| 1. Analysis of Consolidated Business Results | |||||||||
(1) Consolidated Results 
In the three-month period ended September 30, 2008, NTT Group, aiming to transform itself into a Service Creation Business Group, continued its efforts to expand its broadband and ubiquitous services. With the market for conventional fixed-line communications impacted by the expansion of optical access services and the migration from existing fixed-line telephone services to optical IP telephony, NTT Group focused its efforts on expanding sales of such services as "FLET'S Hikari" and "Hikari Denwa". As a result of efforts directed at expanding the service areas for "FLET'S Hikari Next" throughout the Tokyo metropolitan area and other major cities and at launching "FLET'S VPN Wide", a VPN service for corporate customers, and otherwise enhancing the service lineup, the total number of "FLET'S Hikari" subscriptions reached 10.10 million. In the mobile communications market, intensifying rate competition and the recent introduction of MVNOs (*1) and other factors have made competition among businesses increasingly tough. In such an environment, to enable customers to use content and applications with comfort and with peace of mind, NTT Group began offering such new services as the two-level fixed-price packet service, "Pake-hodai double". Efforts directed towards establishing new business models that can meet the challenges of the dramatic changes taking place in the market included the launch of the "706i" series and other new mobile phones, new discount services introduced last year and the introduction of new sales models. This resulted in the number of mobile phone subscriptions growing to 53.94 million, of which 86.1% represent "FOMA" service subscriptions. Also, business efficiency was increased by absorbing eight regional DOCOMO companies into NTT DOCOMO on July 1. For corporate customers, NTT Group strove to provide high value-added solutions tailored to different business types and strengthened its ability to support customers' global business activities. NTT Group also announced plans for developing a infrastructure for SaaS (*2) service providers based on the concept of "SaaS over NGN", supporting SaaS businesses through the utilization of the secure and highly reliable Next-Generation Network (NGN) infrastructure. As result of these efforts, NTT Group's consolidated operating revenues were 2,571.0 billion yen in the three-month period ended September 30, 2008. Consolidated operating expenses were 2,198.0 billion yen. As a result, consolidated operating income was 373.0 billion yen while consolidated net income before income taxes was 383.3 billion yen. Due to the decrease of income tax expenses from the consolidation of eight regional DOCOMO companies into NTT DOCOMO, consolidated net income was 230.8 billion yen for the quarter. For the six-month period ended September 30, 2008, NTT Group's consolidated operating revenues were 5,164.6 billion yen. Consolidated operating expenses were 4,419.5 billion yen, and as a result, consolidated operating income was 745.1 billion yen while consolidated net income before income taxes was 771.2 billion yen. Consolidated net income was 406.4 billion yen for the six-month period ended September 30, 2008.
Results by business segment are as follows. |
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(2) Segment Results Results by segment are as follows. <1> Regional telecommunications business segment  NTT Group's consolidated operating revenues for the three-month period ended September 30, 2008 were 1,013.2 billion yen. Despite an increase in IP-related revenues attributable to the increase in "FLET'S Hikari" subscriptions, revenues decreased due to the migration from fixed-line telephones and leased lines to low-priced IP-based services. Consolidated operating expenses were 983.7 billion yen due to such factors as a decrease in depreciation and amortization. As a result, consolidated operating income in the three-month period ended September 30, 2008 was 29.5 billion yen. For the six-month period ended September 30, 2008, consolidated operating revenues were 2,008.4 billion yen and consolidated operating expenses were 1,967.7 billion yen. As a result, consolidated operating income for the six-month period ended September 30, 2008 was 40.7 billion yen. Number of subscriptions 
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<2> Long-distance and international communications business segment  Consolidated operating revenues for the three-month period ended September 30, 2008 were 325.0 billion yen, as conventional fixed voice related revenues decreased while increases were recorded in OCN, VPN-related services and other IP-related revenues as well as in revenues from corporate solutions services. Consolidated operating expenses for the second quarter were 297.4 billion yen, as a result of decreases in telecommunication facility usage fees in conjunction with the decline in fixed-voice related revenues. As a result of the above, the consolidated operating income for the three-month period ended September 30, 2008 was 27.5 billion yen. For the six-month period ended September 30, 2008, consolidated operating revenues were 636.4 billion yen and consolidated operating expenses were 581.0 billion yen. As a result, consolidated operating income for the six-month period ended September 30, 2008 was 55.4 billion yen. |
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<3> Mobile communications business segment  Consolidated operating revenues for the three-month period ended September 30, 2008 were 1,097.5 billion yen. This was the result of a decrease in mobile voice related revenues due to the expansion of new discount services introduced last year, despite an increase in handset sales revenues in conjunction with the introduction of new sales models. Consolidated operating expenses for the three-month period ended September 30, 2008 were 818.5 billion yen due to the decrease in revenue-linked expenses in conjunction with the decline in the number of handsets sold. As a result, consolidated operating income for the three-month period ended September 30, 2008 was 279.1 billion yen. For the six-month period ended September 30, 2008, consolidated operating revenues were 2,267.8 billion yen and consolidated operating expenses were 1,693.6 billion yen. As a result, consolidated operating income for the six-month period ended September 30, 2008 was 574.2 billion yen. Number of subscriptions 
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<4> Data communications business segment  Consolidated operating revenues for the three-month period ended September 30, 2008 were 265.5 billion yen as a result of increased revenues due to such factors as expanding the scope of consolidated subsidiaries and outsourcing services. Due to an increase in revenue-linked expenses, consolidated operating expenses for the three-month period ended September 30, 2008 were 242.3 billion yen. As a result, consolidated operating income for the three-month period ended September 30, 2008 was 23.2 billion yen. For the six-month period ended September 30, 2008, consolidated operating revenues were 507.3 billion yen and consolidated operating expenses were 462.4 billion yen. As a result, consolidated operating income for the six-month period ended September 30, 2008 was 44.9 billion yen. |
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<5> Other segment  In other business segment, active promotion of real estate, financing, construction and power, system development and advanced technology development businesses resulted in consolidated operating revenues for the three-month period ended September 30, 2008 of 291.6 billion yen and consolidated operating income of 9.2 billion yen. For the six-month period ended September 30, 2008, consolidated operating revenues were 559.2 billion yen and consolidated operating expenses were 23.4 billion yen. |
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