NTT to Raise Stake in Smart Communications, Inc.

At the same time, convertible bonds owned by NTT worth $35.7 million will be converted to common stock. As a result, NTT's stake in Smart will rise to about 37%, up from 15%.

NTT has assisted Smart by providing board members and technical support since it invested initially in the company in 1995.

Smart is a Filipino telecommunications operator providing local, long-distance, international and mobile telecom services. It is the second-largest operator in the country and accounts for the largest share of mobile telecom services. Smart NTT Multimedia, Inc., a joint venture with NTT, is the provision base of NTT's global Arcstar services in the Philippines.

NTT will strengthen its role in the management of Smart, including by increasing its seats on the board from two to four. NTT also plans to expand the presence of the NTT Group's Arcstar services in the Philippines.

The total amount of NTT's new investment will be approximately US$210 million, or approximately 24 billion yen at an exchange rate of US$1/114 yen. This includes US$145 million in shares converted from bonds owned by the FPC group and approximately US$65 million in new investment by NTT.

NTT's past investment in Smart totals US$158.7 million (14.8 billion yen; actual cost), including US$123 million in common stock and US$35.7 million in convertible bonds.

* Based on US$1 equal to 40 pesos (The actual payment is to be based on the average exchange rate prevailing on the 19th and 22nd February, 1999.)

-Outline of Smart Communications, Inc.

-Outline of First Pacific Company Limited