March 1, 2004


Submission for Approval of Business Operation Plan
For Fiscal Year Ending March 31, 2005


Nippon Telegraph and Telephone West Corporation (NTT West) today submitted its business operation plan for the fiscal year ending March 31, 2005 to the Minister of Public Management, Home Affairs, Posts and Telecommunications for approval.


Information and communications are expected to play a key role in the process of forming a ubiquitous network society by enhancing the efficiency and vitality of socioeconomic activities and the convenience of national life. To that end, the public and private sectors are working closely together to bring the network society to reality. At the same time, the information and telecommunications market is undergoing drastic transformations 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 Internet communications. The regional communications market is being affected by the progressive contraction in the conventional fixed-line telephone market as customers continue to switch from fixed to mobile communications, and from voice transmission to Internet and data communications for both fixed-line telephone and mobile communications services, while IP telephony is expected to expand rapidly. The broadband market, the growing leader in telecommunications, has become the scene of intense competition for greater market penetration among ADSL and optical providers in both services and price.

In this intensely competitive environment, NTT West has identified the fiscal year ending March 31, 2005 as critical to its strategy to achieve a dramatic expansion of its broadband businesses based on its Fiber-optic IP Connection Service. NTT West will actively engage in the enrichment of its broadband services, including provision of applications that take advantage of Fiber-optic IP Connection, and in the development of high-value-added solutions businesses such as security services, as the company endeavors to realize a resonant communications environment. NTT West will continue to provide stable, high-quality universal services while simultaneously 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 advance its research and development capabilities in applied fields, and will work towards ensuring the reliability and public availability of telecommunications services.

As a reflection of these fundamental principles, NTT West will strive in its business management during the fiscal year ending March 31, 2005, to offer high-value-added services that cater to diverse modes of use by creating new broadband services and technologies and improve its services by responding effectively and quickly to customer needs and demands. Further, in the face of the severe business environment, NTT West will make every effort to achieve a stable flow of profits through such management innovation programs as increasing business efficiency and trimming costs, while still responding to any changes in the market. 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 NTT West's basic strategies for the fiscal year ending March 31, 2005. While special emphasis will be assigned to the matters summarized below, NTT West will respond with appropriate 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 25.72 million by the end of the fiscal year ending March 31, 2005.

(1) Subscriber Telephones:

(2) Social-Welfare Telephones:
The progress of social welfare has generated demand for various telecommunications 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.

(2) Social-Welfare Telephones:

(3) Public Telephones:
While maintaining public telephones to ensure a minimum level of access to outdoor communications, 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.

(3) Public Telephones:

(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 is projected to reach approximately 3,701,000 circuits and approximately 21,000 circuits, respectively, by the end of the fiscal year ending March 31, 2005.

(4) INS-Net Digital Services:


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 demand, including high-speed digital transmission services and voice and image transmission services.

3. LEASED CIRCUIT SERVICES


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.

5. IMPROVEMENTS AND ADVANCES IN TELECOMMUNICATIONS EQUIPMENT

(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, 2005
- Table 2 Capital Investment Plan for Fiscal Year Ending March 31, 2005
- Attachment 1 Revenues and Expenses Plan for Fiscal Year Ending March 31, 2005
- Attachment 2 Plan for Sources and Application of Funds for Fiscal Year Ending March 31, 2005
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