Performance Highlights and Q&A: First Half of the Fiscal Year Ending March 2017 (Japan)
KDDI’s financial performance for the first half of the fiscal year ending March 2017 demonstrates strong growth, with consolidated operating revenue reaching ¥2,301.6 billion and operating income hitting ¥532.6 billion. These results represent 49.0% and 60.2% progress toward full-year forecasts, respectively. The company attributes this success to increased au ARPA (Average Revenue Per Account) and reduced handset sales expenses, alongside a robust EBITDA of ¥815.5 billion.
The company’s strategic focus centers on its "Life Design" initiative, which aims to expand the "au Economic Zone" by integrating shopping, financial services, and membership programs like au STAR. By leveraging multi-touchpoints—including both online platforms and direct-operated retail stores—KDDI seeks to diversify revenue beyond traditional telecommunications. Key enablers for this strategy include the expansion of au WALLET credit card services and the integration of carrier billing with major digital platforms like the App Store and Apple Pay.
Geographically, KDDI continues to pursue international growth, particularly through its joint venture with Myanma Posts and Telecommunications and the expansion of its TELEHOUSE data center business, which recently added facilities in London and Paris. While the company faces challenges from subscriber migration to mobile virtual network operators (MVNOs) and regulatory constraints on handset sales, it maintains a commitment to a 7% compound annual growth rate (CAGR) through the fiscal year ending March 2019. Management remains focused on sustainable, long-term growth by balancing capital expenditures, potential M&A activity, and shareholder returns, while prioritizing the stabilization of ARPA through value-added services and enhanced network quality.
