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HOME  News Release  1. Summary of Results for the Fiscal Year Ended March 31, 2016

1. Summary of Results for the Fiscal Year Ended March 31, 2016

Information and communications services are expected to make significant contributions to invigorating and increasing the efficiency of social and economic activities, improving lifestyle convenience and vitalizing local economies. Accordingly, the government and the private sector are working in partnership to achieve the development of a ubiquitous broadband network society in which there is an advanced level of utilization of information communication technology (“ICT”). Moreover, the information and telecommunications market is undergoing structural changes as a result of the shift to broadband and globalization, as well as the spread of smart devices and social media, leading to increasingly sophisticated and diversified needs and patterns of usage. There has also been an increase in the utilization of IoT and Big Data as well as an expansion of platform services and cloud services. Regional telecommunications markets are also undergoing significant changes due to competition between the providers of fiber-optic access services and cable television-based broadband services, competition between the various services made available by faster mobile connections, the convergence of fixed and mobile services and of telecommunications and broadcasting, and the convergence of services through the use of a diverse range of wireless devices.

Within this challenging and dramatically changing business environment, NTT West strove to ensure its reliability and public utilization in the information and communications market by, for example, promoting the smooth migration to optical, IP-based networks and enhancing the fiber-optic access network that is the base of broadband services, while continuing to provide and maintain high-quality, stable universal services.

NTT West also aimed to realize a broadband and ubiquitous network environment that enables customers to connect “anytime, anywhere, and with anyone or anything” “in comfort, safety, and with peace of mind,” and to provide various reasonably priced services that match each customer’s patterns of usage.

<1> Efforts to Promote Fiber-optic and IP services

NTT West worked to provide a more comfortable, safer, and more secure next-generation network (NGN) to promote its fiber-optic and IP services. NTT West was committed to expanding the use of optical services (including the Hikari Collaboration Model) by creating new lifestyles through the creation and launch of new services that make use of fiber-optic access lines, such as Hikari Denwa and video distribution services, and by collaborating with other businesses. NTT West also strove to realize a broadband and ubiquitous network environment, including by expanding Wi-Fi platforms.

For “Hikari services,” with respect to the “Hikari Collaboration Model,” the wholesale provision of “FLET’S Hikari” and other services to various service providers, NTT West worked to proactively cultivate new service providers and to increase new demand through support activities. As a result, this business model has attracted over 200 wide-ranging businesses as providers, with the number of subscriptions exceeding 1.5 million lines as of March 2016. Furthermore, with regards to “FLET’S Hikari,” NTT West made efforts to expand its services aimed at retaining its customers, by launching new web movie promotions for the SOHO market and making improvements to the membership program, “CLUB NTT-West.” As a result, “Hikari services” as a whole exceeded 8.5 million subscriber lines as of March 2016.

In the area of Wi-Fi services, as with the previous fiscal year, NTT West worked to expand the coverage area for “DoSPOT,” a Wi-Fi service developed for retail stores provided by NTT MEDIA SUPPLY CO., LTD., and to improve the seamless connectivity environment offered through the “Japan Connected-Free Wi-Fi” application designed by NTT Broadband Platform, Inc. for foreign visitors to Japan. In addition, NTT West worked to expand its Wi-Fi platform by entering into comprehensive collaboration agreements with local governments, as a sign of alliances with such local governments, with respect to public free Wi-Fi, and by promoting the development of Wi-Fi environments.

<2> Initiatives in the Solutions Business

NTT West proactively offered alliance and solution proposals to companies and local governments, and has been deploying “Smart Hikari Solutions” to satisfy regional customers’ needs through the utilization of ICT. Some of the new service developments through alliances included the commencement of measures towards supporting the Social Security and Tax Number System in partnership with Tokio Marine & Nichido Fire Insurance Co., Ltd. and NTT East, the first of its kind in Japan. In addition, NTT West installed information and communications platforms and public wireless LAN services for the government of Inecho in Kyoto prefecture, with whom NTT West has entered into a comprehensive partnership agreement. Through many other similar partnership agreements with other local governments, NTT West has continued to work towards promoting “Smart Hikari Town” to create a convenient and comfortable environment that utilizes ICT.

In terms of new services, NTT West worked to improve its services, including ensuring the same bandwidth to “Business Ether Wide” as a leased line, and newly adding the “Certificate Issuance Services” to “Biz Hikari Cloud”. “Certificate Issuance Services” enable users to apply for various certificates online such as graduation (planned) certificates and to print them out at convenience stores.

For small to medium enterprise customers, NTT West launched a new type of business phone, “Smart Netcommunity αA1 (Standard Type),” which can operate in conjunction with cloud services and revolutionizes conventional work styles by increasing the efficiency of communications through the utilization of smartphones and tablets. In addition, NTT West launched its “Office On-Site Support Services” to provide finely-tailored services to cover the ICT support needs of its customers. Further, NTT West worked to improve its services by launching its “UTM Support Service” in response to the increase in demand for information security triggered by the introduction of the Social Security and Tax Number System.

<3> Status of Business Operation Structure

In terms of its business operating structure, in July 2015, NTT West created the “Alliance Business Headquarters” in order to provide broadband services that are even more comfortable, safe and secure via the B2B2X model through provision of the Hikari Collaboration Model, alliance strategies, new service development and the creation of business models. As for the business market, NTT West also created an “Advanced Solutions Sales Department,” which specializes in cloud services for universities, banks and local governments, within the Corporate Business Headquarters in order to strengthen its ability to provide highly specialized, sophisticated and advanced solutions tailored to customers’ industries and needs.

In the area of facility maintenance, NTT West worked to enhance its disaster preparedness framework by conducting disaster exercises designed to simulate events in the event of a large earthquake along the Nankai Trough, setting installation standards for special public Wi-Fi services for temporary shelters in emergency situations, as well as conducting practical exercises aimed at maintaining and enhancing service quality and strengthening IP service operations. NTT West also implemented measures to prevent accidents involving facilities, such as planned facility inspections, with the goal of eliminating third-party accidents caused by fallen lines. To prevent site accidents involving physical injury, NTT West worked to expand its safety measures by establishing a timeframe for improving safety promotion initiatives.

As part of its comprehensive cost control efforts to maintain profitable operations, NTT West worked to further enhance the efficiency of fiber-optic service installations, including reducing material costs by utilizing terminal equipment and streamlining procurement operations for materials, increasing construction projects that do not require the dispatch of NTT West employees, reducing the number of back orders resulting from emergency pipe work and improving the delivery date on orders for “Business Ether Wide.”

<4> Corporate Social Responsibility (“CSR”) Activities

In the area of CSR promotion, the “NTT Group CSR Charter” (adopted in June 2006) provides that, as responsible members of the information and communication industry, NTT Group companies will provide services of the highest quality and reliability and contribute to the development of a safe, secure and prosperous society in which people, society and the earth are connected through communications. Based on the NTT Group CSR Charter, NTT West established three core CSR principles — “thorough compliance,” “development of a safe and secure society” and “creation of value through business activities” — as well as a “visualization” benchmark. Each NTT West employee takes part in CSR activities, including working to maintain legal compliance, providing safe and reliable communication services, and reducing the burden on the environment.

To ensure “thorough compliance,” NTT West Group has focused on promoting group-wide initiatives in five high-risk areas that have the potential to erode consumer trust in NTT West group companies, namely eradicating “on-the-job misconduct,” “driving while under the influence” and “power harassment,” as well as promoting “thorough management of customers’ information” and observing “respect for human rights.” In conjunction with these initiatives, NTT West also worked to improve the “Corporate Culture” to “create a positive workplace with open communication” thereby working to ensure even greater employee awareness.

Based on the “Green NTT West Strategy” established in June 2012, in order to “achieve its environmental grand design,” NTT West has been working to decrease its environmental burden by decreasing power usage, the amount of its paper uses, and the volume of its waste products. In addition, NTT West also contributed to protecting the earth’s environment by undertaking community-based activities centered around tree-planting and plant growing, grass-cutting and cleaning activities pursuant to the “NTT West Midori Ippai Project” in order to “promote biodiversity preservation activities.”

NTT West has been promoting its group-wide CSR activities and enhancing its environmental management while instilling the principles of the NTT Group CSR Charter. NTT West also issued the “NTT West Group Environmental Report 2015” and the “NTT West Group Environmental Report 2015” to proactively disclose relevant information to its stakeholders.

<5> Financial Standing

As a result of these efforts during the fiscal year ended March 31, 2016, operating revenues totaled 1,528 billion yen (a decrease of 2.9% from the previous fiscal year), operating income was 74.0 billion yen (an increase of 107.6% from the previous fiscal year), income before income taxes was 67.1 billion yen (an increase of 132.8% from the previous fiscal year), and net profit totaled 72.4 billion yen (a decrease of 420.2% from the previous fiscal year).

* Information is current as of the date of issue of the individual press release.
Please be advised that information may be outdated after that point.

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