News Release zxxd100205b

1. QUALITATIVE INFORMATION RELATING TO CONSOLIDATED BUSINESS RESULTS

(1) Consolidated results

*	Certain items for the prior year's financial statements have been reclassified to conform to the presentation for the three/nine months ended December 31, 2009.

During the three-month period ended December 31, 2009, NTT Group took measures to expand broadband and ubiquitous services pursuant to its new Medium-Term Strategy entitled "Road to Service Creation Business Group" adopted in May 2008.

In the fixed-line communications market, the expansion of optical services and the accompanying shift from existing fixed-line telephones to optical IP telephones continued. Diverse services were also deployed by various providers. Under these market conditions, in the next-generation network (NGN) segment, NTT Group endeavored to expand its "FLET'S Hikari Next" service area and the sale of services such as video distribution services that take advantage of the capabilities of the NGN. While NTT Group made efforts to form alliances with other companies to expand distribution, NTT East commenced provision of access services with downstream transmission speed of up to 200Mbps, including "FLET'S Hikari Next Family High-speed Type". In addition, as measures to enhance customer satisfaction and promote continuous subscriptions, NTT EAST started a membership program for FLET'S Hikari customers called, the "FLET'S Hikari Members Club", and NTT West announced the launch of the new "FLET'S Motto (further more) DISCOUNT" as a discount service for long-term commitment of continuous usage. As a result of these efforts, the number of "FLET'S Hikari" subscriptions reached 12.78 million at December 31, 2009.

The mobile communications market has continued to mature in line with the rise in cellular penetration rate and competition among operators has intensified in such area as acquisition of subscribers and further improvement in service offerings. Under these market conditions, NTT DOCOMO released 20 different models in its "2009 winter/spring handset" lineup, introducing new features and services, such as the Auto-GPS function that enables the delivery of information linked to user's current location, and "MyArea" wireless coverage, which uses small femtocell base station¹ to create a private FOMA area in the home as a stable wireless environment for high-speed packet communication, and to detect registered phones entering/leaving the private FOMA area. In addition, NTT DOCOMO has taken various steps aimed at enhancing customers' satisfaction, such as the launch of "Mail Tsukai-hodai" ("all-you-can-use mail"), which allows FOMA users to send and receive i-mode mails within Japan on an unlimited basis for a flat monthly rate, as part of its efforts to provide customers with more affordable and easy-to-use billing options. As a result of these measures, the number of cellular services subscriptions reached 55.44 million, of which 52.05 million were FOMA subscriptions, accounting for 93.9% of all subscriptions.

With respect to services for corporate customers, NTT Group continued its efforts to provide high value-added solutions tailored to customers' industries and business categories and to enhance its support capabilities adapted to the global business activities of the customers. In the area of cloud computing² which can respond to customers' various needs including for further cost-cutting measures and for reduced investment in IT assets, NTT DATA launched its cloud service brand, "BizCloud", for the reliable and fast provision and operation of cloud infrastructure and services optimized to the requirements of its customers, and NTT DATA also announced the launch of a service platform, "BizCloud Platform Service", as the core infrastructure for Private Cloud³ and Community Cloud⁴ services under the "BizCloud" service brand.

In its global businesses, NTT Group formed capital and business alliances with local businesses to further improve its services from the perspective of coverage area expansion, support service enhancement and quality improvement. To supplement the large-capacity fiber-optic submarine cable network connecting Asia and the United States, NTT Group commenced operation of a cable route linking Japan, Mainland China, South Korea and Taiwan in an effort to improve reliability through enhanced redundancy in the Asian network.

As a result of these efforts, NTT Group's consolidated operating revenues for the three-month period ended December 31, 2009 were 2,527.6 billion yen (a decrease of 1.6% from the same period of the previous fiscal year), consolidated operating expenses were 2,226.2 billion yen (a decrease of 3.2% from the same period of the previous fiscal year), consolidated operating income was 301.3 billion yen (an increase of 11.9% from the same period of the previous fiscal year), and consolidated net income before income taxes was 298.3 billion yen (an increase of 9.0% from the same period of the previous fiscal year). Consolidated net income attributable to NTT was 136.8 billion yen (a decrease of 0.7% from the same period of the previous fiscal year).

For the nine-month period ended December 31, 2009, NTT Group's consolidated operating revenues were 7,525.7 billion yen (a decrease of 2.7% from the same period of the previous fiscal year). Consolidated operating expenses were 6,577.6 billion yen (a decrease of 2.1% from the same period of the previous fiscal year). As a result, consolidated operating income was 948.1 billion yen (a decrease of 6.5% from the same period of the previous fiscal year) while consolidated net income before income taxes was 941.9 billion yen (a decrease of 9.9% from the same period of the previous fiscal year). Consolidated net income attributable to NTT was 419.0 billion yen (a decrease of 23.0% from the same period of the previous fiscal year) for the nine-month period ended December 31, 2009.

Notes:
1.	Refers to highly compact base transceiver stations that cover a limited-range area of ten to twenty meters in radius; installing femtocell base transceiver stations enables improved service in homes, small stores and other limited spaces where radio signals from outdoor base stations have difficulty reaching.
2.	Cloud computing is a computer technology whereby software and resources are delivered as a service through a network. It is unique for the fact that the services can be used on an on-demand basis without the need for purchasing hardware including server or software. The term "cloud" is used as a metaphor, based on the drawings used to depict networks such as the Internet in computer network diagrams.
3.	A cloud computing system constructed for a single organization for use as an internal system.
4.	A cloud computing system that can be shared by specific companies using a common data center.
*	NTT Group's consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States.

(2) Segment results
Results by business segment are as follows.

<1> Regional telecommunications business segment

NTT Group's consolidated operating revenues for the three-month period ended December 31, 2009 were 976.0 billion yen (a decrease of 2.8% from the same period of the previous fiscal year). Despite an increase in IP-related revenues attributable to the increase in "FLET'S Hikari" subscriptions, voice-related revenues decreased due to the decline in fixed-line telephone subscriptions. On the other hand, consolidated operating expenses were 945.0 billion yen (a decrease of 3.1% from the same period of the previous fiscal year) due to such factors as a decrease in operating expenses, including depreciation and amortization. As a result, consolidated operating income in the three-month period ended December 31, 2009 was 31.0 billion yen (an increase of 3.9% from the same period of the previous fiscal year).

For the nine-month period ended December 31, 2009, consolidated operating revenues were 2,913.7 billion yen (a decrease of 3.3% from the same period of the previous fiscal year) and consolidated operating expenses were 2,832.0 billion yen (a decrease of 3.8% from the same period of the previous fiscal year). As a result, consolidated operating income for the nine-month period ended December 31, 2009 was 81.7 billion yen (an increase of 15.8% from the same period of the previous fiscal year).

Number of subscriptions

Notes:
1.	The figures for "FLET'S Hikari" include NTT East's "B FLET'S" and "FLET'S Hikari Next" (launched in March 2008) and NTT West's "B FLET'S", "FLET'S Hikari Premium", "FLET'S Hikari Mytown" and "FLET'S Hikari Next" (launched in March 2008).
2.	The figures for "Hikari Denwa" represent number of channels (in thousands).

<2> Long-distance and international communications business segment

Consolidated operating revenues for the three-month period ended December 31, 2009 were 307.3 billion yen (a decrease of 5.4% from the same period of the previous fiscal year) due to a decline in revenues from solutions businesses for corporate customers and conventional fixed-voice related revenues and other factors. Consolidated operating expenses for the same period decreased to 282.3 billion yen (a decrease of 5.3% from the same period of the previous fiscal year) due to lower telecommunication facility usage fees in conjunction with the decline in fixed-voice related revenues. As a result, consolidated operating income for the three months ended December 31, 2009 was 25.0 billion yen (a decrease of 6.3% from the same period of the previous fiscal year).

For the nine-month period ended December 31, 2009, consolidated operating revenues were 923.8 billion yen (a decrease of 3.9% from the same period of the previous fiscal year) and consolidated operating expenses were 847.5 billion yen (a decrease of 3.6% from the same period of the previous fiscal year). As a result, consolidated operating income for the nine-month period ended December 31, 2009 was 76.2 billion yen (a decrease of 7.2% from the same period of the previous fiscal year).

<3> Mobile communications business segment

Consolidated operating revenues for the three-month period ended December 31, 2009 decreased to 1,096.6 billion yen (a decrease of 1.3% from the same period of the previous fiscal year). Despite the increase in packet communications revenues arising from increase in subscriptions for packet flat-rate services, decreases in mobile voice related revenues and handset sales revenues caused by the penetration of new discount services and new handset purchase methods reduced consolidated operating revenues. On the other hand, consolidated operating expenses decreased to 880.6 billion yen (a decrease of 6.6% from the same period of the previous fiscal year) as a result of a decline in depreciation and amortization expenses attributable to the fact that accelerated depreciation of mova-related assets had been carried out in the three-month period ended December 31, 2008. As a result, consolidated operating income for the three-month period ended December 31, 2009 was 216.0 billion yen (an increase of 28.2% from the same period of the previous fiscal year).

For the nine-month period ended December 31, 2009, consolidated operating revenues were 3,242.4 billion yen (a decrease of 4.0% from the same period of the previous fiscal year) and consolidated operating expenses were 2,544.1 billion yen (a decrease of 3.5% from the previous fiscal year). As a result, consolidated operating income for the nine-month period ended December 31, 2009 was 698.3 billion yen (a decrease of 6.0% from the same period of the previous fiscal year).

Number of subscriptions

Notes:
1.	The number of mobile phone service subscriptions, "FOMA" service subscriptions and "mova" service subscriptions include communication module subscriptions.
2.	Effective March 3, 2008, FOMA service subscriptions became mandatory for subscription to "2-in-1" services. Such FOMA service subscriptions are included in the above numbers of Mobile phone service subscriptions and FOMA service subscriptions.
3.	The figures for the number of "i-mode" service subscriptions represent the total for "FOMA" and "mova" combined.

<4> Data communications business segment

Consolidated operating revenues for the three-month period ended December 31, 2009 were 263.9 billion yen (an increase of 2.2% from the same period of the previous fiscal year) as a result of an increase in revenues in connection with expansion of consolidated subsidiaries. On the other hand, consolidated operating expenses for the three-month period ended December 31, 2009 were 247.8 billion yen (an increase of 5.7% from the same period of the previous fiscal year) as a result of an increase in expenses relating to the expansion of consolidated subsidiaries and an increase in selling, general and administrative expenses. As a result, consolidated operating income for the three-month period ended December 31, 2009 was 16.1 billion yen (a decrease of 32.4% from the same period of the previous fiscal year).

For the nine-month period ended December 31, 2009, consolidated operating revenues were 798.2 billion yen (an increase of 4.3% from the same period of the previous fiscal year) and consolidated operating expenses were 745.2 billion yen (an increase of 6.9% from the same period of the previous fiscal year). As a result, consolidated operating income for the nine-month period ended December 31, 2009 was 53.0 billion yen (a decrease of 22.8% from the same period of the previous fiscal year).

<5> Other business segments

In other business segments, while revenues increased in the real estate business, the substantial impact of the deteriorating economy and a slump in sales in the finance business, construction and power business, system development business, advanced technologies development business and other businesses resulted in a decrease in consolidated operating revenues for the three-month period ended December 31, 2009 to 263.6 billion yen (a decrease of 9.0% from the same period of the previous fiscal year) and a decrease in consolidated operating expenses to 256.9 billion yen (a decrease of 5.1% from the same period of the previous fiscal year). As a result, consolidated operating income for the three-month period ended December 31, 2009 was 6.7 billion yen (a decrease of 64.6% from the same period of the previous fiscal year).

For the nine-month period ended December 31, 2009, consolidated operating revenues were 788.9 billion yen (a decrease of 7.1% from the same period of the previous fiscal year) and consolidated operating expenses were 775.4 billion yen (a decrease of 3.9% from the same period of the previous fiscal year). As a result, consolidated operating income for the nine-month period ended December 31, 2009 was 13.5 billion yen (a decrease of 68.0% from the same period of the previous fiscal year).