Interim Consolidated Financial
and business Results
ended September 2006

Faith, Inc.
November 22, 2006

11

NoticeThis
Thisdocument
documentand
anditsits supporting
supportingdocuments
documentscontaincontain
forecasts
forecastsof
ofour
our company’s
company’sfuture
futureperformance.
performance.These
These
are
areestimatesestimatesby
bythethemanagement
managementof
ofFaithFaithbased
basedononcurrently
currentlyavailable
availableinformation.
information.There
Therearearepotential
potentialrisks
risksandanduncertainties
uncertaintiesthat
thatmaymayaffectaffectthe
theresults.
results.
PleasePleasebe
beadvisedadvisedthat
thatactual
actualperformance
performancemay
maydifferdiffersignificantly
significantly fromfrom thethe forecast.
forecast.

22

Interim Consolidated Financial Results
ended September 200633

Highlights of Consolidated Financial Result
We continued to achieve high growth in net sales thanks to
the growth of group companies through tie-ups and acquisitions.
Profit decreased due to decline in sales from the ringtone distribution
service of parent company and to upfront investments to create new market.
Profit: million yen
3,000

Net Sales: billion yen
21

Net Sales

2,750
18

2,500

EBITDA

2,250
14

2,000
1,750

11

1,500

Operating
ProfitNet
Income

1,250
7

1,000
750

4

500
250

0

0
-250
-500

Intrim Mar04

Intrim Mar05

Intrim Mar06

Intrim Mar07-4-750-1,000-7- MVNO Businesssees operating loss
of 0.8 billion yen.
The U.S. company
cannot aggregate
P/L with Japan, so
there is no taxsaving effect on aconsolidated basis.
- Extraordinary
losses of 1.0 billion
yen such as
unrealized losses oninvestment
securities, one-time
amortization of
goodwill, loss on
disposal of fixed
assets, etc.

44Interim FY March 2007 Financial Result (by segment)
Contents Distribution Business realize profit in real term
thanks to factors such as acquisition of Giga Networks, Inc.*
Electronic Payment Business (WebMoney) contributes togroup growth in terms of both sales and profit.
*Net Sales1.89billion、EBITDA1.01billion、Operating profit0.28billon（From June to September）(Unit : Million)

Interim
FY Mar
2004

Interim
FY Mar2005

Year-onyearchangeYear-onyearchangeInterim
FY Mar2006

Year-onyearchangeYear-onyearchangeInterim
FY Mar2007

Year-onyearchangeYear-onyearchange4,919

10,521

5,602

113.8%

13,249

2,728

25.9%

20,193

6,944

52.4%

Content-distribution
Services

4,860

5,390

530

10.9%

6,373

983

18.2%

8,502

2,129

33.4%

Service Business

4,315

4,338

23

0.5%

5,376

1,038

23.9%

7,563

2,187

40.6%

License Business

Net Sales

545

1,051

506

92.8%

997

▲ 54

-5.1%

939

▲ 58

-5.8%

Electronic Payment
Business

−

5,127

−

−

6,854

1,727

33.6%

9,890

3,036

44.2%

MVNO Business

−

−

−

−

−

−

−

−

−

−

2,230

−

−

2,330

100

4.4%

2,185

▲ 145

-6.2%

EBITDA

1

Content-distribution
Services
Electronic Payment
Business

−

2,279

−

−

2,263

▲ 16

-0.7%

2,644

381

16.8%

−

▲ 50

−

−

53

103

−

267

214

403.7%MVNO Business

−

−

−

−

−

−

−

▲ 723

2,529

1,909

▲ 620

-24.5%

1,940

31

1.6%

Operating Profit−

644 ▲ 1,296−-66.8%

Content-distribution
Services
Electronic Payment
Business

−

2,016

−

−

1,931

▲ 85

-4.2%

1,305

▲ 626

-32.4%

−

▲ 106

−

−

▲5

101

−

210

215

−

MVNO Business

−

−

−

−

−

−

−

▲ 825

−

−

Recurring profit

2,441

1,939

▲ 502

-20.5%

2,027

88

4.5%

563 ▲ 1,464

Net Income

1,291

1,014

▲ 277

-21.4%

889▲ 125-12.3%▲ 653 ▲ 1,542 −-72.2%55

FY Interim March 2007 Financial Result
for the Content-distribution Service
Operating profit decrease due to decrease in ringtone distribution service of parent company
Net sales and profit Increase with the purchase of Giga Networks
Net sales : million yen

Profit : million yen

8,000

3,000

7,000
2,500
6,000
2,000
5,000
4,000

1,500

3,000
1,000
2,000

ServiceBusiness
LicenseBuisness
EBITDA
Operating
Profit

500
1,000
0

0
Interim FY Mar Interim FY Mar Interim FY Mar Interim FY Mar
2004
2005
2006
2007

66

FY Interim March 2007 Financial Result
for the Electronic Payment Business
Net Sales : billion yen

Profit : million yen

10

280

9

250

8

220

7

190

6

160

5

130

4

100

3

70

2

EBITDA

40

1

10

0
-1

Net Sales

FY04 中間

FY05 中間FY06 中間Operating
Profit

-20

-2

-50

-3

-80

-4

-110

-5

-140
77

Growth Strategy

88Changes in the business environment in Japan
Content market steadily expands accompanying the diffusion of 3G communication
system. The ringtone market, the source of Faith’s earnings, matures.
Number of mobile phone subscribers

Mobile content market( 1 million contracts)(1 billion yen)

100

350

90

300

80
250

70
200

60
50

150

40
100

30
20

50

10

0

0FY01

2002
FY02

FY03

Total number of handsets

FY04

FY05

3G handsets

2003

Ringtone molody related
Mobile games

2004

2005

Chaku Uta related
O ther99

Growth Strategy for Domestic Contents Distribution Service
Priority Issue
Accelerate Rigthts (copyrights of contents) Creation and Expansion of User Reach

User reach

RightsDistribution infrastructure(Platform)

Video
Joint venturewith Amuse
Group

Music
Tie-up with
Taito,
Information
SquareEnix

Users

TV
Internet
Mobile phones
etc.

(More than 10 mil.)

Platform Solution

Game

Tie-up with
Yoshimoto
Kogyo

Platform technology

10
10Highlights of Business Development
during FY March 2007 (1)Service● Acquired business rights of Giga Networks, No. 2 company in imode ringtones with roughly 3 million paying members, at 12.0
billion yen.
● Strengthened alliance with Yoshimoto Kogyo. Giga Network
increases capital through third-party distribution. Shareholder
composition after capital increase:
Faith: 95.4% Yoshimoto Kogyo: 4.6%
● Established Brave Inc., a jointly invested company by FaithGroup, Taito, and Square Enix, involved in production & digital
distribution of audio/visual software.
● Brave Inc. achieves operating profit in 6 months after
establishment.
● Established Desperado Inc., a joint venture with Amuse Group,etc., involved in production & digital distribution of video products
such as movies.
● Reached the alliance agreement with CROSSWARP Inc., andmoved into the performance-based marketing business for online
games market.
● Decrease in both sales and profit of parent company due todecrease in demand for ringtone distribution service.
● AnyMusic (China) receives Highest Revenue Award at the Bravo
for BREW 2006 held in China.
● Digiplug (France) achieved operating profit in the first half of thisfiscal year.

1111

Highlights of Business Development
during FY March 2007 (2)LicenseElectronic
Payment

MVNO● Announced digital rights management technology for Intel®
ViivTM technology (applied for patented)● Technology Development Prize awarded by the AcousticalSociety of Japan● Formed alliance with InterVideo, Inc. and launched collaborative
marketing for the provision of licenses and related solutions inJapan and Europe.
● Launched WebMoney sales at Seven Eleven (bill receipt atconvenience stores)● Making use of its technology and know-how in electronic money,
actively supported other companies such as supporting theissuance of independent brand electronic money.

● Launched trial operation in the Los Angeles area (USA) for“Voce”● Expand trial operation area in San Francisco and Las Vegas

1212Subjects to be solved for further growth (1)zAcquire “Rights*” through tie-ups with leading companies etc.
- Production, Acquisition, and Publishing of rigths if necessary
as well as tie-ups

zExpansion of User Reach
zStrengthen efforts in free content distribution service
relying on advertisement revenue

ServicezMaintain and improve profitability of ringtone
distribution service- Develop high value-added next generation services making
good use of the user reach of 10 million users, one of the largest
in Japan- Curb running cost (distribution operating, server management, etc.)
by exploiting economy of scale*Rights ; copyright of content

13
13

Subjects to be solved for further growth (2)LicensezEarly commercialization of digital rights management technology
Promotion of dissemination and establishment of business scheme
through tie-up with major companies such as Intel, Inc.
zStrengthening licensing of sound source technology toforeign manufacturers of mobile phones

Electronic
PaymentzReinforcing relationship with leading digital affiliations suchas strengthening ties with other payment methods
zReinforcing partnership with Internet-service companies
such as supporting the issuance of individual brand electronic
money

MVNO

zQuick full launch of business and expansion of subscribers

ManagementzBusiness expansion through promotion ofgroup management and effective and efficient management
throughout the Group1414

A New Approach for Content Distribution
Service in Japan

15
15

Strengthening strategic alliance with Yoshimoto Kogyo Group
Creating new video and audio distribution markets•Yoshimoto Kogyo’s content planning and creating abilities, marketing abilities, and brand strength•Viiv™ technology, the core to Intel® digital home concept•Faith’s authentication technology and know-how of server operation•Faith Group’s 10 million users, including Giga Networks’ 3 million paying members

Expansion of business tie-up on the occasion ofcapital tie-up with Yoshimoto Kogyo
・Open comedy movie site “Odekake Sho Room” onmobile distribution service”GIGA Rainbow”
・Expand the Yoshimoto “Sho” (Comedy) Room・Planning for linking digital broadcast, such as
one-seg, to mobile phone distribution services
Linking celebrities’ events to mobile phone
distribution services
・Joint planning for block distribution services formobile phones, personal computers, and TVs using
Faith’s authentication technology
ZZZ.TV, an entertainment distribution company created jointly by Faith,
Yoshimoto Kogyo, and Intel, implements free content distribution service
compatible with Viiv™ technology.

16
16

Creating New Music Distribution

Creating Digital Label

Expanding Digital Channel

1717

Launch of Production & Digital Distribution of Movies (1)Established Desperado Inc. to create a new movement that will
revolutionize the scheme for the distribution of video contents.
zEmphasize Human Resource (Software) and Planning (Know-how)
Improve the quality of contents and establish an environment that nurtures and keep talented
creators by providing appropriate incentives for the contributions by members in-house andoutsidezEstablish new distribution system for video products regardless of distribution platform
zProduce quality video and music such as TV programs, CM, and music
focusing on movies, and launch video business that maximizes property rights

Movie Production
Pl
BusinessanPlanning/Production ofJapanese Movies

Video buying
Business

Contents Investment
Business
Fee for managing companies
Dividing profit

Fee-based businessbased on rights acquisition andmanagement ofvideos with a focus on
foreign movies

Promotion/Distribution
New Distribution StrategyniEstablish new publishing system andscheme for distribution
ng
/

Pr
od
uc

tio

n

of

Co

nt
en
t

s

TV/Distribution
PV* Production Business
Planning/Productionof videos other than movies*PV：Promotion Video18
18

Launch of Production & Digital Distribution of Movies (2)List of movies by Desperado Inc.
●Advertisement“Abduction: The Megumi Yokota Story”(Japanese premiere on November 25)●Funding Production“Heat Island” “Phoenix” “Little DJ”(All released in 2007)●Purchase“My Date with Drew” (Premiere on December 16)“My Date with Drew”“Abduction: The Megumi Yokota Story”（C） Safari Media LLC 2006

19
19

Medical Information Service
Mobile phone service for “immediate” medical support
in an emergency “anytime” and “anywhere”

Quickly and simply access the service
24 hours a day through finger touch
Search for hospitals

Search fordisease name

Search fora pharmacy

Examine treatments

Recordhealth conditions

Choose over-thecounter medicine

using mobile phone and GPS function

Launch of the service in this fall

20
20

Providing information and promotion service for online games〜Creating an affiliate advertising market where fees are basedon results〜
Promotion site that provides the official videos, news, blogs, strategic
information, and original product presents of online game companies
for free and attracts the registration of new members

2121Overseas Content Distribution Service

22
22Potential of the Overseas Market
Diffusion of mobile internet will lead to further growth(Million people)

Diffusion of mobile internet connection service (based on Faith Inc. research)

700

600

500

Diffusion
Diffusion ofof mobilemobileinternetconnection
internet connection
serviceservice

400

Subscribers
300
45%
44%
200
60%

Users of Internet
connection service

64%

92%
100
44%
0
Japan

China
and
Korea

Oceania

North
South
America America

Europe23
23

Global Expansion of Content Distribution
Overseas contents distribution service steadily expanding●Digiplug (France) achieved operating profit in first half of the year
●AnyMusic (China) received Highest Revenue Award at the Bravo for BREW 2006

EuropeEurope

Asia
Asia

Japan
Japan

U.S.A.
U.S.A.

SouthSouth
Amercia
Amercia

Digiplug

AnyMusic

Faith

Moderati

TakeNet24
24

License Business

25
25

Creation of New Audio & Video Distribution Mechanismwith New DRM* technology〜To make New DRM the second pillar for license businessin addition to sound source technology 〜
DRM (Digital Rights Management) technology for Viiv™ technology by Intel ®
Promotion of business development with Viiv™, which is thecore technology of the digital home concept promoted by Intel®
Content
providerPurchase of viewing rights
through the mobile service

ZZZ.TV

Home

Friend’s home

At restaurants*DRM: digital rights management

Proof of rights holderusing short-range
wireless such as wireless
LAN and FeliCa

On the mobile
In the car

26
26

Mobile Users Throughout the World
Around 1.9 billion mobile users

3G(WCDMA+
cdma2000)
3%

TDMA
5%

CDMA
15%

Analog
5%

Japan’s Share in theworld is around 4%

Future important target

Grow
th
trend

1.9
billionpeopleQualcomm chips, which include Faithsound source software, practicallymonopolize the market

GSM
72%
Source: Faith Inc. research2727Volume of Shipments of Semiconductors for
Mobile Using CMX
32,00030,00028,00026,000China

24,00022,00020,00018,000U.S.A.

16,00014,00012,00010,000

Japan

8,000
6,000
4,000
2,000
0
Dec-01Moderati
Moderati
Launched
Launched
Modtones
Modtones

Dec-02

U.S. Mobile
Content
Market Growth

Dec-03

Dec-04

Dec-05CMX
28
28

Electronic Payment Business〜Prepaid Electronic Money “WebMoney”
for network〜

29
29

“WebMoney” ’s Target Market
Online GameMusic Distribution

90% implementation ratio in domestic
paid-for game sites

90% implementation ration in domestic
music distribution sites

WebMoney

Payment share

WebMoney

Payment share

Other method

Other method

30%

40%
60%

70%

WebMoney: 30％

WebMoney: 60％
（億円）

（億円）

Online games

2,500

Music distribution

600

500

2,000

400
1,500

Projected market size in2010 is ¥237 billion.
Source: Nomura ResearchInstitute’s IT market
Navigator 2006

1,000

500

300

200

100

0
'04

'05

'06

'07

'08

'09

Projected market size in 2010is ¥57 billion.
Source: Nomura ResearchInstitute’s IT market Navigator
2006

'10

30
30

0

'04

'05

'06

'07

'08

'09

'10

Trend in the Monthly Settlement Volume of “WebMoney”●Achieved continued high growth due to increase in demand for online
games and music distribution●Actively promote cooperation with other companies by making good use oftechnology and know-how of electronic money
1200

1000

800

600

400

200

0
Mar-02Mar-03Mar-04(note) March 2002 is 100 for the index

Mar-05Mar-0631
31

ＭＶＮＯ Business32
32

MVNO Businessthe first mobile phone service only for wealthy classes in the world□ 24-hours-a-day call center service□ Visits by assistants (emergency response for damage, losses, and thefts)□ Providing high end terminal such as Motorola/Nokia、
free annual replacement□ Unlimited domestic calling and attractive international calling rates□ Concierge service such as travel services

33
33

Launch of MVNO Business
Efforts toward full and early launch■Reinforce data communications service “Voce Pocket”
Newly establish Voce’s portal website for Voce users to enjoy
communication,
Information, entertainment etc.
■Establishing an efficient and effective marketing system-Sales agency contract with retail stores targeting the wealthy such as
Neiman Marcus and Kitson- Direct marketing targeting the wealthy class within service region- New membership campaign until the end of the year
(Admission: $1000 → $500; Monthly fee: $400 → $200)

Business deployment scheduleMay 2006
Started trial operation in the Los Angeles area
November 2006
Expand trial operation area to San Francisco and
Las Vegas
Around end of 2006 Expand data service and full launchStart expansion into major cities throughout the USA
2008
Reach breakeven subscribers
2009
Achieve profit in operations

34
34

FY March 2007 Financial Projections

35
35

Sales & Earnings Projections
Purchase of Giga Networks, expansion of the electronic payment business, andactive promotion of business tie-ups will greatly increase net sales.
Operating profit will decrease due to the decline in sales from the Japanese ringtone
distribution service of parent company and the failure of MVNO Business inadequately absorbing upfront investments by business expansion.
Profit：Billion Yen

Net Sales：Billion Yen

6.0

50

EBITDA

5.4
4.8

40

4.2
3.6

30

3.0
20

2.4
1.8

10

1.2
0.6

0

0.0
-0.6
-1.2

Net Sales

FY Mar 04

FY Mar 05

FY Mar 06

FY Mar 07(Projection)-10

Operating
ProfitNet
IncomePurchase Giga
Networks seesbusiness rightamortization of 1.7
billion yen- MVNO Business sees
operating loss of 1.4
billion yen
The U.S. company cannot
aggregate P/L with Japan,
so there is no tax-saving
effect on a consolidated
basis.
- Extraordinary losses of
1.0 billion yen such as
unrealized losses oninvestment securities,
one-time amortization of
goodwill, loss on disposalof fixed assets, etc.

36
36

FY March 2007 Financial Projections by Segment
Increase in sales and profit for Contents Distribution Business with the purchase of Giga Networks*
and launch of Brave. Electronic Payment Business will also contribute greatly to growth.
*Net Sales4.63billion、EBITDA2.49billion、Operating profit0.57billon（From June to March）(million yen)

Year-onYear-onyear change year change(%)（Amount）

FY Mar2004

FY Mar2005

FY Mar2006

FY Mar2007

14,671

23,62830,04043,325

13,28544.2%

10,29911,55014,04018,687

4,647

33.1%

Service Business

8,951

9,166

10,832

16,952

6,120

56.5%

License Business

1,348

2,384

3,207

1,735 ▲ 1,472-45.9%

Electronic Payment
Business

4,084

11,724

15,106

21,070

5,964

39.5%

MVNO Business

−

−

−

−

−

5,728

4,712

4,630

4,182

▲ 448

-9.7%

Content-distribution
Services
Electronic Payment
Business

5,628

4,729

5,033

5,499

466

9.3%

43

▲ 19

235

573

338

143.7%MVNO Business−−▲ 622 ▲ 1,924 ▲ 1,302

−

5,115

4,017

3,391

784 ▲ 2,607-76.9%

Content-distribution
Services
Electronic Payment
Business

5,133

4,152

4,029

2,468 ▲ 1,561-38.7%

▲ 30

▲ 136

119

MVNO Business−−

Net Sales
Content-distribution
Services

EBITDA

Operating Profit

91

460

341

▲ 706 ▲ 2,129 ▲ 1,423

286.6%−

37
37

Growth targets for the Faith Group
Faith Group
10 million end-users
E-learning¥129.0 billion

Music distribution¥57.0 billion

E-commerce¥5.6 trillion

Video distribution¥156.0 billion

Online games¥237.0 billion

Internet advertising¥643.0 billion

Internet
80 million people
Television
97 million people
Broadband
22 million people

Mobile90 million
peopleMobile Internet
80 million people

CATV
8.2 million people

BS broadcasts
6.3 million people

CS broadcasts
10 million people

Car navigation
10 million people
38
38
User numbers are based on Faith Inc. research; Projection of market size in 2010 is based on Nomura Research Institute’s IT Market Navigator 2006

Growth throughout the groupby promotion of group management

Faith
Technologies

AnyMusic

Brave

WebMoney

Desperado

Paris

San Francisco
Los Angels

Tokyo
Kyoto
Shenzhen

Faith
Belo Horizonte

Digiplug
Moderati

MedicalGoodyPoint

Communication

GIGA
NETWORKS

Faith
Communications

TakeNET

39
39

Appendix

40
40

FY March 2007 Financial Projections（Comparison with initial projection)(million yen)
Year-onYear-onInitial
Revisedyearchangeyear
changeProjection Projection（Amount）(%)

45,44343,325 ▲ 2,118-4.7%

21,15818,687 ▲ 2,471-11.7%

Service Business

17,935

16,952

▲ 983

-5.5%

License Business

3,223

1,735 ▲ 1,488-46.2%

21,01721,070

53

0.3%

1,067

92

▲ 975

-91.4%

5,997

4,182 ▲ 1,815-30.3%

7,494

5,499 ▲ 1,995-26.6%Net Sales
Content-distribution
Services

Electronic Payment
Business
MVNO Business

EBITDA
Content-distribution
Services
Electronic Payment
Business
MVNO Business

Operating Profit
Content-distribution
Services
Electronic Payment
Business
MVNO Business

Recurring profit
Net Income

614

573

▲ 41

-6.7%

▲ 2,252 ▲ 1,924

328-14.6%

2,556

784 ▲ 1,772-69.3%

4,550

2,468 ▲ 2,082-45.8%

492

460

▲ 32

-6.5%

▲ 2,482 ▲ 2,129353-14.2%

453 ▲ 1,774-79.7%

268 ▲ 1,083 ▲ 1,351

ー

2,227

Main Reason for Revisions

Delay in business launch due to time gaps
in the starting of new domestic contents
distribution service other than ringtones.

Full launch delayed from autumn this year
to the end of the fiscal year.
Downward revision in net sales
Decrease in net fare due to time gaps infull launch
Decrease in EBITDA

Unrealized losses on investment securities,
one-time amortization of goodwill,loss on disposal of fixed assets, etc.

41
41

Quarterly Net Sales
for the Service Business

Net Sales : million yen

4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0

FY03
FY04
FY05
FY06

FY06
FY05
FY04
FY03

1Q

2Q

3Q

4Q

Note: Quarterly estimates manage and disclose only accumulative figures. To understand trends differences inaccumulative figures are made into graphs as shown in the figures of 2Q, 3Q, and 4Q.

4242

Quarterly Net Sales
for the License Service
Net Sales : million yen

FY03
FY04
FY05
FY06

1,600
1,400
1,200
1,000
800
600
400
200
0

FY06
FY05
FY04
FY03

1Q

2Q

3Q

4Q

Note: Quarterly estimates manage and disclose only accumulative figures. To understand trends differences inaccumulative figures are made into graphs as shown in the figures of 2Q, 3Q, and 4Q.

43
43

Quarterly Net Sales
for the Electronic Payment
Net Sales : million yen

FY03
FY04
FY05
FY06

6,000
5,000
4,000
3,000
2,000

FY06
FY05
FY04
FY03

1,000
0

1Q

2Q

3Q

4Q

Note: Quarterly estimates manage and disclose only accumulative figures. To understand trends differences inaccumulative figures are made into graphs as shown in the figures of 2Q, 3Q, and 4Q.

4444

Consolidated Balance Sheet
Intangible assets, liabilities with interest, and total assets will greatly
increase with the purchase of Giga Networks at 12.0 billion yen whereacquisition funds were procured by external loans.
End of September 2006

End of March 2006

(billion Yen)

Short Term Debt 6.1(billion Yen)
Current Liabilities

Current Liabilities9.2

Total Debt
11.6

15.5
Current Asset 17.6

Fixed liabilities2.4
Current Asset 14
Tangible Asset1.2
Intangible Asset 4.5

Total Debt
23.8

Long term Debt 7.0

Capital Stock 3.2
Capital Dtoclk3.2
Paid in Capital
Paid in Capital 3.2
Tngible Asset 1.3
Intangible Asset 14.6
Accumulated Income

Fix Asset 17.5

Shareholder’s equity 9.9

Total Asset 31.5

Fix Asset 23.6

Accumulated
Income 8.5
Shareholder’s equity 17.4

Total 41.2

45
45

Highlights of Financial Result(Parent Company)
Profit: billion yen
26

Net Sales: billion yen
50

24
22
40

20
18

Net Sales

16

30

14
12
20

10

Operating
ProfitRecuring
ProfitNet Incom

8
6

10

4
2
0

0
Interim FY Mar04

Interim FY Mar05

Interim FYMar06

Interim FY07
46
46

Interim FY March 2007 Financial Result(Parent Company)
(百万円)
百万円)

Interim Year-onFY Mar year change
2007 （Amount）

Interim
FY Mar
2004

Interim
FY Mar2005

Year-onyearchangeYear-onyearchangeInterim
FY Mar2006

Year-onyearchangeYear-onyearchangeNet Sales

4,917

4,687

-230

-4.6%

4,558

-129

-2.7%

4,014

-544

-11.9%EBITDA

ー

2,224

ー

ー

2,143

-81

-3.6%

1,307

-836

-39.0%

2,529

2,100

-429

-16.9%

1,993

-107

-5.0%

1,147

-846

-42.4%

2,441

2,134

-307

-12.5%

2,109

-25

-1.1%

1,119

-990

-46.9%

1,224

-230

-15.8%

1,233

9

0.7%

114

-1,119-90.7%

Operating
ProfitRecuring
Profit
Net income

1,454Year-onyearchange47
47

Amortization of Goodwill（million yen）

FY Mar 04

FY Mar 05

FY Mar 06

Interim
FY Mar 07

FY Mar 06(Plan)

WebMoney

51

82

82

41

82

Digiplug

221

239

−

−

-

TakeNet

−

−

531

266

531

Faith Communications

−

−

63

63

126

Goody Point

−

−

39

39

39

GIGA Networks

−

−

−

708

1,771

Cyber Plus

−

−

−

109

217

1,226

2,766

Total

272

322

715

● For Digiplug, the ¥1,936 million balance was amortized in FY Mar05 (recorded as extraordinary loss)● For GoodyPoint, the ¥308 million balance was amortized in Interim FY Mar07(recorded as extraordinary loss)

48
48

Business Model of
Prepaid Electronic Money “WebMoney”
WebMoney

Outlet Store
Selling WebMoney

Affiliate
Store

Credit amount of settlement
Purchase
WebMoneyContract
Shopping using WebMoney

Providing service, product / Download

Paid by WebMoney

Affiliated Store’s Web Site

User
49
49

MVNO Business – Present MVNO Market Conditions
Number of mobile phone subscribers in 2005
Of which wereMVNO market size
MVNO subscribers
Global

1.9 billion people

63 million peopleー(+25% year-on-year)
U.S.

0.19 billion people(diffusion rate of60%)

14 million people

US$ 1.9 billion(Source: Pyramid Research, Diamondcluster)
MVNO subscribers are expected to reach 100
million globally in 2010
Projections for US MVNO market in 2010

Large-scale
MVNO
29 million peoplez Subscribers to reach between 30 and 35 million, and a market
size of 11 billion US dollars.
z Of which between 25 and 29 million will be large-scale MVNO,
and both medium and small MVNOs are expected to capture
2.5 to 3.0 million.

MediumMedium-scale
MVNO
3 million

SmallSmall-scale
MVNO
3 million(Source: Diamondcluster）
50
50