Business briefing materials etc.

December 1, 2021: Presentation for institutional investors on Enterprise Internet Connectivity Services

Summary of the Briefing

At the briefing, we talked about enterprise Internet connectivity services, core service of IIJ, and its critical asset of Internet backbone.

Speakers:

Hajime Shironouchi, Executive Office, Division Director of Network Division

Questions and Answers

Question: Please explain how you have been able to manage your cost related to Internet backbone when you are continuously expanding it. Please also provide a comment about the future outlook for the cost.

Answer: Due to technology advancement, capability of network equipment continues to improve which is reflected in our stable depreciation cost and CAPEX. Also, as an independent and large Internet Service Provider, we can have sales discussion with multiple carriers when purchasing new lines. Through these kinds of initiatives, as an independent and large ISP, we believe we can continue to have stable cost increase while expanding the backbone network itself.

Question: In page 16 of the presentation,you mention 4 different types of clients for your enterprise Internet connectivity services. Is there any difference among them such as how much they contract for bandwidth?

Answer: While type 2 category depends on each client, for type 1 of general enterprise, generally speaking they sign up for 1 Gbps while category 3 of ISPs and Cable TV operators and category 4 of gaming companies, contents holders, and CDN venders sign up for much larger scale like 100Gbps as we provide them transit.