IIJ (Internet Enterprise) will hold a financial results briefing for the third quarter of fiscal 2022 on February 8th. Cumulative sales for the third quarter were 185.34 billion yen, up 11.9% year over year, and operating income was 18.79 billion yen, up 15.3% year over year.
From left, CFO Akihisa Watai, President Eijiro Katsu, and Chairman Koichi Suzuki
All three areas of network services, SI (systems integration), and mobile, excluding mobile phones, were generally strong. In network and OS, we have received orders for large-scale projects from broadcast stations and large financial institutions. The mobile business is also growing steadily, and as of the third quarter, the total number of lines increased by 592,000 year on year to 3,968,000.
Sales and profits increased due to continued acquisition of large-scale projects
The breakdown of the number of mobile lines is 1.685 million for corporate mobiles, 1.197 million for IIJmio (individual), and 1.086 million for MVNE. In the corporate mobile business, the number increased due to additional orders for GPS tracker monitoring and mobile projects for the Digital Agency. The unit price of IIJmio has decreased due to increase in subscription to the new plan (Giga Plan), which is cheaper than the old plan.” “There is,” said Mr. Eijiro Katsu, the company’s president, also said, “The steady growth of the Gigaplan is driving the total increase in mio.”
IIJmio number of lines had only increased by 19,000 from 1,178,000 in the second quarter. The growth is slower than the increase of 52,000 from the first quarter to the second quarter, but “Rakuten (minus 0 yen) increased due to the last minute rush until October, but the effect disappeared, I calmed down,” Katsu said. “I think about new challenges,” he said.
Mobile service performance
The connection fee payable to DOCOMO is based on the future cost method since FY2020, and the connection fee presented by DOCOMO in April each year will be fixed in December of the following year. The connection fee per 1 Mbps introduced in April 2021 was 28,385 yen, but was fixed at 27,024 yen in December 2022, a decrease of 27.5% from the fixed unit price in FY2020. Being cheaper than estimated, more than 500 million yen will be added to sales in the third quarter of fiscal 2022.
Regarding the current cost method in the future, Mr. Katsu said, “I want you to increase the transparency a little more.” “Since the reason why the connection fee has become this way is not disclosed, I think if we do that (increase transparency), the predictability of the future cost approach will increase a little more.”
Changes to DoCoMo connection charges. From 2022, MNOs will introduce a future cost approach that sets out the expected connection fee unit price for 3 years.
As a recent topic, KDDI and Softbank announced that they will provide “dual SIM service” for emergency backup lines. SoftBank President Junichi Miyagawa has also hinted that one phone number will operate two lines. Mr. said Katsu, “The details of KDDI and Softbank’s services are not clear, but I think it will be a verification from now on whether it is technically possible with one number.”
Currently, dual SIM services do not appear to be associated with MVNOs, but IIJmio also offers subline-friendly services such as eSIM and low-capacity plans, so it competes with the this service. Mr. said Katsu, “Generally speaking, I think it is good to have such a service in case of a disaster in terms of convenience. I want you to do it,” he asked.
In the “Working Group on Verification of Competition Rules (38th)” held by the Ministry of Internal Affairs and Communications, MVNOs including IIJ expressed the opinion that single unit discounts on terminals should also be regulated. The terminal discount is limited to 20,000 yen, but this applies only when the terminal and line are provided as a set, and does not apply to individual sales. “They are sold separately (the terminal and the line), but in the end they are sold together. Increasing the number of lines with such a method becomes a problem . The Fair Trade Commission is also investigating it. I argue that the 20,000 yen rule should be applied even when the devices are sold separately.” (Mr. Katsu)
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