| 1. Analysis of Consolidated Business Results | |||||||||
(1) Consolidated Results 
In the three-month period ended December 31, 2008, NTT Group, aiming to transform into a Service Creation Business Group, continued its efforts to expand broadband and ubiquitous services. In the market for fixed-line communications, as the expansion of fiber-optic access services and the migration from existing fixed-line telephone services to optical IP telephony continues, a variety of operators have launched video distribution and other diverse services. Under such market conditions, NTT Group focused its efforts on expanding services, including the expansion of the "FLET'S Hikari Next" service area to cover major cities in the Tokyo metropolitan area and all prefectural capitals in eastern Japan, and the launch of a new service with a maximum communication speed of approximately 1 Gbps for corporate customers, "FLET'S Hikari Next Business Type". Efforts to further improve customer services included reducing the lead time between the application and the connection opening of "FLET'S Hikari" services, and enhancing one-stop support services for matters relating to home and office networks and information devices. As a result of these efforts, the total number of "FLET'S Hikari" subscriptions reached 10.636 million and the total number of "Hikari Denwa" subscriptions reached 7.458 million. In the mobile communications market, which has already entered a mature phase given the high penetration rate of mobile phones, competition among mobile phone operators has intensified in such areas as customer acquisition and further improvement of services. In such a market environment, the future business direction based on a new action plan entitled "DOCOMO's Change and Challenge to Achieve New Growth" was announced. Also, a handset series was developed (*1) to attune its models to the latest preferences and lifestyles of mobile phone users and new services were released, suggesting new usage of mobile phones, such as "i-concier". NTT Group strove for further penetration of business models tailored to the current market conditions, such as new discount services and new handset sales models, and performed a comprehensive review of all of its operations, from customer relations to handsets to network development. As a result of these efforts to enhance customer satisfaction, NTT DOCOMO's churn rate decreased and for the first time in December, the number of customers who moved to NTT DOCOMO exceeded those who moved from NTT DOCOMO using Mobile Number Portability. As a result, the number of mobile service subscriptions reached 54.155 million, of which 47.494 million (87.7%) were FOMA service subscriptions. For corporate customers, NTT Group strove to provide high value-added solutions tailored to customers' different business types and strengthened its ability to support its customers' global business activities. NTT Group began offering various services utilizing SaaS (*2) , which reduces system implementation and operation costs for customers. NTT Group also began offering "GIGASTREAM Premium Ether", a high-quality, high-reliability next-generation leased line service with improved maintainability and convenience, and implemented Japan's first-ever bandwidth-guaranteed service level agreements. As a result of these efforts, NTT Group's consolidated operating revenues were 2,569.8 billion yen in the three-month period ended December 31, 2008. Consolidated operating expenses were 2,300.4 billion yen. Consolidated operating income was 269.4 billion yen, while consolidated net income before income taxes, minority interests and equity in earnings of affiliated companies was 273.7 billion yen and consolidated net income was 137.7 billion yen for the three-month period ended December 31, 2008. For the nine-month period ended December 31, 2008, NTT Group's consolidated operating revenues were 7,734.3 billion yen. Consolidated operating expenses were 6,719.9 billion yen and as a result, consolidated operating income was 1,014.5 billion yen while consolidated net income before income taxes, minority interests and equity in earnings of affiliated companies was 1,044.8 billion yen. Consolidated net income was 544.1 billion yen for the nine-month period ended December 31, 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 December 31, 2008 were 1,004.6 billion yen. Despite an increase in IP-related revenues attributable to the increase in "FLET'S Hikari" subscriptions, revenues decreased due to such factors as the migration from fixed-line telephones and leased lines to low-priced IP-based services. Consolidated operating expenses were 974.7 billion yen, due in part to a decrease in business expenses and amortization and depreciation. As a result, consolidated operating income in the three-month period ended December 31, 2008 was 29.9 billion yen. For the nine-month period ended December 31, 2008, consolidated operating revenues were 3,013.0 billion yen and consolidated operating expenses were 2,942.4 billion yen. As a result, consolidated operating income was 70.6 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 December 31, 2008 were 324.9 billion yen, as conventional fixed-voice related revenues decreased while increases were recorded in OCN, VPN-related services and other IP service revenues, as well as in revenues from corporate solutions services. Consolidated operating expenses for the three-month period ended December 31, 2008 were 298.2 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 December 31, 2008 was 26.7 billion yen. For the nine-month period ended December 31, 2008, consolidated operating revenues were 961.3 billion yen and consolidated operating expenses were 879.2 billion yen. As a result, consolidated operating income for the nine-month period ended December 31, 2008 was 82.1 billion yen. |
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<3> Mobile communications business segment  Consolidated operating revenues for the three-month period ended December 31, 2008 were 1,111.0 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. Consolidated operating expenses for the three-month period ended December 31, 2008 were 942.5 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 December 31, 2008 was 168.4 billion yen. For the nine-month period ended December 31, 2008, consolidated operating revenues were 3,378.8 billion yen and consolidated operating expenses were 2,636.1 billion yen. As a result, consolidated operating income for the nine-month period ended December 31, 2008 was 742.7 billion yen. Number of subscriptions 
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<4> Data communications business segment  Consolidated operating revenues for the three-month period ended December 31, 2008 were 258.3 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 December 31, 2008 were 234.5 billion yen. As a result, consolidated operating income for the three-month period ended December 31, 2008 was 23.8 billion yen. For the nine-month period ended December 31, 2008, consolidated operating revenues were 765.6 billion yen and consolidated operating expenses were 696.9 billion yen. As a result, consolidated operating income for the nine-month period ended December 31, 2008 was 68.7 billion yen. |
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<5> Other business segment  In the "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 December 31, 2008 of 289.6 billion yen and consolidated operating income of 18.8 billion yen. For the nine-month period ended December 31, 2008, consolidated operating revenues were 848.8 billion yen and consolidated operating income was 42.2 billion yen. |
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