OKINAWA CELLULAR TELEPHONE COMPANY

Business Details

Okinawa Cellular Telephone Company is a KDDI-affiliated regional telecommunications operator serving Okinawa Prefecture. It mainly operates Mobile Services (au, UQ, povo), FTTH Services (au Hikari Chura, etc.), and Life Design Services (au Denki). The company consists of the Telecommunications Business (operating revenue of ¥52,291 million) and the Ancillary Business (¥34,057 million), with total operating revenue of ¥86,348 million. As it is a single segment, segment-by-segment disclosure is omitted. Consolidated subsidiaries include OTNet Corporation and others.

Recent Overview

FY2026 (ending March 2026) achieved higher revenue and profit, with higher revenue and profit also forecast for the next fiscal year

In FY2026 (ending March 2026, consolidated), increases in mobile total revenue and device sales revenue drove operating revenue of ¥86,348 million (up 2.4% year on year), operating income of ¥18,693 million (up 5.2%), and net income of ¥13,217 million (up 6.6%), achieving profit growth at every income level. The Ancillary Business fell into an operating loss of ¥115 million. A stock split (1 share to 2 shares) was carried out in October 2025. As subsequent events, the company resolved to cancel 1,875,500 shares of treasury stock (scheduled for May 15, 2026) and to acquire treasury stock up to a limit of 1,700,000 shares and ¥5.0 billion. For FY2027 (ending March 2027), operating revenue is forecast at ¥90,000 million (up 4.2%) and operating income at ¥19,100 million (up 2.2%). Annual dividend is planned at ¥70 per share (an effective increase after adjusting for the stock split, from the equivalent of ¥99 in the prior period).

Key Products

Growth Drivers

• Increase in total Mobile Services subscriptions (driven by multi-brand strategy and improved network quality)
• Expansion of mobile total revenue (growth in both communication revenue and value-added revenue, up 4.2% year on year)
• Increase in cumulative FTTH Service lines (continued facility expansion investment, reaching 132,600 lines)
• Rapid expansion of au Denki contracts (net additions up 104.5% year on year to 4,500 contracts)
• Expansion of Business Solutions sales (explicitly cited as a factor for revenue growth in the next fiscal year's forecast)
• Gradual increase in personal consumption driven by expansion of Okinawa's tourism industry and an overall economic expansion trend
• Rising demand for telecommunications driven by ongoing digitalization across society

Risks

• Intensifying competition in the telecommunications industry (increases in device sales cost of goods and mobile sales-related costs)
• Regulatory change risk, including revisions to guidelines under the Telecommunications Business Act
• The Ancillary Business falling into an operating loss (¥115 million loss in FY2026, ending March 2026) and a rising cost trend
• Slowdown in net additions of FTTH Service lines (3,500 lines, down 27.1% year on year)
• Risk of rising resource prices and economic downward pressure from prolonged U.S. trade policy and geopolitical risks
• Concerns over a slowdown in personal consumption due to rising prices
• Impact of fuel price fluctuations on the electricity retail business (au Denki)
• Possibility that parent company KDDI Corporation could exercise influence contrary to the interests of other shareholders
• Risk of service disruption due to communication failures, natural disasters (earthquakes, typhoons, floods, etc.), or infectious diseases
• Risk of changes in accounting estimates related to the useful life and impairment of fixed assets