Now, we are going to start KDDI's earnings release conference for the second quarter of fiscal year ending March 2026. I'll be serving as the moderator. I am Hiraoka from the Public Relations Department. Today, this earnings release, in addition to the venue, will be distributed on multiple channels, including YouTube. t he three types of documents related to earnings release are uploaded on the website of KDDI. t hose who are in the venue, please refer to the handout. Let me introduce speakers from our end. Representative Director, President, CEO, Hiromichi Matsuda. Director, Senior Managing Executive Officer, CFO, Nanae Saishoji. Director, Managing Executive Officer, CSO, and CDO, Tomohiko Katsuki. Executive Officer, Executive Director of Corporate Management Division, Kenji Aketa. F our of them. Now, President Hiromichi Matsuda, please.
I would like to make a presentation regarding fiscal year ending March 2026, first half financial results. First, let me touch upon this. This is about Osaka Kansai Expo. The expo was very successfully concluded on October 13th. We presented a joint exhibition on the future city together with Hitachi Limited, which was visited by approximately 1.9 million people, a large number of people. I believe we were able to offer an opportunity for children to think about the future by facing the challenges for the future. I extend my sincere gratitude to all the visitors and to all those who contributed to the exhibition. Thank you. Today, I would like to explain about the following four points. First, regarding consolidated results. Our consolidated financial results showed increased revenue and profit. We're making progress toward achieving the EPS target as planned.
On the left-hand side, operating revenue was JPY 2,963.2 billion, a 3.8% increase year-on-year, 46.8% of the full-year forecast. In the middle, operating income was JPY 577.2 billion, a 0.7% progress rate of 49%. On the right, net income attributable to the owners of the parent or the profit for the period was JPY 377.7 billion, up 7.6%, with a progress rate of 50.5%. Second quarter year-over-year growth was strong, with operating revenue up 4.1%, operating income up 2.9%, and net income up by 18.6%. In terms of topics, I will explain the Q1Q situation of the performance in the second quarter. During Q2, we saw the effects of our fee revisions become apparent and achieved solid growth. Quarterly operating revenue increased 6.3% Q1Q, and quarterly operating profit increased by 11.8%, and our profit during the quarter grew by 20.7%.
Next, I will explain the factors behind the changes in the consolidated operating income. Each business grew, offsetting the impact of prior sales promotional expenses from the left. Mobile and the personal service segment increased JPY 11.1 billion year-over-year. Income from finance and energy business and loss on equity method profits combined increased by JPY 12.7 billion. DX increased by JPY 3.9 billion. Technological structural reforms up by JPY 9.6 billion. Impact of prior year sales promotional expenses were negative JPY 31.2 billion, but in total, income growth was JPY 4.1 billion. Now, these are the key points for consolidated operating income in the second half to achieve full-year targets. From the left, mobile business is to accelerate its growth, and with our target to enhance value through service revisions, with second half year-on-year growth exceeding approximately JPY 19 billion and over JPY 30 billion growth for the full year.
Combining DX with BPO turnaround, we will be putting it on the right trajectory. I n the focus areas, combining DX, finance, energy, and lost equity method profits, we're aiming for an addition of approximately JPY 30 billion. T he negative impact from prior year sales promotions will end in the first half. Next, I will discuss our progress in mobile structural transformation. First, let me talk about the virtual cycle created by the power to connect. In the announcement I made in May, I said that we would like to aim at creating a virtual cycle of growth. I feel that this virtual cycle is starting to kick in. As shown in the lower left, our company has consistently pursued proactive investments in 5G base stations focused on communication quality, as well as collaboration with Starlink.
These efforts are now bearing fruit, leading to the creation of KDDI's unique values, such as number one communication quality and tangible connectivity experience, all unique strengths of our company. This has enabled us to offer new plans bundling these features. Furthermore, we're able to pass on the benefits to our partners, return benefits to our partners through measures such as price adjustments based on these revenue sources and sales channel enhancements. This virtuous cycle is the foundation of our sustainable business growth. We will continue to repeat this cycle to grow together with our partners. For value generated by this virtuous cycle, our mobile business is undergoing structural reforms focused on lifetime value, LTV. As is on the left, customers see the attractions of our services in terms of its value, the handsets, and monthly charges to subscribe to au and UQ Mobile.
Our focus is to make sure that each brand meets such customer needs so that they will continue to use our offering. For UQ M obile customers, we would like them to understand the value and the attractions of au and are recommending migrating to au. We've been continuing with this structural reform since six months ago, but we will review plans and sales approaches that would induce short-term churns that occur as a result of customers going after incentives only. In the process of such reforms, some customers who have not used our service for a long time may choose to cancel their subscriptions, but we would like to focus on the long term to drive our growth through value creation and reduction in churns by encouraging longer subscriptions so that we can have a leaner business foundation.
The enhancement of our capability to offer connected experience and communication quality formed the foundation of value creation. KDDI will build the industry's premier network through number one communication quality and area coverage. The left-hand side shows the results of our persistent investment efforts. According to Opensignal's user experience analysis, following our February global number one ranking, we achieved number one in Japan for the third consecutive time last month. On top of that, au Starlink Direct began data communication business in August, and by providing a new value, this business is significantly increasing customers. The number of connections has reached approximately 2.7 million, with 76 compatible models and approximately 10 million devices. As announced today, au Starlink Direct now supports Apple Watch. We have received positive feedback from customers and app development partners.
As an industry top runner, we will continue to create new value together with all of them. This expansion of value creation is based on the connected experience. T his Starlink has surpassed 800,000 by the end of September and surpassed one million users at the end of October. t his offers smooth connectivity even in peak times and during events. Unlimited data overseas on the right, which provides connectivity abroad free of charge for as many as 15 days, is received very well by customers going overseas, and people have started to recognize that they no longer need Wi-Fi overseas. N et increases are 2.9 million. Lawson is a partner. With the Shop Cruise ID, we have added a course where members receive five free coffee coupons every month.
As part of earthquake preparedness support, in the event of a magnitude 7 earthquake, we will provide a service within the year that deposits JPY 30,000 into the au PAY balance or bank account of customers subscribed to eligible rate plans. This is part of value plan. O n the right, RCS, a secure messaging app. With the iPhone update the day before yesterday, you can now use RCS without any prior setup. You can now securely send photos and videos using only a phone number without worrying about the recipient's device or handset. The effects of structural reforms are beginning to materialize. The initiatives we have explained thus far have borne fruit, leading to growth in mobile ARPU, which contributes to lifetime value, and churn rates are showing an improving trend.
On the left, mobile ARPU are reaching JPY 4,460 in Q2, accelerating growth with year-on-year increase of JPY 140. On the right, smartphone churn rate improved QoQ, and year-on-year increase also narrowed from 0.17 points in Q1 to 0.12 points in Q2. As part of a further effect of such initiatives, brand switching or migration from UQ Mobile to au saw a positive reversal finally in September. This is about switching between brands from UQ Mobile to au. And this positive reversal trend continued into October. This is as a result of making our main brand au more attractive and steadily changing the plans and sales approaches. And initiatives to lengthen contracts for UQ Mobile are also bearing fruit. I mprovements in home set discounts as well as handset bundle rates have also been seen substantially at UQ Mobile.
Through the structural transformation focused on lifetime value explained thus far, mobile revenue on a personal service segment basis has significantly surpassed last year's year-on-year growth in the first half, reaching a positive JPY 12.5 billion, accelerating its growth. In the second half, we expect further improvements in churn rate, reduction, and ARPU growth driven by progress and structural transformation. Further improvements in brand mix and expanding contribution from service provisions. The impact of service provisions on mobile revenues is expected to exceed initial forecast.
Next, I will explain the initiatives to achieve the full-year target. We aim for JPY 30 billion scale increase in profit in our focus areas toward achieving the fiscal year March 2026 target.
For this, as shown on the right, energy and Lawson are progressing well, while finance and DX are recognized as challenges due to changes in the business environment since the beginning of the fiscal year. I will later explain the initiatives for growth for both finance and DX. First, finance. In the world with interest rate, there is intensifying competition to procure deposit for us. We cannot depend on housing loan. We have to be mindful of loan-to-deposit ratio, and we have to switch our strategy. Individual deposit balance has grown 1.3 times, and it's steady. But in order to strengthen deposit procurement capability, we have to proceed with our initiatives such as Bank Securities Alliance. As for credit card, we need to urgently increase membership, especially Gold Card. We would like to attain 1.72 million membership and drive growth further. Next, business segment performance.
In the first half, operating income was up 3.4% year-on-year. It's a somewhat slow result. Mobile, IoT, data center progressed well. On the other hand, BPO business, ASI-related business, had temporary profit decrease factors. As a result, we are behind the projection at the beginning of fiscal year. However, we have identified the factor, and we have a clear outlook for resolving those factors. W e have addressed the risks. T he first part of those businesses, BPO business, which is about Altius Link. We need to defend our share in existing service, and we need to expand the service domain by using AI. W e are going to realize integration synergy on the right. Various initiatives worked well, and in September, we increased both revenue and profit.
As a result of activated sales, the new orders taken increased by 2.8 times year-on-year, and the number of ongoing projects increased by about two times year-on-year. We are proceeding with a long-delayed internal system integration, and for cost efficiency improvement, initiatives are progressing. By building on this momentum in the second half of year, we are completing turnaround and boosting profit greatly. For growing profit greatly in the second half, in addition to stable growth of mainstay services, we position expansion of orders for new services as our growth driver. The mobile IoT and main services in the first half grew by more than 10% year-on-year and driving growth in IoT. We started providing our services to connected vehicles of BMW, and all of their vehicles produced in North America from July onward will be equipped with our communication services.
On the right, new services will contribute to growth as facility. Our new office in Takeshiba, the digital office, has received interest of many clients, and by leveraging our know-how in the latter half of year, we will be steadily completing ongoing projects, and Starlink and drone in the area of disaster prevention, inspection, security, we are seeing an increase in the permanent and large-scale projects, and in the second half of year, we will be exploring and growing in the government and municipalities market. Next, our initiatives for the next stage of growth. Six months have passed since the launch of the new management structure, and the construction of our future business foundation is progressing, including the execution of price revisions. Concerning this progress, we will discuss the key themes we are focusing on for the next mid-term management strategy starting next year.
On the left, in the AI era, in addition to transforming infrastructure, including telecommunications, into our next generation model, we will further expand our value added and growth areas by leveraging digital data and AI. We will enhance the value of communications, security, data centers, and other elements that support the AI era and accelerate growth in each business domain through AI-driven efficiency and service deployment. The second point is on the right-hand side. We believe we are entering a phase where business growth centered on telecommunications is possible. Alongside growth, we will focus on return-based capital allocation and capital efficiency. W e aim to maximize investment capacity by utilizing leverage while being mindful of credit ratings. We plan to direct growth investments with discipline toward areas that can expect high returns in medium- to long-term.
Conversely, for areas that do not meet the criteria, we will consider a review of the business portfolio, including withdrawal. In conjunction with these ideas, we intend to implement agile share buybacks alongside our commitment to stable dividend increases. By deepening our strength of sustainable growth in the AI era and pursuing quality with an awareness of capital efficiency, we aim to enhance corporate value. The advancement of the network supporting the AI era is progressing toward the construction of next-generation infrastructure. On the left, while needing to respond to massive traffic demand, we are building a comfortable service area with the industry's highest number of Sub-6 millimeter wave-based stations. Also, by converting 4G repurposed frequencies in the fourth quarter, we aim to achieve an over 90% population coverage by Q4 of this fiscal year. On the right, the practical. I am passionate about this, but millimeter wave.
The other day, at the Takanawa site, together with our partners, we have conducted demonstrations of use cases with Netflix and support from JR East. Netflix video, one episode of a drama now could be downloaded in one second. That's what's enabled by millimeter wave, while showcasing that as for Sony camera. 8 0 consecutive shots or photographs can be uploaded in seconds. A s for the data center initiative, that's central to the theme of next-generation infrastructure. The Telehouse, in terms of the business-to-business connections, it's number three globally, and among the carriers, it's number one. T heir Telehouse strength is to secure locations close to adjacent to urban areas. This resulted in achievements such as high profitability per megawatt and efficient deployment of capital.
Leveraging such expertise, we will construct our sixth data center in London for the AI era with a total construction cost of about JPY 60 billion. London's DC power supply will be enhanced to about 57 megawatts, allowing it to support optimal specifications for real-time processing such as inference AI, and we leverage Telehouse's expertise to quickly establish a data center in Japan. Our Takasaki data center is scheduled to begin operation in January 2026. We will provide sovereign development environment based on AI, and with such infrastructure, we would like to contribute to the enhancement of Japan's industrial competitiveness. On the right-hand side, on the cutting-edge GPU with GDC Google Distributed Cloud, that's going to be utilized by Daiwa Institute of Research.
The strategic initiative with Google Cloud is more expansive so that our AI service will be created in a manner that's beneficial for both clients and service providers. NotebookLM and Gemini of Google will be utilized as we provide services. But after our announcement of our service scheme, we received various inquiries from many content holding companies. Also, KDDI's strength is a combination of real-world and technology. E specially, let me focus on our initiative with Lawson for the purpose of disaster prevention and crime prevention. W e are demonstrating our deployment of AI, where AI drone responds to the site in 10 minutes. O n the right-hand side, for Lawson within office, our employees are participating in the demonstration, and we have delivered results in crew efficiency improvements such as use frequency data accumulation and one-person operations.
We are also conducting various initiatives such as dynamic pricing and meal support coupon. Based upon what I've explained, we will aim to create the next value, creating a positive cycle. The investment and partnerships will become our asset that will create value in the future. 5G, 6G, and next-generation high-quality network that supports the AI era. We will be strengthening the partnership to create added value service in the future. Next March, KDDI will be exhibiting at MWC Barcelona 2026. It marks our third consecutive year of exhibition since 2024, which marked our first exhibition. Our theme has been life transformation. Specific themes or details will be announced at a later date. Stay tuned. Finally, summary. In mobile, our structural reform, mindful of lifetime value, worked well.
Then, on a full-year basis, we have an outlook of increasing profit by more than JPY 30 billion. For finance and DX, we've identified challenges and will be moving into the phase of executing strategy in the second half. This way, consolidated results and mobile have progressed in line with our projection at the beginning of fiscal year. We are growing more confident about the delivery of results. As in terms of dividend, we would like to pay out JPY 40 per share, which is 50% of JPY 80, which is what we announced at the beginning of the fiscal year. For the next stage of growth, we will be proceeding with infrastructure advancements and partnerships for service delivery. In the next round of medium-term plan, we will be aiming to improve corporate value and sustainable growth in the age of AI.
Thank you very much for your attention.