KDDI Corp
TSE:9433
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
4 155
5 070
|
| Price Target |
|
We'll email you a reminder when the closing price reaches JPY.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
KDDI Corp
You don't have any saved screeners yet
Thank you very much for waiting. We would now like to start KDDI Corporation financial results briefing for the first quarter of the fiscal year ending March 2020.
Thank you very much for taking time out of your busy schedule to attend this briefing. I am Horii from IR department and will serve as the moderator. This briefing will be held in Japanese with English simultaneous interpretation, and will also be distributed on-demand later on our company IR website.
Let me introduce the participants today. On your right, from the center, Muramoto, Senior Managing Executive Officer, Director and Executive Director of Corporate Sector; Shoji, Senior Managing Executive Officer, Director and Executive Director of Consumer Business; Morita, Managing Executive Officer, Director and Executive Director of Life Design Business Sector; Amamiya, Managing Executive Officer, Director and Deputy Executive Director and General Manager of Consumer Business Strategy Division. Next, on your left, from the center, Mr. Uchida, Executive Vice President and Executive Director of Technology Sector; Mori, Senior Managing Executive Officer, Director and Executive Director of Solutions Business Sector; Saishoji, Administrative Officer and General Manager of Corporate Management Division.
We have posted 3 financial results-related materials on our IR website. Please refer to the disclaimer regarding the financial results and subscriber targets explained in the material and Q&A session.
First, Mr. Muramoto, Senior Managing Executive Officer, will first explain the financial results followed by Q&A. Mr. Muramoto, please.
Thank you. First of all, thank you very much for viewing KDDI's earnings conference, despite your busy schedules. Without further ado, allow me to make a presentation on the first quarter results of the fiscal year ending March 2020.
First, let me present the highlights of the first quarter performance. As shown on the left-hand side in the graph, first quarter operating revenue was JPY 1,246.1 billion. Progress rate as a percentage of the full year plan was 24%. Operating income, on the right, was JPY 255.8 billion, with the progress rate being 25.1% at the full year plan.
In view of a new player entering the market and planned discontinuation of 3G at the end of March in 2022, we strengthened our measures for retention by focusing mainly on migration of users from 3G to 4G, resulting in increased sales cost.
On top of that, in the first quarter, operating income declined because of factors such as changes in the accounting period for Myanmar's business for the first half, accelerated depreciation of 3G facilities and equipment and reduced valuation of part of the devices. Despite these factors, because Life Design Domain and Business Services segment performed well our performance made positive progress as was initially scheduled.
Next, on au accounts and mobile IDs and their numbers. Net decrease in the number of au accounts, on the left, is steadily becoming smaller due to increased penetration of the unbundling plan as well as effects of bundling with Life Design Services.
The number of mobile IDs on the right shows that while the number of au accounts is on its way to bottoming out, the number of the group's MVNO accounts is exhibiting net increases and steady growth, standing at 27.03 million in total at the end of June.
Next, on total ARPA and total ARPA revenue. As shown on the left, first quarter total ARPA was JPY 7,450, up 3.9% year-on-year. Although we decided not to disclose the breakdown between au telecom ARPA and value-added ARPA, starting from this year, both grew year-on-year. First quarter total ARPA revenue on the right grew steadily at JPY 547.3 billion, up 3.2% year-on-year.
Next is on smartphone price plans. We have introduced an unbundling plan ahead of our competition, and the number of accounts for the plan exceeded 15 million as of end of June this year. With increased penetration of the unbundling plan, decline in the number of monthly discount applicants continues to contribute positively to raising au telecommunications ARPA. We will aim at steadily growing the total ARPA by promoting shifts to smartphones with migration to 4G from 3G and au Data MAX Plan, which has started to accept applications from July 26.
Next, regards to the sales and operating income of the Life Design domain. On the left shown are the sales, which grew by 39.6% year-on-year at JPY 275 billion. Operating income on the right was up 15.2% year-on-year at JPY 38 billion. Granted that there were positive effects from the newly consolidated entities, such as ENERES and Jibun Bank. This domain has been operating very successfully, even excluding these factors.
Next on the operating revenue and income of the Business Services segment. Operating revenue on the left was JPY 217.1 billion, up 1.7% year-on-year. Operating income on the right was JPY 37 billion, up 18.9% year-on-year. On top of the brisk rise in revenues from existing businesses, including the IoT business, tight control over the operational costs and the cost of device purchases has contributed to the bottom line. In other words, we're off to a good start towards achieving our new medium-term management plan.
From this page onward, I would like to explain about the progress made in the new medium-term management plan that was launched this fiscal year. As we launched the new medium-term management plan in May this year, we renewed our brand slogans. KDDI's brand slogan is Tomorrow, Together. au's brand slogan is Explore the extraordinary.
Let me explain the progress we have made under each of these slogans. First on KDDI's new slogan, Tomorrow, Together. This 5G era is the era for competition and collaboration, where you do not necessarily develop everything in-house on your own, but rather work with your partners to build infrastructure and platforms, but then engaging solid competition at the layers above in terms of services and prices. As we push for open innovation, leveraging 5G that would generate new values of experiences, we will make steady efforts developing new generation services that would lead to new platforms and regional regeneration.
First, on the development of the infrastructure for the 5G era. On the left shown is the overall roadmap for 5G. As 3G networks shrink, 4G operations are expected to continue for the time being. Our 5G network is scheduled to be deployed on an NSA, or a non-standalone basis next spring. Our brilliant, superb 4G that we have brushed up on over the years will be combined with a special 5G and will be implemented as a hybrid network. On top of that, in July this year, in order to accelerate our effort to set up 5G networks, we agreed with SOFTBANK on working together to jointly promoting early development of 5G networks in local areas.
Starting from autumn this year, we will engage in joint demonstrations in several areas and build robust networks at an early stage. Next is open innovation that showcases the 5G era. In order to create a business development base and a place for startups and local governments to collaborate, we opened KDDI digital gate last September.
One example of our collaboration with our partners is JAL Innovation Lab. We conduct R&D and demonstration trials on touch list boarding gate with 5G devices and on next generation services using 5G and IoT, such as customers' location measurement in airports. More than 200 companies have used it since its opening. We plan to expand it into Osaka and Okinawa in autumn this year to strongly support this new business creation.
The next area of collaboration is Smart Drone and MaaS. On the left side, in the area of smart drones, we will provide companies and local governments who want to develop new business using drones with platforms. In June, we launched Smart Drone platform and formed a business alliance with LGU+ to develop the global drone market.
On the right side, similarly, in MaaS, we will partner with NAVITIME to promote digital transformation of transport with transportation operators and local government and support customers means of transportation on the platform. We will develop specialized platform, where we collaborate with various customers and create new businesses.
Next is regional revitalization. The important element among the requirements to acquire 5G license was regional revitalization. We started working with local governments to solve their challenges by utilizing our 5G. We launched regional revitalization fund in May and concluded agreements with 63 local governments. We also established a comprehensive partnership on regional revitalization initiatives with Makoto, JP and L Community last week and signed a comprehensive education agreement with Iwate Prefectural University. We will work to achieve SDGs and actively focus on regional revitalization and education projects as the social challenges to be solved through our business.
Next, let me move on to our au brand slogan, Explore the extraordinary. We will propose exciting experience to our individual customers through payment and commerce, such as au PAY and au Wowma! as well as finance. And aim to integrate telecommunication and life design that expands the scale of life design business with telecom at the center. Through such initiatives, we will continue proposing, Explore the extraordinary, that surprises yesterday's us.
Starting with settlement and commerce. Left side, the number of au PAY subscribers exceeded 4 million within only 4 months of launch. Thanks to the collaboration with Rakuten touchpoints available for smartphone payments exceeded 1 million places.
Right side, Wowma! changed its name to au Wowma! on July 25. Furthermore, we started offering live commerce service and free shipping for au Smart Pass Premium members in order to aim for a commerce service, centering on smartphones that is more familiar to our customers.
Next is finance business. We completed TOB for kabu.com Securities in June 2019 and made au Insurance Company, Ltd. a subsidiary in July. As a result, we are now prepared to offer all financial products as one-stop service in au Financial Holdings circle. Our financial business will be based on smart money initiative.
With over 20 million au wallet cards and smartphone that has become the center of our lives, we will bring settlement and financial service closer to our customers' daily lives.
Next is our initiatives for Explore the extraordinary. From the left, in virtual high school baseball, in SPORTS BULL, all 48 games are broadcasted live for free. The movie we invested, Dragon Quest Your Story, will be released tomorrow. We support e-Sports high school tournament, one of the largest tournaments in Japan. And in KidZania, we offer VR experience of Japanese Antarctic Research Expedition as limited time offer. As au brand's slogan goes, we cherish playfulness and aspire to be a company that can continue proposing excitement and fun changes to our customers.
Next, let me show you our SDGs-related feedback. We were selected by leading global SRI, socially responsible investment indices, FTSE4Good Index Series and MSCI ESG Leaders Indexes as their component stocks for 3 consecutive years.
In addition, we were also selected as carbon efficient index stock by S&P for 2 consecutive years, receiving high appraise from various institutions. We will continue aiming for sustainable development with the society through KDDI SDGs initiatives.
Lastly, this is today's summary. For the financial results for the first quarter, we are steadily progressing towards attaining our full year performance targets and steadily expanding the revenue base in telecommunications and non-telecommunication fields.
As initiatives to achieve our new medium-term management plan, we will promote competitions and collaboration towards the 5G era and aim for Explore the extraordinary by integrating telecommunications and life design and promote activities of KDDI SDGs, including regional revitalization.
That concludes my explanation. Thank you very much for your attention.
At this moment, we would like to take questions from the participants. We would like to take as many questions as possible. [Operator Instructions] So let the operator explain how to ask questions.
[Operator Instructions] First question. UBS Securities, Mr. Takahashi.
I have two questions. Here's my first question. Regarding the performance for the first quarter, 11% decline in income. As was explained, as I listened, there are several one-off factors, temporary factors affecting the performance. So it is something temporary, but what are the factors? And what was the size of the impact in terms of amount? And what were the other factors that might not be temporary? If you could please elaborate on the factors affecting the first quarter results.
Well, thank you for the question. Regarding decline in income, allow me to explain. I would like to give you further details. In the first quarter results, we saw a decline in income for the first time in 7 years. And of course, there are various positive and negative factors.
Just to give you the positive factors and the amounts. Personal segment, Life Design Domain, this saw an increase in income of -- by JPY 5 billion. And new business segment, JPY 5.9 billion. So with these 2 combined, a JPY 10.9 billion positive impact.
And the 2 major negative factors affecting the performance. One is something that we view as temporary, which is about JPY 22 billion. And another, the other, the cost of selling assets and devices is increasing.
In the first quarter, market was activated, the competition became harsher. And in order to respond to increased competition, we increased the sales cost. So that's about JPY 17.6 billion, to give you the breakdown.
Now in terms of temporary factors, one, as you may know, in the last third quarter, the Myanmar business. The accounting period for the Myanmar company was changed, and so 6 months' worth of income had to be shifted. And so therefore, year-on-year income for 3 months' worth was subtracted. And there was an announcement that 3G will eventually be discontinued. And therefore, since November last year, accelerated depreciation started. So in the first half, on a year-on-year basis, it's a factor that negatively affects our performance, pushing down income. Other than that, valuation losses in some devices, which were posted in the first quarter.
In view of the future, we wanted to be conservative, so we had marked valuation losses. And other than that, our valuation losses in the inventory under IFRS at the end of every term as valuation shifts for the inventory, depending on the device. There are sales incentives given. And under IFRS, that's accounted for as negative.
Throughout the full year, inventory has to be controlled properly. Therefore, such volatility can be controlled. But in the first quarter, this amount came to be rather substantial. And the difference with the consensus number is around JPY 12 billion. But I think the two factors that I mentioned towards the end are relevant in that regard. That concludes my answer. Thank you very much.
So Myanmar business impact was there and 3G equipment accelerated, depreciation happened. Second quarter and onward, there will be no impact from Myanmar business. And as the accelerated depreciation, it will continue on a year-on-year basis until the second quarter. But other than those, there won't be a lot of negative factors affecting second quarter and onward. So you will be back on the increasing income trend going forward?
Yes, as you rightly pointed out, in the first quarter, most of the temporary factors are factored in, reflected in the plan, we're not worried our Life Design and Business Services segment are growing. And so we are quite sure that we will be able to meet the increased income target for the full year.
And my second question, looking at the new Business Services segment. Your full year plan is 8% increase year-on-year in income. And in the first quarter, 19% income increase was seen. So it seems to be quite successful, apparently. But if you could please elaborate on the breakdown. And IoT business, how has it evolved in the first quarter? If you could also explain that.
Yes. Mr. Mori, who is responsible for the success of the business will answer the question.
I'm Mori. I, myself, will explain. First, overall, it is being grown. We call it the infrastructure business and the mobile sales or revenue and fixed data line business. So these are being increased and grown. So that is the most essential business factor. In the first quarter, these have grown quite successfully, and this shall be maintained for the rest of the year. Every month, the telecom revenue that we have with our customers. At the beginning of the first year, what we have has continued for the remainder of the year. And so as the year passes, it will continue to accumulate. Other than that, starting from this fiscal year, as a growth area in the Business Services segment, IoT, as a growth business, is being focused upon. And global business, overseas business is part of the Business Services segment.
In comparison with the last fiscal year, this has also been grown. And domestic subsidiaries within the group are all making steady progress. So overall, it's been positive.
Now revenue growth vis-a-vis revenue growth, operating income is growing, perhaps even more on that, with respect to revenues. As I said earlier, global overseas revenues. In terms of that, by the end of last fiscal year, unprofitable business was discontinued. We withdrew from such business that's international voice business, we withdrew from that business overseas.
And so that has turned out to be a negative factor in the revenues, so revenue may not appear to be growing as much. But this effect will only linger until this fiscal year because we have already -- maybe withdraw. And so going forward, it will be positive for our bottom line. That's another point. And there was a question regarding IoT. On IoT as well, just as we explained earlier, the number of lines or circuits, net increases, in the medium-term management plan, we are to increase to JPY 80 million, and we're off to a very good start toward achieving that.
Net increases are continuing. So we have the spaces, and we're adding that increases on top of that. So as far as IoT, we are seeing increasing revenue. That concludes my answer. Thank you.
That means that the momentum of increasing your income in the second quarter and onward is likely to continue? Is that what you would say?
Yes, that is our plan.
Next question is from Daiwa Securities. Mr. Ando, please.
My question is about the consumers' competitive landscape. So first quarter and current stage, the device, the discount sales is occurring. So if you could summarize how much subscribers you are acquiring? And what is the current situation? Could you elaborate? And I think this will continue until the end of September. And if you could also talk about the future outlook beyond September?
Yes. So Mr. Shoji -- Mr. Shoji, in charge, will explain.
Yes. Let me explain. As Mr. Muramoto said in his presentation, consumers' business, competitive landscape, continuing on from the fourth quarter last year. This fourth quarter, the market was very active. And as a result, in our business, the market was revitalized. And so the churn rate increased slightly, but we were able to acquire new subscribers.
And in the operation data, the mobile's total sales shows that increase. And one more point. In November last year, we said we will discontinue 3G service in fiscal year '21, which is year ending March '22. There are still quite some 3 -- number of 3G users. So to prepare for the new competitive landscape, this program to -- for the replacement of their mobile phone was accelerated in the first quarter. And so that also increased our cost. So does this answer your question?
Yes. My additional question is, the Ministry of Internal Affairs and Communications, MIC, has the new regulation of the penalty of JPY 1,000 and the JPY 20,000 subsidy sold such plan -- price plan and any possible impact on your sales activities?
Regarding the price. In October, the new law will probably come into effect. So to prepare for that, as you know, our unbundled plan in July of 2017, Pitatto/Flat Plan was introduced. And as of the end of this June, 15 million users have already joined the Pitatto/Flat Plan. So under this new law, our new price plan has been growing steadily in the past 2 years, and so we are already prepared for that. On the other hand, the way we market and sell to prepare for October, we have to separate the device and the communication charges, so we need to follow the regulation, the new law and act accordingly. So we need to be fully prepared for that. And we are on schedule until now. But we don't know how the market will move from October onward. We have to keep our close eyes. But so far, things have been trending as scheduled.
That concludes my answer.
So just for clarification. So the way you sell your devices and the price plan, price structure do not need to be changed dramatically? You think you can continue your business without a big change?
Yes. For our price plan, Pitatto Flat/Plan and Flat Plan 7 Plus that started in June. And au Data MAX, which is the unlimited plan, which started on July 26, we think we are fully prepared.
Of course, depending on the market situation, we need to review our price plans flexibly. Now the way we sell our devices. Today, we made an announcement regarding the current upgrade program. We will stop the sales on September 30. However, we want to -- after October, we want to continue offering an easy method for customers to purchase devices. So for the device selling program, we will listen to our customers' voices and watch the market trend and decide accordingly.
The next question from Mitsubishi UFJ Morgan Stanley Securities, Mr. Tanaka.
Tanaka speaking. Can you hear my voice?
Yes, I can hear you.
I have two questions. So I will be asking the questions one by one. Question number one. Earlier, I would like to ask them, there was explanation of our Business Services segment. I understood that wholesale business is growing. But is that mainly about the data center business?
The data center business is one of the pillars of the business. Other than that, the so-called system integration type of business for corporations, that is also ground. So with these two, we are proceeding quite nicely.
Understood. For overseas, I didn't know that the volume of system integration business was so that large. Is that sizable?
Yes. It is quite sizable.
So if it's for overseas customers, corporate customers, what is the strength of KDDI's SI Business? And how well is it received overseas?
How shall I put it? Just like in the Japanese market, where we have a license, where there is a license, we may provide telecom-based business, just as we do with the Japanese customers. But other than that, connecting offices or hubs and network as such. Or within the customer office, there could be a network-based business that we can provide. So inclusive of Japan, we provide an end-to-end service. That is the main part of our business.
Understood. So within the segment, in terms of IoT, global telecommunications platform business. I was able to hear about that in a seminar I attended. Japan and the U.S. are leading, but it seems that there are moves made in China. So by country, how speedy are -- is each of the countries? And what is the direction?
Well, here in Japan, we have been working on this for some time. The U.S. has also made an announcement. They will be proceeding with it as well.
You mentioned China. China is also included. Globally, in 120 countries, services can be provided. Starting from this fiscal year, this is something that we are launching. And the number of revenues, I'm sure it will contribute positively to our growth going forward.
My second question. Page 6, about Life Design Domain that you explained. ENERES and Jibun Bank, they were turned into subsidiaries. In terms of revenue and income, how much have they generated? Even excluding these, you said that you are still seeing increased sales and income. And so what kind of business is leading the performance? Is it sustainable?
Morita will answer. Morita is responsible for Life Design business.
Well, first ENERES and Jibun Bank. What is the impact of consolidating these entities in terms of sales and income? Because that was what was asked in the question. But sorry, as to the specific amounts of sales or income, we do not disclose these numbers. But there is a certain level of revenue and income that is generated quite good. And there was another part of the question, asking what about others?
Well, in terms of income, as has been the case, au Smart Pass continues to be quite successful. Smart Pass ratio or share is rising. In the first quarter the ratio of 47%. At this moment, 51%. It's growing. So this is leading the performance. So that is the overview of what is happening.
By the way, in that regard, how shall I put it? Regarding au Smart Pass Premium accounts, Premium subscriptions, what's the number for that Smart Pass? Overall, since so much, there has been a decline. If you could please explain why?
Well, 47%, 51%, I said. That is the ratio of Smart Pass Premium subscriptions as a percentage of total, it's successful. Smart Pass Premium, 7.81 million in total. And Smart Pass penetration has been rising. So it seems to be maturing and saturating.
Next question is from Morgan Stanley MUFG Securities, Mr. Tsusaka, please.
Yes, this is Tsusaka. I have a question on Rakuten, new entrant. And your roaming support and the impact it will have in the overall competition -- competitive environment? So Rakuten started preparing for it. And according to their announcement, Tokyo, Nagoya, and Osaka will be outside of the scope of roaming. But as gradually, we started understanding the details, in buildings in Tokyo will be supported and the underground areas will be supported. So the support area seems to be expanding. And in addition, if suppose Rakuten's network is not ready, maybe Tokyo area will also be supported, otherwise, Rakuten service may not be launched. This is often discussed in the industry. So your roaming support with Rakuten, your roaming support to Rakuten, is there some fixed arrangement? Or if Rakuten may face some troubles, you may proactively support roaming flexibly. So formally, Tokyo is out of scope for the support. But if there are issues or problems, then maybe you will offer support in Tokyo as well, because this has an impact on the competitive landscape.
So if you could share with us -- any information you can share with us. What kind of discussion is now taking place?
And there are some sensitive matters. So I can only talk so much. But -- so roaming contract with Rakuten is now entering its final phase, and we are hammering out the details. Our stance, initial stance, was Tokyo, Nagoya, Osaka's subway and main buildings will be in scope, but others will be out of scope in Tokyo, Nagoya, and Osaka. Rakuten will be entering the market as MNO. So obviously, they need to build their own network, we think. And in many areas, Rakuten's virtualization technology is being promoted. And so I am sure they are preparing well. So we have no intention of changing our initial stance. So that's my message. Does this answer your question?
Yes. So if you could share with us one technical aspect. So roaming -- so was the condition for the network and -- but what I hear is in your roaming area, the users may move. And when the user moved to Rakuten's network area to allow for the handover, the communication is cut once. And then when the device requires the communication again, the communication resumes only after the request, I hear this information in the industry. Is this correct?
So Uchida-san, intake -- in charge of Technology will respond.
We are testing now. So in October, things will be clear on what can be possible. So please allow me to stop there.
I did not understand that. Please, again?
So we are currently conducting the roaming test with Rakuten, so we will look at the results, and the result will be shared and made public in October. That's all. Did that answer the question?
So in other words, you cannot answer the question at this moment?
Correct. Because we're still conducting the test.
Next question. Nomura Securities, Mr. Masuno.
I have several points I would like to ask. Question number one, with respect to the competitive landscape competition, between April and June, you had a sales promotion. As a result, au churn rate went up slightly. And although you did say that you were able to also acquire new subscriptions, the number of au IDs is declining slightly. So I wonder, to whom you have lost your customers to? DOCOMO has increased its handset or device prices. So I don't think you are losing to DOCOMO. So you must be losing to someone else rather than DOCOMO. It seems that the number of IDs, subscriptions are declining, that selling to other competitors?
Shoji-san, if you could please answer?
Yes. Well, you have already answered your question in your question, I have to repeat, mostly what you said already, sorry. As you know, since MVNO started, yes, MNOs have increased in MVNO market. And 2 years ago, we introduced our Pitatto/Flat Plan, and we haven't been able to stop the net decreases.
As Muramoto-san said in the presentation, last year, in the first quarter, the market was calm, but fourth quarter last year and first -- fourth quarter last year and first quarter this year, the market was quite active. So as it turned out, we have been able to gain new additions, new acquisitions more.
Having said so, we are still having net decreases. And it was just as explained in the presentation. But the number of net decreases is becoming smaller and smaller, quite substantially. We would like to turn it positive as a person responsible, but it's still negative.
And whom -- to whom did we lose these IDs?
Well, I'd like to refrain from answering that point. I think what you are suspecting is perhaps right.
And in terms of income? Well, for the full year plan, you are quite confident that you'll be able to meet the targets. But in order to meet the targets, in the second quarter onward, you will have to have an increase in income of JPY 40 billion. So 3G -- switch over from 3G and Rakuten's entry into the market.
And you will not be able to slacken your efforts in promoting sales. And so what's your view for the rest of the year? You said that the factors are negatively affecting the performance are temporary. Yet, they are still affecting the performance. So in the second half, what would be your view on those points?
Well, as I said, there are temporary factors that that affected our performance in the first quarter, they will be gone. But for the second quarter, starting from October, a new law will be enforced. If that's going to be the case, then the market conditions in October will change. So in the second quarter between July and September, the market will be active again.
There will be increased number of customers looking to purchase handsets and devices. But on the other hand, a law will be introduced. As you can see from the law, there will be complete separation between the telecom charges and the handset price. We will not be able to include the services as part of the handset price. We won't be able to take any bold measures. But conversely put, naturally, the liquidity, if you will, will decline and switch over from 3G and -- 3G users to be shifted to 4G. We'll have to continue promoting that. And that is already part of this fiscal year's plan, so we're assured that we will be able to meet the plan.
Now as you can see from the operations data. au users, their number is still declining, but it's almost bottoming out. And total ARPA, inclusive of telecom and voice ARPA, everything included, this is going up quite smoothly.
So considering this, we are quite sure that we will be able to meet the plan for this fiscal year. Thank you very much.
And allow me to ask additionally. So Personal au ID, the number has been declined by 500,000, a substantial decline. Well, that has not turned out to be the case. So compared to the plan of 500,000, I'm sure your performance will be more positive than that with respect to ARPA, and this is a request. We're getting confused between telecom ARPA and non-telecom ARPA. Is it the services that are growing? Is it the Denki? Or is it indemnity? Repair that's going up? If you could please provide us with the details.
Well, allow me to answer. I have to apologize, but telecom ARPA, value-added ARPA, indemnity ARPA and Denki ARPA, these are the 4 components of ARPA, total ARPA.
To give you the conclusion, all 4 are growing. And repair ARPA is somewhat flat. But other than that, everything else is growing.
[Operator Instructions] Next question, Goldman Sachs Securities, Mr. Matsuhashi, please.
This is Matsuhashi from Goldman Sachs. I have two questions. First, is the profit and loss related question -- clarification. So you mentioned one-off factor. So could you give us a breakdown of the one-off factors by the amount and the write-off of the device? You said that this is a one-off factor, but why do you think this is a one-off factor?
Given the competitive landscape, you mentioned JPY 17.6 billion, we think a sizable amount will be remaining in the second quarter -- third quarter. But even then, you will be able to increase -- achieve an increase.
So the device write-off. We did this on a pinpoint manner for some of the devices. So this was incurred in the first quarter. So from the second quarter onward, it will not be there.
And we wrote off once. But if those devices that we've written off contribute to sales, then we can enjoy the return in the form of profit. And then the write-off of the inventory, it fluctuates from term to term. So by controlling the level to the optimal level, it goes up and down.
So from the second quarter onward, we will control the level at an optimal level. So this was also a one-off event in the first quarter.
I'm sorry, I would like to refrain from mentioning the amount, and JPY 17.6 billion sales cost in the first quarter. As Shoji-san said earlier, depending on the market situation, we will control this to the optimal level. And we are confident that we can do so. So please rest assured.
Just one point of clarification. So this write off, did you bring this down to JPY 0? Or is this like the used deemed sales price?
It's the former, JPY 0.
Okay. And second question is about the facility sharing with SOFTBANK. To what extent can you expand this? It is difficult to do this in the pinpoint fashion, but the maximum case and minimum case, if you could give us a rough image of the range? So if you could elaborate on the potentiality of this infrastructure sharing and the limitations. Are there any technical or other limitations that you need to overcome?
So Mr. Uchida, in charge of Technology, will respond.
As mentioned in the presentation, first, starting this fall in Asahikawa and Narita and Fukuyama in the 3 locations, we will do the demonstration trial. So facilities and constructions and construction of the base stations, we will try to identify the challenges and risks through these trials. So that's where we are.
So once we do this, we will be able to understand and decide where the maximum and minimum level will be.
So how much time will it take for you to make this decision?
I would very much like to start this from fall, but I am hoping for by the end of the year. Thank you very much.
Time where we have to close this. So let us bring the Q&A session to close. With that, we would like to close the first quarter earnings conference for KDDI for the year ending March 2020. Thank you very much for your participation.
[Statements in English on this transcript were spoken by an interpreter present on the live call.]