1. BUSINESS RESULTS (1)  Analysis Concerning Business Results Overview of Consolidated Business Results During the consolidated fiscal year ended March 31, 2010, against the backdrop of an improvement in the global economy, particularly in Asia, and the effect of major economic stimulus programs, the Japanese economy showed signs of recovery in exports and production. However, the economic climate remained difficult, with capital investments decreasing substantially and the job market rapidly worsening due to a deterioration in corporate earnings. In the information and telecommunications market, as the rollout of broadband and ubiquitous services rapidly progresses, optical access services are increasing in the fixed-line communications field and conventional fixed-line telephony is transitioning to optical IP telephone services. In the mobile communications field, services and handsets are becoming more diverse and advanced, and rates are being repeatedly reduced, giving rise to increasingly fierce competition. Many other dramatic changes and developments are occurring in conjunction with the increased use of IP, including convergence between fixed-line communications and mobile communications and between communications and broadcasting services, and the creation of diverse new network-based businesses. Under these difficult circumstances, NTT Group worked to expand broadband and ubiquitous services pursuant to its Medium-Term Strategy, adopted in May 2008, entitled “Road to Service Creation Business Group.” - Fixed-Line Communications NTT Group further expanded the coverage area for “FLET’S Hikari Next”, the next-generation network (NGN) commercial service, and enhanced services, including a high-speed service with a maximum download speed of 200Mbps introduced in Eastern Japan. NTT Group also pursued initiatives in collaboration with other companies to expand sales. In addition, NTT Group took steps to enhance the quality of customer service by, among other things, reducing the lead time between a customer’s application and the start of FLET’S Hikari service, strengthening support services and expanding benefits offered to customers under its membership programs. As a result of these efforts, the number of FLET’S Hikari subscriptions reached 13.25 million. - Mobile Communications NTT Group introduced new services to support its customers’ lifestyles through mobile phones, including a new function for the “i-concier” activity support service, which distributes information linked to the user’s location, and DOCOMO Keitai Sokin (mobile payment), a new mobile phone payment method. In addition, as part of its efforts to achieve further growth by increasing use of data communications, NTT Group revised billing plans and worked to enhance the content offerings for video and other services. As a result of these efforts, the number of mobile phone subscriptions reached 56.08 million, of which 53.20 million are FOMA service subscriptions (95% of all subscriptions). - Solutions NTT Group worked to provide high value-added solutions according to customer industries and business categories by expanding its service line-up to include outsourcing and information security, complementing its construction and provision of customer systems. NTT Group also reorganized some of its business structures and sought to strengthen its sales capabilities, mainly through acquisitions of other service providers, to proactively meet the needs of customers and society. - Upper Layer Services NTT Group took steps to enhance its services by among other things, expanding the high-definition content available on “Hikari TV”, an IP Television (IPTV) service distributed over FLET’S Hikari. NTT Group also expanded the line-up of video services that are designed to take advantage of the capabilities of the NGN, including the launch of Digital Cinema, a service for the distribution of films to theaters using the NGN. NTT Group also worked to develop a new market for cloud computing services, which provides services through a network, including the launch of a full range of services covering everything from infrastructure to applications. Furthermore, through investments by the venture fund, NTT Investment Partners Fund, L.P., NTT Group sought to promote collaborations with business partners in a wide range of fields, particularly education. - Global Businesses NTT Group moved forward with the expansion of overseas data centers and the acquisition of businesses, including a security service provider, in an effort to improve its line-up of solutions services and support services. In order to enhance the convenience and reliability of its networks, NTT Group strengthened its network through the acquisition of a submarine cable business and the expansion of the service area for international mobile phone roaming services. NTT Group also directed efforts toward the global expansion of its content distribution and other application services. - Research and Development To expand the range of services that take advantage of the capabilities of the NGN, NTT Group engaged in R&D directed at the technical advancement of IPTV, Digital Signage, Digital Cinema and other video services, as well as cloud computing services. Furthermore, NTT Group engaged in R&D for commercialization of Home Information and Communication Technologies (Home ICT) and made efforts to develop technologies for mobile communication using LTE, the next-generation standard, which is scheduled for launch in December 2010. NTT Group also moved forward with R&D on advanced technologies that will support future businesses, including new encryption technologies, high-capacity optical transmission technologies, and quantum information processing. - CSR NTT Group is working in concert to undertake corporate social responsibility (CSR) activities aimed at contributing to the sustainable development of society. In particular, as part of its “Green NTT” program, an environmental policy initiative encouraging the use of natural energy, NTT Group set up solar systems at three Group owned facilities via NTT Green LLP, which was established through investments by individual NTT group companies. This became the first environmental program in Japan established in the form of a corporate group limited liability partnership. As a result of these efforts, due to such factors as a decrease in mobile handset sales revenues and mobile voice-related revenues arising from penetration of new handset sales models in the mobile communications business and a decrease in voice-related revenues arising from the decline in the number of subscriptions for fixed-line telephone services, NTT Group’s consolidated operating revenues for the fiscal year ended March 31, 2010 were 10,181.4 billion yen (a decrease of 2.3% from the previous fiscal year). Consolidated operating expenses were 9,063.7 billion yen (a decrease of 2.6% from the previous fiscal year) due to a decrease in expenses for purchase of goods and services and other expenses and amortization costs. As a result, consolidated operating income was 1,117.7 billion yen (an increase of 0.7% from the previous fiscal year), consolidated income before income taxes was 1,120.1 billion yen (an increase of 1.3% from the previous fiscal year), and consolidated net income attributable to NTT was 492.3 billion yen (a decrease of 8.6% from the previous fiscal year). The forecast of performance in the fiscal year ending March 31, 2011 is as follows: operating revenues of 10,160.0 billion yen (a decrease of 0.2% from the fiscal year under review), operating income of 1,165.0 billion yen (an increase of 4.2% from the fiscal year under review), income before income taxes of 1,155.0 billion yen (an increase of 3.1% from the fiscal year under review), and net income attributable to NTT of 500.0 billion yen (an increase of 1.6% from the fiscal year under review). The business results for NTT (holding company) and each segment for the consolidated fiscal year ended March 31, 2010 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 also 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. Furthermore, NTT exercised voting and other shareholder rights at the general shareholders’ meetings of each group company. [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 proceeded with the full-scale development of ubiquitous broadband services in line with its Medium-Term Management Strategy, “Road to Service Creation Business Group,” and provided advice and intermediary services for global businesses. In addition, NTT provided support to promote the promulgation of upper-layer services utilizing the NGN in particular through its administration of the Next-Generation Services Joint Development Forum and joint operation of a start-up company whose investors include the NTT Investment Partners Fund, L.P. As compensation for these services, NTT received 18.3 billion yen in group management and administration revenues for the fiscal year under review (a decrease of 1.3% from the previous fiscal year). [2] Fundamental research and development activities NTT has conducted research and development on basic technologies to achieve the objectives set out in its Medium-Term Management Strategy, “Road to Service Creation Business Group,” and to contribute to the creation of a ubiquitous broadband society. Commercialization of the results of research and development was 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, and through proactive collaboration with other businesses. NTT has also been actively engaged in the global deployment of research results, research and development that could contribute to solving social issues, and research on advanced technologies for the future. - Research and development contributing to service creation Demand for Home ICT is expected to grow with the spread of broadband services and digital home electronics and NTT, together with partner companies, is using test bed environments to verify technologies and examine proposed business models in this field. NTT pursued advancements in IPTV and digital signage technology, and supported the commercialization of the newly launched Digital Cinema service, which utilizes highly-secure, high-quality distribution technologies developed in NTT’s laboratories. In addition, efforts were made in research and development aimed at realization of safe and secure cloud computing services. With regard to its network platforms, NTT worked to improve the ease of maintenance and operability of the NGN in order to enhance the NGN’s functional capability and to achieve cost reductions. Research and development was also undertaken on optical access technologies, including technologies for expanding the coverage area of optical cabling for multi-unit dwellings and technologies for simplifying installation. - Global deployment of research results NTT also engaged in research and development efforts focused on three basic principles: “R&D for global operations”; “international standardization”; and “relationship-building.” Optical-related components that use NTT technologies, such as optical transmission devices and optical connectors, captured large market shares worldwide. Furthermore, the results of our research on high-speed optical access protocols were utilized for commercial services in Vietnam. In addition, NTT's video-encryption technologies are used by overseas broadcasters, and were chosen as the codec for international transmissions at the Vancouver Olympics. - Research and development contributing to solving social problems To reduce the environmental burden resulting from the operation of NTT’s businesses, NTT engaged in research and development on CO2 reduction technologies, such as high-efficiency fuel cell batteries and high-voltage direct-current supply, which decreases electricity loss during supply, as well as research and development on optical packet routers, which are aimed at drastically reducing future network power consumption. In the healthcare field, NTT successfully developed a framework for collecting and sharing vital data, such as daily blood pressure and weight, across a network to be utilized for remote health guidance. - Advanced research NTT has also conducted research and development activities on advanced technologies that will support NTT Group’s continuous development. These efforts include research and development on new encryption technologies and efforts to verify the safety of existing encryption methodologies. As a result of these efforts, NTT achieved a world record in prime factor decomposition, which is one of the principal underpinnings of public-key encryption. In optical transmission technologies, NTT succeeded in achieving 69 Tbps transmission, the world record for a single optical fiber cable. In the field of quantum information processing, NTT became the first in the world to succeed in performing multi-function basic calculations, which are necessary for creating a quantum computer, using only a single qubit. In addition, with the goal of achieving more natural communication environments, NTT engaged in research to understand the structure in the brain for controlling and processing signals. As a result of these research and development activities, NTT’s total expenditures on research and development during the fiscal year under review were 134.0 billion yen (an increase of 1.4% from the previous fiscal year), and NTT received basic research and development revenues of 126.9 billion yen (an increase of 0.0% 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, 2010, NTT determined that the business practices, financial conditions, retained profits, and other conditions during the previous fiscal year (the fiscal year ended March 31, 2009) 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 217.8 billion yen in dividends (an increase of 9.4% from the previous fiscal year). As a result of the above activities, NTT’s operating revenues for the fiscal year ended March 31, 2010 were 379.0 billion yen (an increase of 4.2% from the previous fiscal year), recurring profit was 215.5 billion yen (an increase of 9.7% from the previous fiscal year), and net income was 215.7 billion yen (an increase of 10.1% from the previous fiscal year). Regional Communications Business Segment Overview of Business Results by Business Segment 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’s 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 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 the efficiency of their business operations. 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 almost all service areas of FLET’S Hikari. - NTT West: The service area was expanded to 80% of the service areas of FLET’S Hikari. Major Services Launched in the Fiscal Year Under Review Major Collaborative Projects with Other Businesses Entered into in the Fiscal Year Under Review [2] Improving Customer Service - NTT East and NTT West continued to work on reducing the time it takes for customers to start receiving optical access services by expanding optical cabling for multi-unit dwellings, providing immediate determination of installation work dates, and carrying out remote installation. (NTT East/NTT West) - Subscriptions to Remote Support Service, which provides one-stop support for customers experiencing broadband service problems, exceeded 2.10 million. (NTT East/NTT West) Main Support Services Launched in the Fiscal Year Under Review [3] Review of Business Operating Structures - The 113 Centers for taking calls for repair requests and the sites for interconnection operations with other businesses were consolidated to promote efficiency in the business operating structure. (NTT East) - Order processing time for FLET’S Hikari subscriptions was successfully shortened by actively reviewing operations and workflows, including those of installation companies, and improving systems. (NTT East/NTT West) As a result of the above activities, in the fiscal year ended March 31, 2010, revenues from IP services grew due to the increase in the number of FLET’S Hikari subscriptions, but growth in IP services revenues was offset by a decline in fixed voice-related revenues caused by a reduction in fixed-line telephone subscriptions, and consequently consolidated operating revenues in the regional communications business segment were 3,964.3 billion yen (a decrease of 2.5% from the previous fiscal year). Due to decreases in expenses for purchase of goods and services and other expenses, however, consolidated operating expenses were 3,882.2 billion yen (a decrease of 2.8% from the previous fiscal year) in the fiscal year ended March 31, 2010. As a result, consolidated operating income was 82.1 billion yen (an increase of 16.5% from the previous fiscal year). Business Improvement Order Issued by the Minister of Internal Affairs and Communications Following the discovery that an employee at an NTT West Group unit improperly provided information on customers of other businesses to certain sales agencies, NTT West received a business practice improvement order on February 4, 2010 under the Telecommunications Business Act, Article 29 from the Minister of Internal Affairs and Communications. On February 26, 2010, NTT West submitted a business practice improvement plan to the Minister of Internal Affairs and Communications. We deeply regret, and offer our sincere apologies for, any concerns and inconvenience caused to our customers and other affected parties. NTT West solemnly accepts the business practice improvement order and will ensure the implementation of the business practice improvement plan. In addition, NTT East, which is also in a position to handle information on customers of other businesses, will endeavor to thoroughly strengthen its information management. To bolster these efforts, in April 2010 both companies formed an Information Security Department, which is tasked with drafting company-wide policies on information security, improving related structures and rules, and planning, implementing and inspecting security measures so that groupwide and uniform efforts on information security are carried out at the two companies and their group subsidiary units. NTT Group is committed to continue striving to restore trust through its concerted efforts. Long-Distance and International Communications Business Segment Overview of Business Results by Business Segment NTT Communications Corporation (NTT Communications), which is the main subsidiary of NTT in the long-distance and international communications business segment, as an “ICT Solution Partner” that provides corporate customers with solutions for their management issues, expanded its consulting business, and offered high value-added solutions tailored to customer needs. 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 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 this market environment, 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, particularly in areas of high demand, such as outsourcing and information security. Main Services Launched in the Fiscal Year Under Review Verification Testing of the Basic Service Framework for Realizing New Cloud Computing Verification testing was carried out for the Setten service platform, which will realize a new type of cloud computing framework that enables use of necessary functions anytime, anywhere, regardless of the connection environment, and offers high-quality, highly reliable and high value-added services, ranging from networks to applications. [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 - Network expansion - Pacific Crossing Limited, which owns the Japan-U.S. submarine cable PC-1, was acquired to further improve the reliability of infrastructure between Japan and the U.S. - Efforts were made to increase network (IP backbone) capacity for speedy and stable distribution of Internet data worldwide; achieved a cable capacity of 300Gbps, one of the highest in the ISP industry, for the Japan-U.S. route having the largest communication volume. - Business site development - To support business development by customers, in Russia, a branch of local subsidiary NTT Communication Russia LLC, was established in St. Petersburg. - In India, the Neemrana branch of a local subsidiary, NTT Communications India Private Ltd., was established. - In the Philippines, a local subsidiary, NTT Communications Philippines Corporation, was established. - In Belgium, the Brussels branch of a European subsidiary, NTT EUROPE LTD., was established. - In China, the Wuhan office of a local subsidiary, NTT Communications China Co., Ltd., was established. - Expansion of data centers - In Vietnam, the joint venture between NTT Communications Corporation and the Vietnam Posts and Telecommunications Group established a data center in Hanoi and began offering service. - In the U.S., a local subsidiary, NTT America, Inc., set up a data center in Santa Clara, California, for service enhancement. - Stronger security service structure - Responding to requests from customers operating globally for a wide range of security services, the German firm Integralis AG, a global leader in the security business, was acquired to bolster the framework for provision of services. [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, while providing new services in the upper-layer services field, such as OCN, that are customized for diverse lifestyles. Main Activities during the Fiscal Year under Review - Expansion of OCN services - OCN Mobile Access FOMA and other services that can be used with NTT DOCOMO's flat-rate data plans were added to address the needs of mobile users. - OCN Kids Care was launched to support an environment where both children and parents can use the Internet with a sense of security; not only are harmful websites blocked when children use personal computers but caregivers are also able to confirm usage status through mobile phones. - Efforts were directed at improving convenience by enabling customers to seamlessly use OCN e-mail, blog and other services with a single login, increasing capacity of e-mail service and adding linked functions for maps and scheduler, etc. - Enhancement of other upper-layer services - Efforts were made to further increase use of the 050 Anshin (Safe) Number service, by proposing a new way of using the service under the name Wan Nyan Ber where pet dogs and cats wear pet tags with a 050 number on them so that the owners can be contacted when their pets get lost. - Hikari TV subscriptions exceeded 1 million as a result of efforts made to expand the service area of IP retransmission of terrestrial digital broadcasts and enrichment of high-definition content. As a result of these developments, revenues from fixed-line voice services and revenues from the provision of solutions to corporate customers decreased and, consequently, consolidated operating revenues in the long-distance and international communications business segment for the fiscal year ended March 31, 2010 were 1,259.6 billion yen (a decrease of 4.2% from the previous fiscal year). On the other hand, during the fiscal year ended March 31, 2010, revenues from use of communication facilities decreased in conjunction with the drop in fixed-line voice service revenues and, consequently, consolidated operating expenses were 1,161.4 billion yen (a decrease of 4.7% from the previous fiscal year). As a result, consolidated operating income was 98.2 billion yen (an increase of 1.4% from the previous fiscal year). Mobile Communications Business Segment Overview of Business Results by Business Segment Number of Subscriptions Notes: 1. Figures for mobile phone service subscriptions, FOMA service subscriptions and mova service subscriptions include communications module service subscriptions. 2. Effective March 3, 2008, the use of the “2-in-1” service, in principle, requires a “FOMA” subscription; the number of mobile phone service subscriptions and the number of “FOMA” service subscriptions include such “FOMA” subscriptions. 3. The number of i-mode service subscriptions is the total of FOMA service subscriptions and mova service subscriptions. NTT DOCOMO, Inc. (NTT DOCOMO), the main subsidiary of NTT in the mobile communications business segment, reorganized its business, with “innovation and challenge” as its basic policy. With the aim of increasing its income, NTT DOCOMO provided a range of services in response to the varied needs of its customers that have resulted in expanded data communication use. [1] Enhancement of Service Main Services which were Launched or for which Additional Efforts were Made During the Fiscal Year Under Review Main Customer After-Saler Services which were Launched or for which Additional Efforts were Made During the Fiscal Year Under Review [2] Expansion of data communication use - Fees were revised so that the rate for packet flat-rate service “Pake-hodai double” starts at 390 yen (including tax) per month. - Fees were revised so that the rate for packet flat-rate service for smart phones, “Biz-hodai double”, starts at 390 yen (including tax) per month. Moreover, it was decided that for users who use both i-mode compatible FOMA phones and smart phones, “Biz-hodai double” would be integrated into “Pake-hodai double” starting April 1, 2010. - Through collaboration with content providers, including BeeTVR, the content offerings of DOCOMO Doga were expanded. - In PC data communications, strategic measures were taken to increase sales, including introduction of a user-friendly fee structure and enhancement of the product line-up. [3] Enhancement of Charge Services Main Charge Services Launched in the Fiscal Year Under Review [4] Reinforcement of Handset Line-up Main Products Launched in the Fiscal Year Under Review [5] Development of International Services Enhancement of International Roaming Services - Enhancement of International Roaming Services Voice and short message services: 207 Packet communications services:   156 Video phone services:   50 - To provide greater convenience to subscribers using international roaming services, the “Overseas GPS” function was launched, enabling the overseas use of such functions as confirmation of current position on a map, navigation showing the route to a destination, and search of local information. - In an effort to provide greater support, the number of locations providing customer support overseas was increased to 13; support includes providing free handset charging services and responding to inquiries regarding use and operation of handsets overseas. Establishment of an Overseas Business Base - With the goal of conducting more efficient software development, securing stable product supply and improving functions, NTT DOCOMO invested in the US firm Packet Video Corporation, which has a software development and license business centering on a multimedia player for mobile handsets. - To reinforce the structure for establishing a base for the overseas platform business, NTT DOCOMO purchased net mobile AG, a German mobile content distribution platform operator. - i-channel, a push-type information distribution service, was launched as a content distribution service through overseas subsidiaries in India, Guam, Saipan and the UK, and a comic distribution service was launched in India and France. [6] Expansion of the Credit Business Promotion of 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 at a good rate and increasing the number of member shops in the DCMX DOCOMO Point Mall, an Internet shopping site. Expansion of the iD Credit Brand Efforts were made to enlist new stores offering payment with the iD brand so that customers may have more opportunity to use the iD credit brand at stores that are deeply integrated with their daily lives. In August 2009, the introduction of iD terminals at McDonald’s restaurants nationwide (with some exceptions) was completed. At the same time, “Kazasu Coupons” were introduced to increase customer convenience. As a result of the above developments, while revenues from packet communication increased due to the increase in packet flat-rate subscription, mobile voice related revenues decreased due to penetration of new discount plans and new handset models and, consequently, consolidated operating revenues for the mobile communications business segment for the fiscal year ended March 31, 2010 were 4,284.4 billion yen (a decrease of 3.7% from the previous fiscal year). On the other hand, as a result of a decrease in mobile handset costs arising from the decline in sales of mobile handsets and the decrease in depreciation and amortization attributable to the fact that the accelerated depreciation of mova-related assets had been carried out in the previous fiscal year, consolidated operating expenses were 3,456.0 billion yen (a decrease of 4.6% from the previous fiscal year). As a result, consolidated operating income was 828.4 billion yen (an increase of 0.4% from the previous fiscal year). Data Communications Business Segment Overview of Business Results by Business Segment NTT DATA Corporation (NTT DATA), the main subsidiary in the data communications business segment, made efforts to “achieve quantitative expansion through quality” and, in order to achieve sustainable business development and increase corporate value, NTT DATA worked to pursuing the primary strategies of its Medium-term Management Policy, namely “Strengthening of Service Provision Capability,” “Group Business Enhancement and Expansion,” and “Environment-Oriented Management” towards its goal of being ranked “No. 1 in customer satisfaction” as a “Leading-edge innovator.” NTT DATA’s main activities are discussed below. [1] Management Policies Strengthening of Service Provision Capability - In the latest version of “CMMI,” the guidelines for process improvement in organizations in charge of system development, the organizations within NTT DATA responsible for system building and service provision in the national security field achieved Capability Level 5, the highest level. - A trial run for “24-hour development,” which aims to reduce development time by making effective use of the time differences among overseas branches so that software development and other development can be carried out on an around-the-clock basis, was performed between Japan and Germany and Japan and India. Group Business Enhancement and Expansion - Enhancement of overseas SAP consulting and support - Through its German subsidiary itelligence AG, NTT DATA purchased 2B Interactive B.V. of Holland, and ADELANTE S.A.S. (currently itelligence France S.A.S.) of France. - Through its Singapore subsidiary NTT DATA Asia Pacific Pte. Ltd., NTT DATA purchased the Australian firm Extend Technologies Group Holdings Ltd and agreed to acquire the Malaysian firm Business Formula (M) Sdn Bhd. - To deploy cloud computing businesses aimed at domestic Chinese financial institutions, NTT DATA jointly established Yucheng Lian Rong Data Technologies Limited with Yucheng Technologies Limited, which holds the top share in Internet banking in China, thereby establishing a foothold in the Chinese financial market. - NTT DATA acquired NJK Corporation in order to build a firmer operating base for its software development businesses. - In order to enhance service capabilities, expand the scale of group businesses, and create further synergies, the seventeen group companies were reorganized and consolidated into six. Environment-Oriented Management - With the goal of reducing the environmental burden within the NTT DATA group as well as reducing the overall environmental burden to society arising from the businesses conducted by its subsidiaries, NTT DATA primarily through its Environmental Management Planning and Administration Office, established the three medium-to-long term goals of “Green by NTT DATA Group,” “Green of NTT DATA Group” and “NTT DATA Group on the Earth.” - The electric vehicle battery-charging infrastructure service trial project, which is part of the FY2009 Project for Spread of the Electric Car and Preparation of the Necessary Environment being conducted by the Ministry of Economy, Trade and Industry (METI)’s Agency for Natural Resources and Energy, was implemented through collaboration among 25 business and local governments. - NTT Facilities and the Green Data CenterR, a service that reduces NTT’s environmental burden and energy consumption, won the Minister of METI Award in the Green IT Awards 2009 (sponsored by the Green IT Promotion Council). In addition to the foregoing, with the goal of efficiently increasing the capabilities of the NTT DATA group and responding flexibly to the needs of customers and society, NTT DATA reorganized its business structure, consolidating multiple business organizations into three companies. - Public & Financial Company Business group providing IT services for sectors supporting social infrastructure, including public administration, healthcare, finance and financial settlement. - Global IT Services Company Business group that provides global IT services that support such business activities as manufacturing, distribution, services, media, communications and other business activities. - Solutions & Technology Company Business group that offers platforms and solutions that support cutting-edge IT services. [2] Status of Business Activity Measures Public Administration Sector - Nippon Automated Cargo and Port Consolidated System, Inc. launched “next-generation Air Nippon Automated Cargo Clearance System (Air-NAACS),” which was developed by NTT DATA. - Received an order from the Ministry of Land, Infrastructure, Transport and Tourism for “design and development of the next-generation electronic information processing system for automobile registration and inspection.” Financial Sector - Received an order from Japan Post Bank Co., Ltd., for, among other things, the “procurement of its next-generation business system.” - The Bank of Yokohama, Ltd., commenced use of the “Shared System for the Three Banks” created for three regional banks, as the first user. - Carried out system improvements in large-scale projects, including the consolidation of mainframe systems at Shinkin Banks’ Shinkin Shared System Center, and updated The JA Bank's online credit system, JASTEM. Industrial Sector - As a business company to promote Biz∫ (Biz Integral), a next-generation solution, NTT DATA formed NTT DATA BIZ Integral Corporation in collaboration with NTT DATA Intramart Corporation, NTT DATA Systems Corporation, Information Technology System Co., Ltd., WingArc Technologies, Inc. and Toyo Business Engineering Corporation. - Received an order from the Osaka Stock Exchange Co., Ltd. for the development and operation of a next-generation derivative-trading system, adopting a software package from the Swedish firm NASDAQ OMX Group, Inc. (Sweden). - Using the know-how developed in projects for International Financial Reporting Standards (IFRS) compliance in Europe and elsewhere, NTT DATA launched a comprehensive service to provide support for IFRS compliance for Japanese corporations, covering everything from conceptualization to establishment, operational reform, system construction and training. Cross-Sectoral Efforts - NTT DATA began providing comprehensive cloud solutions, covering everything from infrastructure to applications, offering “optimized consulting services” and “migration services (such as a transfer service for a customer’s current system assets).” As a result of these efforts, due to an increase in revenues arising from the expansion of consolidated subsidiaries, consolidated operating revenues from the data communications business segment for the fiscal year ended March 31, 2010 were 1,132.5 billion yen (an increase of 0.5% from the previous fiscal year). On the other hand, consolidated operating expenses were 1,067.6 billion yen (an increase of 2.6% from the previous fiscal year) due to increase in sales and operation costs associated with the expansion of consolidated subsidiaries. As a result, consolidated operating income was 64.9 billion yen (a decrease of 25.2% from the previous fiscal year). Other Business Segments Overview of Business Results by Business Segment In other business segments, while revenues from the real estate business increased, due to a decrease in revenues from the construction and electricity business, system development business and advanced technology development business, consolidated operating revenues for the fiscal year ended March 31, 2010 were 1,132.6 billion yen (a decrease of 2.8% from the previous fiscal year). On the other hand, while the real-estate business recorded a decrease in inventory values, due to a decrease in loan loss expenses in financing business, consolidated operating expenses for the fiscal year ended March 31, 2010 were 1,119.3 billion yen (a decrease of 2.7% from the previous fiscal year). As a result, consolidated operating income was 13.3 billion yen (a decrease of 12.2% from the previous fiscal year).     Copyright (c) 2010 Nippon telegraph and telephone corporation