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NTTis... Spring 2011

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Message from Senior Executive Vice President Uji
~ Striving to become a Global ICT Service Company ~

We asked Mr. Noritaka Uji, a Senior Executive Vice President who is in charge of technology strategies for NTT Group, about the status of its efforts on services and research and development and NTT's global expansion.

What are your thoughts about the current state of information and communications?

Representative Director and Senior Executive Vice President Noritaka Uji

There are major changes in information and communications around the world. For example, there is "service convergence", which is represented by cross-boundary services between broadcasting and communications such as video distribution using circuit lines and One-Seg broadcasting for mobile phones. Also, as everyone may be aware, the emergence of cloud computing is driving a shift from "owning" servers and software to "using" those functions via networks.
New technologies and services that drive such big changes are created through various types of collaborations (partnerships). We would like to take on new challenges to achieve great developments in technology and services, and financially, through collaborations among companies of different industries, not just domestically, but also internationally, in various forms.
NTT Group has been working to expand both the fixed and mobile broadband network towards realization of a broadband and ubiquitous society. Japan's broadband network has become the world's fastest and cheapest by applying optical and wireless technologies which were cultivated over many years and by promoting technological development for cost-reduction. Optical broadband covers approximately 90% of Japan, and the next-generation network (NGN) coverage area is scheduled to encompass most of the existing fiber-optic service coverage area by March 2011. In addition, with regard to the high-speed mobile broadband, XiŽ (pronounced crossy), a service based on the new communication standard, Long Term Evolution (LTE), with high-speed, large-capacity and low latency features, was launched in December 2010.
It is important to consider what kind of valuable services we can provide our customers by utilizing such infrastructure. To this end, we will actively promote the provision of services using both the fixed and mobile broadband networks.

What kind of services are you currently contemplating?

We are contemplating services that make maximum use of broadband capabilities. In particular, we would like to take video, Home ICT and cloud computing services, which we have been promoting so far, to further enhanced levels, while also creating and developing new services. Hikari TV, a video distribution service using an optical IP network, already has more than 1.3 million subscribers. Retransmission of digital terrestrial television broadcasting, multi-channel broadcasting and Video On Demand (VOD), among other things, are already in use, and in 2010, NTT Group launched a three-dimensional (3D) video distribution, a remote programming service using devices such as mobile phones and retransmission of satellite broadcasts over IP. In 2011, there are also plans to begin field trials centered on NTT Laboratories for a high-quality, Full HD (full high-definition), 3D video distribution service as part of our ongoing efforts to provide more convenient and enjoyable services.
As for Home ICT, we have been forming alliances and conducting joint experiments with many companies since December 2009, starting with major home electronics and office equipment manufacturers. With basic technology verification experiments completed, we began field trials in November 2010, and full-scale services will finally commence after spring 2011. The number of subscribers for existing services, such as configuration support for personal computers and network devices and Remote Support Service for responding to user problems remotely, is steadily increasing. Going forward, we see Home ICT becoming a home control center that serves to improve quality of life and help solve diverse social problems in relation to home security, video sharing, medicine and healthcare, education, environment and other areas. Also, I would like to promote Home ICT as its technology can also be used to expand services as Office ICT to a large number of small and medium enterprises.
NTT Group has been developing platforms and networks for realizing cloud computing as well as applications to run on those platforms in collaboration with other partners.
At NTT Laboratories, important large-scale distributed processing platforms and operation management technologies are currently being developed towards the expansion of cloud computing, with an emphasis on keywords such as "open", "secure", "large-scale", "distribution", and "eco". Through partnerships with other business enterprises, I would also like to apply the technique and know-how that we have gained to cloud computing services for corporate customers, government, and the medicine, healthcare and education fields to develop safe and secure cloud computing structures for social infrastructure.
By furthering the development of video, Home ICT and cloud computing, we will in the near future be entering an era where it will be commonplace for users to seamlessly access their daily living and working environment regardless of the customer's location or device. In 2011, fixed-mobile convergence (a service format converging fixed and mobile communications) that includes the broadband network, upper-layer services and a diverse range of devices will become even more important.

Will these services continue developing?

Service creation is endless. This is because simply being able to provide a service is not the same as making it easy to use and providing it at a reasonable price. Mobile phones, for example, have evolved from a car phone to a shoulder phone, and then to a mobile handset, and has even become more fashionable.
An increasingly wide variety of functions continue to become available on mobile phones, such as concierge services and mobile wallet (Osaifu-Keitai), and now, the mobile phone is simply becoming one's "mobile". Furthermore, with the smartphone coming into existence, mobile phones are now being used in all facets of social life.
Mobile phone technology is evolving much faster than I originally imagined. From a global perspective, it is amazing how the number of mobile subscribers has surpassed fixed-line users in Japan, how fast and inexpensive broadband connections have become, how computer performance and memory capacity have significantly increased, and how large volumes of data can now be uploaded to servers. Even though I knew these were technologically possible, the speed at which it has been achieved is truly remarkable.

It seems that NTT is being asked to provide services that keep up with this blistering speed.

Yes, that is right. I am always telling researchers and developers that "Speed is of the essence." If it were only NTT providing services, perhaps the current pace would be sufficient, but because this market includes all global players, there are just as many technological innovations being developed.
Above all, cloud computing is attracting a lot of attention. As participants in cloud computing services include computer and network-device manufacturers, network-related start-up companies, the software industry and even telecommunications operators like NTT, the competition mechanism is changing radically. It is exactly for this reason that technological innovation and competition are being forced to move very quickly. We must respond to this sort of competition through advancement of technological innovation for our customers.
NTT began as a Japanese telecommunications company, but wants to become an enterprise that provides ICT technology and services on a global basis. NTT is a company that, while expert at developing technology, knows how to utilize that technology and provide it in the form of actual services. NTT's research and development system, which is widely regarded as world class, has about 6000 researchers throughout NTT Group and is the source of NTT's competitive power and growth. However, there is a gap between what can be done technologically and what is truly easy to use as a service. Needless to say, we must make an effort to provide products that fit with customers and the times by improving cost performance and ease of use, among other factors. There are still many things that we should and can do to provide customers with good services while competing globally. The level of quality demanded by Japanese consumers is very high in a good sense, which makes Japanese technology grow, and I believe taking this technology overseas with an eye to global expansion is a move in the right direction.

Please give us some examples where NTT's technology is used overseas.

We provided video transmission equipment for the 2010 FIFA World Cup in South Africa. This equipment was used by more than 20 broadcasting stations around the world to deliver high-quality video to over 60 countries. This is an example of the service convergence between communications and broadcasting.
Our technology was also used at the rescue site for the Chilean miners trapped by the cave-in accident.
Do you remember how a videophone was used to check on conditions underground? That videophone used NTT's technology. In 2006, NTT teamed up with CODELCO, a Chilean state-owned mining company, to establish a joint venture called "micomo" to spread the results of NTT's research and development in the mining industry. micomo was the company that installed a videophone underground at the rescue site by passing an optical fiber through a hole opened at the surface. Since cave-ins and other types of accidents are inherent risks in mines, we established micomo thinking that safety management and means of communication were absolute necessities underground. I am extremely pleased that NTT's video communication technology proved to be useful at the rescue site.

Please tell us about NTT's global strategy for the future.

With respect to the keyword, "global", merger and acquisition (M&A) activities with overseas companies have become a trend in Japan as a result of the strong yen. The reality is that the growth in the Japanese market has been limited, and in the end, global expansion is essential to a company's growth. There are still markets worldwide that are growing, and those are simply too good of opportunities to pass up. NTT Group is also actively promoting M&A. We expect our acquisition in 2010 of Dimension Data, which has a presence in 49 countries around the world, will open up new markets for NTT. In addition, we think that Keane International, Inc., which was acquired by NTT DATA, and whose main U.S. business is systems integration, will serve as a key in NTT Group's business development in the U.S.
Although it is a Japanese communications company, NTT is expanding its business regions and content with an eye to becoming a global ICT service company. With these big changes, NTT will finally make a full-scale move into the global market. It is a visionary and pioneering move for a non-manufacturing telecommunications company like NTT to expand globally other than in the network business and to broaden its business line. NTT Group boasts multifaceted group power including upper-layer services, solutions, construction and power, and research and development, in addition to fixed and mobile communications businesses. NTT Group hopes to demonstrate these comprehensive abilities going forward.

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