Notice Regarding Development of Medium-term Business Planpdf.irpocket.com/C9419/o1Tt/slBE/a9ly.pdf · Sales: JPY 15.0 billion (MIN)–JPY 20.0 billion (MAX) Operating profit: JPY

February 13, 2017

Press Release

Company Name: WirelessGate, Inc.

(Code 9419: TSE First Section)

Location: 5F Tennozu Yusen Bldg., 2-2-20

Higashi Shinagawa, Shinagawa-ku, Tokyo

Representative: Takehiro Ikeda

Founder and CEO

Inquiries: Naoki Sunaga

CIRO and Member of the Board

Corporate Officer

Head of Investor Relations Department

(Phone: 03-6433-2045)

Notice Regarding Development of

Medium-term Business Plan — Medium-term Business Plan: WirelessGate 2020 Vision—

WirelessGate, Inc. (Head Office: Shinagawa-ku, Tokyo; Founder and CEO: Takehiro Ikeda; hereinafter

“WirelessGate”), a wireless broadband service provider, is pleased to announce the development of its Medium-

term Business Plan through the fiscal year ending December 31, 2020.

1. Background for development of Medium-term Business Plan

WirelessGate changed its stock listing to the First Section of the Tokyo Stock Exchange in 2016 and was

selected as one of the 50 candidates for the 5th Corporate Value Improvement Award announced by Tokyo

Stock Exchange, Inc. The award is designed to recognize companies employing management practices

aimed at improving corporate value with a strong awareness of investor perspectives. In addition,

WirelessGate has been selected as part of the “JPX-Nikkei Mid and Small Cap Index.”

Against this backdrop, WirelessGate has been considering the need to develop the Medium-term

Business Plan. In order to present its growth strategies to all stakeholders, WirelessGate has developed the

“Medium-term Business Plan: WirelessGate 2020 Vision”.

2. Overview of Medium-term Business Plan

Period: From January 1, 2017 to December 31, 2020 (four years)

Management goals: Fiscal year ending December 31, 2020 (final fiscal year)

Sales: JPY 15.0 billion (MIN)–JPY 20.0 billion (MAX)

Operating profit: JPY 2.0 billion (MIN)–JPY 3.0 billion (MAX)

Operating profit margin: 13–15%

* For more details about the Medium-term Business Plan, please refer to the following pages.

Based on our management policy of “aiming to realize a more creative society through the provision of

wireless broadband service,” we are committed to increasing corporate value from the medium- and long-term

perspective. We aim to make a broad social contribution by carrying out business focused on creating value

through the construction of a highly independent and transparent governance structure and appropriate

collaborations with various stakeholders. We will continue to endeavor to meet your expectations, and we also

hope that you will continue to support us.

COPYRIGHT (c) WirelessGate, Inc. All Rights Reserved.

Medium-term Business Plan:

WirelessGate 2020 Vision(2017–2020)

February 13, 2017

WirelessGate, Inc.(Code 9419: TSE First Section)


Basic Policy for Medium-term Business Plan

Basic policy

Concentrating management resources into the growing BtoB business (wireless

business domain services) while facilitating the BtoC business, producing stable

revenue

Financial targets

Business strategy

“Aiming to realize a more creative society through the provision of wireless

broadband service”

Sales: JPY 15.0–20.0 billion (up 23–63% vs. 2016 results)

Operating profit: JPY 2.0–3.0 billion (up 60–140% vs. 2016 results)

Operating profit margin: 13–15% (2016 results: 10.2%)

Accelerating transformation of our business portfolio by positioning 2020 as the initial

stage

1

Aiming to improve corporate value in the mid- to long-term while making stable

dividend payments


BtoC Business Strategy (Stable Revenue Business)

External environment

Initiatives

Business strategy

• Securing cost-efficient communications bandwidth

• Ensuring diversification of communications services and peripherals

• Solid establishment of cost-efficient marketing methods

2

• Expansion of Wi-Fi infrastructure

• Restructuring of communications services

• Collaboration with peripheral vendors with high affinity for communications services

• Diversification of sales channels mainly through wholesale of communications

services

• Expansion of communications bandwidth demand in line with enrichment of content

• Diversification of communications demand in line with diversification of devices

and lifestyles

• Intensification of competition due mainly to changes in sales practices of

communications services


• Expansion of Wi-Fi infrastructure

– Expansion of wholesale agreements with Wi-Fi service providers

• Restructuring of communications services

– Restructuring of SIM business

– Review of product lines and further reinforcement of Wi-Fi networks

• Collaboration with peripheral vendors with high affinity for


– Tie-in sale such as “MAMORIO”

• Diversification of sales channels mainly through wholesale of


– Wholesale to communications operators and service providers

Details of BtoC Business Initiatives

3


Sale of “MAMORIO”, the world’s smallest loss

prevention IoT device

Collaboration with Peripheral Vendors with High

Affinity for Communications Services

4


BtoB Business Strategy (Growth Business)

• Development of communications environment for foreign tourists

• Provision of diverse communications services necessary for IoT solutions

• Establishment of partnership to provide various IoT solutions in one stop

External environment

Initiatives

Business strategy

5

• Increase in foreign visitors to Japan including the Tokyo 2020 Olympic and

Paralympic Games

• Emergence of IoT solutions to complement a decline in labor force caused by

population decline and super-aging of the population

• Development of sustainable and free Wi-Fi environment

• Development of secure, high-speed, and large-capacity communications

infrastructure

• Promotion of business alliances including investment


• Development of sustainable and free Wi-Fi

environment

– Introduction of monetization model

• Development of secure, high-speed, and large-

capacity communications infrastructure

– Application of “LTE over Wi-Fi” technology

• Promotion of business alliances including investment

– Strategic investment in companies with potential business

synergies

Details of BtoB Business Initiatives

6


Monetization Model in Wi-Fi Infrastructure Business

7

Location data-linked ad distribution

Delivering information tailored to each user based on local information by using location

information obtained through Wi-Fi connection and DSP*1/RTB*2 technologies

Example)

Connect with free Wi-Fi Data obtained through

Wi-Fi connection is analyzed Ads are delivered based

on information from Wi-Fi

(*1) DSP (Demand Side Platform)

A system for advertisers developed to facilitate the unified management of efforts such as optimizing the delivery of multiple ads and

verifying their effects

(*2) RTB (Real Time Bidding)

Each time an ad is displayed, the system analyzes information such as the users browsing the ad, the page showing the ad, and the

frequency of its display per user. As a result, bidding and delivery can be made available in an auction form only if it is deemed to be

optimal.

Ad distribution

system


Secure, High-speed, and Large-capacity

Communications Infrastructure Using LTE over Wi-Fi

8

Deploy LTE over various communications infrastructure by installing

agent software to node and network sides

LTE

LTE

LTE Network

Services

Agent

software

IoT devicesVarious access technologies

(e.g. Wi-Fi, Ethernet)

Secure communications

environment

Wi-Fi AP

eNodeB

softwareEnabling the development of cost-efficient

communications infrastructure


Strategic Investment in Companies with Business

Synergies

Wi-Fi infrastructure business

IoT business

Cumulative investment:

Approx. JPY 2.0 billion

IoT business

• nCore

• LTE-X

• MAMORIO

• AzurePower

• Liquid

Wi-Fi infrastructure

business

• Fon Japan

• Andeco

• Tangerine

• DIGISURF

• Kansai Broadband

Main investment partners

9


Illustration of Business Growth (Sales)

2016 2020

BtoCBtoC(Wireless

broadband services)

BtoB(Wireless business

domain services)

BtoB

Aiming to achieve

consolidated sales of

JPY 15.0 billion (MIN)–

JPY 20.0 billion (MAX)

10

Business growth driven by the rise of wireless business

domain services


Illustration of Business Growth (Operating Profit)

2016 2020

BtoCBtoC

(Wireless broadband

services )

BtoB(Wireless business

domain services)

BtoB

Aiming to achieve

consolidated operating

profit of JPY 2.0 billion

(MIN)–JPY 3.0 billion

(MAX)

11

Growth in profit driven by the rise of wireless business

domain services


WirelessGate KPI

Wireless broadband

services

Wireless

business

domain services

No. of IDs Unit price

No. of offices Unit price

SG&A

expenses Revenue

12

No. of devices Unit price


WirelessGate as Investment Target

Stable revenue

base

Many growth

opportunities

Improvement of

corporate value

Capital gain

Mid- to long-term

Income gain

13


Mid-term Shareholder Return Policy

Flexible share buyback

+

Focus on DOE

ROE

Expansion of revenue

opportunities using

capital/business alliance

and M&AStable dividend payment

Dividend payout

ratio

Total return ratio

14


ROE Dividend payout ratio

Shareholder Return during Cultivation and

Investment Phases

15

24.6%

40.0%

11.3%

85.7%

FY2016

DOE: 9.8%

FY2017

DOE: 9.7% (investment phase)(cultivation phase)


• Shifted to a company with the audit and supervisory committee (March 2016)

- Of the three members of the Audit & Supervisory Committee, two are outside directors.

• Established the Corporate Governance Basic Policy (May 2016) in line with the application of

Corporate Governance Codes

URL：http://www.wirelessgate.co.jp/en/governance.html

Out of 73 Corporate Governance Code items

“Comply” items: 67 “Explain” items: 6

“Explain” items

• Early disclosure of convocation notice

• English translation of convocation notice

• Listing of reasons for selection of each director in convocation notice

• Development of medium-term business plan

• Disclosure of medium-term business plan

• Board of Directors evaluation

Achieving sustainable growth and improving corporate value

over the medium term

Corporate Governance

16


Management Philosophy

“Aiming to realize a more creative society through

the provision of wireless broadband service”

17


Cautionary Note Regarding Forward-Looking

Statements

The materials and information provided in this briefing contain

“forward-looking statements.” These are based on assumptions

involving current expectations, forecasts, and risks, and involve

uncertainties that may produce results that substantially differ from

statements.

These risks and uncertainties include general domestic and

international economic circumstances, such as general industrial

and market conditions and fluctuations in interest rates and foreign

exchange rates.

WirelessGate, Inc. is under no obligation to update or revise any of

the forward-looking statements included in this briefing upon the

emergence of any new information or future event.

18

Documents

Notice Regarding Development of Medium-term Business Planpdf.irpocket.com/C9419/o1Tt/slBE/a9ly.pdf · Sales: JPY 15.0 billion (MIN)–JPY 20.0 billion (MAX) Operating profit: JPY