[NTT WEST]Attachment 1 Summary of Results@0311 - Telecommunications and ICT Services and Solutions

Attachment 1

Summary of Results

During the six months ended September 30, 2003, the Japanese economy showed evidence of a pick up in overall activity: capital spending grew as corporate earnings recovered thanks to higher exports and progress in capital stock; and personal consumption is back on an upward trend, albeit slow, on the back of rising stock prices.

In the meantime, the telecommunications sector saw the advent of the era of full-fledged broadband services, the number of subscribers topping 11 million in step with the dissemination of the Internet in everyday life, fueled by rapid technological breakthroughs, market demand that is becoming ever more advanced and diverse, and lower rates for broadband services amid intensifying competition among carriers. All this contributed to greater competition for subscribers.

Meanwhile, the contraction of the fixed-line telephone market showed no sign of touching bottom. Between the ongoing shift from fixed to mobile telecommunications and the rapid diffusion of broadband services, the shift from fixed-line telephone to IP (Internet protocol) phone is accelerating, and penetration of IP phone services based on VoIP technology is quickly prevailing.

Amid this extremely difficult competitive environment, Nippon Telegraph and Telephone West Corporation (NTT West) has set about the task of 'turning to a revenue growth trend' and 'continuously achieving profitability' in this strategically important year. In concrete terms, aggressive efforts are being made to expand optical and other broadband businesses, the solution business based on service integration, and the lines of business of the NTT West Group as a whole. Towards the early realization of a 'resonant' communication environment, we are:

(1) Tapping into broadband businesses

i) Greater variety in broadband access services

To satisfy the growing demand for higher throughput, NTT West has added "FLET'S ADSL MORE 24," providing connection speeds of up to approximately 24Mbps (downstream), to its existing three plans for "FLET'S ADSL (MORE 12M, 8M and 1.5M)." Another addition to our menu of broadband access services is an Ethernet VPN service, "FLAT ETHER," which allows users to create an economical private network of connections within a single prefecture at a flat rate.

Following the inter-prefectural connection of regional IP networks in March 2003, designed to extend FLET'S services to enable communications among the three prefectures of Osaka, Kyoto and Hyogo, NTT WEST expanded these services in June 2003 to all the areas it serves (30 prefectures including Toyama, Gifu, Shizuoka and westward).

In March 2003, NTT West began offering time-limited special discounted rates for "B-FLET'S," "FLET'S ADSL" and "FLET'S Communication" services. In July 2003, to boost subscriptions to FLET'S, the "group discount" and "time-limited discount" were extended to "B-FLET'S" service and "FLET'S SPOT" wireless LAN service, respectively.

ii) Richer variety in broadband application services

Extending the area for FLET'S services has allowed customers to use the inter-prefectural services "FLET'S Communication," "FLET'S Square," "FLET'S Group," and "FLET'S Office Wide" within our entire service area, adding greatly to their convenience.

To enhance the appeal of the "FLET'S SQUARE" service, NTT West is striving to distribute to users of FLET'S access services attractive content, in collaboration with influential brands, that makes the most of broadband technology. Among the fruits of these collaborations are: "Disney BB on FLET'S" with The Walt Disney Company Japan and D Wonderland Inc., "Takarazuka on FLET'S" with Hankyu Corporation and The Takarazuka Revue Company, and "GAME on FLET'S" with the Korea Game Development & Promotion Institute.

iii) Preparing to drive broadband businesses

With a view to swiftly and efficiently expediting our broadband business and increasing our operating efficiency in existing fields, so we can transform NTT West into a specialist broadband service provider, we have instituted a reorganization of the Head Office and established a Broadband Services Promotion Headquarters alongside a separate Fundamental Services Promotion Headquarters. The first is charged with the mission to carry out the general series of operations for broadband, from the development of services, to the setting up of equipment, to the promotion of sales, in an integrated and self-contained fashion. The mission of the second is to increase the efficiency of operations for fundamental services such as telephones, public telephones and telegrams, while striving to halt any decline in revenues from existing telephone services.

FLET'S Customer Relation Center (FRC) has been established in cooperation with NTT Marketing Act Corporation as our central contact for the entire service area. To the growing number of on-line orders and inquiries, the FRC will offer support services that are optimized to customers' lifestyles. Through coordination with NTT NEOMEIT Corporation, the Network Operation Center and IP Network Service Center, which were responsible for 24-hour-a-day, 365-day-a-year monitoring and control of the networks for our services, have merged to improve network management, becoming the Western Japan IT Operations Center. We expect these new organizations will help us quickly and accurately meet the ever more sophisticated and diverse requirements of the customer.

(2) Exploring the solution business

Under the leadership of the e-Government Promotion Offices at NTT West's Head Office, branches and Group companies, aggressive marketing efforts are underway for "G. prosol," a total solution for local governments in the sector-specific prosol Series. In the hope of swiftly addressing the need for a range of administrative services using basic residential register cards, triggered by the recent launch of full-scale operation of the national basic residential registers network system, NTT West has teamed with NTT NEOMEIT Corporation to start offering an "IC card solution for the basic residential registers network system," a one-stop service covering the construction and maintenance of a variety of services such as electronic applications, electronic voting, reservation of public facilities, and related systems.

An integrated call center solution service has also been inaugurated as an addition to the "C. prosol" total solution for optimizing non-physical distribution (commercial transaction cycles) in enterprises. The new service integrates the diverse contact channels - such as telephone, facsimile, website and e-mail - that businesses use to respond to orders and inquiries from customers, simultaneously increasing efficiency in customer service and customer relation management.

(3) Expanding the business lines of the NTT West Group

NTT NEOMEIT Corporation has been dedicated to establishing its brand (NEOMEIT) through the development and provision of new services, tapping into the know-how accumulated in the MI (maintenance integration) and other lines of business. To address the demand for increasingly diverse and sophisticated digital maps, the company has started offering GEOSPACE, a detailed digital map of the country designed to facilitate the smooth introduction of a digital geographical information system by municipal governments and other customers. The company has added to the line of services for OZFA, its broadband-capable original brand of PCs developed in alliance with other manufacturers, and provides lower prices in response to diverse customer demand.

NTT Marketing Act Corporation has been intent on the expansion of its business line through aggressive promotion of ACTOS, a uniform brand for new services in the IT arena, while pursuing its existing businesses, which include tele-marketing. In more concrete terms, the company has started to extend a special membership discount on merchandise offered by the Marketing Act Group companies, and launched the ACTOS Member program to provide customers with useful advice. On top of this, the company has also introduced ACTOS Mobile C, a two-dimensional coded ASP service. With more than one user able to share the Internet customer management and two-dimensional code distribution systems, the new service produces cost savings for sales promotion and customer management.

At NTT Asset Planning Kansai Corporation, our real-estate vehicle, we have started to lease broadband-equipped small offices under the NTT-AP First Office brand name, creating new businesses through the use of state-of-the-art telecommunications technologies.

To urgently restore communications services to customers on Miyako Island, Okinawa, heavily damaged by Typhoon 14, NTT West teamed up with NTT NEOMEIT Corporation, which is responsible for maintenance and operation of communications equipment in our service area, to ensure they had access to support from the entire service area, in an effort to provide quality, reliable services without interruption.

As part of the ongoing initiative to establish solid business ethics - an pressing issue for private enterprises - training courses in the subject were given to the managers at NTT West and its Group companies to make sure that everyone has a proper understanding of the importance of business ethics, thereby establishing a norm for the prevention of corporate misconduct within the Group.

As a result of the above efforts, principal marketing results as of September 30, 2003 were: installed subscriber telephone lines stood at 25.63 million; INS-Net 64 line installations for INS-Net services totaled 4.39 million; FLET'S ADSL line installations came to 1.52 million; B FLET'S lines totaled 250,000.

During the first six months of the fiscal year ending March 31, 2004, we recorded operating revenues of 1,060.9 billon yen, ordinary profit of 39.6 billion yen, and net profit of 26.4 billion yen.

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