Attachment 1

Summary of Results



During the six months ended September 30, 2004, the Japanese economy continued to recover at an overall healthy pace, fueled by a significant improvement in corporate earnings owing to increased exports and production as well as a moderate upswing in consumer spending.

In the telecommunications market, penetration and expansion of broadband access services like ADSL (asymmetric digital subscriber line) and optical lines are gaining momentum in step with the advanced and diversified demands of users in an increasingly globalized world. Nevertheless, intensifying competition for customers in both prices and services among telecommunication carriers made for an ever more severe business environment.

Meanwhile, the fixed-line telecommunications market continued to narrow against the backdrop of an accelerated changeover from fixed-line to mobile telephony and from voice to Internet and data telecommunications, along with a proliferation of IP phone services for businesses. The shrinking market combined with the launch of direct connection phone services using dry copper has ushered in full-scale competition.

In the face of rapidly changing markets and competition as well as constantly changing surrounding circumstances, Nippon Telegraph and Telephone West Corporation (NTT West) has positioned fiscal 2004 as the springboard to creating new momentum for a dramatic leap into the fiber-optic broadband market and the transformation of its revenue structure from telephone-based to IP-based. Toward this end, NTT West has been aggressive in its efforts to take full advantage of the characteristics of fiber optics to enrich its application services and content, promote high value-added solutions offerings like security services, and expand the operations of the entire NTT West Group in a bid to create a resonant communications environment. In line with this, NTT West is committed to the aggressive pursuit of:

1. Development of Broadband Business
i) Expanded Broadband Access Services
In response to customer demand for high-speed telecommunications, NTT West has launched a new service, "FLET'S ADSL MORE SPECIAL," with a downstream speed of up to 47 Mbps and upstream speed of up to 5 Mbps, in addition to the five existing FLET'S ADSL plans: MORE 40, MORE 24, MORE, 8M PLAN and 1.5M PLAN.

Also, in order to make the FLET'S service available to a wider range of customers, NTT West offered special plans limited to new subscribers during specified periods: a one-month free service campaign for B-FLET'S, a three-month free service campaign for FLET'S ADSL. NTT West likewise introduced attractive special discount programs in April 2004 for continuing B-FLET'S and FLET'S ADSL users: "FLET'S ATTO (amazing) DISCOUNT" and "FLET'S ZUTTO (continuous) DISCOUNT."

In addition, NTT West has mounted multifaceted promotional campaigns through marketing alliances with home appliance volume retailers and tie-ups with Internet Service Providers, as well as offered customers the chance to win special VIP seats for "a-nation '04" in its "FLET'S a-nation campaign," co-sponsored by the AVEX GROUP.

ii) Expanded Broadband Application Services
NTT West's FLET'S SQUARE provides attractive broadband content to B-FLET'S and FLET'S ADSL customers in collaboration with leading content holders, including "a-nation 2003 concert image" from the AVEX GROUP, information about "Searching for the Bluebird" and "Takarazuka Dream Kingdom" from the Takarazuka Revue Company, and "Pokemon content" from the Pokemon Company.

Meanwhile, to respond to growing customer demand for lower calling charges and high quality IP phone service comparable to fixed-line phones, NTT West launched "HIKARI DENWA (fiber-optic phone)," a new IP phone service for multi-family dwellings targeted at users subscribing to B-FLET'S Condominium Type. This service allows customers to keep their existing telephone numbers, make emergency calls to 110, 118 and 119 services, and access toll-free numbers.

The number of access points for FLET'S SPOT, the main pillar of NTT West's ubiquitous network service, exceeded 1,500 in the NTT West service region at the end of May 2004. NTT West now provides the widest public wireless LAN service coverage in Japan, employing the shared wireless LAN method at commonly accessed places within the public transportation network (JR-West Nozomi Line stops, etc.) since June 2004.

In addition, in order to make its service available to many more customers, NTT West targeted new subscribers with a limited-time three-month free access campaign for FLET'S COMMUNICATION and FLET'S SPOT. On top of this, NTT West offered free switching equipment installation to subscribers who signed up for B-FLET'S, FLET'S ADSL and FLET'S ISDN at the same time.

2. Development of Solution Business
NTT West's prosol Series provides customized system solutions to a wide range of customers according to their type of business. To enhance its lineup of Internet VPN Solutions on its N.prosol menu, the optimum total network solution, NTT West added the "SSL-VPN Solution," a product that uses SSL (secure socket layer) encryption to accomplish a network environment where data is protected from such security failures as eavesdropping, spoofing and falsification as if it were being transferred over dedicated lines, and its "TV Conference Package," a product for businesses and local governments that provides high-quality voice and image communications cheaply and swiftly via broadband lines like B-FLET'S.

Furthermore, NTT West introduced new items to the lineup for "C.prosol," a total solution for optimizing commerce (commercial transaction cycles) for business. NTT West's "Shared EDI Solution for Liquor Businesses" promises increased operating efficiency and speed by using the Internet to exchange a wide range of electronic information from order intake/placement data to new products and hot-selling items in the industry. "EDI Solution for Department Stores" allows vendors like wholesalers and manufacturers to easily create the product masters needed to process sales in-store and generate a timely and multi-dimensional analysis of sales and other transaction data to aid in strategic merchandising.

NTT West also collaborated with Fukuoka City and the Fukuoka City Foundation for Health Plan Promotion in an experiment to demonstrate the feasibility, convenience and validity of a new library system service using the wireless IC tag technology that will serve as the foundation for the ubiquitous network society.

NTT West teamed up with NTT MARKETING ACT CORPORATION and NTT NEOMEIT CORPORATION to offer the "Information Security Audit Service," which provides an objective assessment of a customer's information asset management according to the standards of the Information Security Audits of the Ministry of Economy, Trade and Industry. NTT West also worked together with Trend Micro Inc. to introduce the "Training in Fighting Spam," a new security service that provides measures against security threats in response to the ever more sophisticated and complex needs of businesses and local governments.

NTT West is going to build an IP phone system connecting the 49 operating bases of OSAKA GAS CO., LTD. to fully exploit the benefits of a ubiquitous communications environment. The progressive switchover is scheduled to start in 2005, with completion at the end of 2006.

3. Expanded NTT West Group Operations
NTT NEOMEIT CORPORTATION, in collaboration with the National Institute of Advanced Industrial Science and Technology, has begun research in pursuit of a customer information management system with stronger security measures, such as decentralized data storage employing grid technology in its AQStage PF IP Call Center Service to prevent leakage of customer data from a call center.

NTT NEOMEIT also launched "InfoDock," a comprehensive information security diagnostic tool through which security experts can provide customers with an analytical evaluation of information security and measures for improvement through face-to-face conversations at the customer's office.

In addition, NTT NEOMEIT has added "AQStage Call S" to its existing lineup of services, an economical and easy-to-install IP phone service for small- and medium-sized businesses, and "AQStage Shared Public Wireless LAN Access Point Service," which houses multiple wireless LAN carriers in a single public wireless LAN access point and promotes solutions and services for radio interference problems.

NTT MARKETING ACT CORPORATION introduced "ACTOS WATCH-OVER EYE," a new monitoring service for the security of the elderly, wherein sensor systems are installed in the homes of elderly people who live alone so that either other family members or local government staff can review the daily living situation from a distance via personal computer and an e-mail message can be transmitted to a pre-registered contact if a problem is detected.

NTT MARKETING ACT has likewise worked together with NTT Syscom Corporation and Dai Nippon Printing Co., Ltd. to develop "ACTOS KIT OKKAKE (surveillance) CAMERA MENU," an image distribution system combining broadband lines and wireless IC tag technology. NTT MARKETING ACT GROUP offers this solution package mainly to kindergartens and nursery schools.

On top of the above, for customers who could not use their telephones due to building damage from typhoons and those who had no access to their telephones because they had been ordered to evacuate, NTT West waived the basic fees and reinstallation charges for the period of their move from damaged buildings to temporary housing.

The spate of corporate scandals is bringing about growing social criticism, and the NTT West Group has been actively working on corporate ethics. Throughout the period, the Group applied itself to cultivating high ethical standards both officially and privately and creating a solid corporate culture against fraud and misconduct. Newly produced videos that carry the president's messages to the employees and corporate ethics workshops for all levels of management were used to spread ethical consciousness throughout the organization.

Moreover, in light of the series of information leaks around the country, the NTT West Group took appropriate actions to protect its customer information based on the concepts of the Act for the Protection of Computer Processed Personal Data held by Administrative Organs promulgated last year. Among the specific measures the NTT Group implemented were a complete overhaul of its systems operation and stricter control of customer information held by contractors, in addition to those already in practice, such as training workshops for all employees to boost moral and improvements to the administrative structure that handles customer information to maintain full control of customer data.

As a result of the above efforts, the principal marketing results as of September 30, 2004 were: the number of subscriber telephone lines installed stood at 25.65 million; in INS-Net services, the number of INS-Net 64 lines installed totaled 3.98 million; and the number of FLET'S ADSL and B-FLET'S came to 2.12 million and 0.58 million respectively.

Operating revenues for the first six months of the fiscal year ending March 31, 2005 was 129.1 billion yen, recurring profit, 53.4 billion yen, and net income, 31.5 billion yen.


Back
Privacy Policy

Copyright (C) NIPPON TELEGRAPH AND TELEPHONE WEST CORPORATION