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Thank you very much for attending today despite your busy schedules. We will now start the briefing of NTT's financial results for the first quarter. I am Fujiki from the IR office and will be serving as today's facilitator. First, I would like to introduce today's attending members. Mr. Sawada, Representative Member of the Board, President. Mr. Shimada, Representative Member of the Board, Senior Executive Vice President. Mr. Kimura, Executive Officer, Senior VP, Head of Corporate Strategy Planning. Mr. Nakayama, Executive Officer, Senior VP, Head of Finance and Accounting. Today's briefing is conducted in the web streaming format. please refer to the presentation materials posted on our company IR website. On the first page of the presentation materials, points to be considered is stated, so we kindly ask you to please go through them. Today's briefing will be streamed live via our company's IR website and plan to be streamed on our website later. We seek your understanding. After this, President and Mr. Sawada will explain the financial results outlined and others. Then we will open the floor for questions. Mr. Sawada, please.

Good afternoon, ladies and gentlemen. Thank you for joining us despite your busy schedule. We appreciate your kind attendance and participation. Before I start the explanation, may I offer my sincere sympathies to those who are affected by COVID-19 as well as to those people who are affected by the heavy rainfall that took place in July of 2020. I would now like to take the floor and briefly talk about the consolidated financial results as well as the forecast for this fiscal year. So, please turn to page four of the material. Page four, please. This talks about the status of consolidated results for the first quarter. We experienced a decline in both operating revenue and operating income. Operating revenue dropped by 5.1% year-on-year. The decline in overseas was quite large, standing at 8% decline. Domestic revenues dropped by 3.8% year-on-year. As for operating income, we were able to cover the drop in revenue through various cost reduction, so operating income dropped by 1.5% year-on-year. We were able to keep the decline in operating income to 1.5%. Now, as for impact of COVID-19 on our first quarter results, the negative impact on revenue was 70 billion yen and negative impact on operating income was 10 billion yen. Let me now talk about the contributing factors by segment. Please take a look at this chart. Let's start with the mobile communication business. This was already announced by Docomo previously. Operating revenue dropped, and operating income grew year on year. The reduction in handset sales revenue, as well as in global roaming revenue, and drop in mobile communication service revenue due to expanded impact from the new rate plan was offset by cost reduction, so operating income increased year on year. Turning now to regional communication business on the right-hand side. The top shows operating revenue, the bottom shows operating income. Voice service revenue as well as hospital-related revenue dropped due to the impact of COVID-19. There was also loss from retirement of unnecessary fixed asset. And also there was cost for developing environment to respond to COVID-19. So operating income in this segment dropped year on year. As for long distance and international communication business, well, there's declining operating revenue due to COVID-19 and foreign currency. Operating income grew year on year due to freezing of measures, as well as cost reduction from structural reform, which was undertaken overseas last year. As for data communication segment, this was already announced earlier by NTT Data. There is increase in operating revenue but decline in operating income. This is primarily due to the impact of COVID-19, so a decline in operating income year on year. As for the other business, NTT Urban Solutions. There is impact from COVID-19, but due to expanded consolidation, operating revenue increased year on year. Operating income remained more or less at the same level as that of the previous year. Let me now turn to the overview of fiscal year 2020 financial forecasts. Please take a look at the overview which is indicated on this page. Let me talk about the impact from COVID-19. On operating revenue, there's going to be a decrease of 350 billion yen and a decrease of 70 billion yen in operating income as a result of COVID-19. So what are the causes of this impact? What is the backdrop? We are assuming that in Japan, there will not be any reissuance of state of emergency declaration. and economic activity is expected to gradually recover following the lifting of the state of emergency in May. So we are anticipating gradual recovery in the domestic economy. That is the assumption for this forecast. As for overseas, While we see a similar trend per se, there are variances from country to country. So while recovery is expected to gradually occur overseas as well, the recovery is expected to be slower than in Japan, particularly in places such as Europe and in the United States. So as a result, operating revenue expected to decrease significantly by approximately 400 billion yen compared to fiscal year 2019. Operating income, operating profit will increase compared to fiscal year 2019, covered by approximately 80 billion yen of reduction in capital investment and 100 billion yen reduction in cost. So we are anticipating an increase in operating income. as well as in profit year on year this fiscal year. So let me talk about some concrete numbers which are indicated on the following page. Please take a look at this list. Operating revenue, 11.5 trillion yen, a decline of roughly 400 billion yen year on year. Of the 350 billion yen impact of COVID-19, domestic impact is roughly 180 billion yen and overseas impact is roughly 170 billion yen. So domestic and overseas contribute 50% roughly in terms of the impact on operating revenue. Turning to operating income, We are anticipating increase of close to 30 billion yen, and we are anticipating 1.5 trillion yen. The impact is on operating income from COVID-19 is larger on domestic business. As for net profit, slight increase. And EPS is expected to increase very slightly. Next page, please. This is the financial forecast summary by company. So how would each company fare in terms of the forecast summary? This is the list. So please take a look at the horizontal line. Operating revenue, operating income. Docomo number has already shown operating revenue decline, but operating income will increase. As for NTD East and West. Both will experience increase in both operating revenue and operating income. That is the plan that is in place for Entity East and West. For Entity West, they will achieve increase in both operating revenue and operating income for the first time since the establishment of the company. As for Entity East, This is an increase in both operating revenue and operating income for the first time since 2010. For one thing, this is due to increase in revenue from expanded net increase in the fiber sales, and also due to contributions from cost reduction, and also increase in activities from the subsidiaries. So that is the situation. As for long-distance and international communication segment, We carried out restructuring in reorganization last year. So we cannot do year-on-year comparison. So that is why we're showing you the performance of the segment. So we're anticipating decline in operating revenue, but increase in operating income. And impact from structural reform will play into this picture. As for entity data, as was already announced previously, decline in operating revenue as well as in operating income. So due to COVID-19 and also due to the structural reform that has taken place in the United States, In terms of operating revenue, it is expected to decline for the first time since the company was first established in 1988. That is the forecast at this juncture for NTT data. As for NTT Urban Solutions, they expect an increase in revenue but decline in operating income. Real estate revenue will expand due to consolidation, but operating income is expected to decline.

Next page, please. By segment summary, I already explained at the individual operating company explanation before, so I would like to skip this. Now I'd like to move on to topics. Over here, too, I would like to take up enough time to receive your questions. So I would like to just briefly like to explain about that we will be shifting our focus on the remote work, and we'll be having a system to support that in October. And the remote world is what we are seeking for to realize. We would like to provide the services that will support realizing such a remote world, and we are thinking of providing seven services, especially a safe service and also function-wise that has a competitive superiority against the competitors, so for the online conferences or the local government's work processes, automation tools. And also, a service providing that conversation will be realized through glass panels or acrylic panels called window talk. Next page, I would like to touch upon the overview of the medium-term management strategy initiative progress. The 5G technology, at least one antenna, has been installed in all of the prefectures in Japan at the end of June. And also, the first attempt as a group entity, Group Green Bond, has been issued in June also. So for the rest of the information, I would like you to take a look later. That is all from my side. Thank you very much.

Thank you. We would now like to take your questions. We'll take questions from those who have registered beforehand and who are already connected to the internet conference system, as we have already informed you in advance. As for the ways in which you will take your questions. The operator will explain how we will take your questions. Thank you. We now like to start the Q&A session. If you have questions, please push the raising of the hand mark on the bottom of the screen. Also, when you ask your question, please state your name, affiliation, and then go on to your question. Also, before you speak, please make sure that you push the microphone button to unmute your terminal, your handset. So when I like to go on to the Q&A session. From Nomura Securities, Mr. Masuno, you have a question, sir. So Mr. Masuno, please. Thank you. Yes, please go ahead, Masuno-san. Can you hear my voice? I have several questions. The impact of COVID-19 on our operating income, the domestic impact was quite significant. That is my frank impression. So can you explain how negatively COVID-19 can have impact? I know that overseas is probably the slowdown in sales, but what about the domestic breakdown between domestic and overseas? What is the breakdown of the 70 billion yen impact on operating income between domestic and overseas? Can you elaborate, please? That's my first question. Thank you. In terms of operating income, yes, we anticipate 45 billion yen impact on domestic operating income. The most significant factor would be probably handset gross profit for Docomo and also the international roaming service revenue decline. So that would be the two major factors on decline in operating income. So that will come close to 30 billion yen total. Furthermore, as for data, and as for entity urban solutions and other business, for entity data, the domestic impact is not that large. But in other business, we believe that because they're building centric businesses, they're affected by COVID-19. So that's the situation for the domestic business. As there are several tens of billions, some billions of yen impact on the regional communication, system integration and other services are especially slow down in sales. So that has translated into slow down in operating income. As for overseas, so 25 billion yen impact on operating income, that's primarily, as I pointed out, from system integration related decline. In other words, declining pipeline translated into decline in operating income. Thank you very much. On the other hand, you talk about 100 billion yen cost reduction going forward. At the Docomo's financial presentation the other day, Docomo said that they're also going to the 100 billion yen cost reduction. Can you give us a breakdown by markets or by business? The 100 billion yen set by Docomo and our 100 billion yen They are not based on the same definition, although we talk about cost reduction. We talked about $100 billion in cost reduction in this presentation this time around. So this aggregation of impact of COVID-19 on a net basis, yes, there's the negative impact as well as the positive impact from COVID-19, so that's been netted out. So the net impact is $70 billion. Net impact is negative $70 billion on operating income. And also there's a 30 billion yen positive impact. So 100 billion yen cost reduction will come into play. So a certain percentage of Dokomo's cost reduction is reflected in 100 billion yen, but that is not actually straightforward, I see. So you believe 100 billion yen is cost reduction? So that 100 billion yen is offsetting the loss in operating income. Yes, that's the case. Okay. As a result of communication, you expect an increase in operating revenue. So operating revenue increase in regional communication, that is historic. But the first quarter, I think there's operating revenue declined in the first quarter. So are you saying that from the second, third quarter, and fourth quarter, you're anticipating increase in operating revenues despite the decline in operating income in the first quarter? As for NTT East, NTTBP, The equity portion was 50% NTT East, which means that there was expansion in the consolidation of NTT East. As you know, telecom service revenue was on a downward trend in East, but then that is now being offset. And that positive impact is expected in second quarter onwards. So that is the impact. So that is association, rather, for NTT East. As for NTT West, one noteworthy aspect is that NTT Marketing Act and Smart Connect, these subsidiary firms for NTT West, They're actually experiencing positive impact from COVID-19. So on a full year basis, that is going to contribute. So that's one noteworthy aspect for NTD West. Then there was one common element for both NTD East and West is that in the first quarter, there is 80,000 net increase for fiber. So in the first quarter, yes, net increase was 80,000 for fiber for NTD East and West. So if we take a look at this on a full-year basis, we believe that there is going to be the possibility of increase in operating revenue for NTD East and West. So, yes, things were somewhat difficult for the first quarter because of the front-loading of costs. But going forward, we believe that the situation will ease and that they will transition to increase in network revenue increase. There was a reference to Entity Smart Connect. The name should be Solmari. It's not Smart Connect. It should be Entity Solmari. I just wanted to make that correction. Thank you. Thank you very much. My last question is about the long-distance international communication. On a full-year basis, you're anticipating $20 billion increase in operating income. But the positive impact from social reform that was carried out in 2019, I think that should be a must positive driver. What is the contribution for the social reform that was carried out in 2019? That would be roughly 30 billion, I see. What about entity data? Is 30 billion including entity data in all the companies? No, not just entity limited. It's just entity limited. 30 billion for entity limited. As for entity data, They're anticipating $4 billion in further structural reform costs, as well as in the United States. So on a net basis, I think the impact will be negative for NTD data as far as the structural reform cost is concerned. I see. Yes, NTD data explained that. But as for NTD data, they spent a lot of cost for structural reform last year. So if you compare this year and the previous year, I don't think there's going to be any additional negative impact from structural reform at NTD data. Yes, that's the case. So they're adding impact from COVID-19 and structural reform, and so then that comes to $19 billion. Thank you very much. That's all for me. Thank you.

Mr. Masno, thank you very much. I'd like to take the next question. SMBC Nikko Securities, Mr. Kikuchi, please go ahead. This is Kikuchi speaking. I have two questions. The first question is related to Mr. Masano's question. It's regarding NTT Limited Structure Reform's effect. How much and what kind of effect have been generated? Is it on the cost side? The top line is declining. improving and strengthening the top line. Are you seeing effects? That has improved the competitiveness, and because of that, is there a large increase in profit? And due to COVID-19, there's a large impact of declining revenue. So what is the impact of COVID-19, and what is going to happen to that impact moving forward? That's my first question. Thank you very much for your question. Regarding NTT Limited's structural reform, it was $30 billion. Out of that, 20 billion yen is personnel expenses. We have conducted quite a bit of streamlining, so the remaining 10 billion will be other expenses related. And so we are seeing an effect in terms of cash. In the top line increase, there's about 10 billion yen of foreign exchange impact included in that number. And furthermore, this time, we had accounting system changes in the NTT Limited. product selling that does not have a high added value. We are just going to record the commission fee and that's about 10 billion and the remaining COVID-19 impact is also there but top line wise the decline other than the COVID-19 impact is not that large. The high added value services is about 30% of the overall revenue composition, and that has increased up to 36%. And so in that sense, so the revenue structure is shifting over to a higher margin. In 2023, we would like to increase that portion up to 50%. So we are on that track towards that target, and we are seeing a positive impact of going through that track this fiscal year. Understood. So the COVID-19 impact for NTT data, they have announced their results last week, and we have heard their explanation, and NTT data has more impact from it, and the reason behind that is probably because for NTT Limited, they have a positive effect, too? Is that the reason? Yes. In the same way, the COVID impact is on the profit in the same way. But NTT Limited has a more positive effect from the streamlining initiatives. Okay, understood. My second question, well, if it's just about COVID-19, it seems that it's not enough. So the other day you have announced an alliance with NAC. And it's only been about a month since you made that announcement. However, are there any progress I've made? Or is it being highly received by other people? Or maybe people are asking you to explain about it more? But within the last month, is there something that you can share as an update with us? Okay, thank you very much. We had a working team created amongst both countries, and we have restarted the working team to discuss what kind of alliance can be realized and how it is perceived or received. Within this industry, amongst our peers or from the political arena and also the international arena, we are receiving positive feedback. And furthermore, NEC, I think that will include Fujitsu also, and towards these Japanese vendors from Australia and also from the UK, there are offers already made, as you know. So, on a total basis, the external environment, we are having positive feedback. So, the R&D code development, code R&D with NEC, we would like to strengthen it, and we would like to think of front-loading that process. So, Mr. Shimada, if you have anything to add, this is Shimada speaking. The working team with NEC, Currently, first of all, is discussing which market should we aggressively focus on. Therefore, the overseas sales strategy included is also discussed, and what we will be selling. Of course, we need to think of that also. However, the IP the entity has and the technology and NEC's IP and technology, they will be combined together. And so not just for Japan, but how can we roll out that globally is going to be the key discussion. So we will be having that discussion. Thank you very much. We wanted to say that we will be selling also. Our subsidiary companies overseas have a keen interest in this, so we have them participate in this working team and we have started this process. Okay, thank you very much.

Thank you very much, Mr. Kikuchi. Next. From Merrill Lynch, Nihon Securities, Kinoshita-san, the floor is yours. Mr. Kinoshita, please. Thank you. This is Kinoshita. I hope you can hear my voice. Yes, we hear you. Thank you. I would like to ask two questions, if I may. My first question, a point of clarification or confirmation. As for overseas, it seems that you're freezing some of the measures. That's what you alluded to, especially at NTD Limited. For this period as well, due to reorganization, you're anticipating 10 billion yen cost. I think that's what you mentioned or indicated in the beginning of the year. So on this point, now that the first quarter is over, did you implement these actions? And also, in terms of the full-year plan, restructuring costs, have they been reflected and factored in? Or are you going to defer this? That's my first question. Thank you. As you pointed out, for this fiscal year, we do anticipate some restructuring-related cost as well. But in the first quarter, the pace was quite slow. So at the end of the day, we've been able to actually narrow down on such cost. In mid-May, to all the subsidiary firms, with regard to measures, we have asked that they practice self-restraint. And I believe that has been understood well by various companies, including those outside Japan. And as for PMI, we have been considering two-year PMI. And response to regulators, that has been significantly affected by COVID-19. So that type of cost will probably be deferred to a certain extent. So And although there's going to be a three-month delay, we'll be changing the name of the companies, but also IT system-related actions might be somewhat delayed as well. So that cost is also likely to be pushed back. Thank you. A point of clarification. So for this fiscal year, you don't anticipate that significant cost? Is that your plan? We believe that there will be a decrease against the plan that we announced. There is likely to be decline. However, it depends on the situation related to COVID-19. And actually, we want to bring forward the implementation timing of the measures. So we cannot give you a clear response at the structure. Against the plan that Jeff pointed out, is this going to put pressure on your performance? No, we want to avoid any pressure on our performance. But it's not factored in in your current plan, right? No, it is factored in in our plan. Oh, I see. It's factored in your plan. I see. Thank you. That's clear now. My second question, in relation to COVID-19, for this fiscal in terms of revenue, 350 billion yen, and also 70 billion yen impact on operating income, and also 80 billion yen impact on CapEx, and 100 billion in cost reduction. That's what you mentioned. Let's say that COVID-19 were to actually wind down this fiscal year. Will such actions be carried over into the following year? Or do you believe that these are simply temporary impacts? How should we see this? So, in terms of capex and cost reduction included, how should we see these numbers? To what extent is it emergency-related actions? And what part of these numbers will be carried over into the following year? I would appreciate some insight from you. Thank you. So, 350 billion yen impact on operating revenue from COVID-19. Overseas, 170 billion yen. And domestic, system integration included is roughly 50%. So, actually, These we are anticipating possibility of system integration business that relate to social distance. So if we're going to live with COVID-19 going forward, then I believe system integration related to social distancing type of activities will probably be can be sustained. On the other hand, travel and mobility of people is really cut back, which means that roaming and handset related to purchases will probably not revert to the previous levels. So impact on COVID-19 will really be a patchwork if you will, aggregation of various different factors. So I guess this backdrop, the positive aspect is the new solutions and network services will be launched. So the positive impact from COVID-19 will probably come into play down the road. So 70 billion in reduction in capex will probably come back to a certain extent going forward. In terms of cost, yes, some costs may have to be expended down the road. So I think it's still a working process. Depending on COVID-19, we really cannot predict what will happen. I see. Thank you. It's 80 billion yen, right? Yes, close to 80 billion yen reduction in capex. And that will probably revert to the previous level down the road. Yes, I think we'll see recovery in capex down eventually. And maybe for cost, maybe 50% to pick up in cost going forward, maybe. So I realize it's a working process, so I do understand. Thank you for your response, sir. That's all.

Mr. Kinoshita, thank you very much. would like to take the next question. Taiwan Securities, Mr. Ando, would like to take your question. Please go ahead. This is Ando speaking. Can you hear me? Yes, we can hear you. I also have two questions. First of all, next fiscal year, while I'm talking about the COVID-19 impact, 800 billion yen revenue forecast is 170 billion. In a quarterly basis, how is it allocated? And regarding the operating income, what is the image you have of it going forward? First of all, thank you very much for your question. This 800 billion yen, what you mentioned, this is what I've mentioned before. This is the company-wide. And 170 billion is for overseas. Oh, yes, yes, sorry, sorry about that. For the 800 billion yen, when I mentioned about that number, about half of it is we expected from coming from system integration. And that ended up being 170 billion yen. That is because we had quite of a high expectation. But after that, there was a very strict lockdown. And the assumption was that we will have no more pipeline, new pipeline coming in. But compared to that, in reality, we had the order backlog up till now. And also, new solutions are being launched. For example, Arcadin. It's a conference system selling company. Their profit has increased about 60%, several 10 billion yen increase in just one quarter. So we are seeing such a result. So there is some reshuffling, but when I said about the operating income, it's a net. So it goes down, but something will go up. So as a total, it's about 50% is where it's going to settle at. is what we expect. However, if we look at NTT Limited situation, at the first quarter, there's no impact on the profit in terms of COVID-19 because they're still remaining their business on the order backlog. However, moving forward in the next three quarters, they expect about 10 billion. That is because In the first quarter, the pipeline they were expected to have, they weren't able to have it. So because of that, from second quarter onwards, there will be an impact on the remaining quarters. So the system integration will have a large impact in the second half, and the profit will also increase largely in the second half. Okay, thank you very much. And also, this is a kind of a similar question, or maybe you have already answered to this question. However, the margin for overseas business is 1.6%, and that has improved to 2.2%. What kind of content the improvement is this so if you can give me the large picture on the improvement and also the value added a product percentage why did it increase during this quarter and has improved Did you receive a large project? Are there any unique reasons to it? Can you please elaborate more? Thank you very much for your question. Regarding the operating income margin for the overseas businesses, last time it was not very good. But the main reason is that last year, we conducted the structural reform in July. So it's up to that when we compare the quarter to quarter basis. But after the structural reform, various peoples, including back office, people we had quite of a sufficient amount in terms of a number of people, so we streamlined that. So through the cost streamlining processes, they were able to reduce by 30 billion yen, and that actually pushed up the profitability of the business. And for entity data side, the situation has not largely changed. Therefore, entity's limited improvement has largely contributed to the improvement of margin. That's the large picture. And regarding the high value-added services, Managed Services Company Secure24 or the web service company Alcaden. They are increasing the profitability, but both of them are related to remote working or solutions that can respond to COVID-19. So in that sense, the reason why the high value added products are increasing is because there is increasing demand for those type of new solutions. Okay, understood it very well. Thank you very much. Mr. Ando, thank you very much for your question.

Next question. If you have a question, please push the question mark, please push the hand mark question on the bottom screen. Next question from Macaulay Capital Securities. Yamashina-san, and the floor is yours. Please go ahead. Thank you. My name is Yamashina from Macaulay. Thank you very much for this opportunity. No, thank you. I wanted to ask you what entity was. You're talking about the increase in operating income. Based on the presentation, it seems the system equation and others are contributing to the increase in operating income. You talked about Marketing Act and Sol Mare. You introduced those subsidy firms earlier. So for Solmaru and Marketing Act, which of these companies are involved in this increase in operating income? And also Marketing Act, what type of demand is picking up for Marketing Act? That's my question. Thank you. I would like to ask my colleague to respond. Kitamura here. With regard to Solmaru, they're included in the other business segment. As for Marketing Act, likewise, they're also accounted for in the other business segment. So they're not reflected in the system integration business segment. Have we answered your question? Oh, and also, with regard to Marketing Act, yes. They will be counted under the operating revenue in the other business. And how much? As for Marketing Act, what type of business are they carrying out? In principle, It's a company that outsources marketing from Entity West. So corporate sales activities are being outsourced from Entity West. So it's a company that carries out corporate marketing. So it's more or less a call center. So I think increasing demand is primarily due to subcontracting of call center operations. So local governments and municipalities, their call centers are also being... carried out by Marketing Act. So I think they're increasing that capacity. That's probably translated into increasing demand. I say thank you very much for that. If that is the case, then bearing in mind the impact from COVID-19, such as the impact that you talked about, well, entity, well, so Mara, maybe it's a temporary demand. That's my impression. But going forward, not just this fiscal year, but when you consider next fiscal year onwards, Do you believe that these two companies can continue to enjoy an increase in operating income, and will they contribute to the increase in revenues and income at NTT West? As for Solmare, they're distributing a manga animation through the web. So people are staying home. and they want to enjoy these contents in a desirable environment. And I think this can be sustainable. So for Solmara, I believe that increase in profit will continue. This trend will continue for Solmara as for marketing act. Well, from the perspective of impact of COVID-19, maybe that is a temporary windfall. Right now, under the brand name of One Contact, We're offering integration of various call centers and offering them to various companies. And we want to offer call center operations on a work-from-home basis. And that is being carried out by Entity Marketing Act. So I believe there will be this factor that can support their business down the road. I say thank you very much.

Mr. Yamashina, thank you very much. We would like to take the next question. Nomada Securities, Mr. Masuno, please go ahead. I have additional questions, sorry about that. We were talking about the most recent situation regarding the results, but regarding the mid-term management strategy in order to achieve the goals, the telecommunications business in Japan, the overseas business, and you have a renewable energy business, various things are incorporated, and energy and real estate businesses as a more longer span businesses is what I think. But towards achieving this mid-term management strategy, strategic profit increase? What is the progress of that? And also, I believe it's going to be after COVID-19, but what is going to happen after that world and what kind of measures and initiatives are you thinking of implementing in that time period? Can you share that with us? Thank you very much. Basically, the midterms major indicator is EPS. we would like to mainly focus on increasing the profit for achieving this EPS KPI. But not just for our industry IT, but for the overall other industries. For the IT industry, the impact can be taken positively. The content is the service of strategy, meaning that after COVID-19, it will be a remote world more, and so the services and solutions for the remote world can be generated more from us, and us strongly promoting the usage of such services and solutions. is what's going to happen, not just us, but globally, all of the companies will be putting their efforts in this. Another point is DX, digital transformation, especially the Japanese corporations, including ourselves. In many ways, have the master techniques utilized in our work. But we need to aggressively promote DX, and through the B2B2X model, we want our technologies and solutions used by them. And we would like to accelerate that process more than now. So, this will lead to my first point, enhancing and strengthening the solutions that we provide. And during the midterm period, we are not going to deviate from that. We will be conducting the – at the same time, expanding new services, IT services. Thank you very much. Mr. Masno, thank you very much.

MS. Next question, please. If you have a question, please push the raising of the hand mark on the bottom of the screen. We'll now go on to the next question from Merrill Lynch, Japan's Securities, Kinoshita-san. The floor is yours, Mr. Kinoshita, please. Mr. Thank you. This is my second time around as well. I would like to ask this question, if I may. My first question. You talked about very robust cells of fiber. How should we see the situation? How should we assess this? Is it due to the tailwind from COVID-19? Or is there something else at play? What is the reason that is driving the increase in fiber cells? I have a sense that the cells is accelerating. How do you see the backdrop? Yes, thank you for the question. Due to the impact of COVID-19, I think people really want to hang on to their fiber because they want quality services. So churn is coming down. So yes, impact from COVID-19. That is the reason. So you're saying that the churn rate has been coming down. So down the road, do you think people will be happy that they have fiber? So do you think that you'll be able to hang on to a very low churn rate? Or do you believe that after time, the churn rate will revert to the previous level? What is your sense? Well, actually, this applies to ourselves. Our company is going to be accelerating working from home. Depending on COVID-19, all the companies may actually discuss the possibility of reverting to working from home. That is going to happen. So I think this can be a sustainable trend. Actually, it might actually accelerate. So I believe this is a very positive trend. I see. So with the lower churn rate, so there's going to be, so with the lower churn rate, will you be able to maintain this trend? Yes, that is, I believe, the basic trend. Well, churn rate is actually flat. So cancellation is coming down. And that has had an impact on that increase. I see. Another question about entity limited. impact from revenue and 20 billion due to change in system. This is a quarterly figure, right? Is that how we should see this number? Yes, Nakayama here. Yes, due to change in system, that's 20 billion for the first quarter on a full year basis, which has been 90 billion, if you will, in terms of the impact from change in the system. Thank you. That's what I wanted to hear. Thank you very much. Thank you, Kinoshita-san.

We'd like to take the next question. For those of you who have questions, please press the hand-raising mark on the bottom of the screen. Are there anyone else who would like to ask a question? No more questions? It seems that there are no questions. So with this, we would like to conclude today's briefing session. Thank you very much for your participation today. Thank you.