KDDI delivered a strong start to FY2027 as rising mobile revenue, higher ARPU, subscriber growth and lower churn combined with rapid expansion in AI integration, cybersecurity, cloud and data centers.
For the April-June 2026 quarter, KDDI’s operating revenue increased 5.1 percent to ¥1.4873 trillion from ¥1.4157 trillion.
Mobile services, financial services, devices, AI integration, cybersecurity and data centers contributed to KDDI’s growth as the Japanese telecom operator expands beyond connectivity into digital infrastructure and enterprise technology.
KDDI Mobile Revenue Rises 4.6% to ¥491.5 Billion
Telecom Core remained KDDI’s largest operation, with revenue increasing 3.4 percent to ¥1.0837 trillion from ¥1.0479 trillion. Within the segment, mobile communication revenue climbed 4.6 percent to ¥491.5 billion from ¥469.8 billion.
Telecom Core operating income increased 19.5 percent, or ¥34.4 billion, to ¥210.7 billion. Higher mobile communication revenue contributed ¥18.0 billion to profit growth.
KDDI’s Telecom Core encompasses its au, UQ mobile and povo brands as well as smartphone sales and FTTH/CATV broadband services. Its strategy centers on increasing customer Life Time Value while using AI to enhance network quality and operational efficiency.
KDDI Mobile ARPU Climbs 3.8% to ¥4,400
Improving customer economics were visible in KDDI’s mobile KPIs. Mobile ARPU increased ¥160, or 3.8 percent year on year, to ¥4,400, compared with ¥4,240 in FY2026-03 Q1.
KDDI linked the improvement to steady subscriber growth for offerings including the au Value Link Plan and Komi-Komi Plan Value, supporting its strategy of competing on service value and increasing customer lifetime value.
Smartphone Subscribers Reach 33.30 Million, Churn Drops to 1.17%
KDDI’s smartphone subscriptions reached 33.30 million in June 2026, an increase of 390,000 year on year from 32.91 million.
The subscriber base increased sequentially from 32.91 million in June 2025 to 32.93 million in September 2025, 33.00 million in December 2025, 33.23 million in March 2026 and 33.30 million in June 2026.
Smartphone churn improved by 0.06 percentage points year on year, falling to 1.17 percent from 1.23 percent. Churn was 1.21 percent in FY2026-03 Q2, 1.23 percent in Q3 and 1.48 percent in Q4 before declining to 1.17 percent in FY2027-03 Q1.
KDDI attributed the improvement to its mobile structural transformation, while its strategy to attract younger customers and win subscribers from competing operators also supported momentum.
The difference between UQ mobile-to-au migrations and au-to-UQ mobile migrations improved 70 percent, strengthening KDDI’s efforts to move customers toward its premium au brand and extend contract duration.
KDDI 5G SA Coverage Tops 90%, Fast Lane Users Exceed 3.1 Million
KDDI is strengthening network differentiation as part of its ARPU and retention strategy. 5G Standalone population coverage exceeded 90 percent as of the end of March 2026, while cumulative users of au 5G Fast Lane exceeded 3.1 million as of July 14, 2026.
International roaming for au Starlink Direct is available in the United States and Canada, with availability in four countries planned within 2026. The au Starlink Direct SOS service has offered 24/7 relaying of SOS information from out-of-coverage areas since May 28, 2026.
KDDI’s UQ mobile proposition is also gaining traction. The UQ Komi-Komi Otoku Discount offers 35GB per month, and following the initiative, Komi-Komi Plan Value selections increased approximately 2.1 times, while the au PAY Gold Card selection rate increased approximately 1.6 times.
Povo also recorded stronger customer activity. New MNP subscriptions from other carriers increased approximately 4.4 times following the launch of new toppings, while Giga Charge card sales increased approximately 4.3 times from FY2026-03 Q1.
AI and Cybersecurity Revenue Surges 19.2%
KDDI is expanding AI-related products and combining telecom, devices, Lawson and digital services to increase customer lifetime value.
KDDI’s Business Growth operation recorded the fastest segment revenue expansion, rising 11.7 percent to ¥165.2 billion from ¥147.8 billion.
All five Business Growth areas recorded higher revenue and income. AI Integration/Cybersecurity revenue surged 19.2 percent to ¥47.2 billion from ¥39.6 billion, while Connected Solutions revenue increased 14.6 percent to ¥24.3 billion from ¥21.2 billion.
KDDI is focusing on expanding its cloud foundation for AI integration and building overseas connectivity data center capacity to capture growing demand for AI inference infrastructure.
AI Cuts Customer-Support Response Time to 30 Seconds
KDDI is deploying AI internally as well as selling AI services to enterprises. Its au Sales Support AI was rolled out to approximately 2,000 au stores in July 2026.
The system handles an environment generating approximately 200,000 internal inquiries per month, with inquiries to human support halved. Response time has been reduced to around 30 seconds with AI, versus 128 seconds for human chat and 259 seconds by phone.
KDDI is also applying AI to governance, introducing an AI system for credit screening and an anomaly-detection tool using financial data.
KDDI Invests ¥155.91 Billion in Property, Equipment and Intangible Assets
KDDI’s financial statements show ¥82.997 billion in purchases of property, plant and equipment during the April-June quarter, down from ¥88.255 billion a year earlier. Purchases of intangible assets increased to ¥72.913 billion from ¥66.291 billion.
Together, these two investment categories amounted to approximately ¥155.910 billion, compared with ¥154.546 billion in the previous-year period. These figures provide an indication of KDDI’s infrastructure investment, although the company does not label the ¥155.91 billion combined figure as Capex in the quarterly disclosure.
KDDI’s investments support mobile networks, broadband, cloud, AI infrastructure and data center expansion. Its All-Photonic Network initiative is targeting approximately 60 percent lower power consumption compared with the conventional network design, while connecting data centers with low latency.
KDDI maintained its outlook for the fiscal year ending March 31, 2027, targeting ¥6.410 trillion in operating revenue, up 5.6 percent.
BABURAJAN KIZHAKEDATH