1. BUSINESS RESULTS (1)  Analysis Concerning Business Results Overview of Consolidated Business Results During the consolidated fiscal year ended March 31, 2009, turmoil in the international financial markets gave rise to a global economic crisis and the Japanese economy underwent a rapid downturn including substantial drops in exports and production and declines in corporate profits and employment. In the information and telecommunications fields, as the rollout of broadband and ubiquitous services progresses, the use of optical services is increasing in the fixed-line communications market and conventional fixed-line telephony is transitioning to optical IP telephone services. In the mobile communications market, services and handsets are becoming more diverse and advanced while rate competition and entry into the market by new MVNOs are giving rise to increasingly fierce competition. Many other dramatic changes are occurring in conjunction with the increased use of IP, including the integration of and collaboration between fixed-line and mobile communications and communications and broadcasting services, and the creation of diverse new businesses using networks. The effects of the intensification of competition and the economic downturn are also being felt within NTT Group, in areas such as orders for solutions services and sales of FLET'S Hikari services and mobile phone handsets. Under these difficult circumstances, NTT Group is working to expand 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 such as FLET'S Hikari Next as of March 2008, and worked to expand and enhance services that capitalize on the unique characteristics of the NGN, such as Hikari TV. NTT Group also took steps to enhance the quality of customer service, such as reducing the lead time between a customer's application and the start of FLET'S Hikari service and enhancing support services. As a result of these efforts, the number of FLET'S Hikari subscriptions reached 11.13 million. 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 such as "i-concier", which delivers information at times and through delivery methods suited to a customer's interests and preferences. NTT Group continued its efforts to firmly establish business models tailored to changes in the market environment, including the new discount services and new handset purchase methods that were introduced during the previous fiscal year. NTT Group also worked to raise customer satisfaction by conducting a comprehensive review extending from customer relations to handsets and 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, NTT Group worked to provide high value-added solutions according to customer industries and business categories and to raise support capabilities adapted to the global business activities of its 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. In its global businesses, NTT Group used its comprehensive capabilities to provide ICT solutions. Overseas business sites were expanded, acquisitions of interests in SI businesses in Europe and the Americas were made to provide solution services and data centers were improved. With respect to international roaming services for mobile phones, the lineup of compatible handsets was expanded and tie-ups with overseas carriers were strengthened to increase the number of countries and territories where services are offered and to provide more convenient services. In addition, NTT Group is working in concert to undertake CSR (corporate social responsibility) activities intended to contribute to the sustainable development of society. NTT Group has positioned the prevention of global warming as a top-priority of its environmental agenda, and is implementing a variety of measures to reduce carbon dioxide emissions from the business activities of individual group companies and, through the provision of goods and services, to reduce carbon emissions of society as a whole. "Green NTT," a policy encouraging the development and use of clean energy such as solar power, was launched in May 2008, and NTT Green LLP was established in August 2008 through joint investments by individual group companies to promote solar power generation. As a result of these efforts, NTT Group's consolidated operating revenues for the fiscal year ended March 31, 2009 were 10,416.3 billion yen (a decrease of 2.5% from the previous fiscal year) and consolidated operating expenses were 9,306.6 billion yen (a decrease of 0.7% from the previous fiscal year). Consolidated operating income was 1,109.8 billion yen (a decrease of 14.9% from the previous fiscal year), consolidated income before income taxes was 1,105.2 billion yen (a decrease of 16.4% from the previous fiscal year), and consolidated net income was 538.7 billion yen (a decrease of 15.2% from the previous fiscal year). The forecast of performance in the fiscal year ending March 31, 2010 is as follows: consolidated operating revenues of 10,300.0 billion yen (a decrease of 1.1% from the fiscal year under review), consolidated operating income of 1,110.0 billion yen (an increase of 0.0% from the fiscal year under review), consolidated income before income taxes of 1,080.0 billion yen (a decrease of 2.3% from the fiscal year under review), and consolidated net income of 460.0 billion yen (a decrease of 14.6% from the fiscal year under review).* *With the application of the Statement of Financial Accounting Standards No. 160 ("SFAS 160"), "Noncontrolling Interests in Consolidated Financial Statements - An Amendment of ARB No. 51" starting in the fiscal year ending March 31, 2010, "Net Income" for the fiscal year under review includes noncontrolling interests but Net Income for the consolidated financial results forecasts for the fiscal year ending march 31, 2010 shows "Net Income Attributable to the Parent" that excludes noncontrolling interests. For further details, please see "(Reference) Statement of Financial Accounting Standards No. 160, 'Noncontrolling Interests in Consolidated Financial Statements - An Amendment of ARB No. 51'". The business results for NTT (holding company) and the main NTT Group companies by segment types for the consolidated fiscal year ended March 31, 2009 are as follows. Nippon Telegraph and Telephone Corporation (Holding Company) Overview of Business Results In its capacity as the holding company of the NTT Group companies, NTT continued working on the planning of group-wide strategies and redistribution of managerial resources in line with changes in the business environment. NTT provided appropriate and timely advice and intermediary services to facilitate the performance of business activities in line with the NTT Group's policies and objectives, while maintaining the principle of independent and autonomous action by individual group companies. NTT conducted fundamental research and development and provided the results to each group company so they could be broadly disseminated, while planning and promoting the commercialization of fundamental technologies. NTT also exercised voting and other shareholder rights at the general shareholders' meetings of each group company. During the fiscal year ended March 31, 2009, NTT acquired 40,517,500* of its own shares at a total cost of 199,999.9 million yen pursuant to a resolution of the Board of Directors adopted on May 13, 2008. * The number of shares acquired (40,517,500 shares) represents the number of shares acquired prior to the January 4, 2009 share split (341,307 shares) multiplied by 100 (34,130,700 shares) plus the number of shares acquired after the share split (6,386,800 shares). [1] Provision of advice and intermediary services to group companies NTT provided appropriate and timely advice and intermediary services to group companies to facilitate the performance of business activities in line with group policies and objectives. Specifically, NTT adopted the new Medium-Term Management Strategy, "Road to Service Creation Business Group" and provided advice and intermediary services aimed at the full-scale development of ubiquitous broadband services. In addition, NTT provided support through the Next-Generation Services Joint Development Forum, which was established in March 2008 to promote the promulgation of services utilizing the NGN. As compensation for these services, NTT received 18.6 billion yen in group management and administration revenues for the fiscal year under review (a decrease of 2.5% from the previous fiscal year). [2] Fundamental research and development activities To promote the implementation of its new Medium-Term Management Strategy, "Road to Service Creation Business Group," NTT Group has conducted research and development on basic technologies which will pave the way for the development of the sophisticated networks and new services that will in turn contribute to the creation of a ubiquitous broadband society. Commercialization of the results of research and development was effectively carried out through NTT Group's comprehensive production system under which research and development achievements are integrated into marketing and planning activities for key business lines. Also, NTT has been actively engaged in research and development on basic technologies for the future and in the global promotion of its technologies. -Research and development concerning NGN and fiber-optic access NTT has conducted research and development and provided technical support to its operating companies in support of the full-scale expansion of service areas for the NGN after its commercialization, including research to enhance the functionality and improve the operational capabilities of the NGN. As for fiber-optic access, among other things, NTT promoted research and development on small-radius, low-friction indoor fiber-optic cables, which are easier to install in pre-existing apartment buildings than conventional fiber-optic cables, contributing to the reduction of installation costs. Moreover, based on the actual results achieved and know how gained through the operation of NGN services on a commercial basis, NTT has been promoting technologies related to the NGN and fiber-optic access abroad, and is actively engaged in the international standardization of advanced technologies. -Research and development on services using the NGN NTT has actively engaged in a wide range of research and development activities targeted at commercializing new services for the NGN. Specifically, it has engaged in research and development on basic technologies for IPTV, a new fiber-optic-based video distribution service, and the results of this research are being used in the commercial services provided by NTT Plala Inc. Additionally, NTT has focused its efforts on the commercialization of SaaS (Software as a Service). In this regard, NTT has promoted research and development on the basic technologies required to achieve the commercialization of SaaS products for the NGN that capitalize on the high-security, high-reliability features of the NGN, and has also moved ahead with alliances with domestic and overseas companies relating to the development of SaaS for the NGN infrastructure. Other research and development activities included digital signage, which enables the distribution of advertisements to discrete locations at specified time intervals. -Research and development on shared ICT platforms and technologies leading to new business opportunities NTT also engaged in research and development efforts relating to the ICT platform that supports the deployment of services. Among other things, as part of its efforts to develop environmentally-friendly data centers, NTT has been promoting research and development related to environmental technologies that contribute to the reduction of carbon dioxide emission by communication equipment and data centers, such as high-voltage DC feed and fixed oxide fuel batteries. In addition, NTT has engaged in research and development activities and supported the commercialization of technologies leading to new commercial opportunities, such as a new communications technology that exploits the surface electric field of the human body, and a technology that uses parts or fragments of music and video files on the internet to identify the content of the work . -Cutting-edge basic technologies NTT has also continued to conduct research and development activities on numerous basic technologies that support NTT Group's continuous development. These efforts include research and development in the following areas: realization of the world's largest transmission volume and longest transmission distance with a view to developing the technologies required to support the massive-capacity fiber-optic networks of the future; and technologies for the development of ultra power-saving computers including semiconductor devices that perform calculations using minute vibrations and ultracompact, low power consumption optic bit memory. As a result of these research and development activities, NTT's total expenditures on research and development during the fiscal year under review were 132.1 billion yen (a decrease of 2.0% from the previous fiscal year), and NTT received basic research and development revenues of 126.9 billion yen (an increase of 0.1% from the previous fiscal year) as compensation for these research and development activities. [3] Share ownership and exercise of voting rights NTT exercises its rights as a shareholder based on the principle that each group company should conduct its business activities in line with NTT Group's policies and objectives, while maintaining their independence and autonomy. When exercising voting rights as a shareholder at the general shareholders meetings of each group company in the fiscal year ended March 31, 2009, NTT determined that the business practices, financial conditions, retained profits, and other conditions during the previous fiscal year (the fiscal year ended March 31, 2008) were appropriate and, accordingly, NTT voted to approve the disposition of unappropriated retained earnings based on proposals from each group company as well as the election of directors and other matters. As a result, NTT received 199.0 billion yen in dividends (a decrease of 6.6% from the previous fiscal year). As a result of the above activities, NTT's operating revenues for the fiscal year ended March 31, 2009 were 363.7 billion yen (a decrease of 3.2% from the previous fiscal year), recurring profit was 196.4 billion yen (a decrease of 9.8% from the previous fiscal year), and net income was 195.9 billion yen (an increase of 0.1% from the previous fiscal year). Regional Communications Business Segment Overview of Business Results Number of Subscriptions Notes 1. The figures for FLET'S Hikari include subscriptions to NTT East's B FLET'S and FLET'S Hikari Next and to NTT's West's B FLET'S, FLET'S Hikari Premium, FLET'S Hikari Mytown and FLET'S Hikari Next. 2. The figures for Hikari Denwa indicate the number of channels (in thousands). Nippon Telegraph and Telephone East Corporation (NTT East) and Nippon Telegraph and Telephone West Corporation (NTT West), which are the main subsidiaries of NTT in the regional communications business segment, worked to build solid revenue structures by enhancing and expanding broadband services with a focus on FLET'S Hikari and continued their efforts to raise business efficiency. Their main activities are discussed below. [1] Fiber-Optic and IP Services Expansion of NGN Service Areas The areas in which the FLET'S Hikari Next service is offered were expanded. - NTT East: The service area was expanded to major cities in the Tokyo metropolitan district including all 23 wards of Tokyo as well as regional cities that are prefectural capitals. - NTT West: The service area was expanded to the 06 area code in Osaka, cabinet ordinance-designated cities, and some cities that are prefectural capitals. Major Services Launched in the Fiscal Year Under Review Major Collaborative Projects with Other Businesses Entered into on in the Fiscal Year Under Review [2] Improving Customer Service Measures were taken to develop and provide a variety of different services so customers can use broadband services with a sense of security. Main Support Services Launched in the Fiscal Year Under Review [3] Review of Business Operating Structures - 116 call centers increased efficiency by concentrating bases, mainly in regional districts, and outsourcing operations to group companies. (NTT East) - 116 call centers installed automated voice recognition systems to provide voice guidance in response to customer requests and inquiries, directing calls to specialized operators and increasing call intake efficiency. (NTT West) - NTT East and NTT Facilities, Inc. jointly established NTT East Properties, Inc. to lease space, mainly office space, to NTT East group companies and increase the use of land owned by NTT East. (NTT East) - NTT West established six companies, including NTT West Home Techno Kansai Corporation, to develop and provide one-stop solutions concerning home IT environments. (NTT West) As a result of the above activities, in the fiscal year ended March 31, 2009, revenues from IP services grew as a result of the increase in the number of FLET'S Hikari subscriptions, but growth in revenues was offset by the shift from fixed-line telephones and leased lines to low-cost IP services, and consequently consolidated operating revenues in the regional communications business segment were 4,064.8 billion yen (a decrease of 3.4% from the previous fiscal year). Further, in the fiscal year ended March 31, 2009, although expenses for purchase of goods and services and other expenses and amortization costs decreased, consolidated operating expenses were 3,994.3 billion yen (an increase of 1.8% from the previous fiscal year) due, among other things, to the expiration of 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. Consolidated operating income was 70.5 billion yen (a decrease of 75.3% from the previous fiscal year). Retraction Order Issued by the Fair Trade Commission On July 15, 2008, the Fair Trade Commission issued a retraction order to NTT East and NTT West pursuant to Article 6, Paragraph 1 of the Act against Unjustifiable Premiums and Misleading Representation Concerning Products and Services regarding a series of flyers, newspaper advertisements, leaflets and direct mailings issued by NTT East between March and November of 2007 and a series of flyers in newspapers and direct mailings issued by NTT West between February and August of 2007 to advertise Hikari Denwa Services. We deeply regret, and offer our sincere apologies for, any concerns and inconvenience caused to our customers and others. NTT East and NTT West have so far taken measures to correct their advertising, including improvements in response to notices issued by the Fair Trade Commission, and will continue their efforts to present advertising that is clear from the customers' point of view. Long-Distance and International Communications Business Segment Overview of Business Results NTT Communications Corporation (NTT Communications), which is the main subsidiary of NTT in the long-distance and international communications business segment, worked to provide corporate customers with ICT (Information and Communication Technology) solutions for their management issues, expand its consulting business, and offer high value-added services tailored to customer requests. For individual customers, NTT Communications also provided attractive services tailored to diverse lifestyles and customer requests under the "CreativE-Life for Everyone" brand. NTT Communications' main activities were as follows. [1] Development of Services for Corporate Customers While the corporate business environment is rapidly changing and companies are consolidating their core business activities to increase their competitiveness and improve their ability to respond to changes in the business environment in a flexible manner, in areas where customer demands are high, such as outsourcing and information security, NTT Communications took measures to establish globally competitive operations and provide integrated and high value-added solutions tailored to customers' business categories and formats to help solve customer management issues. Main Services Launched in the Fiscal Year Under Review [2] Development of Global Business In response to the demands of Japanese and multinational corporations for seamless and high-quality services in Japan and other countries, NTT Communications worked to provide high value-added total ICT solutions that combine network integration with data center, security, and server management services. Main Activities during the Fiscal Year Under Review - Expansion of the data center business - In Hong Kong, the floor area of the Tai Po Data Center, which has been providing data center services, was increased. - Agreement was reached with China Telecom Shanghai, a subsidiary of China Telecom Group, to establish the Yuanqu Data Center in Shanghai, and the data center began its operation. - Network expansion - Operation of a new communications route between Japan and Europe (the HSCS route) was started using an optical submarine cable between Japan and Russia (the Hokkaido-Sakhalin Cable System; HSCS) in collaboration with TransTeleCom Company CJSC, Russia's largest telecommunication carrier. - Business site development - To support business development by customers, a new branch of NTT Communications' subsidiary in India, NTT Communications India Private Limited, was established in Chennai, and NTT Communication Russia LLC, a local subsidiary, was established in Russia. Efforts were made to enhance the provision of ICT solutions. [3] Development of Services for Individual Customers With respect to telephone services, NTT Communications continued to respond to its customers' diverse demands through services such as PL@TINUM LINE and SEKAIWARI, while providing new services customized for diverse lifestyles in the upper-layer business field with a focus on OCN. Main Activities during the Fiscal Year under Review - Increased number of OCN members - In addition to conducting sales promotion activities with an emphasis on optical services such as OCN Hikari with FLET'S, NTT Communications provided diverse services designed to meet customers' demands such as the launch of high-speed mobile connectivity services. As a result of these activities, the number of OCN members surpassed 7 million in June 2008. The company is also taking measures that take environmental preservation into consideration such as making Internet distribution of bills in place of traditional paper bills. - New business that takes advantage of the characteristics of 050 IP telephony - With respect to the 050 Anshin Number service, an incoming call and forwarding service that protects privacy, NTT Communications expanded the terms and conditions of the service to allow use by customers other than OCN members, and launched the 050 Business Dial service, which allows use of 050 numbers for a company's reception number, and worked to provide new added value for 050 IP telephony. - Enhanced Hikari TV service menu - With regard to Hikari TV services provided by NTT Plala Inc., development of a variety of services such as the NGN IP retransmission of terrestrial digital broadcasts, NHK on-demand services and expansion of high-definition programming resulted in the number of Hikari TV members surpassing 500,000 in March 2009. - Development of new collaborative services for mobile phones and PCs - NTT Resonant Inc. collaborated with NTT DoCoMo, Inc. to commence group integration, including the development of seamless services that take advantage of the characteristics of both mobile phones and PCs and the enhancement of search functions on the iMenu® site. As a result of these efforts, while revenues from IP services such as OCN and VPN-related services and revenues from the provision of solutions to corporate customers increased, revenues from conventional fixed-line voice services decreased, and consequently, consolidated operating revenues in the long-distance and international communications business segment for the fiscal year ended March 31, 2009 were 1,315.5 billion yen (a decrease of 0.6% from the previous fiscal year). Further, during the fiscal year ended March 31, 2009, although communications facility fees declined in conjunction with the drop in fixed-line voice service revenues, consolidated operating expenses were 1,218.6 billion yen (an increase of 0.1% from the previous fiscal year) due to, among other things, the expiration of the one-time increase in income realized from the gain on the transfer of the substitutional portion of the Employees' Pension Fund that was recorded in the fiscal year ended March 31, 2008, and consolidated operating income was 96.9 billion yen (a decrease of 8.5% from the previous fiscal year). Mobile Communications Business Segment Overview of Business Results Number of Subscriptions Notes: 1. Figures for mobile phone service subscriptions and FOMA service subscriptions include communications module service subscriptions. 2. Effective March 3, 2008, use of the 2-in-1 service is conditioned on conclusion of a FOMA agreement, and the number of mobile phone service subscriptions and FOMA subscriptions includes such FOMA contracts. 3. The number of i-mode service subscriptions is the total of FOMA service subscriptions and mova service subscriptions. NTT DoCoMo, Inc. (NTT DOCOMO), which is the main subsidiary of NTT in the mobile communications business segment, took measures to raise its competitiveness even further by conducting reviews from the customer's perspective, enhancing service charge rates, developing new series of handset models, introducing new services, and raising network quality. NTT DOCOMO also continued its efforts to firmly establish new business models tailored to changes in the market environment, including the new discount services and handset sales models continued its efforts to firmly establish business models tailored to changes in the market environment, including the new discount services and new handset purchase methods that were introduced during the previous fiscal year. NTT DOCOMO's main activities are discussed below. [1] Enhancement of Service Charge Rates and Establishment of New Handset Sales Models - Pake Hodai Double, a new flat-rate packet service, was introduced to enable customers to use the abundant content and applications that are unique to the FOMA services with even greater ease and sense of security. - Under the new purchase method that allows customers to choose from two rate plans according to their preferences, the Value Course accounted for more than 90% of sales. - Value Course: Although the cost of purchasing a handset is greater than before, application of a new low monthly rate Value Plan allows payment for the handset in installments. - Basic Course: The conventional rate plan applies, and the handset purchase fee is discounted conditioned on continuous use of the same handset for two years. [2] Introduction of New Handset Series - NTT DOCOMO updated its four handset series in November 2008 to allow customers to select handsets according to their personal preference and lifestyle. [3] Development of International Services Enhancement of International Roaming Services - NTT DOCOMO expanded its lineup of handsets compatible with international roaming. As a result, more than 90% of customers who use an international roaming service during the fiscal year under review were able to access such service with their own mobile phones. - NTT DOCOMO launched the new Kaigai Plus Number service, an international roaming service that offers discounts up to 60% for voice communications when using international roaming services in South Korea. - A 3G network was created in Hawaii with America's AT&T Inc. Also, DOCOMO PACIFIC, INC., an NTT DOCOMO subsidiary, began providing 3G services in Guam. - Voice and short message services: 182 Packet communications services: 138 Video phone services: 49 Capital Alliances with Other Companies - NTT DOCOMO invested in TM International (Bangladesh) Limited to develop the mobile phone service business in Bangladesh and acquire new growth opportunities. - NTT DOCOMO reached an agreement to form a capital tie-up with Tata Sons Limited, the holding company of India's Tata group, and Tata Teleservices Limited ("TTSL"), a company in the Tata group, in order to expand its business base and increase revenues in India's mobile communications market, and invested in TTSL and Tata Teleservices (Maharashtra) Limited, a TTSL affiliate. [4] Improved Service and After-Sales Service Main Services Launched in the Fiscal Year Under Review * Blackberry® is the registered trademark of Research In Motion Limited. Main After-Sales Services Launched in the Fiscal Year Under Review - NTT DOCOMO began performing on-site surveys within 48 hours, in principle, after NTT DOCOMO responds to a request from a customer in order to respond more promptly to requests for service area improvements. - A continuous use period was added to the conditions for determining membership stages in the docomo Premier Club, a membership service provided to NTT DOCOMO group mobile phone subscribers, and services to long-term customers were enhanced, including by raising the maximum number of "docomo points" that can be obtained. - NTT DOCOMO began providing a mobile phone data recovery service that recovers contact and other information from mobile phones that no longer work because of water damage and that sends the information to the customer on a CD. [5] Expansion of the Credit Business - DCMX credit service - Efforts were made to expand the use of this service by increasing the number of shops where "docomo points" can be obtained and opening the DCMX DoCoMo Point Mall Internet site. - DCMX (iD) Coupons that can be used to pay for a portion of purchased items when using DCMX (iD) and DCMX mini were launched and efforts were directed towards service improvement. - Expansion of the iD Credit Brand - DOCOMO moved ahead with the installation of scanners in shops prioritizing those that are closely involved in customers' daily lives. - To promote use, scanners were also installed in shops in Guam and China, the first overseas installation of Japanese non-contact IC electronic money. As a result of the above developments, revenues from mobile voice communications fell because of the expanded use of new discount services and other factors, and consequently, consolidated operating revenues for the mobile communications business segment for the fiscal year ended March 31, 2009 were 4,448.0 billion yen (a decrease of 5.6% from the previous fiscal year). Also, as a result of lower revenue-linked expenses in conjunction with declining handset sales and other factors, consolidated operating expenses were 3,622.6 billion yen (a decrease of 7.5% from the previous fiscal year) and consolidated operating income was 825.4 billion yen (an increase of 3.6% from the previous fiscal year). Data Communications Business Segment Overview of Business Results In pursuit of being "number one in customer satisfaction", NTT DATA Corporation (NTT DATA), the main subsidiary in the data communications business segment, implemented medium-term management policies including marketing reforms and development process reforms. NTT DATA also engaged in vigorous marketing activities and promoted the development of efficient systems geared towards obtaining orders for new systems and launching new services, while continuing to provide stable services for existing systems. NTT DATA's main activities are discussed below. [1] Management Policies Marketing Reforms - Appointed Solution Representatives (SRs) who oversee all software and service marketing activities, and implemented other product marketing reforms. - Analyzed the results of customer satisfaction surveys and improvement actions, internally shared information concerning case studies that can serve as models to improve customer satisfaction and laterally spread knowledge and expertise. Development Process Reforms - Six SI companies including NTT DATA established a study group to visualize customer requests with respect to information system platforms from the customer's perspective, identified nonfunctional requests that were difficult to visualize and understand in the past and systematically organized them into a list of system platform request items. - Introduced Axure RP, Axure Software Solutions, Inc.'s tool for easily creating system screen prototypes, and developed methods for accurately identifying customer requests including system ease-of-use. Efficient Group Management - Merged four development subsidiaries that mainly focus on system development for the public sector to form NTT DATA i Corporation in an effort to reinforce the development infrastructure through the integration and consolidation of development resources and expertise. - Established a Group Shared Service Center (G-SSC) within NTT DATA Management Service Corporation as the "Shared Service Operational Headquarters" to increase management and operational efficiency throughout the NTT DATA group. - Dissolved NTT DATA GC Corporation and took other measures to withdraw from unprofitable businesses and shift human and material resources to highly profitable businesses in order to raise profitability. Growth Engines - In the healthcare business field, NTT DATA launched the "Receipt Online Connection Service", which allows medical institutions, pharmacies, and other establishments to use existing Internet environments for submitting medical bills online to health insurance agencies. - In the embedded software business field, NTT DATA obtained management rights to Panasonic MSE Co., Ltd. from its parent, Panasonic Mobile Communications Co., Ltd., and launched NTT DATA MSE Corporation. Human Resource Development - Moved forward with the expansion and use of professional CDP* certification; professional staff and others that can utilize high-level specialized skills for planning and implementation are certified as project managers, technical specialists and marketing personnel. *Professional CDP (Career Development Program) is a certification system that defines the type of human resources that NTT DATA seeks, sets skill levels by stages, and certifies the specialization skills of individual employees according to their knowledge, experience, and technical skills. The system enables employees to become objectively aware of their own skill levels and accumulate experience and grow through work and training based on awareness of their career path, linking corporate growth with employee growth. [2] Status of Business Activity Measures Public Sector - Received an order from Nippon Automated Cargo and Port Consolidated System, Inc. for construction, hardware leasing, technical maintenance and operation support services for a next-generation customs information processing system (next-generation NAACS) and a trade management subsystem, and began fulfilling such order. - Received an order from the National Tax Administration Agency for the "Financing of Additional Hardware Relating to Fiscal Year 2008 Electronic National Tax Filing and Payment System".Corporation. Financial Sector - Encouraged the use of the Regional Bank Integrated Services Center, a shared system for financial institutions, to expand use of the NTT DATA Standard Banking System (BeSTA), and began providing services to The Fukui Bank, Ltd. As a result, a total of 22 regional banks and 13 workers' credit unions have decided to use BeSTA. - Concluded a capital and business alliance agreement with XNET Corporation, a major business service provider in the field of solutions for capital markets, and XNET became a consolidated subsidiary of NTT DATA. Corporate Customers - Reached an agreement with Sumitomo Mitsui Financial Group, the Japan Research Institute, Limited ("JRI") and JRI Solutions, Limited on a broad-ranging business and capital partnership between NTT DATA and JRI Solutions, Limited in the IT services field, and JRI Solutions, Limited made a new start as an NTT DATA consolidated subsidiary under the name JSOL Corporation. - Launched the SmarP SaaS solution for supporting corporate sales promotion activities. Development of Global Business - NTT DATA established capital tie-ups with local SI businesses to expand its business base in Europe. - NTT DATA acquired from Germany's BMW AG the management right of Cirquent GmbH, a German IT consulting company, advanced a tie-up with its German subsidiary, itelligence AG, and began providing a wider range of services to customers. As a result of these efforts, revenues for the data communications business segment for the fiscal year ended March 31, 2009 increased as a result of the expansion of consolidated subsidiaries and other factors, and consolidated operating revenues were 1,127.2 billion yen (an increase of 6.4% from the previous fiscal year). Also, higher revenue-linked expenses and other factors resulted in consolidated operating expenses of 1,040.5 billion yen (an increase of 4.0% from the previous fiscal year). Consolidated operating income was 86.8 billion yen (an increase of 47.5% from the previous fiscal year). Other Business Segments Overview of Business Results In other business segments, while NTT promoted the real estate business, finance business, construction and electric power business, system development business, cutting-edge technology development business and other businesses, consolidated operating revenues for the fiscal year ended March 31, 2009 were 1,165.2 billion yen (a decrease of 1.7% from the previous fiscal year) due to the increase in doubtful accounts expenses in the finance business and an expanded slow-down in the real estate property development business among other factor. Consolidated operating expenses were 1,150.0 billion yen (an increase of 4.0% from the previous fiscal year) and as a result, consolidated operating income was 15.2 billion yen (a decrease of 80.8% from the previous fiscal year).     Copyright (c) 2009 Nippon telegraph and telephone corporation