| 3. Business Operation Policy | ||
|
||
For over 100 years, the NTT Group has been the mainstay behind the growth and development of Japanese telecommunications; this track record, the confidence that comes with it, and our R&D capabilities, which are second to none in the world, serve as the foundation from which we will "continue to provide safe and secure service, and continue always to earn the trust of our customers and stakeholders." With these words as our guide, amidst fierce competition in the marketplace, we will fulfill the legal responsibilities and social mission demanded of each of our businesses in a market environmental characterized by intense competition, and at the same time move proactively to develop our businesses to meet the needs of the ubiquitous broadband society of the 21st century. Our aim is for sustainable development backed always by a high level of trust from both our customers and our shareholders. In order to respond to the increasingly diversified and complex needs of customers in the wake of the rapid developments taking place in the information and telecommunications market, NTT Group set forth the following three managerial goals in NTT Group's Medium-Term Management Strategy. As NTT Group makes steady progress towards achieving these goals, NTT Group will proactively work to provide greater convenience to its customers, contribute to overcoming social problems, and implement management that emphasizes shareholder value. a) Use the combined strengths of NTT companies to proactively build a ubiquitous broadband market that responds to customer needs and contributes to the realization of the National ICT Policy. b) Build a safe, secure and convenient communications network environment and broadband access infrastructure, while achieving a seamless migration from fixed line to IP telephony services and from metal wire systems to optical fiber. c) Strive to increase corporate value and achieve sustained growth. |
||
|
||
During the second six-month period of the fiscal year ending in March 31, 2008, while oil prices and overseas economic developments needs to be closely monitored, exports are expected to continue increasing and domestic personal consumption to rise as a result of strong corporate income and higher wages. As a result, we expect that the Japanese economy will continue to advance at a moderate pace. In the information and telecommunications market, while ubiquitous broadband communications continue to spread and the development of IP networks is accelerating the convergence of services, the competition to respond to the diversifying needs of customers is expected to grow even more fierce. Under this business climate, NTT Group will continue to respond to changes in the business environment as it implements its Medium-Term Management Strategy. Specific business developments include, with respect to optical access services, ongoing efforts to improve customer service such as measures to enhance the customer subscription process so we can respond promptly to customer comments and requests. With respect to FOMA, NTT Group is raising its overall competitive strength by listening to its customers' suggestions for providing unique products and services, while constructing high-quality and stable networks, improving after-sales follow-up services, and introducing customer-friendly rate plans. In addition, we are working to create new revenue sources by offering attractive content and services that make use of HSDPA and working to achieve continuous expansion of overseas roaming services.Also, in efforts to develop business that does not depend on communications traffic, we are further expanding credit services. With respect to next-generation networks, we are working to launch new commercial services that take into account the results obtained through field testing, such as our customers' opinions and desires regarding products and the results of technical review. The next-generation network will guarantee a high quality end-to-end network with its network control functions while enjoying its high-speed, wide-band IP and broadband based technologies and securing high reliability and security. Having "open" and "collaboration" as our key words, we are collaborating with other carriers and companies in other sectors and industries to develop varied and wide-ranging ubiquitous broadband services so we can maximize the number of customers who will be enjoying our next-generation network. Based on these ideas, as soon as preparations for the provision of commercial services are complete, we will start commercial services in areas of the Tokyo Metropolitan region and Osaka Prefecture and will steadily expand service territories. We will also provide environments that allow companies in various industries to create new services and business models that take advantage of the features of our next-generation network. With respect to the provision of solution services to corporate customers, NTT Group will implement business process reforms under its new business structure and will make efforts to better respond to customer needs by reinforcing our marketing and development capabilities. In response to the globalization of our customers' business, we will work to enhance our business capabilities in Asia, a region where the expansion of business by Japanese companies is expected to grow rapidly. At the same time, we will continue our NTT Group-wide review of business processes and consolidation of bases to raise management efficiency. Through the activities described above, NTT Group will continue to work to improve NTT Group corporate value. NTT's consolidated projections for the fiscal year ending March 31, 2008 are as follows: operating revenues are projected to reach 10,600.0 billion yen (a decrease of 1.5% from the previous year); operating income is projected to reach 1,320.0 billion yen (an increase of 19.2% from the previous year); income before income taxes is projected to amount to 1,320.0 billion yen (an increase of 16.0% from the previous year), while net income is expected to reach 530.0 billion yen (an increase of 11.1% from the previous year). Moreover, on July 1, 2007, the NTT Kosei-Nenkin-Kikin ("NTT Plan") received permission to be relieved of the obligations related to past services to disburse the NTT Plan benefits covering the substitutional portion. Under U.S. GAAP, on a consolidated basis, gain or loss on transfer of such portion will be recognized when the entire transfer has been completed. With respect to the impact which this transfer will have on consolidated earnings, the results of preliminary calculations as of March 31, 2007 were approximately 340.0 billion yen and is reflected in its full-year forecasted results as a decrease in operating expenses. Future usage of the telephone cards issued by NTT Group is expected to be reasonably estimated. Although the method of calculation for such figure is still under review, a preliminary estimate at present of roughly 30.0 billion yen has been included in the consolidated performance forecasts for the fiscal year ending March 31, 2008 and was recorded as a decrease in operating revenue. Note: The forward-looking statements and projected figures concerning the future performance of NTT and its subsidiaries 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 currently available to it regarding the economy, the telecommunications industry in Japan and other factors. These projections and estimates may be affected by the future business operations of NTT and its subsidiaries and affiliates, the state of the economy in Japan and abroad, possible fluctuations in the securities markets, the pricing of services, the effects of competition, the performance of new products, services and new businesses, changes to laws and regulations affecting the telecommunications industry in Japan and elsewhere and other changes in circumstances that could cause actual results to differ materially from the forecasts contained or referred to herein. |
||
|
Copyright (c) 2007 Nippon telegraph and telephone corporation |