Thank you very much for waiting. We will now start financial results briefing of KDDI Corporation for the Q3 of the fiscal year ending March 2021. Thank you very much for taking time out of your busy schedule to attend the meeting via the Internet. I am Hongbo from IR Department and will serve as the moderator. In order to prevent the spread of COVID-nineteen, this briefing is distributed live online with Japanese to English simultaneous interpretation, and it will be distributed on demand later on our IR website.
We ask you for your understanding. Let me introduce the participants today. Shinichi Muramoto, Executive Vice President and Executive Director of Corporate Sector Takashi Shoji, Executive Vice President and Executive Director of Personal Business Keiichi Mori, Senior Managing Executive Officer and Executive Director of Solutions Business Sector Kazuyuki Yoshimura, Executive Officer and Executive Director of Technology Sector Nanae Saishoji, Executive Officer and General Manager of Corporate Management Division 3 financial results related materials, presentation, tanxing and detailed materials and one TSE disclosure material, a total of 4 are posted on our IR website. Please refer to the disclaimer in the materials regarding the contents in these documents as well as performance targets and projected subscriber counts in the Q and A session today. Mr.
Muramoto will first explain the financial results followed by Q and A. Mr. Muramoto, please.
Thank you very much for joining us in the KDDI meeting on the business results out of your busy schedules. Allow me to share with you financial results for the Q3 of the fiscal year ending March 2021. I would like to focus on 4 items. First, highlights of the financial results for the third through the Q3. Left hand side, the consolidated operating revenues for the 1st through the 3rd quarters were JPY 3,923,800,000,000 up 0.5 percent year on year.
Right hand side, operating income was JPY 871,000,000,000 up 3.2% year on year. Both operating revenues and operating income increased. Next, cumulative consolidated operating income from 1st through the 3rd quarter was up 27,200,000,000 yen Let me explain factors behind it. From the left, Life Design domain, excluding Energy Business and Business Services segment, which are growth fields, significantly contributed with plus 40,000,000,000 yen Next, in Energy Business. Cumulative results until the 3rd quarter were up €11,000,000,000 Yet from last December, the wholesale electricity market prices soared, which partially affected the business.
The effect is felt in January as well, but could be well absorbed in the consolidated results. We intend to achieve the beginning of the term forecast steadily. Negative factors were a decrease in mobile telecommunications revenue and an increase in strategic costs, including the promotion of 5 gs and smartphone settlements. Growth fields are driving the results. Next shows a progress in growth fields.
Left, sales of life design domain for 3 quarters were cumulatively JPY 940,000,000,000 The progress ratio for the full year target was 72.9 percent. Right hand side, Business Services segment. Operating revenues for cumulative 3 quarters were JPY 722,000,000,000 Progress ratio was 76.0%. It's a steady progress towards targets set at the beginning of the fiscal year under midterm management plan. Next, on Personal Services segment.
Left hand side, au total ARPA revenues for 3 quarters cumulatively were JPY 1,721,500,000,000. The progress ratio was 75.5%. Right hand side, revenues of UQ Mobile and MVNO, which have been integrated since October, were JPY JPY 70,200,000,000 for 3 cumulative quarters. The progress ratio was 78.0%. Both show a steady progress towards targets set at the beginning of the fiscal year.
On January 13, we announced new plans to bring 5 gs for everyone. Here is a chart of new plans. With no complicated conditions for a discount, we aimed at simple and inexpensive plans catering to diverse needs for family or an individual. The left shows au, Unlimited Use Without Anxiety, offering full service values with unlimited data, support and family discount. The center shows PoVO, EU's new dedicated online brand, which is JPY 2,480 for 20 gigabatt.
Depending on the customer's usage style, you can choose additional services and customize it freely. The ride shows UQ Mobile, where an individual customer can use a small to mid volume service carryover over the counter support at low prices. We will continue to work hard by adopting our customers' perspective to deliver exciting 5 gs for everyone. Now let me introduce toppings, a characteristic of PoWO. POVO has a simple basic charge.
Customers can choose functions and services they like or they need as toppings. The right shows an example of toppings at the start of service. Here, 500 yen per month is added for unlimited domestic phone calls of 5 minutes or less. By adding to 100 yen you can get 24 hour unlimited data usage. We'll be adding more topping services going forward.
Simple and low price without discount conditions daily, weekly or monthly, you can add or remove services you want as toppings. That's a new experience we would like to deliver. From next week, starting on February 1, Monday, we are starting Poivol early entry campaign. If you conclude a forward contract, you'll receive 3,000 yen equivalent in your au PAY account. We are looking forward to your participation.
To boost our momentum, we make the strength of our 3 prices and brands even more appealing while actively promoting 5 gs. With au, promoting 5 gs with set plans that allow you to use unlimited data without anxiety. With Povo, increase new contracts by differentiation with toppings and achieve high NPS by providing new experience. With UQ Mobile, increase new contracts and promote data usage by renewing our carryover plans. As the ratio of UQ Mobile and power accounts increases, mixed telecommunications ARPU tends to decline going forward.
Yet, we intend to increase new contracts and data usage. And by strengthening our proposals for life design services in each brand, we aim to achieve sustainable growth. Expanding the 5 gs area. The left shows the number of 5 gs base stations and the area deployment. Last December, we started offering 5 gs in all the prefectures.
In March, it will be about 10,000 base stations. In the spring, we plan to expand rail line areas covering all areas around the Tokyo Yamanote line and the Osaka Loop line. In March 2022, we are planning to increase the number to about 50,000 base stations with 90% population coverage nationwide. The right shows the utilization of existing frequencies in 3.5 megahertz band it has started since December. In 700 megahertz band, it is scheduled to begin in the spring.
Using existing frequencies, we aim to build uninterrupted 5 gs network, accelerating the area expansion. Next about the sales of 5 gs devices. In December, it exceeded 1,200,000 units. The sales of new iPhones rolled out in October have been brisk as well. We're promoting sales to achieve the target set at the beginning of the fiscal year.
About the services in the 5 gs era, the left shows au 5 gs experience. With identifying functions, it checks the user status concerning the unlimited use and whether a user is in the 5 gs area, then automatically improve image quality. In addition, by collaborating with Netflix, Amazon and various other partners, we'll offer a new set plan with unlimited use. We'll announce the new set plan prices in March.
Next is our initiatives in Growth Fields. This slide shows Business Services segment's KPI, IoT Connections. Our initial forecast was 15,000,000 connections, but we exceeded 16,000,000 in December and achieved the target ahead of our initial forecast. Next is expansion of IoT. Left side shows connected cars driving the growth of cumulative IoT connections.
We are deploying global communication platform through our partnership with Toyota and expanding it to China, North America, Europe and Australia. We also promote our partnership with Mazda and Subaru who are adopting it in their new models successively. Right side shows that smart meters are spreading not only to electricity, but also gas and water system. Our partnership with Toyo Keiki has made further progress in 2 years. We are also working with Ecomot on infectious disease control and jointly developing various services including KDDI IoT cloud standard thermal camera package.
Next is expansion of business fields. We signed a basic agreement with JR East last December to aim for joint commercialization by integrating traffic and telecommunications. In addition to joint promotion of Core City, Shinagawa development project, we will study the development of satellite cities as distributed base and mobility service. Through pilot tests for bullet train workplaces, as shown on this slide, we will aim to realize rich human centric lifestyle and work style. Next, we will create new businesses with our partners in Japan and abroad and promote KDDI Accelerate 5.0.
On the left side, KDDI Digital Gate, our 5 gs and IoT business development base and corporate department base that supports DX and the new KDDI research at Telier will collaborate as Toranomon Triangle and function as the fora for open innovation. Right side, in KDDI research atelier, we will propose new lifestyles as development base for applied R and D and build communities for sharing and discussion to disseminate our initiatives. Next is life design domains KPI. Left side, transaction volume of settlement and loan is growing strongly and reached JPY 6,500,000,000,000 up 40% year on year. Right side, number of our au pay card credit card reached 6,100,000 yen and is also growing favorably.
Next is the status of cashless payment via the smartphone as the important customer touch point. Left side shows the number of points and settlements participating stores. It exceeded 3,550,000 in December last year, doubling the number from the previous year. Touch points available for payments are expanding rapidly. Right side, au PAY!
And Punta collaboration is progressing as well. In December last year, au PAY was installed in digital Ponta cards. This allows customers to settle their transactions without opening their au PAY app and is improving customer convenience. Also starting this month, AU Pay is installed in Lawson app. We will work to improve our services to make it easier for customers to use.
Next is our initiative to leverage the customer touch point enhanced through smartphone settlement and drive the usage of our financial services. Left side, we will launch the first service in Japan that reduces mortgage interest rate when used in combination with AU Mobile called Mortgage AU Mobile preferential discount on March 1. In the middle, AU PAY Gold Card privilege is enhanced to make it easier for users to collect ponza points by using au communication services and au related service. Right side, au Kabocom Securities launched investment by points in September last year, where users can start investment trust with Punta points. We will grow the number of au PAY users and expand the usage by making various financial services more attractive.
Lastly, let me introduce some initiatives in non financial areas. Transformation into a human resources first company. Left side, last July, we introduced a new HR system to realize a work style where employees can generate outcome regardless of time or place. We are promoting declaration of KDDI new work style, KDDI version of job style personnel system and internal DX as a unified 3 part reform. Right side, we reduced KDDI head office seats by 40% vis a vis our headcount in December last year to optimize our office space.
For example, we addressed the challenge of the lack of communication among employees due to prolonged teleworking and set up 1 on 1 meeting spaces. Furthermore, we distributed PCs based on the 0 trust concept to all employees to realize a hybrid workplace combining teleworking and commuting. Next is regional revitalization. Left side shows the regional revitalization project pursued by KDDI called TehtoTeh. We are forming partnerships with regions in HR Development, DX Promotion and fund utilization to establish a sustainable business model.
Right side shows our major initiatives in the Q3. We collaborated with local governments, educational institutions, various groups and companies throughout Japan. In particular, we worked on regional revitalization using 5 gs and culture and art creation projects in Q3. Lastly, this is today's summary. We will aim for business growth by promoting 5 gs and growth fields.
In consolidated financial results and medium term targets, performance in growth fields drove our 3rd quarter results and growth fields progressed steadily towards our medium term management plan targets. In business strategies, we are responding to a wide range of customer needs with a new rate plan and appealing the strength of our 3 plans, while actively promoting 5 gs. We achieved target for cumulative total IoT connections ahead of initial forecasts. And we are aiming to expand usage by making various services attractive in financial services. And promoting DX together with customers and communities and contributing to the sustainable growth of society.
Thank you very much for your kind attention.
Now we would like to entertain your questions so that we can address as many people as possible in your questions. We would like to limit your questions to 2 per person. If you have 2 questions, please wait for the answer to your first question and then ask your second question, please. From those of you already registered and connected, we would like to entertain your questions 1 by 1 as we already informed you. Some explanation about how to pose ask a question.
If you have a question, please press asterisk 7 keys. When designated, wait for the moderator to announce your name and affiliation. And then the guidance will say, you are unmuted. After you hear that, please state your question. The first question, Daiwa Securities, Mr.
Ando, Following the voice guidance, please state your question. The floor is yours. Daiwa Securities, Ando. Can you hear me? Yes.
Two questions, please. First, cutting the prices, what's the impact of lowering the prices? Could you share with us the direction, please? Mixed ARPU is likely to decline, as you said in your presentation. But with the increase of our accounts, do you think that will cover this up?
If cost reduction is necessary, in what areas major cost reduction is possible? Could you please share with me the general direction? Thank you for your question. First, the impact of lowering the prices, the increase of accounts cost reduction initiatives. Well then, I will just share with you the overall things, and Shoji will give you some follow-up explanation.
As you said, naturally, after lowering the prices, a certain level of impact will be held felt in the revenues. We are studying the next fiscal year plans internally, what will be the impact of lowering the prices. But this is what I would like to share with you first. Sustainable growth, it's something we have been particular about. So in principle, going forward, we would like to grow sustainably.
In that sense, how best we can expand IDs with these competitive 3 brands, we must do a good job there. And also, as we shared with you, in the growth field, Life Design Business Services segment, with growth, we need to drive growth, drive sustainable growth. As for the cost reduction, yes, it was mentioned. In the midterm plan, about JPY 100,000,000,000 equivalent cost reduction is what we intend to do thoroughly in the next fiscal year. It's likely to contribute to the performance.
Going beyond that, we would like to go even beyond that. As for specifics, for instance, as I've mentioned today, consolidation of office areas, that's 1, cost reduction area and also sales channels are likely to change significantly. Reviewing the sales and marketing cost is another thing that we would like to do rather boldly. About the IDs, Shoji will address your question. Shoji speaking.
Some supplementary information. As Muramoto said, that's almost everything that we wanted to say. But this time, au UQ, we're going to reorganize the lineup. We believe that we reorganize the lineup, making it simple. About UQ, prices, 15, 25 giga, you can see that it's higher in capacity and the price is lower.
And also for you, Q, carryover is possible. Carryover is another characteristic. We believe that this is a kind of a weapon. So for Povo, the new online brand, which has been established with very simple 20 giga at JPY 2,480 with toppings, as you already know. For the first time, we are going to do this.
We would like to come up with various ideas so that customers will be really happy with these products. As for au, as you already know, 4 gs, JPY 1,000 5 gs, JPY 2,000. Price reduction has been conducted, especially the high volume, unlimited use of data. If a family of 3 uses together with SmartValue, JPY 4,480, that's the level we are talking about. So it's a good for upselling, easy for people to use this for looking at the segments and customers.
We would like to enhance our capability to acquire customers. And also, we would like to seek upselling to higher priced products. If it's just a simple mix up, it might decline in total. But ID expansion and with upselling, we would like to grow sustainably. Thank you.
Thank you very much. My second question, together with those, in growth fields, growing growth fields even more, I think that's what I hear pretty often these days. As for my question, in these 2 months or so, any changes in your initiatives or efforts or depending on the areas, I think environment might have changed somewhat. Any signs of new changes or any changes in the overall direction, for instance, in corporate or in other major areas, finance, financial settlements or power, electricity? By area by area, if you could just address my question, please.
Thank you. About Life Design field, Shoji. And about the Business Services Growth Fields, Mori will address your questions. First of all, about Life Design field. Let me explain.
About Life Design, as Muramoto said in the presentation, including Financial Businesses, especially Financial Business and Electricity, it has enjoyed steady growth. We come up with the new rate plan, au, UQ, Volvo accounts. We would like to increase them. We believe that it can increase. And Life Design Services can be combined appropriately.
That's exactly what we have been doing. And it's functioning very well, I believe. Au pay card, if you just look at the actual each year, JPY 9,900,000 to JPY 1,000,000 increase per year financial transactions volume JPY 6,500,000,000 if you look at the substance. Of course, number of settlements has increased. That's run.
But Jibun Bank mortgage loan housing loan, if you look at the disbursement, it's higher than JPY 1,000,000,000,000 in terms of disbursement. So mortgage loans have been doing very well. On the au side, telecommunications products, life design products, organic manner, they function very well together. And on top of that, not just au customers, for UQ customers, for they can use our life design products, it's convenient for other customers, I believe. So there's still more room for growth and expansion, including the sales, the life design products should be enhanced more.
So I hope you will keep your expectations high. Under san, are you satisfied now from Mori, please? For corporate, the businesses business services. For instance, look at IoT. In the first half of the year, partly because of the COVID-nineteen, that's just here in Japan, but in the world over, IoT, DX, the pace had slowed somewhat.
We had certain plans. In the middle of the second quarter from the summer, almost on track. Some were delayed, but almost on the plan, customer number has been on the increase. If you look at connected cars, just as an example, more manufacturers are supported by us. And expanding to Australia and Europe.
And in the Q3 and or worse, it's increasing in a full fledged manner. And the remote working and area that's related to work style, 1st, mobile saw some increase, but then office and outside, more and more people work combining different places. So not just mobile communications, but fixed light communications needs to be made easier to use with higher bandwidth. So that's another area we can expect to see some increase.
Thank you very much. Thank you, Mr. Ando. Next question? Nomura Securities.
Mr. Masuno, please. After the voice guidance, please mention your question. Please go ahead. This is Masimo from Nomura Securities.
My first question is on page 4. The results, the profit increase and decrease. So here, the growth fields, Life Design and Business Services segment are the increase in profit. So compared to the plan, especially business profit increase is large. The businesses that are driving the profit, what are they?
And in others, you see a negative. It's a decline. You mentioned that in sales promotion, settlement and other areas, sales promotion is one factor. So this others, could you elaborate what you are doing in more specific terms? Thank you very much.
So the business, which is very strong, will be explained by Mori san. Mr. Mori, please. So we originally had a growth plan, but the demand is stronger than we expected for telework. So in mobile, mobile was stronger than expected and the profit grew more than anticipated.
In addition, our group company, our subsidiary, our subsidiary that does business for small and medium sized enterprises And the call centers, a subsidiary that this call center business are growing very strongly. So this drove our profit upward. So I will explain the others part where profit declined. As mentioned earlier, the biggest factor was the strategic cost. Various campaigns were launched very aggressively.
And depreciation cost, as you can see in these numbers, is increasing slightly. In the 3rd quarter starting from 3rd quarter, we posted some liabilities. This is in October 2018, we announced the migration of 3 gs. And so in order to we had the liabilities this is a provision, but we had to reevaluate this liability. So starting this quarter, we included that.
So that is the additional portion here. And the handset device sales in Q3 was strong. So this incurred some cost. Last year, because of the revision in the business law, the handset device sales cost was lower. But this time, a new iPhone was launched in October, which is selling very well.
So that was one factor. Does this answer your question? Thank you. My second question is the 3 brands price decline, price cut. We conduct various simulation.
Setting the numbers aside, I wanted to ask you about how you led to this point. So au brand, unlimited brand, price cut will have small impact, we think, but auq and Poivol impact will be large, we think. On the other hand, as you mentioned, the net addition will be captured in UQ and PoWALL. I think you can capture net addition net subscriber addition. And I think this can offset the decline in revenue.
So I think that is the overall structure. UQ and Povo move from au, do you expect AU move into UQ and Povo and the additions? I think you can capture additional subscribers, but do you see any problem or obstacle to that? If you could elaborate, please. Thank you.
Shouji will explain. Yes. Let me explain. So what you just mentioned is correct. You're right.
But you're right. But this service has not started yet. And from February onward, Yuqiu will start its service. And in March April, we will start the service on a more full scale. So we want to keep watching the market closely.
And as you correctly mentioned, Yuqiu and Poohu have attractive prices and services. So users from au, I think there will be a certain level of au customers moving to Povo and UQ. On the other hand, in December last year, UQ Mobile was integrated to KDDI. And since then, from UQ Mobile to AU, users who moved from UQ Mobile to AU has grown by 3.7 times and this pace has not decelerated. And those who moved to AU, most of them use DataMax and the unlimited use plan, the unlimited use MAX.
So
of course, as you mentioned, Yuqiu and PoVo, this mid volume, middle volume is the main battlefield in the market. So we want to win in this main battlefield with Povo and UQ. And those who do not think the data is enough will come
to
au. Au has the unlimited use max and the price there has lowered, has declined, reduced significantly. So I think this will be attractive. So the mixed ARPU is lower, but we want to combine our measures and make it easier for our users to use, we're making our best effort to achieve the sustainable growth. Thank you.
Thank you very much. That's all. Thank you very much, Mr. Masuno. Next question please.
UBS Securities, Mr. Takahashi. After the guidance, please state your question. The floor is yours. UBS Securities, Takahashi.
I have two questions. First, about the growth fields. This term, regarding the plan, as I look out to your 4th quarter plan, Life Design Business Services, income seems to come down. Did you assume certain special factors? Could you address that question?
And towards the next term, next fiscal year, in the Business Services, you said that you were just it couldn't be better. But against this year's plan, it's about the flat Life Design. The profit is increasing steadily. Towards the next fiscal year, The rate of growth is going to accelerate in your opinion. Could you address that question, please?
Thank you for your question. About life design and business services on each, Q4 compared with what's externally communicated in the 4th quarter, it doesn't look very profitable. How do we see it? And also, the next term, what's the picture overall picture we have? Can you address that?
Shouji san, Mori san, address the questions, please? Let's see. Excuse me. Which numbers were you actually referring to? I'm not sure.
Totally speaking, at the Q3, it's higher than the plan in terms of the progress. As I said before, about the Energy business in December, about JPY 4,000,000,000 impact was felt. In January, I think it's likely to have a negative impact. But as you already know, in this week or so, in the wholesale electricity market, numbers have become calmer. And the consolidated business results, we believe that that negative factor is absorbed in contents, in the finance, commerce.
We would like to double down on them. About the next year, it's the same. You don't have to be concerned so much on Life Design. Mr. Mori?
About the Q4 plan, on a continued basis, as a growth base, it's pretty robust. But next term and for further growth, aggressive initiatives will be conducted. We would like to also spend some cost. That's why we have this plan. Next term and onwards, With COVID-nineteen, there were some positive effects.
That positive momentum is likely to slow down little by little. But on the other hand, for digitalization of business, that shift or direction or the changing of the work style, that direction, I believe that society has been transformed towards the new normal society. Our digital solutions communications can be used, and we would like to launch them in accelerated manner so that we can enjoy further growth. Thank you. About the Q4 income, a little more additional comment.
As you already know probably, by quarter income structure, in principle, the Q4 each year, it tends to be slower or smaller. That's the past record. In the spring campaign, that's one of the reasons. And for the future growth, we have to be prepared and make preparations. So that entails spending some cost, and that's why you might get that impression.
About the personal services, as was mentioned in the presentation, in the Energy business, that was a bit unexpected. Negative factor was felt in the Q4. Yes, that has a negative factor on the Q4 income. About the Business Services, as Mori said, I hope that it's going to be better than the plan By doing what we should do for the next term, we would like to do better than that. On the consolidated basis, we would like to make sure we can clear what we have already communicated to the external community.
About my second question, in the mid term business plan, cost reduction, JPY 100,000,000,000 target, I have a question about this. As you already answered previously, more than 50% of the time for the midterm plan already passed. Regarding the current progress, visavis this JPY 100,000,000,000, how much has been achieved? Let's see. It's almost cleared.
But most of them will become clearer in the next business year. Did this answer your question? About JPY 100,000,000,000, you think you are comfortable. But regarding the specific numbers, the majority will be manifested in the next business term. That's correct.
Thank you very much. Thank you.
Thank you very much, Mr. Takahashi. Next question? Mitsubishi UFJ Morgan Stanley Securities. Mr.
Tanaka, please follow the voice guidance and ask your question. Please go ahead. This is Tanaka speaking. Can you hear me? Yes.
I have two questions. First question is related to Takashi san's question earlier. So this manifestation of JPY 100,000,000,000 in next year, this will be from this year to next year. Profit increase from this JPY 100,000,000,000 cost cut is already within sight. I cannot mention the detail, but JPY 100,000,000,000 will not it will not be the entire JPY 100,000,000,000 from cost cut.
It will be mostly next year, but there are some this year, too. Some portion is realized this year, too. So it's not a full profit increase of JPY 100,000,000,000, but mostly maybe JPY 80,000,000,000 or JPY 70,000,000,000 will be the cost cut factor contribution from cost cut. And you have a good prospect for that? Yes.
I want you to guess that. 2nd question.
This
time, Energy, Electricity business was JPY 4,000,000,000 negative and January will be at that level again. So electricity, power, I'm not well versed with this area, but from February onward, it will not be negative. You will not incur a loss. I think you will try to expand your contract going forward. So the profit margin will be smaller going forward.
Your power contract profit will be difficult going forward Or you don't have to worry about the loss at all? So if you could elaborate on the structure rough structure. Thank you very much. Yes. Thank you for the question.
So Energy business will be explained by Mr. Shoji. Yes. Let me respond. This Energy Power is a bit complex.
So we are doing this as the PPS, including au Denki, we do retail business to au users, au customers, and this number has become sizable now. So how we procure our energy? The energy cost increase this time has not impacted KDDI this time. So which part was impacted? Energy is procured by our consolidated subsidiary, Eneris.
They procure the energy. But Eneris, JPX, from the wholesale market, they are not procuring entirely. They are looking at the risk and balancing the supply and demand. And part of that, the wholesale power market demand was strong. And according to what I heard, as was mentioned in newspaper, LNG supply became tight.
And so the electricity power company supply was impacted. And so the supply side was, in short. So this wholesale power market started from 2016, something that never happened in the past 4 years. The transaction price surge occurred from December late December.
So
but the government ministry in charge is now involved in trying to address this. So the wholesale power market, selling and buying price is now settled. But the way we procure the energy is not just that. We also have bilateral transaction and KDDI and EPC, electric power companies and our customers, we sell on behalf of our customers. So various formats are combined to sell power to our customers.
So will this happen again? So will this happen again? The wholesale power market, we cannot rule the possibility that this happens again. So we have to avoid volatility. So bilateral power source transaction will be increased.
We will try to realign, rearrange our portfolio to reduce the volatility going forward. And from next month March and next year, we will do this to minimize our risk. Does this answer your question? Yes. Thank you very much.
I understand well.
Mr. Tanaka, thank you very much. We are running out of time. So the next question will be the last question. SMBC Nikko Securities, Kikuchi san.
Kikuchi speaking. I will limit my question to just one. About live design, they have it has enjoyed robust growth. It's very positive, I think. For increased income, services are contributing to them.
But in terms of the biggest contribution, what is the order or the ranking in this fiscal year? And as for the next fiscal year, do you think that order will not change next fiscal year? Communications revenues cannot be expected to increase so much. So in the next fiscal year to forecast your company growth, which will be the drivers? Thank you.
Thank you for your question. You asked me the order of the contribution to income. I cannot share with you the specifics, but until the Q3, on a cumulative basis in Life Design, financial settlements to increased income, that contributed most. Smart Pass, content related areas and energy, their contributions are about comparable, about the same. As for the next fiscal year, it's not really about the ranking.
We would like to grow each of them. Please expect some good results. About the financial settlements, au PAY is enjoying growth, but what about the sales promotion cost? I think you are spending some cost. In financial transact settlements, you are doing housing loan mortgage loan as well.
And financial settlements cover many things, I think. Could you give us breakdown? And also, what about the cost for each? Let's see. More recently, what's going up?
Credit cards. As I said in the presentation, year on year, members increased more than 17%. So that's pretty significant. And carrier settlements, so called kantan settlements, simple settlements, there have been also brisk. And as Shiori said, au Jibun Bank mortgage loans, housing loans are doing very well.
They are going up very significantly. As for cost, this Life Design field and Consumer business, to a certain extent, we do see some allocation and manage them. So this is not the only area where the cost is incurred. That's all I can say. I hope this answers your question.
Thank you.
Thank you very much, Mr. Kikuchi. So we just answered the last question. So with that, we would like to close our financial results briefing for KDDI Corporation for the Q3 of the fiscal year ending March 2021. Thank you very much for your attendance today.