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Message to All Shareholders

I would like to present here a brief introduction to “NTTis... Report on the Financial Results of the 24th Term,” and to take this opportunity to thank all shareholders for your continued support.

During the fiscal year ended March 31, 2009, NTT Group has worked to expand its broadband and ubiquitous services pursuant to its new Medium-Term Strategy adopted in May 2008 entitled “Road to Service Creation Business Group.”
In the fixed-line communications market, NTT Group expanded the coverage area for the Next-Generation Network (NGN) that is now being used to provide commercial services as of March 2008, and worked to expand and enhance services that capitalize on the unique characteristics of the NGN, such as video transmission services. As a result of these efforts, the number of FLET’S Hikari subscriptions reached 11.13 million as of March 31, 2009. In the mobile communications market, NTT Group deployed new mobile phone handsets tailored to customer preferences and lifestyles and offered new services that support customers’ day-to-day lives. NTT Group also worked to raise customer satisfaction by conducting a comprehensive review extending from customer relations to network structures. As a result of these efforts, the number of mobile phone subscriptions reached 54.60 million, of which 49.04 million are FOMA service subscriptions, accounting for 90% of all subscriptions.
With regard to services for corporate customers, in the area of SaaS, which reduces customer information system installation and operation burdens, NTT Group collaborated with its business partners to develop safe and secure SaaS platforms and provide a wide range of services.

Despite the effects of economic downturn which appeared in various forms during the latter half of the fiscal year ended March 31, 2009, extensive group-wide efforts to reduce costs have minimized its effect on NTT Group’s income. As a result, operating income in the fiscal year ended March 31, 2009 was 1,109.8 billion yen, a decline of 194.9 billion yen from the previous fiscal year (a real decrease of 35.0 billion yen, when excluding 159.9 billion yen in special profits such as the one-time increase in income realized from the gain on the transfer of the substitutional portion of the Employee Pension Fund that was recorded in the fiscal year ended March 31, 2008).

In this extremely harsh business climate, NTT Group will create and deploy broadband and ubiquitous services using its full IP network infrastructure in response to consumer preferences, pursuant to the Medium-Term Management Strategy. Specific actions will include the expansion of businesses in the following four areas of strategic growth, each promoting the transformation of NTT Group’s business portfolio, centering on IP and solution businesses: (1) expansion of network services, including NGN and 3G services, and expansion of upper layer businesses; (2) expansion of solutions business for corporate customers; (3) promotion of new businesses by using the results of NTT Group’s research and development, in addition to conducting business in the environment, energy, and real estate fields; and (4) development of global businesses using the comprehensive strengths of the entire NTT Group.

Through the activities described above, NTT Group will continue its efforts to create a rich communications environment through the provision of broadband and ubiquitous services, increase the efficiency of business activities, create new business opportunities, contribute to solutions to a wide range of societal issues such as low birth rates, the aging of the population and various environmental problems, and maximize group corporate value.
In addition to increasing corporate value over the medium- and long-term, NTT has identified the return of profits to shareholders as an important management goal. In determining the level of dividends, NTT, while giving consideration to stability and sustainability, takes into account a full range of factors, including business performance, financial standing, and dividend payout ratio.
Dividends for the fiscal year ended March 31, 2009 will be 110 yen per share (an increase of 20 yen over the previous fiscal year) after taking into consideration the effect of the 100-for-1 stock split carried out on January 4, 2009. For the fiscal year ending March 31, 2010, dividends of 120 yen per share for the full year (an increase of 10 yen over the previous fiscal year) are planned, which will be implemented with the interim dividend payment.

I would like to conclude this message by thanking our shareholders in advance for your further understanding and support.

June 2009

Board of Directors