think about that, if we look at the gap against the Adjusted EBITDA, year on year, there is a JPY 3 billion increase. Also, region-wise, if you look at page 10, you can tell at a glance, APAC is not performing well, honestly speaking. Therefore, in terms of the full-year target achievement, regarding the APAC region, the situation is quite tough, is our understanding. Therefore, the APAC region, how much can they get closer to the target? Also, for the overseas business in the other regions, how much recovery can be made will be the key point for this fiscal year's target achievement. By region, comparatively speaking, the strong-performing region is EMEA. We have EMEA, the Spain, and Latin America. That region, continuing from last fiscal year, they are performing strong.
For the European region, we are seeing the signs of a recovery. Therefore, EMEA, even looking at the numbers, they are strongly performing. Thanks to all the efforts, it is getting better. I will stop here once.
Also, just looking at the three months for the other areas, operating margin is going down. In the media press conference, you said that investment for the AI strategy and organizational investments. Can you elaborate on that point more?
It is page seven on the material. 37.1 or 371 is the number here. This is what I have explained in the press conference, and there, it is about half and half of that whole number. AI investment, it is a strategic investment to create or generate AI business. AI Vista, that is an easy-to-understand point.
Conventionally, we have been conducting M&As, but in a different style, we wanted to hire talented personnel. Instead of conducting M&A, we wanted to directly hire these excellent talent at the top class. If we hire such top-class talent, then there will be other excellent talent that will follow them. On a profit and loss basis, we are spending money, but because of that, we will be able to go after more revenue after that. We are spending for that. The other half is, last year, there was some replacement between segments. There was a shift within segments or transfer between segments, so you can explain that. The other segment, last fiscal year, as an NTT Group company at the headquarter, there was a Japan domestic group company that belonged to that, and they have a stronger synergy with the Japan domestic business.
From the second half, they were transferred over to the Japan business. Therefore, for the first half, the other business segment seems that they had a decline in profit, but then it became a positive factor for the Japan business. Half of that is because of this.
Okay, understood. Thank you very much.
[Non-English content] We will move on to the next question. Please raise your hand if you have a question. [Non-English content] There is nobody raising their hands in the room. We would now like to take questions from people joining online. Those of you joining online, are there any questions? Please click the raise hand button if you have a question. Those of you in the room, please raise your hand. There is a question from a person in the room, the person in the front row, please.
Thank you. Daiwa Securities, Tokunaga. I have two questions. First, it may be difficult for you to comment on this point, but i n Q3 onwards, you might see brighter signs. It was mentioned about DevCo, et cetera, and the various projects that might be up and running. That was mentioned in NTT, Inc.'s session. In the first half, you were in a tough situation, but towards the second half, it seems as though there are many projects that you are trying to get prepared for. There might be some seasonality or timing. Because of that, progress in the first half may not have been good enough. It seems as though you have contingency plans in the projects that you are prepared for. Is that the correct understanding?
Tokunaga-san, you referred to DevCo in your question, and data center transfer or sale. There was data center transfer to a Singaporean REIT that was set up last year. In addition to that, there is a development-type joint venture that we set up with a partner. There is asset transfer to this DevCo as well. We will be responsible for 20%-30%, but the majority will be shouldered by another partner. We are considering this other scheme as well, a DevCo scheme. I mentioned to people of the mass media that at the earliest timing, this second half, we want to be able to explain in more detail about this DevCo scheme. It is one month after we started the second half of the fiscal year. When we say early timing, it might be around Q3. At around that timing, we want to be able to explain more to you about DevCo and this DevCo scheme.
As we work on this, just transferring to a REIT will not create enough cash recycling because, in the case of a REIT, to a certain extent, it has to be mature and the yield has to be high. These are the assets to be sold to a REIT, and that alone, there is a lot of needs, and that will not be enough for cash recycling. Relatively speaking, from the early development stage, we want to work with a partner, and introducing this kind of a scheme, it will be the key in working on large-scale projects in the future. We need to be prepared for this, and if we have the first, we can continue on with second or third vehicles. This is strategically an important point for us, and at the earliest timing, we would like to report more on this DevCo scheme.
In addition to that, you referred to seasonality. Our business overall, there is IT system. A large portion of our business is IT system, and in the first half and second half, there is more of this business in the second half of the fiscal year compared with the first half. There are some projects with a very clear prospect in the second half, and this is a trend every year. Q1 and Q2, we are not so strong year-on-year, but in Q3 and Q4, we tend to increase performance and achieve our annual plan. That is the trend we see every year. In that sense, there is indeed seasonality. Anything else to add? That is it. Thank you.
My second question is a similar question about the midterm plan. DOCOMO mentioned that consumer communication revenue is turning around because of price revision, and NTT DATA's midterm EBITDA target towards 2030. What kind of curve or trend are you expecting? Towards the end, are you expecting a sharp increase in EBITDA? In the first half, because of strong new orders received, are you expecting a sharp increase in the first part of your midterm plan? Which is the case?
Towards 2030, when we think about 2030, how much development in AI is there going to be? That is an important point. Domestic business and overseas business, if there is a development in AI, we can streamline our development process, and the overall sales volume will decline, or profit-wise, there is a negative factor if there is growth in AI.
But there will be new projects where we can introduce AI, and by so doing, we may be able to increase overall performance, and that is the overall understanding we have. But depending upon how things develop, we may end up accumulating profit in different ways. Generally speaking, in Japan, public and financial businesses, relatively speaking, they tend to be long-term businesses, and the digitization or open trend, because of that, we are seeing an increase in new orders received. That will basically contribute to increasing profit going forward. In addition, AI type, as well as recurring type, new platform type projects we want to add. Towards the second half of our midterm plan, how much benefit can we enjoy from that? That is the moment of truth.
A target towards 2030, it's important to achieve our target towards 2030 numerically, but in addition to that, business portfolio is also important. New recurring type sales, how much of that can we increase and contribute to the profit? That is also important for the future of NTT DATA. Whether we can accumulate that kind of business as planned is an important point. The overseas business, we are, frankly speaking, struggling at the moment. How a profit can be generated in our overseas business in the next five years, the first half, we may not expect something substantial or significant. Rather than that, towards the second half of our midterm plan, we may see more increase in our performance or numbers. That's how we see the situation at the moment. Thank you.
President Shimada mentioned that there's a slight decline in M&A, and you're more in a transformation phase. Is that the correct understanding? Overseas, in transforming your overseas business, you may have to spend the cost at some timing. Should we be prepared for some cost to transform overseas business?
First of all, with regards to M&A, how shall I say it? About one year ago, we were expecting relatively large companies responsible for overall IT service, and with the advent of AI, the services that may have tend to become legacy. So, those kinds of potential deals we have put on hold. In addition to that, deals that may have a positive impact on AI, and in order to increase industry knowledge, there might be some good M&A deals. We hope to see more of those M&A deals, and that is what I think.
But at this point in time, most recently, this fiscal year, for example, can we expect a large M&A deal immediately? That is not the situation at the moment. Overseas business, if you take a look at the overall overseas business, the sense of crisis I have is the United States. This is a very large market. The U.S. market is a very large market with a high growth rate, but NTT DATA Group, relatively speaking, is struggling in the United States., and we are in a tough situation. How much growth can we enjoy in the U.S. business? We have to think about, and based on that, we may have to think more about M&A. But can we see M&A deals coming up immediately? We are not sure. Europe, in the U.K., we are weak considering the overall market size.
In five to 10 years' time, what is the ideal situation for these businesses? We first need to come up with a clear strategy, and as means to achieve and implement our strategy, we may use M&A. There is that possibility in the next five years. At what kind of timing? What should we come up with? We have to think more about this. Concerning M&A, that is how we perceive M&A currently. How shall I say it? We will embark on M&A in accordance with necessity, and that is how we understand the situation. Cost effect, cost benefit, the transaction cost, and transformation cost, what is your take on that? The transformation cost, this fiscal year as well as next fiscal year as well, we do expect a substantial amount of transformation or integration cost in the group. Overseas business, we had dispersed systems.
Ever since we started the transformation from 2023 to 2024, we are trying to integrate our dispersed systems. Decades have passed since acquisition, but we have not done so much to integrate IT system, but we have to work on this going forward. Otherwise, we will not be able to increase the quality of our corporate management, and we will not be able to take next action to be extreme. Even if we try to embark on M&A, if systems are dispersed, we will not be able to get the corporate management up and running sufficiently. Therefore, integration transformation is important. It leads us to the next stage. Therefore, this year and next year, we will incur substantial transformation cost. Once this has settled down, we currently expect the transformation cost to decrease on an annual basis.
Overseas business transformation or integration cost, we expect a substantial amount, about JPY 20 billion. For IT system, we expect to peak out sometime, and after that, we expect system integration to contribute to our company's profit.
[Non-English content]
Thank you very much. I would like to take the next question. I would like you to raise your hand if you have any questions. The last row on the right-hand side, please go ahead.
This is Kikuchi from SMBC Nikko Securities. I have two questions. Regarding the group strategy, I would like to ask one question each for Japan and overseas. The first is that it has been close to a year since you became wholly owned, joining the NTT Group, and within one year, is there some outcomes or positive effects, or if there is something that you think that you can newly do? I would like to know if such thing exists. How are you going to become with DOCOMO Business, or will be able to use the NTT R&D labs resources, and maybe you are seeing something new because you can use the various resources within the group now for the Japan business?
I would like to answer that question. After becoming 100% subsidiary and with DOCOMO Business and NTT DATA in detail, we started to understand each other in more clarity, and with what kind of companies we have as customers, what kind of customers we have, and what kind of business is conducted. By mutually understanding that, joint go-to-market, for example, other customers that NTT DATA was not able to reach till now, we will have DOCOMO Business come with us and approach the customers. There is a business case such, and that has led to actual business transactions. As mentioned before, NTT DATA tends to go deeply inside the customer side. On the other hand, DOCOMO Business, they have the solutions, and they are providing that to a broader customer base. So use that and expand our business. We believe that we will be able to see some positive effects to a certain level.
As announced previously, using Frontier AI business, DOCOMO Business and NTT DATA, we did not have the opportunity to collaborate and roll out a business, but from the network layer to the consulting layer, DOCOMO Business has a different layer that they do. So we will be able to combine those layers and respond to the customer from now onwards. From the customer's perspective, it seems that till now, it was a separate company, but now we will be able to do that as one. So we are receiving quite a number of inquiries from the customers. So, it has only been a year, and we are seeing positive effects out of this. But a more quantifying positive effect is something that we will see moving forward.
The utilization of the NTT R&D labs for NTT DATA as an innovation center, we have centers globally to showcase innovative technology. Not just providing the technology, but with discussions with the customers, we are searching for areas that we can utilize the technology. We are having other group, other companies join us. So, we will be able to roll out these innovations outside the labs within the NTT Group collaboration. For NTT Group, the NTT Law, maybe at some point 2028 or 2029, if it is totally abolished, including NTT EAST and WEST, I believe that various things can happen within the group. But for overseas business, losing visibility is how I feel.
This is my second question. So, various companies were acquired at certain timings, and Dimension Data was acquired with having separate directions of companies that were acquired, and this is the outcome of that process, is what I think. Can it stay as it is with this structure? Is it a structure to achieve more growth? Looking at it from the outside, it's questionable. Mr. Nakayama, probably that is why you have proposed various challenges. I think that there may be a necessity of conducting specific actions this fiscal year, next fiscal year. You said no M&As, but what are your thoughts, Mr. Nakayama, or other members of what can be done or what should be done or what you would like to do?
Regarding the overseas business. Looking back, our history is, as you have correctly pointed out, NTT DATA Group has acquired many companies, and that became under our company. We have worked on various integration menus. It's not that all of them are independently separate, but within the last several years, we have integrated the go-to-market function and others. If you go to the United States now, the former NTT Limited products, we utilize that. On top of that, we put NTT DATA's product, and we call it a big deal. From the customer's platform and the layers above it, type of scale projects, we're able to acquire that. That is because within this AI era, dealing with the various vendors will cause quite a high management cost.
But for us, we have quite a broad portfolio compared to our competitors, so the customers will be able to have one-stop shopping. That is why we would like to achieve growth by providing this type of business service. But looking at the current AI era's situation, the upper layer AI usage use case, still the customer side is under trial. So it is not penetrated that much yet. On the other hand, the AI infrastructure, how are you going to set that up, is an urgent matter for the customer side. So the recent orders that we're seeing now is from the infrastructure buildup for responding to AI era in the overseas business. The infrastructure layer, the margin, especially the resale of the equipment, tend to be low, but that part of the business is going ahead right now.
Of course, depending on the region, there are regions that have strong equipment sales. Also, there are regions where you can start immediately from the consulting layer. So depending on the region, not looking at it all as one, as global, but looking at each individual region's characteristics. So from the bottom layer to the upper layer, we'll be able to aim to a structure where customers can use all those layers. I would like to add, what Umehara answered is the overall picture. However, depending on the country, the situation differs. Therefore, within the current AI era, what we are aiming for as the company-wide strategy is that when the customer side conducts an AI transformation, whether we'll be able to become their best partner or not is something that we would like to strongly promote as our differentiating strength.
AI type of service being strong, that becomes 80% or 90% of the sales, and the 10% is the so-called tech service. Such region, the entities that go into the customer side as a customer front have the strengths, so we can sell the tech products, and we can talk about AI as well. We are a company that has headquarters in Japan, and we are working these things in Japan, and we have the know-how in Japan. We would like to roll that out in the same way overseas as well. The strategy or the tactic is that by region or, well, every year, the number is going up and down. That is an important point. When we look further down the road, in this country, what should we do? That is what I would like to look at a little more.
Therefore, the everis team in Spain, how they enter the customer size through IT service is quite strong. Behind that, there is equipment sales that is there. That is going comparatively well. However, what of the concern is the Asia region, where the dominant business is selling the equipment. It is a large volume, thin profit, and if they are not able to be deep inside the customers, it is difficult to bring up the next business. In terms of investment and a broad sense, including investment in personnel, what are we going to do about that? We would like to look at the situation by country and the headquarters side get involved more. I think that is the wise way to go. Not in a nutshell saying global as one, the business is like this, so it is better to divest. It is not a simple story as such.
I think that a tactics or strategy by country has the most meaning to it, is what I think. I would like to discuss this point more with the NTT, Inc. side. Number-wise, it seems that there is a high volatility, but I believe that each business is going to become stronger. Including myself and us and your company, you are the major player globally, and the same level company as yours have a technology roadmap or a clear service roadmap. They are showing a direction that let us work together towards that direction.
There are many companies as such, so NTT DATA Group, like the roadmap or technology or the services or the R&D that you have, if you can show that to us clearly, then we will know that the group is working towards become one, and we will know in a more clear way which direction you are heading towards. Okay, thank you very much for such a valuable feedback.
Thank you very much. Participants in the room, are there any additional questions? Please go ahead. Those of you participating online as well, if you have a question, please click the raise hand button.
Masuno, Nomura Securities, just one point about AI infrastructure concept I want to confirm. If I take a look at your domestic business, data centers in the 2030s after the midterm plan in places like Tochigi and Inzai, you are expecting these large projects, and these projects are after the midterm plan period. In Japan and overseas, how do you intend to allocate the data center resources? After the five-year midterm plan, I have the impression that your Japan business is going to become substantially larger based on your announcement. Is my understanding correct? In the industry, GPU investment and the tens of billions of investment I hear, but NTT is not making this kind of an announcement. Therefore, what is your stance on GPU investment? You may be actually investing, just not making announcement. What is your perception on AI infrastructure?
Domestic data center, of course, GDC, Global Data Center, standardized data centers, there's that as well. Originally, NTT DATA had owned data centers. If you take a look at the group companies besides NTT DATA have data centers as well. We want to utilize all of these data centers to the maximum extent as we proceed with our business going forward. Large data centers, in 2030 onwards, we will construct large data centers, but not only NTT DATA, but in the group as a whole.
We want to take a look at the supply and demand and make sure we take sufficient measures. Concerning GPU, GPUaaS, we already have that service. State-of-the-art GPU, we are considering to handle. AI platform or software development, we want to conduct using AI. As we do that, what kind of platform infrastructure do we need, and what kind of service can we offer to our customers? That happen to be very important points. Of course, GPU, we purchase massive GPUs, and do we need to do that much? Is there the market that we need to carefully analyze the situation? But we are actually making investment. In accordance with how business develops, we would like to conduct the right level of investment.
It seems strange. If you are constructing so many data centers, you have to purchase three times as much GPU. If you start doing that, you may have to invest as much as JPY 100 billion in GPU, and not only your company, but I'm talking about Japan as a whole. It seems as though I have the image that there's not a sufficient GPU investment. That's why I wanted to ask NTT DATA's stance.
Your response is you want to respond in accordance with the market situation. Yes, GPUaaS, we are offering mainly in Japan currently. Because in Japan, of course, we take care of their system, and joint usage type of system we are developing. Considering the history of the business, we are able to offer this service in Japan, and that's why we are starting out from Japan.
We are constructing data centers overseas, but as we have mentioned from before, of course, we have enterprise service, but there is an increase in hyperscaler-related data center service. The data centers that we construct, they are leased by the hyperscalers, and they invest in, they fill in the data centers with GPU. That is the business model. That is why you may have the impression that there is not so much GPU investment compared with the number of data centers built. We would like to take a look at the demand in each region, and in accordance with the business model we have in Japan as well as overseas, we would like to respond appropriately.
Thank you. That is it.
Thank you very much. At this room and those who are participating remotely, are there any additional questions that you would like to ask? It seems that there are no further questions. With this, we would like to conclude NTT DATA Group Corporation's second quarter financial results briefing. Thank you very much for today.