ENVALITH
日本通信株式会社 logo

Japan Communications Inc.

9424・Prime Market・Information & Communication

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日本通信株式会社 logo
Japan Communications Inc.9424

Business

Nihon Tsushin Co., Ltd. (Japan Communications Inc.) operates under the mission of "Carrying bits safely and securely," running an MVNO/MVNE business (Nihon Tsushin SIM and bmobile brands) utilizing the mobile communication networks of NTT DOCOMO and SoftBank, a Mobile Solutions business for corporations and partners (MSP Business), and a digital ID and authentication infrastructure business (FPoS Business) leveraging its proprietary patented FPoS technology. Its main customers are individual users (947 thousand lines as of the end of March 2026), corporate partners such as businesses, financial institutions, and payment agents, and financial institutions in the US market. The group operates its business through 6 consolidated subsidiaries and 1 equity-method affiliate, and has achieved profitability for 5 consecutive fiscal periods since FY2022 (ending March 2022).

Business Model

The main revenue source is a monthly recurring-charge model of unlimited/semi-unlimited voice plans centered on Nihon Tsushin SIM, representing a stock-type model in which subscriber growth directly drives sales. Following the 2020 arbitration ruling by the Minister of Internal Affairs and Communications, wholesale voice fees from NTT DoCoMo were rationalized, establishing a structure in which subscriber growth directly translates into revenue while securing a certain gross margin. In addition, the company is diversifying its revenue base through the Mobile Solutions (MSP Business), which provides dedicated mobile lines and SIMs for local 5G to corporate and partner clients, as well as digital certificate and digital ID authentication services leveraging FPoS (FinTech Platform over SIM) technology.

Company Strengths

Under the June 2020 ruling by the Minister of Internal Affairs and Communications, the voice wholesale rate from NTT DOCOMO was set at "an amount not exceeding the appropriate cost under efficient management plus an appropriate profit," establishing a cost structure capable of competing with MNOs. The company achieved operating profit for 5 consecutive periods from FY2022 (ending March 2022) through FY2026 (ending March 2026), with revenue expanding from ¥4,634 million to ¥11,634 million.

Nihon Tsushin SIM was ranked No.1 overall in the MVNO category of J.D. Power Japan's "2025 Mobile Phone Service Customer Satisfaction Study" for 2 consecutive years. High ratings for communication quality, reasonable pricing structure, and procedural support have underpinned continuous growth in the number of contracted lines, reaching 947 thousand lines as of the end of March 2026.

FPoS (FinTech Platform over SIM) is the company's proprietary patented technology, which has been recognized by the Financial Services Agency as contributing to ensuring the safety and improving the convenience of financial transactions. my FinTech Co., Ltd. obtained certification for specified certification business under the Electronic Signature Act in November 2021, and as of the end of March 2026, has built up a track record of 127,646 electronic certificates issued and cumulative settlement amounts exceeding ¥5.0 billion in regional payments utilizing FPoS.

ENVALITH's Perspective

In FY2026 (ending March 2026), the company achieved solid revenue growth with sales of ¥11,633 million (up 25.9% year on year), while cost of sales increased 33.8%, outpacing revenue growth, causing the gross profit margin to decline from 47.8% to 38.0%. SG&A expenses also expanded to ¥3,280 million (up 13.9% year on year), and the operating margin declined slightly to 9.7% (from 10.4% in the prior period). Bond interest expense (¥29,692 thousand) and amortization of bond issuance costs (¥4,822 thousand) associated with the issuance of bonds to fund approximately ¥6.5 billion in total initial investment for Neo Career pushed up non-operating expenses, and the upfront investment phase is expected to continue from FY2027 (ending March 2027) onward.

Net income attributable to owners of the parent decreased 10.1% to ¥763 million from ¥849 million in the prior period. The primary cause was the recognition of a ¥215 million impairment loss on business assets at my FinTech Co., Ltd., the subsidiary responsible for the FPoS (FinTech Platform over SIM) business, which has continued to post operating losses in recent years. While the FPoS business has expanded its track record through the accumulation of electronic certificate issuance volumes and expansion into regional payment and financial institution use cases, monetization remains at an early stage, and investors need to carefully assess the timing and scale of future profit contribution.

The approximately ¥6.5 billion in initial investment funds for Neo Career has been fully raised through the issuance of the 1st to 4th unsecured bonds (limited to qualified institutional investors), underwritten by MUFG Bank, Resona Bank, and Bank of Yokohama. Network construction, connection testing, and operational preparations are underway ahead of the planned service launch on November 24, 2026. If the Neo Career New Service is realized, a fundamental change in the revenue structure is expected; however, it should be noted that the majority of the ¥3,636 million in cash flow from financing activities consisted of proceeds from bond issuance, and the equity ratio declined from 50.4% to 37.6%.

Growth Strategy

Aiming for ¥65.0 billion in sales in FY2030 through three pillars: transition to Neo Career, FPoS adoption expansion, and strengthening of digital authentication infrastructure

Based on voice/SMS network interconnection with NTT DOCOMO, the company plans to begin providing the new service as Neo Career on November 24, 2026. Fundraising for the initial total investment of approximately ¥6.5 billion has been completed, and network construction, connection testing, and operational setup are underway. The company aims to achieve a smooth migration of the existing 947,000-line customer base through the FPoS-compatible "Nihon Tsushin App."

The "Nihon Tsushin App" is scheduled to be upgraded to support FPoS in June 2026. Adoption is being built up in areas such as regional payment services (Mebuku Pay, Yudepi, etc.) and identity verification for financial institutions (in collaboration with the ChiginNet Network Service). As of the end of March 2026, the number of electronic certificates issued reached 127,646, and cumulative regional payment transaction value exceeded ¥5.0 billion. Accelerating monetization at subsidiary my FinTech remains a challenge.

The company is deploying FPoS-based security equivalent to that of the My Number Card (JPKI integration, HSM private key management, dynamic opt-in) to municipalities, financial institutions, and businesses. Leveraging the SIM authentication technology and authentication infrastructure accumulated at its U.S. subsidiary, the company is also applying this to Neo Career's SIM authentication technology, building a differentiated platform that fuses telecommunications with digital identity.

Based on the mid- to long-term management policy "Vision 2030" formulated in May 2026, the company is promoting dual-pillar growth of the telecommunications services business and the digital trust business. FY2027 (ending March 2027) is positioned as the first year of Vision 2030, with the realization of Neo Career and the expansion of FPoS adoption as the top priorities. The FY2030 targets are sales of ¥65.0 billion and operating profit of ¥15.0 billion.

Last updated: July 19, 2026