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NTT DoCoMo CEO Discusses F3Q2011 Results - Earnings Call Transcript

Proper cost control. Well despite the increase of smartphone sales and resultant increase in data traffic, we were able to save equipment sales expenses as well as capital expenditures. So as I said, we were able to simultaneously achieve these three different challenges. Number five. Now this chart compares to year-on-year changes in operating income compare – year-on-year changes in operating income, as you see there, our operating income increased by 55.8 billion yen year-on-year.

Now first let me talk about the reduction of operating income, our operating revenues of 33.2 billion yen. Among that, voice revenues decreased by 140.5 billion yen, due to the expanded uptick of Value Plan and the reduction of billable MOU. On the other hand, packet revenues increased by 76.6 billion yen. Other revenues also increased by 54.6 billion yen. As I said earlier, this is the revenues from the new businesses. As we cultivated these new opportunities, we were able to generate additional revenues.

Equipment sales revenues, this dropped, so this is a reduction. Equipment sales revenues decreased by 23.9 billion yen. I’ll come back to this topic later but total handset sales, total number of handsets sold increased but because we were able to reduce the cost of equipment, we were able to – the total handset sales revenues decreased by 23.9 billion yen. So that was about the revenue side. Now let me talk about the expense side. The operating expenses decreased due to the decrease of equipment sales expenses which decreased by 42.4 billion yen. Because we were able to curb the procurement costs and saved commission fee, we were able to reduce the equipment sales expenses by up to 42.4 billion yen year-on-year.

Also network costs decreased by 43 – 45.3 billion yen due to a reduction in depreciation and amortization. Other expenses also decreased by 1.3 billion yen. The subsidiary related expenses and other expenses that are linked to other revenues increased however because we changed the loyalty program allowances estimation method. The reduction was limited to 1.3 billion yen. So all-in-all, we were able to achieve 758.5 billion yen in operating income which increased by 55.8 billion year-on-year.

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