February 28, 2003


Application for Approval of the Business Operation Plan for Fiscal Year Ending March 31, 2004



Nippon Telegraph and Telephone West Corporation (NTT West) today submitted its business operation plan for the fiscal year ending March 31, 2004 to the Minister of Public Management, Home Affairs, Posts and Telecommunications for approval.

Information and communications are capable of overcoming the "constraints of time and distance." As such, they are expected to make a major contribution to revitalizing and improving the efficiency of social and economic activities by realizing a safer and more affluent social environment, by bolstering the productivity and competitiveness of the corporate sector, and by helping to resolve various key social challenges, such as the declining birth rate, the aging population and environmental issues. On the other hand, the information and telecommunications market is undergoing drastic transformations which are affecting the structure of the market itself. These changes include the growing sophistication and diversification of user needs, the steady progress of globalization, and the explosive growth in demand for mobile and Internet communications. Meanwhile, the regional communications market is being affected by the shrinkage in the fixed-line telephone market as customers continue to switch from fixed to mobile communications, and from telephones to IP communications at an accelerated pace. The broadband market, the leading growth sector in telecommunications, has become the scene of intense competition among ADSL and optical services in terms of both services and price.

In this intensely competitive environment, NTT West has identified the fiscal year ending March 31, 2004 as a critical starting point in attaining stable profitability. NTT West will endeavor to create a firm foundation for future profitability as well as realize a resonant communications environment by actively engaging in the development of broadband businesses based on Fiber-optic IP Connection Service and solutions businesses based on integrated services. NTT West will continue to provide stable and high-quality universal services while also developing its optical access network as the backbone for its broadband services. Furthermore, NTT West will contribute to the development of a fair telecommunications market, will enhance its research and development capabilities in applied fields, and will work towards ensuring the reliability of the telecommunications industry and its openness to the public.

Reflecting these fundamental principles, in its business management during the fiscal year ending March 31, 2004, notwithstanding the severe business environment, NTT West will make every effort to achieve profitability by further cutting costs while boosting revenues. It will also strive to improve its services by responding effectively and quickly to customer needs and demands. With regard to plant and equipment investment, NTT West will spare no effort in improving the efficiency of investments, while concentrating on the development of more advanced infrastructure needed for stimulating new demand for broadband businesses. In other areas, NTT West will implement measures for maintaining smooth interconnection and open networks. It will seek to promote its research and development position in applied fields, improve disaster prevention measures, promote human resources development, and actively pursue new business opportunities in cooperation with NTT group companies. Through this line of action, NTT West will endeavor to achieve a stable course of future development. NTT West stands ready to share the benefits of these initiatives with its customers, local communities and the shareholders in the holding company.

The above outlines the basic strategies of NTT West for the fiscal year ending March 31, 2004. While special emphasis will be assigned to the matters summarized below, NTT West will respond with due flexibility to any changes in the business environment.


1. VOICE TRANSMISSION SERVICES

(1) Subscriber Telephones:

NTT West stands ready to respond speedily to all demand for subscriber telephones, including the relocation of existing lines. The total number of subscribers is projected to reach approximately 25.46 million by the end of the fiscal year ending March 31, 2004.

Item Planned Number
Additional Installations (0.12) million subscribers
Relocations: 2.55 million subscribers

(2) Social-Welfare Telephones

The progress of social welfare has generated various demands for telecommunication services. To respond to welfare-related needs, NTT West shall promote the installation of its "Silver Phones series"(Anshin [Relief], Meiryo [Clearness], Hibiki [Sound], Fureai [Communication]) and other welfare-oriented products.

Item Planned Number
Silver Phones
Anshin (Relief): 300 units
Meiryo (Clearness): 100 units

(3) Public Telephones:

While maintaining public telephones to ensure a minimum level of outdoor communications access, NTT West will continue to review and to remove low-use public telephones. On the other hand, in its commitment to improved services and welfare, NTT West will promote the installation of public telephone boxes for wheelchair users.

Item Planned Number
Public Telephones: (53,000) units

(4) INS-Net Digital Services:

INS-Net Digital Services are now available in all areas with potential demand. The total number of INS-Net 64 subscriber lines and INS-Net 1500 subscriber lines are projected to reach approximately 4,145,000 circuits and approximately 18,000 circuits lines, respectively, by the end of the fiscal year ending March 31, 2004.

Item Planned Number
INS-Net 64 Subscriber Lines: (530,000) circuits
INS-Net 1500 Subscriber Lines: (1,000) circuits


2. DATA TRANSMISSION SERVICES

NTT West shall continue providing IP Connection Services featuring a full line of flat-rate Internet access plans for INS-Net, ADSL and fiber-optic services.


3. LEASED CIRCUIT SERVICES

Facilities for leased circuit services are scheduled to be installed to actively respond to demands, including those for high-speed digital transmission services, and voice and image transmission services.

Item Planned Number
Conventional Leased Circuits: (41,000) circuits
High-Speed Digital Transmission Circuits: (25,000) circuits


4. TELEGRAPH SERVICES

NTT West shall promote such measures as the maintenance of telegraph operation systems to enhance services and raise efficiency.


5. IMPROVEMENTS AND ADVANCES IN TELECOMMUNICATIONS EQUIPMENT

(1) Optical Access Network:

NTT West shall actively promote the deployment of the Optical Access Network in coordination with expanding demand for broadband services.

Item Planned Number
Optical Subscriber Cables: 2.8 million fiber km
(Cover rate at the end of March 2004 will be 75 %.)

(2) Telecommunications Network:

NTT West shall enhance network services as well as improve network economy and efficiency while meeting demand for broadband services.

(3) Disaster-Prevention Measures:

NTT West shall promote necessary disaster-prevention measures for telecommunications equipment. To this end, it shall establish emergency communication and crisis management measures, as well as procedures for restoring systems and distributing vital information in the event of a large-scale disaster.

(4) Installation of Underground Transmission Cables:

NTT West shall install underground transmission cables to aid transmission stability, secure safe and comfortable passage spaces and improve the appearance of urban areas, in cooperation with the local and national governments or other companies.

(5) Facility Maintenance:

NTT West shall implement facility maintenance, including the replacement of cables, to maintain customer services, ensure safety and harmony with social environments and stabilize communications systems.
NTT West shall pursue cost reduction by making exhaustive use of existing equipment and facilities in improving and upgrading communications facilities.


6. PROMOTION OF RESEARCH AND DEVELOPMENT ACTIVITIES

To further stabilize and strengthen the foundations of the business operations, and to meet public demand for information and telecommunications, NTT West shall promote research and development in the spheres of network systems and access systems which create more sophisticated telecommunications networks. In addition, NTT West shall also promote research and development in such areas as information distribution applications and communications terminals of various types which expand the range of choices available to customers in their selection of reliable and convenient services through sophisticated telecommunications networks.


The summary of the business plans for the above principal services and the plant and equipment investment plans are outlined in the attached tables.



- Table 1
Principal Services Plan for Fiscal Year Ending March 31, 2004
- Table 2
Capital Investment Plan for Fiscal Year Ending March 31, 2004
- Attachment 1
Revenues and Expenses Plan for Fiscal Year Ending March 31, 2004
- Attachment 2
Plan of Sources and Applications of Funds for Fiscal Year Ending March 31, 2004




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