1. Basic management policy

The MTI Group understands that creating services required at any given time in this time of constant change and delivering them to every part of the world are of particular importance in the process of create a society in which customers can live more freely and be who they are. Under the vision of “Making the world move a step forward,” we will continue to be our customers’ partner, supporting them in their daily lives, and will contribute to the betterment of future society by providing services that make our customers’ lives more convenient and affluent.

2. Target management indexes

The MTI Group believes that sales growth rate and degree of improvement in operating margin are important management indices. Through the sustained improvement of these indices, we aim to continuously enhance corporate value. In addition, the Group’s policy regarding the total return ratio is to return profits to shareholders targeting a payout ratio of 35% over the medium term.

3. Medium- to long-term management strategy

Our strategy is to use a portion of the stable earnings generated by our content distribution and Real Affiliate business, our main earnings pillars, to invest in fields with high growth potential with the aim of fostering new fields capable of generating steady earnings. At the same time, we will invest in fields expected to have large markets and high growth.
  We will also strive to increase the number of subscribers in new fields amid the rapid growth in the market for smartphone services. Additionally, we will aggressively work to create business opportunities by developing new services targeting smartphones and we will work to realize sustained sales and continuous growth of profits.
  Medium- to long-term management strategies for each contents category are explained below.

a) Improvement in average revenue per user (ARPU) in the content business
With the penetration rate of smartphones reaching a high level, the Company will work to provide services that are easier to use and understand and services that that offer added value that is greater than that of the current services.
  Music, books, comics and video are uniquely popular among customers. That being said, the Company expects that the video-streaming market will continue to grow. To improve ARPU, it is therefore seeking to enhance the lineup of video content through an increase in the number of Hollywood movie titles.

b) Initiatives in the Healthcare-related business
The Company plans to operate the healthcare-related service business from a medium-term perspective, given its strong growth potential and the greater possibility than that in the past, of developing into a stock-type business by providing long-term support according to customers’ life stages.
  The Company provides an array of services related to the medical and healthcare fields and will work to make each service profitable at an early stage. At the same time, the Company will strive to establish services that are convenient for customers by integrating services in which multiple organizations such as medical institutions, dispensing pharmacies, medical checkup facilities, health insurance associations, and local governments collaborate with one another.

4. Issues to address

1) Enhancing technological capacity
Linkage is becoming increasingly sophisticated and complex following the spread of smart services with the use of the cloud, artificial intelligence (AI) and other technologies, APIs for inter-system linkage and other mechanisms. In this situation, we understand the importance of strengthening information security to offer high value-added and reliable services to customers.
  We will therefore establish and implement a management process for quick and accurate responses to cyber security threats. We will also increase the number of professionals with expertise. We will not only develop systems capable of handling personal information but also work appropriately to fulfill legal obligation, creating an environment that ensures the secure and reliable use of services.

2) Enhancing development capacity
In 2020, fifth-generation mobile communication systems (5G) will launch. It is expected to pave the way for higher value-added smart services. We must construct a structure for developing high-quality technologies to win future support from customers.
  Therefore, we will move forward with development approaches that offer a quick and flexible response to changes in technological circumstances. We will focus on the recruitment, education and development of highly skilled professionals to raise the technology level of our development personnel. In addition, we will accelerate offshore development to create a development system that is high in quality and efficiency.

3) Enhancing marketing capacity
Following the sophistication of smart services and an increase in the age range of users, customers’ needs are constantly changing and diversifying. We are aware that it is important to erect a system for analyzing big data to gain accurate insight into such changes and to expand our marketing capabilities for responding to customers’ needs before they arise.
  Therefore, we will continue to reinforce our marketing organization and system as well as personnel education and development by enhancing efforts to secure staff with technical skills and by upgrading our internal training programs. Accordingly, we will continue to improve the marketing ability that gives us strength.

4) Enhancing design capacity
In smart services, technological evolution paves the way for a wider variety of expressions. In the 5G era, we will see service distribution featuring more advanced designs, such as mixed reality (MR) and ultra-high resolution images. We think it is vital to construct a system for offering high quality interaction designs, which will be important for customers in selecting what services to use.
  Therefore, we will pursue designs that will be selected continuously by customers in the 5G era through research activities. We will also work intensively to recruit, educate and train highly skilled personnel to establish a structure for higher quality designs.