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Earnings Transcript for 9433.T - Q3 Fiscal Year 2023

Ikuko Hongou: Thank you very much for waiting. We will now begin the financial results briefing of KDDI Corporation for the third quarter of fiscal year ending March 2023. Thank you very much for taking time out of your busy schedule to join us today. I am Hongou of Investor Relations department and will serve as the moderator today. This briefing will be broadcast live on the Internet with simultaneous Japanese to English interpretation. The presentation will be available on demand on our IR website at a later date. Thank you for your understanding in advance.
Let me introduce the participants today. Muramoto, Executive Vice President and Executive Director of Corporate Sector; Mori, Executive Vice President and Executive Director of Solutions Business sector; Amamiya, Executive Vice President and Executive Director of Personal Business sector; Yoshimura, Senior Managing Executive Officer and Executive Director of Technology sector; lastly, Aketa, Executive Officer and General Manager of Corporate Management division. :
Three financial results related materials, 1 presentation material, [ Tamsin ] quarterly report and detailed materials are posted on our IR website. Please refer to the disclaimer in the material regarding statements made in these documents, performance targets and projected subscriber numbers, et cetera, explained in the Q&A session today. Executive Vice President, Muramoto will first explain the financial results followed by Q&A. Mr. Muramoto, please. :
Shinichi Muramoto: Thank you for joining us in the meeting on KDDI business results out of your busy schedules. Before the question-and-answer session, let me share with you the summary of the business results of the third quarter of the fiscal year ending in March 2023 and forecast for this fiscal year, next fiscal year and beyond.
First of all, the summary of the third quarter business results. Despite the impacts of fuel price hikes on energy business, we are aiming to increase profit for full year, and promote digital twin and other future initiatives. :
First, on consolidated financial results. Q3 cumulative results were generally in line with expectations, excluding the impact of fuel price hikes, et cetera, aim to increase profit for full year by promoting focused areas and cost efficiency in the fourth quarter. Negative impact of fuel price hikes, et cetera, is expected to ease in the next fiscal year and beyond. :
Next, on progress towards a rebound in communications ARPU revenues gradually easing the impact of price reduction and data usage growth gains momentum with 5G penetration. We're aiming further to increase data usage by making medium and large capacity plans more attractive. :
Lastly, on sustainability management and focus areas. Business Services segments and financial business performed steadily. Digital Twin Starlink, renewable energy generation, promoting future initiatives that provide new values to society. :
Next concerns forecast for this fiscal year ending in March 2023 and beyond. There are major positive and negative factors. The left shows a strong performance with a small reduction of roaming revenues against the initial forecast. And communications ARPU revenue has been steady. :
Moving to the left. Regarding negative factors for this term. Energy business was lower than the initial forecast. As for the unexpected minus JPY 20 billion for the impact of fuel price hikes and minus JPY 15 billion for communication failure are factored in. :
As for the forecast concerning the next term and beyond, moving to the right for the positive factors for the next term and beyond communications ARPU revenue and energy business performance stabilization is reflected. Regarding the negative factors, while the impact of the fuel cost hikes continues, the adverse impact is likely to ease. So much for the summary. Thank you again for joining us today. :
Ikuko Hongou: Now we would like to take questions. [Operator Instructions]
We will first take questions from those of you who are preregistered and are connected to the system. So let me explain the process. [Operator Instructions] We will take questions until the scheduled time. [Operator Instructions]:
The first person, Daiwa Securities, Ando-san, please. :
Yoshio Ando: Daiwa Securities, Ando speaking. Can you hear me?
Ikuko Hongou: Yes, we can hear you.
Yoshio Ando: Two questions. March 2023 and March 2024 forecast. Page 7, please. March 2024 and beyond the turning point. Multi-brand communications ARPU revenues increase was mentioned. So first, I would like to clarify the second quarter was a bit sluggish about the net addition of subscribers. Are you confident about the recovery? Also, in terms of ARPU, concerning the sustainability, the worldwide support discount impact or decrease of the downgrade. What about the impact of upgrade? In the third quarter, I think some factors are manifested. Going forward, what is your outlook? Concerning ARPU, what's the possibility of the increase? If you could share with us the overview, please.
Ikuko Hongou: Ando-san, thank you for your question. Communications of revenues and ID and ARPU currently and also going forward, to your question was concerning the outlook. Amamiya-san from Personal business, please.
Toshitake Amamiya: IDs and ARPUs. Two questions have been raised. First of all, about the IDs. As you understood, concerning the second quarter, slightly sluggish, but in the third quarter, where momentum is recovering, especially concerning the IDs, UQ mobile is enjoying a pretty good momentum. It's likely to continue, we believe. And we do have some expectations. We have multi-brands so other than this, we have povo. We are targeting Z generation, and it's been also stable.
Concerning au. How to reduce this negative amount? That's the issue. More recently from au to UQ, the migration is decreasing. And we believe that there's going to be a favorable movement going forward. Concerning ARPU, based on 5G, we will be promoting this. Traffic has been going up steadily. In the case of au or in the case of KDDI, the ratio of MAX plan still has room for more growth. The ARPU increase is something we really would like to focus on. And in the first half of the next fiscal year, communications ARPU, the revenues should be stabilized. Ando-san, did we answer your question? We can't hear you, Ando-san. Please, if you see the unmute please dialogue box. Could you unmute yourself? :
Ikuko Hongou: When the connection is recovered, we would like to discuss this. Now we would like to move on to the next one, Nomura Securities, Masuno-san. [Operator Instructions]
Daisaku Masuno: Can you hear me?
Ikuko Hongou: Yes.
Daisaku Masuno: I have 2 questions. First is about communications ARPU revenue. I think we have a clear direction. In the capital markets, they may not be believing this yet. So you mentioned that by the end of -- middle of next year, the telecommunications ARPU will rebound. So on the natural course, if MAX plan increases or the support discount impact goes away, will this be viable? Or I'm sure there are many measures going forward. So new measures, effective measures are in mind. If you could share with us your plan, please?
Ikuko Hongou: Thank you very much. So Amamiya would like to respond.
Toshitake Amamiya: Yes, about the rebound of ARPU. As I mentioned earlier, our customers will use 5G, and the plan will shift to MAX, MAX plan. So organically, we are moving in the direction of the rebound of ARPU. But we want to accelerate this and achieve this as early as possible. And so there are various measures we have in our plan. We want our customers to use the smartphone without stress and with comfort and enjoy 5G. So it's not just about ARPU increase measures, but also the improvement of the quality of 5G. Thank you very much.
Daisaku Masuno: Yes, as a follow-up question. The 5G ratio was 49% at the end of December. This includes UQ and povo. So what is about au 5G ratio? And I think that will be the basis of MAX. So what do you plan au 5G ratio to be next year?
Toshitake Amamiya: It is not a disclosed number. I cannot quantify, but three brand, 49%. So of course, au will be lower ratio. Currently, new subscribers, 60% more or plus is already MAX. So at this pace, we can have a clear view of next year's level.
Daisaku Masuno: My second question is about your midterm EPS target. From the capital markets, the consensus EPS is lower than your plan, and there is quite a gap. That's the capital markets view. So on the EPS basis -- and you had the communication failure and the fuel cost hike, all these unexpected events, but in 2 years on that basis, in order to achieve the midterm EPS target, what pace at the operating profit and buyback do you think you need to conduct and proceed?
Unknown Executive: Let me answer that question. It's our first year still. But as you rightly mentioned, there were some unexpected events. And things are not easy. Things are difficult. Our medium-term plan is a rolling plan and we are continuing our discussions. Originally, our midterm strategy, the third year level target was JPY 100 billion increase in profit and cost enhancement of JPY 500 -- JPY 100 billion and ARPU revenue increase at the same level as last year or above.
Among the 3 focus areas, energy business was unexpected. The profit growth is a bit difficult. So how to recover this area is our focus now and our plan -- the rolling plan as the entire company. But we're not thinking of changing the target yet. So the growth investment that we have mentioned will be utilized effectively. And if possible, ARPU revenue, we want to increase in the front-loaded fashion as soon as possible to come close to the target. :
Daisaku Masuno: So another follow-up question. So the medium-term EPS target will remain unchanged, I understand. In energy, deviation, it's maybe JPY 10 billion profit difference. And so I do not think it's a big impact. But other than energy, in the next 2 years, how much core operating profit, core operating income, excluding business investment, what kind of growth pace are you anticipating in the core operating income?
Unknown Executive: So to repeat myself, in the focus area, profit growth of over JPY 100 billion is anticipated. So energy is a bit weak and may fall slightly short. But in other areas, we will catch up.
Ikuko Hongou: We would like to entertain the next question. SMBC Nikko Securities, Kikuchi-san.
Satoru Kikuchi: Kikuchi speaking. I have 3 questions. First, about KPI churn rate, year-on-year, it's still high. Q-on-Q, it's still going up. You don't have a net addition. So momentum is recovering. So for acquisition, perhaps you need some cost, as I understand. The large-scale discount is continuing according to some people. So contract cost on your business performance, I don't have to worry about the possible impact on the business performance. And the current competition environment and towards March, April, what's going to be the competitive landscape? And what kind of cost will be incurred. If you could give us any comment, I'd appreciate it.
Ikuko Hongou: Thank you about mobile competitive landscape and the cost that's incurred. And the future outlook. Amamiya-san, please.
Toshitake Amamiya: First of all, churn rate, if you look at the numbers year-on-year and Q-on-Q, there's a slight increase. Concerning this, [indiscernible] MIC, the Ministry has been making efforts, lowering the switching cost, and that's penetrating in the market. And the fluidity, I think, has increased for that part. But that doesn't mean the trend has changed from before. Spent the acquisition cost and increase the number of IDs. That's the kind of management we would like to do.
Regarding the contract cost, balance is going up. But at a certain level, the write-off and making them as assets, we would like to strike a good balance. Again, looking at the entire profitability and earnings, we would like to exercise control. :
Satoru Kikuchi: My second question, focus areas. I have 2 questions. First, Business Services segment. Profit is increasing steadily. Both revenues and profits increased. Regarding the factors, the third quarter, I would like you to again teach us again.
Ikuko Hongou: Mori-san, please.
Keiichi Mori: Thank you for your question. First of all, NEXT Core -- Core -- NEXT Core. Let me approach this question in these ways. In the presentation, as I touched upon, as we touched upon, NEXT Core business. The right-hand side, corporate DX business -- business infrastructure these 3. In terms of revenues and the operating income, the double-digit growth has been enjoyed. So these are major drivers together, as you can see on the left-hand side, this is the top line of the revenues, 17.4% year-on-year increase. So these 3 areas, if you move on to the right-hand side. As I said, double-digit growth has been enjoyed.
Regarding the factors. First, what we call corporate DX. Smart work, the way you work, this is utilized for such purposes. It started during the COVID-19, smart work and security. And we call this managed services. On the [Indiscernible] companies, the remote environment that's typically used in the smart work. The infrastructure management or the operation that's something that we can provide as a service, and that has enjoyed increase. :
Business DX, there are various variety of services, IoT and other new areas, we have been very active. And I hope you come up with high expectations in this regard. Additionally, about the core business. Communications ARPU revenues, in the case of mobile, not such a high growth like NEXT Core, but we have been able to increase it somewhat. And just as we try to increase our number of IDs on top of communications using smartphone, there are various services, and they are also enjoying growth. And these were fixed service, it's not decreasing. It's been increasing steadily. :
Satoru Kikuchi: Which means you are focused on those areas, and they are all enjoying growth, and that trend is likely to continue. You didn't have any temporary incidents. Am I correct?
Keiichi Mori: Well, no temporary incidents or factors. Put differently, 3 years ago, when the COVID started, there was a temporary increase for some, but now it has come back to almost normal times. So including the smart work, the new smart work, the demand is -- has been brisk and capitalizing on that and enjoying growth. That's what it is.
Satoru Kikuchi: My third question about finance. As Masuno-san asked, towards the midterm objective Business Services segment finance, they have room for growth, and you need to focus on improving there. But for us, it's rather difficult to see the structure for earnings. Page 6, please, in the appendix.
Page 6 in the details materials. :
Banking business and other businesses and operating the earnings and cost if I do the subtraction, I might be able to see this. But I like to take this once again. This term, banking business, the recurring profit -- the second quarter is increased and the third quarter is lower than that in the second quarter, but compared with the previous year -- compared with the last year -- compared with the first year, first quarter, it's up. And cost also or expenses increased as well. But what are the events behind this? Housing loans have seen some changes. The rate has increased the hike. You have Jibun Bank, what's the impact on Jibun Bank? Likely impact on Jibun Bank regarding the rate hike and other businesses, they are also enjoying good growth, but cost has also increased. And ordinary expenses also increased, credit card, au PAY, they are enjoying growth.:
What's the impact on the numbers? And what about the revenues and expenses? What kind of curve? And how are you going to increase the profit? How is it going to contribute to the EPS of your company? If I could see that. The next business term and beyond that, I think there will be higher expectations for your profits. :
Ikuko Hongou: Thank you. But the detailed explanation might be rather difficult for us to provide you with them. But to give you a kind of an overview about housing loans, credit, the profit growth going forward. Amamiya-san, could you touch upon that, please?
Toshitake Amamiya: Third quarter profit didn't enjoy much growth. I think you mentioned that. Interest rate had some impact. Let me explain. Housing loans, fixed rate loans, there are some of those fixed interest rate loans. The fixed rate loans and reviewing the future values has been conducted. And there is a slight negative part, and that has a negative result, and that has an impact to a certain extent. But regarding Jibun Bank, as the overall business, fixed rate mortgage loans, about 5% of the total unlikely to have a major impact.
Going forward, interest rates, if they go up, it will likely to have a positive effect on the total. Now financial business as a total. Regarding the bulk of the profits, the bank, credit card, they are the drivers of the profitability. We are trying to expand the scope of the business. So in terms of cost, yes, the cost has been incurred. So in terms of profit, profit growth at this moment may not seem so big, but as the scope of the business expands, in 2 years or 3 years' time, we would like to increase the profits. About the detailed numbers, we don't have them, but that's the overview. :
Satoru Kikuchi: About the bank, there's an impact. I think mainly they are housing loans, but what about the other businesses in the finance, the difference between the recurring profit and recurring expenses in the next term and beyond, is it going to go up, meaning that you will not be enjoying higher profit? Or are you going to enjoy better profit?
Toshitake Amamiya: Of course, we are going to increase profits. But the rate of increase compared with the current 1 or 2 years, 3 years and 4 years' time, that's likely to be wider.
Ikuko Hongou: So we will take the next question. J.P. Morgan Securities, Chiba-san, please.
Kaori Chiba: This is Chiba from JPMorgan Securities. I have 2 questions. First is about numbers. Page 6, you talk about DX in our focus areas and the progress of profit. In the earlier Q&A, I understood that it is growing steadily. Now to achieve this year's target, 4 quarter DX, I think, is expected to grow significantly. Is my understanding correct? And along with the pipeline, if you could elaborate, please.
Ikuko Hongou: Mori-san, please.
Keiichi Mori: Yes, as you rightly mentioned, in the fourth quarter, we plan to grow significantly. So the pipeline, the business to achieve that, we have the KPI. So the status up to the third quarter is exceeding the plan. So by keeping this space, it is a high goal, but we plan to achieve this full year target.
Kaori Chiba: Understood. So just a follow-up. In Q4, do you have any particularly large projects or deals businesses?
Keiichi Mori: It's the year-end. So there are, I think, businesses that have higher sales towards the end of the year. Our original core business continues continuously. But in the NEXT Core business, of course, there are businesses that continue. But on the other hand, there are businesses where we build and charge the fee for that. And the things -- businesses we build will come in to us -- will be paid as onetime payment, but this will continue into next year and the payment will come on top of that.
Kaori Chiba: Another medium- to long-term question. Page 23 of the material says renewable. You said you are thinking of the direct supply. With the fuel cost hike, by taking this measure, what is the cost impact in the medium to long term? Can this expect cost efficiency? What is your thinking behind this?
Keiichi Mori: So as we made a release in January, we will start this business in April. The first primary purpose is the contribution to zero carbon. On a nonconsolidated basis, we are aiming for zero carbon in 2030. The electricity we use in-house is large. And so switching to renewable energy is now accelerated. So for the own use, the renewable energy generation will be accelerated. And cost in the medium term, it depends on the cost level around the world, but we think we can procure at a relatively low cost. So we will have this medium- to long-term perspective and enjoy the cost benefit along with the carbon neutrality.
Ikuko Hongou: Next question, please. Mitsubishi UFJ Morgan Stanley Securities, Tanaka-san.
Hideaki Tanaka: Tanaka speaking. Can you hear me?
Ikuko Hongou: Yes, we can hear you.
Hideaki Tanaka: Two questions, one by one. First, Business Services segment profits. I've heard that they have been steady for 3 months, the third quarter rate of increased profit, 4%. And the margin seems to be deteriorating year-on-year because the revenue increase rate was higher, so margin is deteriorating, I think. What are the factors behind this?
In relation to this, unexpected, the impact from the higher fuel cost, JPY 20 billion. Now Personal and Business Services segment, and what about the quarter movement in the quarter, I think that it might be relevant. If I may add, fourth quarter and beyond, you are talking about accumulating projects or undertakings. But existing business, core business is the bulky part. So there was a cost due to the communication failure. So my impression is the hurdle is high. What do you think? :
Ikuko Hongou: Mr. Mori, please.
Keiichi Mori: First, about income, profitability. You mentioned the growth in the previous year. For each term, quarter-on-quarter versus previous year. First quarter, second quarter, first quarter, it's been going up. And concerning the third quarter, revenues, 8.9%; income, 8.4%. In terms of profit, there was this communication failure and excluding communication failure and fuel cost hikes. So by doing this, sequentially, we can improve this further.
Regarding the fourth quarter targets, hurdle has been raised. As for the accumulation, the monthly -- what we have in KPI is what we can acquire monthly, and that's higher than the plan by continuing this pace. The target as kind of area, we would like to achieve the plan. The target has been raised but currently, what we are doing is higher than the plan, especially the new areas in the next quarter, they are enjoying good growth. Rather than Q-on-Q, it's a simple thing. October to December, 3 months rate of increase in terms of profitability, that's 4%. In the first half, there was a communication failure cost on the 3G closure had an impact, but the growth rate is not so brisk. :
Hideaki Tanaka: I think there is perhaps impact from the fuel cost hikes. Am I correct in assuming those?
Keiichi Mori: Yes. So excluding those, as I said before, 8.4% increase in profits. This term on the full year, JPY 20 billion impact from fewer cost hikes.
Hideaki Tanaka: The personal business, how much was that? And in Q3, what was it like? That would really clarify my questions.
Shinichi Muramoto: Let me see, Muramoto speaking. Cumulatively, until the third quarter, communication failure, the fuel cost hikes excluded JPY 150.9 billion. That's for the Business Services segment year-on-year, plus JPY 8.4 billion, 5.9% growth, until the third quarter cumulatively. Now third quarter, single quarter, Y-o-Y, year-on-year, as Mori mentioned a little more than 8% growth has been achieved. Profitability, excluding the fuel cost hikes, cumulatively to the third quarter, almost comparable to the previous year, 18.7%.
Hideaki Tanaka: Understood. My second question, value-added ARPU. Page 12, please. Page 12. Thank you so much for this information. Electricity ARPU, Denki ARPU, thank you for giving us this information. Value-added ARPU increased by JPY 37 billion and Denki, JPY 32 billion and plus JPY 5 billion. Of course, it's in the positive territory, which is good. But what's the breakdown? I would like to know the breakdown and about the payment of settlement, the amount of settlement or the transaction volume. In terms of growth rate, it's become -- it's losing momentum. What about the outlook going forward, please?
Ikuko Hongou: Amamiya-san, please?
Toshitake Amamiya: Value-added ARPU, as you pointed out, concerning commerce, slight decrease. But other than that, they enjoyed growth.
It's kind of a universal growth. :
First, product support ARPU. ARPU fee increased and also the support. We are doing many things. They increased revenues and finance and the settlement, the revenues increased also, smart fast premium numbers -- members increased. They all have a positive impact, and we enjoy this much growth. Going forward as well, we would like to increase them steadily. :
Hideaki Tanaka: So in terms of the momentum settlement, in terms of momentum, what about the content and settlements?
Toshitake Amamiya: It's not that which is strong. Universally, they are enjoying growth.
Ikuko Hongou: We will take the next question. BofA Securities, Kinoshita-san.
Yoshiyuki Kinoshita: This is Kinoshita, speaking. I have 2 questions. For this fiscal year, you are aiming for increased profit, higher profit. But with the communications failure and energy, these unexpected events -- to absorb these events and achieve the target may seem a bit difficult. So -- it's not that you are aiming for to achieve the company's plan. Could you elaborate on the message you may reach the target or not. What is your feeling? That's my first question.
Toshitake Amamiya: A very straightforward question. In Q2, we sent out a similar message. So the negative factors for the full year was specified so about JPY 20 billion of fuel cost hike negative impact. This is a very big impact and difficult to recover. As of Q2, energy business, towards Q3 and Q4, we thought we can make a recovery. We thought in Q2. But now it seems more difficult. Energy business is now facing a downside. So this difficult factor has added on -- for over 20 years, we have been increasing our profit year-on-year. So we want to continue this track record.
Yoshiyuki Kinoshita: Second question. This is not relevant to the financial performance, but in 5G, network slice, you are starting to operate network slice. Then corporate demand can go up 1 step in your business. Do you have a specific timing internally? If so, we want to know by when this can become a business when you can launch this business.
Ikuko Hongou: So this is corporate business. So Mori-san?
Keiichi Mori: So 5G SA stand-alone using slice. Network slice. We are starting to launch a few. We are developing with our customers and we need to increase this. To do that, 5G SA -- the area where we can offer 5G SA need to be expanded. These 2 need to go in parallel. The big demand will come next fiscal year, around the middle of next fiscal year, by then, until then we are preparing and announcing some, so we need to follow through and also deploy horizontally. So that is the order we are thinking of.
Yoshiyuki Kinoshita: A follow-up question. So overall, when you slice, you have to make sure it will not disadvantage the general users. So with MIC Ministry, I hear that you are coordinating with MIC. Is there any issue there?
Keiichi Mori: No, not so far. But going forward, I want the technology side to also add some comments.
Unknown Executive: So right now, by slicing no issue so far. But as Mori-san just said, when we slice the prioritized control, we have to avoid the impact. So we need to control the area. So that's another point that we need to address.
Ikuko Hongou: Next, Daiwa Securities, Ando-san. [Operator Instructions]
Yoshio Ando: Daiwa Securities, Ando. Can you hear?
Ikuko Hongou: Yes.
Yoshio Ando: Zoom froze, sorry about that. My additional question about CapEx. Outlook for your CapEx. Materials cost increased. I think that's one factor. And in the next fiscal year, there are projects that you must do and some -- and you perhaps manage those that are not urgent -- all in or around the next fiscal year, together with the environmental changes, what is your understanding for your CapEx?
Ikuko Hongou: It's related to CapEx. Yoshimura-san, please.
Kazuyuki Yoshimura: Towards the next fiscal term, and currently concerning -- centering on the 5G, the -- yes, we are making investment. In the next fiscal term. Regarding the CapEx, last time we had to respond to the communication failure. So this is about JPY 50 billion, including the CapEx. So including that but still policy for the next term CapEx sales, 12%, no changes from the previous ones. In the mid to long term, we would like to control them.
Ikuko Hongou: So next question, SBI Securities, Moriyuki-san.
Shinji Moriyuki: Yes, this is Moriyuki from SBI Securities. I have a question on Page 7, the profit forecast once again. So negative factor, this is unexpected few tens of billions of yen. In energy business, it's not mentioned here because the amount is not that large. How much is that?
Unknown Executive: We are not specific about that. It is not something we can disclose, but not as big. You are right. So roaming revenue will be the shortfall of JPY 11 billion. And then with telecommunications, you will absorb in the other areas, cost reduction -- offset with cost reduction.
Shinji Moriyuki: Yes, you can guess, but this roaming revenue from third quarter, the negative is becoming bigger. Will this pace become full scale? Or what do you project as the future direction?
Unknown Executive: In Q3, JPY 20 billion, the reduction decrease is JPY 20 billion. Initially, we expected JPY 50 billion, but it's at this level. Fourth quarter the trend will continue at this pace. But compared to Q1, Q2, the third quarter negative is bigger. Well, yes, naturally, of course, because the roaming area will decrease, shrink.
Shinji Moriyuki: Understood. Next Page 11, multi-brand ID, UQ mobile, new subscription au ratio is now declining. On the other hand, you said switching cost is lower, and so the mobility is now rising. So until now, au shifted to UQ, but now going to other carriers and UQ is recovering that, and that is why the ratio is lowering. Can you see it that way?
So the decline internally, but it went outside and the shortfall was retained by UQ. And that's why the ratio is lower. What is the reason the ratio is lower now? Is it because the volume zone has shifted? If you could elaborate, please. :
Unknown Executive: So shift from au to UQ is slowing down how we see the background, the reasons for that. With the rise in churn, this is happening. So I thought that, that can be one interpretation. But if the [indiscernible] move have already moved then -- yes. Amamiya-san.
Toshitake Amamiya: What you just said is a difficult part. We don't know how much people were supposed to go outside or captured by UQ or the ones we're not planning to go to other carriers are shifting to UQ. How we see this is very difficult. But looking at the overall balance from au, the outflow from au is not that large. And shift to UQ is declining. So we're looking at various indicators to judge, but we are trying to reduce the churn and also reducing the outflow to other carriers. We think we're successful doing that.
Shinji Moriyuki: So the churn is rising now? Is it because of au or because of UQ, which churn is rising? That is not disclosed, but -- I cannot have the number at hand. Both are about the same. I see not that different. On the other hand, positive factors UQ is now becoming more prominent or how do you see this movement?
Toshitake Amamiya: It is increasing. In Q3, this trend became more conspicuous. So from au to UQ and UQ to au, the gap is now becoming smaller.
Shinji Moriyuki: So Page 11, this line graph. So this is a reverse correlation.
Toshitake Amamiya: Yes. Yes.
Ikuko Hongou: Thank you for your questions. It's about time. If you -- there was no person who wanted to raise a question. So with this, we would like to include this meeting of the business results of the third quarter of the fiscal year ending March 2023 of KDDI Corporation. Thank you so much for your participation today.