Kddi Corporation · TSE:9433

Kddi — FY2004 Earnings Presentation

37 slides from Kddi's earnings presentation, Apr 28, 2004

1. Slide 1: Ubiquitous Solution Company - KDDI Corporation

   Ubiquitous Solution Company KDDI CORPORATION 2004 3 2004 4 28

2. Slide 2: Slide 2

3. Slide 3: FY2004 Results Summary

   1.1. 2004 3 1 au BBC 2.2% 107.7% 2 1 1,798 2003.3 3,173 3 1 2,095 2003.3 3,600 4 au 12.2% 345.2% 1x 49.6% 1x 1,300 2003 11 28 WIN EV-DO 5 BBC & AC (84 ) FTTH 2003 10 10 TV 12 12 6 TU-KA & FCF BBC 1

4. Slide 4: FY2005 Forecast

   1.2. 2005 3 04.3 05.3 1 au 28,461 29,820 1,359 2,921 3,200 279 Dau 1,819 395 1,696 1,915 220 ARPU 7,440 7,140 300 DAC 145 BBC& 118 2 2,533 3,230 697 3 FCF 4,042 2,510 1,532 4 1 4,800 2

5. Slide 5: FY2005 Business Strategy

   1.3. 2005 3 1 2 2005 3 1 3 au 1x WIN EV-DO) 3G 4 BBC & ADSL FTTH 5 TU-KA & TU-KA : AirH 3

6. Slide 6: Consolidated Results and Forecast

   2. 40,000 4,000 30,000 3,000 20,000 2,000 10,000 1,000 0 0 03.3 04.3 05.3 03.3 04.3 05.3 03.3 04.3 05.3 ( ) 27,853 28,461 2.2% 29,820 4.8% 1,407 2,921 107.7% 3,200 9.5% 5.0% 10.3% - 10.7% - 1,132 2,745 142.5% 3,110 13.3% 574 1,170 104.0% 1,900 62.4% FCF 3,053 4,042 32.4% 2,510 -37.9% EBITDA 5,635 6,

7. Slide 7: au Segment Results and Forecast

   3.1. au 30,000 3,000 25,000 2,500 20,000 2,000 15,000 1,500 10,000 1,000 5,000 500 0 0 03.3 04.3 05.3 03.3 04.3 05.3 03.3 04.3 05.3 ( ) 03.3 04.3 05.3 ( ) 14,049 16,959 19,150 16,263 18,251 20,070 - 361 450 538 2,395 2,790 WIN(EV-DO) 0 343 - 3.3% 13.1% 13.9% 1x 6,806 13,166 - 418 2,291 2,740 cdmaOne

8. Slide 8: au Subscribers and ARPU

   3.2. au ~ ~ 04.3 03.3 PDC au ARPU 1,857 3,500 3,000 1,769 712 2,500 * 2,000 2,395 800 04.3 1,500 1,000 PDC 538 500 03.3 0 6

9. Slide 9: BBC Segment Results

   4. BBC 8,000 800 6,000 600 4,000 400 2,000 200 0 0 03.3 04.3 05.3 03.3 04.3 05.3 03.3 04.3 05.3 ( ) 03.3 04.3 05.3 ( ) 6,019 5,425 5,150 DION 2,373 2,687 2,900 603 164 30 ADSL 498 1,109 1,650 10.0% 3.0% 0.6% FTTH ( ) - 23 200 604 158 30 - * 9 - 323 -288 40 04.3 FCF 1,169 742 10 21 EBITDA 1,768 1,124

10. Slide 10: TU-KA Segment Results

    5. TU-KA 4,000 400 3,000 300 2,000 200 1,000 100 0 0 03.3 04.3 05.3 03.3 04.3 05.3 03.3 04.3 05.3 ( ) 03.3 04.3 05.3 ( ) 3,181 2,765 2,540 3,783 3,632 3,550 62 154 160 ARPU 5,330 5,020 4,710 1.9% 5.6% 6.3% 1 114 140 -32 91 90 FCF 521 550 520 EBITDA 665 712 650 20.9% 25.7% 25.6% 8

11. Slide 11: AirH' Segment Results

    6. 2,500 250 2,000 200 1,500 150 1,000 100 500 50 0 0 03.3 04.3 05.3 03.3 04.3 05.3 03.3 04.3 05.3 ( ) 03.3 04.3 05.3 ( ) 1,976 1,840 1,810 2,975 2,897 3,000 203 211 190 AirH" 765 990 1,300 10.3% 11.5% 10.5% 177 190 170 ARPU 5,010 4,750 4,610 170 191 170 430 472 380 622 613 580 31.5% 33.3% 32.0% 9

12. Slide 12: Capex, Depreciation and Debt

    7. 03.3 04.3 05.3 ( ) 2,462 2,533 3,230 au 1,673 1,612 2,000 BBC& 408 551 820 TU-KA 162 147 90 117 129 180 3,890 3,657 3,780 au 1,760 1,849 2,020 BBC& 1,054 841 860 TU-KA 600 538 480 396 387 380 14,970 11,798 9,020 au BBC& 9,372 7,360 5,470 TU-KA 3,178 2,624 2,140 1,827 1,345 1,010 Debt / EBITDA 2.7

13. Slide 13: au, BBC and TU-KA Strategies

    au BBC TU-KA 11

14. Slide 14: au and BBC Business Integration

    1.1. AC au BBC 2004.4.1. NW 12

15. Slide 15: Fixed-Mobile Convergence and Network

    1.2. 04.3 05.3 06.3 1x 3 EZ WIN WIN au FMC BBC BB & IP TU-KA TU-KA 13

16. Slide 16: Total Customer Satisfaction

    1.3. TCS Total Customer Satisfaction 30 10% EBITDA 25% 20% 14

17. Slide 17: au Strategy

    2. au 50% 15

18. Slide 18: Mobile Number Portability and Competition

    3. AC MNP „ „ 2003 4 03 04 2003 11 MNP NTT ZC 2006 15% NTT „ „ 2003 7 3G „ „ 2003 11 „ „ NTT 2003 11 EV-DO 2GHz 1x FTTH 16

19. Slide 19: Subscriber Trends

    1.1. * * 50,000 45,000 40,000 35,000 0 02.3 03.3 04.3 02.3 03.3 04.3 05.3 3,650 4,050 3,840 4,000 2,190 1,860 1,800 2,040 42,000 40,000 36,000 36,000 43,000 37,000 37,000 36,000 870 1,010 1,057 1,110 510 500 490 567 17

20. Slide 20: WIN and 1x Subscriber Share

    1.2. 3 1,696 100% 500 WIN 80% 1x 400 60% 300 40% 200 20% 100 0% 0 4/‘01 9/‘01 3/‘02 9/‘02 3/‘03 9/‘03 3/’04 02.3 03.3 04.3 < / > <15.0% / 17.7%> <28.1% / 18.6%> <49.6% / 20.8%> 18

21. Slide 21: Churn Rate

    1.3. 2.7% 3.0% 2.5% 2.5%2.5% 2.5% 2.0% 1.8% 1.8% 2.0% 1.7% 1.56% 1.54% 1.5% 1.40% 1.48% 1.0% 0.5% 0.3 0.0% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 02.3 03.3 04.3 <2.6%> <1.8%> <1.49%> 19

22. Slide 22: ARPU Trends

    1.4. ARPU ARPU 7,140 12,000 Total ARPU 1x ARPU WIN 10,420 9,610 9,240 10,000 7,560 7,660 7,640 7,420 7,480 7,540 7,490 7,280 8,820 8,810 8,640 8,400 8,100 8,000 90 90 7,140 6,950 6,000 7,030 6,830 6,530 6,630 6,470 6,330 6,070 6,420 6,420 6,320 5,990 5,930 5,900 5,830 5,560 5,340 5,340 4,000 2,000 3

23. Slide 23: MoU Trends

    1.5. MoU MoU EZ MoU WIN 300 WIN 600 472 250 442 455 500 397 193 192 190 181 182 185 184 177 200 400 178 179 178 171 150 350 300 295 100 255 200 198 194 190 213 233 MoU 50 100 0 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 02.3 03.3 04.3 < MoU > < 189 > < 182 > < 176 > < > < 202 > < 286 > < 443 > 21

24. Slide 24: WIN Services and ARPU

    2.1. WIN EZ 87% WIN ARPU 1x WIN 1x 16,000 ARPU 11,610 12,000 10,420 8,100 8,000 7,060 WIN 6,950 37% 6,070 4,000 cdmaOne 24% +1x 4,550 3,470 2,030 0 0% 20% 40% 60% 80% 100% 04.3/4Q 02.3/1Q 04.3/4Q 18 19 29 30 40 50 60 WIN 1x WIN ARPU 1 1x ARPU 22

25. Slide 25: WIN Flat-Rate Plans and ARPU

    2.2. WIN WIN WIN+EZ WIN ARPU 4,500 49% WIN WIN EZ ARPU 10,000 4,500 22% 52% 48% 12% 49% 7,500~ 10,000 17% 4,500 7,500 04.3 WIN EZ WIN 3 ARPU 23

26. Slide 26: WIN Pricing Plans

    2.3. WIN WIN WIN WIN WIN FOMA 3,900 2,486 ~ 6,700 4,350 ~ * SS~ 67 4,200 3,900 300 150 * 8,400 6,986 ~ 10,750 8,400 ~ EZ EZ EV-DO NW IP WIN 1 FOMA 1 24

27. Slide 27: EC and Content Services

    3.1. EC WIN EC EZ FM TV FTTH DION 25

28. Slide 28: Packet Usage cdmaOne/1x and WIN

    3.2. cdmaOne/1x WIN 2 04 3 2,000 1,510 1,500 1,300 1,000 720 700 740 500 430 380 390 0 cdmaOne/1X WIN WIN EZweb 26

29. Slide 29: EC Kei-Credit and IC Card

    3.3. EC Kei-Credit IC IC 2003 3 8 „ UIM * / “ ” „ ( ) ( ) 27

30. Slide 30: Advertising and EZweb Business

    3.4. - 2000 12 - KDDI 51% DY 35% - EZweb EZ - - FM TV CM 15 ! !? ©a1adnet corporation/Hakuhodo DY/ /BUDDIEZ 28

31. Slide 31: Handsets and Devices

    4. ~05.3 EZ Bluetooth IrDA EZ FM WIN 2GHz 29

32. Slide 32: Network: 800MHz EV-DO and 2GHz

    5. 800MHz EV-DO 2GHz 2GHz 1x 1x 2GHz 800MHz WIN(EV-DO) 04.3 05.3 06.3 EV-DO 15 1x BB 2GHz 1x 50 50% EV-DO 70% 800MHz EV-DO 90% EV-DO 95B/1x 30

33. Slide 33: P's Boat CPA and IP-VPN

    6. P’s Boat CPA IP-VPN AP Server Web DB Server DION AP Server Web Server KDDI iDC CPA:cdma Packet Access P’s Boat 31

34. Slide 34: BBC Business Strategy (FTTH)

    BBC & (FTTH) 30 21 20 9 10 - 0 - 03.12 04.3 - 32

35. Slide 35: TU-KA 2G Strategy

    TU-KA 1. TU-KA 2G - TS41 1,000 800 30 40 600 50 60 400 20 200 0 10 02/4 02/9 03/3 03/9 04/3 33

36. Slide 36: AirH' Strategy

    TU-KA 2. AirH” 4 14 100 / 80kbps 200kbps / / 96 / PC - 25 3,780 / 25 - 4,060 / / 32Kbps - 7,560 / / 128Kbps 1 A&B 34

37. Slide 37: Ubiquitous Solution Company

    Ubiquitous Solution Company

KDDI — FY2004 Earnings Presentation on 6ix