Kddi Corporation · TSE:9433

Kddi — FY2007 Earnings Presentation

40 slides from Kddi's earnings presentation, Apr 24, 2007

1. Slide 1: KDDI CORPORATION Ubiquitous Solution Company

   Ubiquitous Solution Company KDDI CORPORATION 2007 3 2010 2007 4 24

2. Slide 2: Designing The Future

   Designing The Future

3. Slide 3: FY2007 results overview

   1.1. 2007 3 1 ¾ au +9.0% +16.2% 2 au ¾ +6.7% +8.8% ¾3 29.1% au 28.2% 0.9% 55.8% au 93.7% -37.9% No.1 ¾MNP 81.6 au 85.3 -3.7 ¾au WIN 3 1,455 77% ¾ au 143 213 2005 10 2008 3 396 3 ¾ +15.3% 490 123 ¾ 3 281 ¾ FTTH 2007 1 1 3 59 MNP Mobile Number Portability 2

4. Slide 4: FY2008 forecast (1)

   1.2. 2008 3 (1) 2007.3 2008.3 1 2 - MNP - 3 FTTH 33,353 35,000 +1,647 / + 4.9% 3,447 3,900 + 453 / +13.1% - 3,857 4,380 + 523 / +13.6% - 490 560 70 / - au ARPU 6,610 6,150 460 - 2,819 3,000 + 181 - 281 320 + 39 - FTTH 59 90 + 31 3

5. Slide 5: FY2008 forecast (2)

   1.2. 2008 3 (2) 2007.3 2008.3 2 19 140 3 7 JCNH JCN* CATV 326 10 * 4 au 2GHz FTTH 5,000 + 615 4

6. Slide 6: FY2008 to 2010 targets: No.1

   1.3. 2008 3 1 2010 No.1 ¾ 2 au ¾ No.1 ¾ 3,000 30 % ¾ au 2008 3 ¾ 3 ¾ 320 ¾ 30% FTTH 4 FMBC 4 1 Fixed Mobile & Broadcast Convergence 5

7. Slide 7: Consolidated results and forecast

   2. 50,000 5,000 40,000 4,000 30,000 +13.1% +9.0% +4.9% 3,000 +16.2% 20,000 2,000 10,000 1,000 0 0 06.3 07.3 08.3 06.3 07.3 08.3 06.3 07.3 08.3 30,608 33,353 9.0% 35,000 4.9% 2,966 3,447 16.2% 3,900 13.1% 9.7% 10.3% - 11.1% - 2,940 3,509 19.4% 3,900 11.1% 1,906 1,867 -2.0% 2,200 17.8% FCF 1,396 2,965

8. Slide 8: Mobile business (au, PDC)

   3. / au PDC 50,000 5,000 40,000 4,000 +13.6% 30,000 3,000 +8.8% 20,000 +6.7% +3.2% 2,000 10,000 1,000 0 0 06.3 07.3 08.3 06.3 07.3 08.3 06.3 07.3 08.3 06.3 07.3 08.3 25,104 26,774 6.7% 27,630 3.2% 25,439 28,188 30,000 au 23,352 26,106 11.8% 27,560 5.6% 586 699 740 1,752 668 -61.9% 70 -89.5% au 22,69

9. Slide 9: Fixed-line business (ADSL, FTTH)

   4. 10,000 0 8,000 -200 6,000 +2.6% -400 +15.3% 4,000 -600 2,000 -800 0 -1,000 06.3 07.3 08.3 06.3 07.3 08.3 N.A. 06.3 07.3 08.3 06.3 07.3 08.3 6,193 7,144 15.3% 7,330 2.6% ADSL 1,516 1,512 1,500 -613 -490 - -560 - FTTH 167 * 592 900 -9.9% -6.9% - -7.6% - 1,799 2,813 3,200 -622 -472 - -600 - FTTH 07.

10. Slide 10: Capital expenditure

    5. 2GHz CDN 4,000 800MHz EV-DO 800MHz 1X FTTH 1,500 3,000 19 1,084 803 552 1,000 2,000 3,700 397 1,315 42 451 272 649 1,170 1,000 500 200 1,080 415 35 689 95 0 66 6833 0 06.3 07.3 08.3 ( ) 06.3 07.3 08.3 ( ) 06.3 07.3 08.3 ( ) 4,147 4,385 5,000 2,751 3,289 3,700 1,347 880 1,170 9

11. Slide 11: Designing The Future

    Designing The Future 10

12. Slide 12: au subscriber trends and MNP

    1.1. KDDI(au ) au au MNP 100% 1,000 au MNP 80% 800 au 60% 600 40% 400 20% 200 0% 0 -20% -200 -40% -400 3/'05 6/'05 9/'05 12/'05 3/'06 6/'06 9/'06 12/'06 3/'07 06.3 07.3 231 48.1% 275 55.8% au 65.8% -17.7% au 93.7% -37.9% 2,544 27.7% 2,819 29.1% au 24.7% 3.0% au 28.2% 0.9% 11

13. Slide 13: au MNP net adds

    1.2. au au „ MNP MNP MNP 1,150 297 MNP 853 07.3 / 1,230 673 75 853 2,831 2,906 1,996 06.3 / 1,252 706 38 2,665 0 500 1,000 1,500 2,000 2,500 3,000 MNP MNP 12

14. Slide 14: au churn rate

    1.3. au au 2.0% 1.5% 1.26% 1.21% 1.23% 1.11% 1.07% 1.04% 1.00% 0.95% 1.0% 0.5% 0.18 0.0% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 06.3 07.3 08.3 <1.20%> <1.02%> <1.04%> 13

15. Slide 15: au acquisition and handset costs

    1.4. au au * * 40,000 35,000 30,000 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 06.3 07.3 06.3 07.3 08.3 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 4,920 5,680 5,650 1,020 1,190 1,190 1,520 1,240 1,290 1,450 1,700 37,000 37,000 36,000 38,000 37,000 35,000 38,000 38,000 37,000 35,000 37,000 1,325 1,555 1,570 270 322 337 396 327 352 411 46

16. Slide 16: au ARPU

    1.5. au ARPU au 180 Total ARPU WIN ARPU 12,000 159 163 159 160 151 150 150 148 MoU 9,970 9,990 9,680 140 133 9,310 9,070 10,000 8,850 8,610 8,310 140 7,050 7,190 7,090 6,840 6,810 8,000 120 6,700 6,600 6,380 6,150 6,480 6,530 6,220 120 5,840 5,580 5,400 100 140 110 5,180 4,960 6,000 80 5,240 5,300 5

17. Slide 17: WIN subscribers

    1.6. WIN au 3 WIN au 53% 77% WIN 100% 25,000 83% 82% 81% 81% 80% 79% 78% 77% 77% 80% 18,750 20,000 14,549 60% 15,000 12,520 10,770 9,460 40% 8,280 10,000 6,750 5,550 4,319 20% 3,252 5,000 0% 0 3/'05 6/'05 9/'05 12/'05 3/'06 6/'06 9/'06 12/'06 3/'07 3/'08 WIN au 17% 36% 40% 44% 49% 53% 63% 16

18. Slide 18: au services and platform

    2. au & au LISTEN MOBILE SERVICE LISMO MEDIA SKIN PCSV 07.3 WIN 43 2006 9 BCMCS cdmaOne CDMA2000 1xEV-DO 1xEV-DO 1x Rev.0 Rev.A 1998 2002 2003 2006 12 Evolution PCSV PC site viewer 17

19. Slide 19: au common platform KCP

    3. au 07 au 05.3 100 WIN KDDI au KCP KDDI Common Platform KCP+ 100 100% 90 80% 80 60% BREW (KCP) BREW (KCP) 70 40% OS OS 60 20% MSM MSM7500TM 50 0% 05.3 06.3 07.3 08.3 18

20. Slide 20: au handset sales

    4. au 143 213 2005 10 2008 3 au 5,000 4,000 2,767 349 706 1,091 1,457 3,000 2,370 1,770 3,528 2,131 3,125 1,959 2,000 1,525 2,739 2,341 1,128 1,916 779 1,000 1,428 401 872 761 755 780 815 788 648 471 0 9/'05 12/'05 3/'06 6/'06 9/'06 12/'06 3/'07 19

21. Slide 21: FTTH subscribers

    1. 3 281 320 4,000 3,200 2,813 3,000 Year-3 2,441 2,607 2,223 0 2,000 1,799 Year-2 1,165 1,000 Year-1 677 408 41 0 3/'05 9/'05 3/'06 9/'06 3/'07 3/'08 06.3 07.3 08.3 Year-1 Year-2 Year-3 20

22. Slide 22: FTTH strategy (1)

    2. FTTH (1) FTTH 2007 1 1 30% FTTH Step 2 Step 1 FTTH KDDI GE-PON IP CDN KDDI FTTH * * 2007 1 1 ( ) 21

23. Slide 23: FTTH strategy (2)

    2. FTTH (2) FTTH 3 59 FTTH 06.3 FTTH 1,200 FTTH 1,000 900 800 06.3 07.3 08.3 592 0 600 400 192 FTTH 200 167 138 490 91 560 0 613 3/'05 9/'05 3/'06 9/'06 3/'07 3/'08 22

24. Slide 24: Designing The Future

    Designing The Future 23

25. Slide 25: KDDI 2010 vision

    2010 2010 KDDI 2010 2007 10 2005 06 MNP FTTH FTTH 2002 04 au 24

26. Slide 26: 2010 targets and priorities

    2010 2010 „ No.1 „ „ 2010 4 6,000 ¾ • ¾ FTTH ¾ FMBC ¾ ICT *Information and Communication Technology „ 25

27. Slide 27: 2010 strategy

    2010 „ 2010 0 0 26

28. Slide 28: 2010 mobile and EC strategy

    (1) 2010 „ EC 27

29. Slide 29: 2010 targets by business

    (2) 2010 50,000 8,000 40,000 40,000 35,000 6,000 33,353 6,000 30,000 3,900 4,000 3,447 20,000 2,000 10,000 0 0 2006 2007 2010 2006 2007 2010 ICT ICT * EC * * 28

30. Slide 30: Mobile strategy: Rev.A and KCP

    „ ¾ • KDDI KCP Rev.A • ARPU • • • • 800MHz • • Rev.A 29

31. Slide 31: FTTH strategy to 2010

    „ FTTH ¾ FTTH 30% ¾ ARPU ¾KDDI 300 2005 2006 2007 FTTH 0 490 560 613 30

32. Slide 32: Home TV and PC services

    „ „ 2006 272 2010 2.5 TV au PC (STB) 31

33. Slide 33: FMBC

    2010 FMBC „ roadcast ixed obile 32

34. Slide 34: ICT solutions business

    ICT 2010 „ ICT *Information and Communication Technology * software as a service FMC Mobile LAN L2/3 iDC Centrex Ware Host VPN IP -ing ICT Convergence 33

35. Slide 35: 3G MMD and KDDI NGN

    2010 3G MMD KDDI NGN MMD Multimedia Domain NGN Next Generation Network ¾ MMD ¾ FMBC DB NGN (SDP) HSS/AAA IP DB MMD xDSL 2 LAN IMT-2000 Bluetooth NGN IP IP ) QoS CDN 34

36. Slide 36: 2010 operating income target

    2010 „ 6,000 4,385 5,000 5,000 4,000 3,000 2,000 1,000 0 2006 2007 2010 35

37. Slide 37: 2010 target ratios and shareholder returns

    2010 „ 20% „ 1 20.3% 22.4% 10,000 20.8% 9,500 21.2% 8,000 6,900 5,000 16.8% 5,000 4,500 17.5% 3,600 3,500 2,095 1,790 2,400 1,000 5,000 4,500 895 1,200 3,500 2,400 895 895 1,200 2001 2002 2003 2004 2005 2006 2007 2008 2010 2005 2006 2001 36

38. Slide 38: 2010 growth initiatives

    2010 2010 ¾ 2010 - 2010 SIM MVNO - - ¾ICT ¾ 2010 NTT 37

39. Slide 39: KDDI customer satisfaction and CSR

    2010 2010 KDDI ICT FMBC TCS Total Customer Satisfaction CSR 38

40. Slide 40: Designing The Future

    Designing The Future Designing The Future 39

KDDI — FY2007 Earnings Presentation on 6ix