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Message to Shareholders and Investors

I predict that the gevolution of the mobile and Internet fieldh will progress rapidly from here. Our company aims to become the gbest mobile conciergeh for customers rather than mere gmobile phone distributors.h


I would like to explain the Bell-Park's performance for the 19th term (Jan. 1, 2011 to Jun. 30, 2011) as well as estimation for the business environment and our decisions.
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I hope things are going well with you. I sincerely appreciate your patronage.
In addition, I would like to express my condolences to the deceased victims of the Great East Japan Earthquake, and hope they rest in peace.
I also would like to express my heartfelt sympathy to the shareholders and others in the devastated areas, and hope these areas will be restored soon.

SOFTBANK MOBILE, which is the mobile network operator for mobile phones handled by our company, has been No. 1 in the net increase of subscribers for 15 consecutive months since April 2010, as giPhone,h giPad,h and data cards, etc. sold well.
In this business environment, in order to increase total sales volume, which is the sum of the number of new subscribers and the number of replacement handsets, we have conducted sales promotion actively, constructed two directly-managed stores and 1 franchised store, and relocated 3 stores to more favorable locations, during the first half of the current year.
Then, among 2,609 Softbank shops in Japan, our company owns 131 directly managed stores and 51 franchised stores, a total of 182 stores.
The two stores in Sendai City, which were temporarily closed after the Great East Japan Earthquake, were reopened in May and June, respectively. Consequently, the number of sales for the first half of the current year came up to 327,265 in total (9.0% increase compared to the same period in the previous year), with 193,687 of new subscribers (9.8% increase) and 133,578 of replacement handsets (7.7% increase). This value is 48.8% of the target total sales volume (670,000) for this fiscal year.
The total sales volume for the first half of the current year increased from the same period of the previous year, and so sales increased. However, since part of commission fees decreased, gross profit was sluggish. Selling, general and administrative expenses increased from the same period of the previous year, because of the significant increase in sales promotion cost due to the fierce competition with other distributors and the augmentation in personnel expense due to the increase in full-time employee ratio for medium to long-term development of sales staff.

As a result of the above, the figures for the first half of the current year are as follows: net sales of 32,442 million yen (13.3% compared to the same period in the previous year), operating income of 1,243 million yen (23.0% decrease), ordinary income of 1,217 million yen (24.6% decrease), and net income of 645 million yen (31.1% decrease).
We expect that the mobile phone field will witness the age of smartphones and smart pads and gthe mobile and internet field will evolveh rapidly. We aim to evolve from a gmobile phone distributorh to the gbest mobile conciergeh for customers.

As for infrastructure, the high-speed service of 3.9G (*LTE), which is just one step short of the fourth generation mobile phones, is about to start. As data communication is increasing steeply, it is important to offload from the 3G line (by increasing base stations and enriching Wi-Fi spots, etc.) and increase communication speed further.
Through the improvement of infrastructure, we believe that anyone will soon be able to read magazines and newspapers, receive lectures, work, and enjoy watching broadcasting by using a smartphone or a smart pad anywhere.
On the other hand, in the field of mobile phone distribution, we expect that merger, acquisition, and competition will occur and a big chance will come for the firms that are excellent in personnel quality, productivity, and finance.

We concentrate on our core business, secure annual profit, improve financial systems, grow steadily, and develop competent personnel. We would appreciate your continued support.

*LTE (long term evolution): the new standard for mobile phone communications


September 2011
President & CEO
Takeru Nishikawa
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