The forward-looking statements and projected figures concerning the future performance of NTT and itssubsidiaries and affiliates contained or referred to herein are based on a series of assumptions,projections, estimates, judgments and beliefs of the management of NTT in light of information currentlyavailable to it regarding NTT and its subsidiaries and affiliates, the economy and telecommunicationsindustry in Japan and overseas, and other factors. These projections and estimates may be affected bythe future business operations of NTT and its subsidiaries and affiliates, the state of the economy inJapan and abroad, possible fluctuations in the securities markets, the pricing of services, the effects ofcompetition, the performance of new products, services and new businesses, changes to laws andregulations affecting the telecommunications industry in Japan and elsewhere, other changes incircumstances that could cause actual results to differ materially from the forecasts contained or referredto herein, as well as other risks included in NTT’s most recent Annual Report on Form 20-F and otherfilings and submissions with the United States Securities and Exchange Commission.* “E” in this material represents that the figure is a plan or projection for operation. ‐1‐ Copyright(c) 2011 Nippon Telegraph and Telephone Corporation
Agenda ①Fixed Line Business ②Global Business ③CAPEX ④Shareholder Returns ⑤Others (Regulatory Issues) ‐2‐ Copyright(c) 2011 Nippon Telegraph and Telephone Corporation
①-1 Fixed Line Business NTT East: IP-related revenues will overtake voice revenue levels with the increase in FTTH subscriptions NTT West: IP-related revenues are increasing to levels close to voice revenues NTT EAST NTT WEST （Billions of yen） （Billions of yen）Revenues 2,061.3 2,002.7 1,952.9 1,928.6 1,960.0 1,910.0 Revenues 1,951.5 1,901.2 1,824.3 1,780.8 1,756.0 1,701.0(Change (Changeyear-on-year) (-58.6) (-49.7) (-24.3) (31.3) (-50.0) year-on-year) (-50.2) (-76.9) (-43.4) (-24.8) (-55.0) 1,159.0 Voice Revenues 1,140.0 Voice Revenues 1,031.9 1,016.6 911.2 896.4 816.1 808.0 798.1 739.0 729.0 IP-related Revenues 645.5 724.0 650.0 IP-related Revenues 652.0 563.9 582.0 641.0 9,833 525.5 462.6 460.4 8,583 359.4 7,533 385.8 7,418 6,291 304.9 6,568 5,718 4,963 4,843 3,815 3,399 FTTH FTTH 2,677Subscriptions Subscriptions (thousands) (thousands) 2007/3 2008/3 2009/3 2010/3 2011/3E 2012/3E 2007/3 2008/3 2009/3 2010/3 2011/3E 2012/3E(Year ended/ing March 31) (Year ended/ing March 31) ‐3‐ Copyright(c) 2011 Nippon Telegraph and Telephone Corporation
①-2 Fixed Line BusinessPlan to achieve profitability from FTTH services (FLET’S Hikari + Hikari Denwa) on a single-yearbasis in the year ending March 31, 2012. Efforts in order to achieve profitability Increase cost-efficiency Increase ARPU and Increase cost-efficiency in sales-related expenditures prevent subscription cancellations in facility construction expenditures (control sales promotion costs, etc.) Year ended/ing 2008/3 2009/3 2010/3 2012/3 March 31 Achieve (82.9) profitability FLET’S Hikari (126.4)100.0 billion yen (192.4) (6.0) (88.9) Hikari (27.8) Denwa Improved by (154.2) 65.3 billion yen200.0 billion yen (Note) FLET’S Hikari: 2008/3, 2009/3: figures of designated telecommunications services (excluding voice transmission services) except specified telecommunications services 2010/3: figures of designated telecommunications services (FTTH access services) except specified telecommunications services Hikari Denwa: 2009/3: figures of designated telecommunications services (voice transmission services) except specified telecommunications services 2010/3: figures of designated telecommunications services (other services) except specified telecommunications services (In 2008/3, FTTH balances were not calculated, since Hikari Denwa was not part of designated telecommunications services.) ‐4‐ Copyright(c) 2011 Nippon Telegraph and Telephone Corporation
②-1 Global BusinessWhile seeking business synergies through the acquisition of Dimension Data and Keane, NTTGroup will integrate the strengths of its group companies and provide comprehensive ICT services. Respond to the needs for high-quality, comprehensive ICT services from corporate customers in Japan and abroad with global, end-to-end, one-stop services. North Asia Europe America Australia, South America, Africa, etc.アプリケーションApplications Keane Local subsidiaries Application development, Customized operation, and infrastructure Packaged management for large corporations and public (SAP, etc.) institutions Locations in 11 countries Platforms Data Centers NTT Worldwide Telecommunication Dimension Data Deployment and Networks Local subsidiaries maintenance of IT system infrastructure, etc. 24-hour support at 7 global service centers worldwide Office ICT Locations in 49 countries ディメンジョン・データ社Middle East) (including Africa and the (On Premises) ‐5‐ Copyright(c) 2011 Nippon Telegraph and Telephone Corporation
②-2 Global Business By taking the globalization of users and increased growth momentum in emerging countries as an opportunity, NTT Group will actively expand global businesses, and target global business revenues of over 10 billion dollars (US) by the year ending March 31, 2013. SI/NI business for corporate users and mobile business for consumers will be developed as the two key pillars. 2013/3 E 2012/3 E Revenues* 2011/3 E 2008/3 over over US$2 billion US$4 billion US$8 billion US$10 billion Dimension Data US$4 billion Keane US$0.8 billion *Revenues on a FY2009 full year basis Global ICT solutions for business users in Japan and overseas － New business developments, as well as cloud services contributing to cost SI/NI business Expansion Policy reduction and increased productivity. － High quality total ICT solutions providing end-to-end, global one-stop services for corporate users Global development of network services － Data communications services, such as IP-VPN － Tier 1 ISP, submarine cable － Mobile international roaming services, mobile services in other countries Global development of application services Mobile business content distribution, etc. for consumers － Distribution of comics to mobile phones － Content distribution in Europe － Multi-device video distribution*Simple aggregate of global business revenues for NTT Group companies (internally governed figures). ‐6‐ Copyright(c) 2011 Nippon Telegraph and Telephone Corporation
③ CAPEXCAPEX levels peaked in the year ended March 31, 2009 and now show a decreasing trend - Fixed: Provision of NGN to entire FTTH service area by the year ending Mar. 31, 2011; to be reduced thereafter - Mobile: CAPEX, including LTE investments, are not expected to surpass current levels (Billions of yen) CAPEX/Sales ratio 2,500 CAPEX/Sales ratio 21% 21% 20% 20% 20% 2,236.9 20% 2,191.9 19% 156.1 2,128.9 2,145.1 136.2 211.2 222.1 1,987.1 2,000 1,960.0 143.6 Target 170.0 ▲15% 15% 15% 887.1 934.4 758.7 737.6 1,500 686.5 675.0 Other NTT DOCOMO (Consolidated) NTT DATA (Consolidated) NTTCommunications 112.1 10% 139.5 176.8 180.0 162.5 NTT (Holding Company) 150.0 1,000 145.6 NTT West 100.5 108.1 112.8 107.6 25.5 57.7 118.0 NTT East 50.3 45.0 40.6 37.0 34.0 462.9 412.4 374.4 378.2 391.1 380.0 365.0 5% 500 Optical Optical Optical Optical Optical Optical Optical 449.1 investment 469.0 investment 454.8 investment 430.0 422.2 investment 435.9 investment investment 410.0 investment 349.0 356.0 328.0 316.0 322.0 310.0 300.0 0 0% （Year ended/ing 2006/3 2007/3 2008/3 2009/3 2010/3 2011/3E * 2012/3E 2013/3E March 31) * Consolidated figure for 2011/3E is the forecast from the presentation of the financial results for the nine months ended December 31, 2010. 2011/3E figures for NTT East and NTT (Holding Company) in the Business Operation Plans submitted to the Minister of MIC in March, 2011, were revised to 420.0 billion yen and 36.0 billion yen, respectively. ‐7‐ Copyright(c) 2011 Nippon Telegraph and Telephone Corporation
④ Shareholder ReturnsEnhancing shareholder returns in the medium-term.Annual dividends have increased for 4 consecutive years to double the original amount. (Yen) 150 50% Dividends per share Dividends per share 120 120 110 40% Pay-out ratio 100 90 30% Pay-out ratio 80 32.3% 31.8% 60 Approx 27.5% 20% 50 23.0% 17.1% 23% * 10% 0 0% 2006/3 2007/3 2008/3 2009/3 2010/3 2011/3E Year ended/ing March 31 (Billions of yen) Adopted policy for cancellation of all treasury Share buybacks 600 539.4 stocks (approximately 0.25 billion shares as of March 31, 2010). 400 ･Cancellation over two years (half each year) Buy back of shares held by the ･The first cancellation completed in Nov. 2010 200.0 200 Government 94.4 0 Year ended/ing March 31 2006/3 2007/3 2008/3 2009/3 2010/3 2011/3E *Excludes special factors such as the gain on the transfer of substitutional portion of the employee pension fund ‐8‐ Copyright(c) 2011 Nippon Telegraph and Telephone Corporation
⑤-1 Others（Regulatory Issues） The “Hikari-no-Michi” Vision ● By thorough use of ICT, realize broadband service usage in all households (49 million households) by around 2015. ● With an increase in ICT related investments, realize approx. 3% sustainable economic growth after 2020, and significantly contribute to the reduction of CO2 emission. ◎ In order to realize the thorough use of ICT, ・ consider submitting legislations to promote e-government and collective use of ICT to the next ordinary session of the Diet ◎ In order to realize the use of broadband services in all households, ・ improve the infrastructure deployment rate from 90% to 100%, and the service subscription rate from 30% to 100%, with broadband speed exceeding 100Mbps ・ as a means to realize these ideals, review/implement necessary measures, including the structural/functional separation of NTT East and NTT West’s access line network by the end of this year, in view of submission to the next ordinary session of diet. ‐9‐ Copyright(c) 2011 Nippon Telegraph and Telephone Corporation
⑤-2 Others（Regulatory Issues）Basic Policy in realizing the “Hikari-no-Michi” Vision (December 14, 2010、by the Ministry of Internal Affairs and Communications) Submit legislative bills to the next session of the diet, in accordance with strengthening the firewall between NTT East and NTT West’s sales division and facilities division. Begin discussions to consider bringing down the interconnection charges of FTTH services, to reach a conclusion by March 2011. Commence a comprehensive study regarding the status of compliance to regulations, and initiatives corresponding to the “Hikari-no Michi” vision , in about a 3 year period.NTT’s Advocate Broadband environment in Japan is at world-leading levels Promotion of ICT use is essential for the expansion of broadband Separation of the access line network will impair management efficiency and shareholders’ value ‐10‐ Copyright(c) 2011 Nippon Telegraph and Telephone Corporation
A particular slide catching your eye?
Clipping is a handy way to collect important slides you want to go back to later.