For Immediate Release
February 28, 1996


NTT Submits Business Operation Plan for Fiscal Year Ending March 31, 1997 to Minister of Posts and Telecommunications for Approval

Nippon Telegraph and Telephone Corporation (NTT) announced today that it has submitted its business operation plan for fiscal year ending March 31, 1997, to the Minister of Posts and Telecommunications for approval.

Under this plan, NTT will improve services by surveying customer needs and advance its stable management bases by making efforts to reduce costs and increase sales and work to establish smooth interconnection discussions and open access networks. NTT will strengthen its R&D and disaster prevention measures. It will also promote staff member training and new business development for the future growth of the company and contribute to its customers, stockholders and to society.

The telecommunications industry is expected to actively contribute to the development and efficiency of social and economic activities. Its market is rapidly developing to meet more sophisticated, diverse, and global customer needs and is taking firm steps in the world trend toward the multimedia era through remarkable technological developments. Intensifying competition, especially in the long-distance telecommunications market, is going to enter a new era, shifting from mere price competition to real service competition. Also, the mobile telephone market is expanding rapidly and competition in the local communications markets are appearing as new trends.
In these circumstances, NTT continues to provide both stable and high-quality universal services and innovative new services for a wide range of corporate and individual activities; to promote concrete activities toward realizing the multimedia era; to contribute to the achievement of telecommunications markets with fair competition; to develop infrastructure, such as optical access network for the 21st century; and to minimize the information gaps among areas. NTT is also working for the early provision of new services, nationwide; conducting greater R&D; maintaining its public-service functions; participating in domestic telecommunications businesses in foreign countries; responding to customer expectations; and contributing to society. NTT will achieve these important missions by stabilizing and ensuring its management bases. Under NTT's operation plan for fiscal year ending March 31, 1997, the company will implement a flexible management in response to the changing managerial environment, putting emphasis on the following items:


Attachment No. 1

NTT Business Operation Plans for Fiscal Year Ending March 31, 1997

1. TELEPHONE SERVICES

(1) Subscribers:
Additional installations1.1 million
Relocations7.0 million
Expected subscribers at the end of March 199762.2 million

(2) Additional installations of social-welfare
telephones (Silver Phone series):
Anshin (Relief) 5,000 units
Meiryo (Clearness)1,000 units
Hibiki (Sound)100 units
Fureai (Communication)1,000 units
Hitsudan (Written Conversation)100 units

(3) Public telephones:
Additional installations and replacements27,000 units
Digital public telephones among those 27,000 units21,000 units
Public silver phones6,000 units
Public phone booths for wheelchair users100 units
*Digital public telephones essentially include voice adjustment function


2. TELEX SERVICES

Telex service operations will continue to be effective while economizing.


3. TELEGRAPH SERVICES

NTT will implement measures, such as the maintenance and replacement of telegraph operation systems for more efficiency and improve its services with the appropriate provision of kanji (Chinese characters) telegraph services and others.


4. LEASED CIRCUIT SERVICES

Facilities for leased circuit services are scheduled to be installed to actively respond to demands, including those for high-speed digital transmission services, data transmission services, and voice and image transmission services. The number of general leased circuits is expected to decrease with further shifts to Signal Supervisory Communication Service.
Ordinary leased circuits:(70,000) circuits
High-speed digital circuits:23,000 circuits


5. DIGITAL DATA TRANSMISSION SERVICES

The Type I packet switching service is expected to cover most areas of expected demand. The Type II packet switching service covers all areas nationwide; therefore, NTT plans to build equipment for the switching service in response to public demand.
Expansion of packet switching service (Type I):(4,000)circuits
Expansion of packet switching service (Type II):18,000 circuits


6. OTHER SERVICES

(1) Facsimile communication network services

NTT plans to provide facsimile communication network services for all areas nationwide and to build equipment for the network services in response to public demand.
Expansion of facsimile communication network service:129,000 circuits

(2) Videotex communication services

NTT plans to provide videotex communication services for all areas nationwide and to build equipment for the network services in response to public demand.
Expansion of videotex communication service:130,000 circuits

(3) INS Net digital services

NTT provides INS Net 64 and INS Net 1500 for all cities nationwide and plans to offer these services to rural areas in consideration of circumstances, such as public demand.
Expansion of INS Net 64 subscriber lines:196,000circuits
Expansion of INS Net 1500 subscriber lines: 3,500circuits
Expansion of INS Net service areas:499 areas
Expected service areas at the end of March 1997:4,107areas


7. IMPROVEMENTS AND ADVANCES IN TELECOMMUNICATIONS EQUIPMENT

(1) Digitization of communications network

NTT plans to proceed with digitization of the local switches to achieve a digital communications network that will be the infrastructure for the coming information-oriented society to offer innovative services and make its networks more effective and economical.
Expansion of digital local switches:4.4million terminals
Expansion of ISDN terminals:730,000terminals
Expansion of digital toll switches:480,000channels
Expansion of digital transmission lines:710sections

(2) Satellite communications

NTT plans to maintain/replace earth stations, such as those for satellite monitoring and control.


(3) Optical Access Network

The establishment of an Optical Access Network will actively progress in quick coordination with public demand for service sophistication and the replacement of existing metal cables.
Optical subscriber cable:1.79 million fiber km
(Nationwide cover rate at the end of March, 1997 will be 16%.)

(4) Disaster-Prevention measures

NTT will promote needed disaster-prevention measures for telecommunications equipment, security measures for emergency communication, crisis management and restoration system to prepare large-scale disaster, and support of information distribution after a disaster occurs.


(5) Installation of underground transmission cables

NTT will install underground transmission cables to aid transmission stability, secure safe and comfortable passage spaces and improve the appearance of urban areas, in corporation with the local and national governments or other companies.


(6) Facility maintenance

NTT will implement facility maintenance, including cable and telephone-pole replacement, to improve customer services, ensure safety and harmony with social environments, and stabilize communications systems.


8. PROMOTION OF RESEARCH AND DEVELOPMENT ACTIVITIES

To meet public demand for the coming multimedia era, and to further strengthen the basis of its business operations, NTT will contribute to domestic and international standardization activities as well as standardize its R&D results by technical cooperation with others and conduct R&D in (a) technologies for sophisticated and diversified multimedia communications services, (b) technologies to sophisticate the network as the foundation of multimedia communications services, and (c) advanced and basic technologies as a pillar for future telecommunications.

More specifically, NTT will conduct R&D activities as follows:

(1) Network technology

Upgrading the telecommunications network, NTT will promote R&D in the fields of network configuration, fiber-optic subscriber transmission systems, and high-speed broadband communications systems, toward the progress and expansion of ISDN. NTT will also continue promoting R&D in operation systems to improve the reliability of its networks and customer services. In addition, NTT will continue to create and develop a new utilization method and technology by associating with participants in a joint utilization test of multimedia communications while promoting the realization of new network services.


(2) Terminal technology

NTT will progress in R&D on communication terminals so that customers can select from various useful services that NTT provides via an advanced telecommunications network.


(3) Combined technology

NTT will progress in R&D technologies, including various middleware technologies, which are applicable to areas previously mentioned aimed at facilitating the convenient use of a sophisticated telecommunications network.


(4) Basic technology

NTT will progress in R&D in future communications networks, advanced information processing, LSI (large scale integration) circuits and opto- electronics to contribute to the development and improvement of Japan's telecommunications industry as well as to take the lead in advanced and basic technologies for future telecommunications.


Attachment No. 2

Construction Plan for Fiscal Year Ending March 31, 1997

Estimated expenses
(billions of yen)

1. Expansion and improvement of services
(1) Telephone1,403
(2) Telex/Telegraph5
(3) Leased circuits114
(4) Digital data exchange14
(5) Integrated services digital network34
(6) Other services10
1,580*
2. R&D facilities139
3 . Other facilities201
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Total1,920
Note:* Approximately 840 billion yen will be invested to improve telecommunications facilities and among those approximately 500 billion yen will be invested in digital switches and digital transmission lines. Also, approximately 240 billion yen will be invested in optical access network.


Attachment No. 3

Revenues and Expenses Plan for Fiscal Year Ending March 31, 1997

(billions of yen)
Revenues
Operating revenues
(1) Telephone4,840
(2) Telex/Telegraph97
(3) Leased circuits756
(4) Others570
6,263
Non-operating revenues69
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Total revenues6,332
Expenses
Operating expense
(1) Operating costs4,107
(2) Taxes and dues212
(3) Depreciation1,615
5,934
Non-operating expenses164
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Total expenses6,098
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Recurring profit234

Attachment No. 4

Plan of Sources and Applications of Funds for
Fiscal Year Ending March 31, 1997

(billions of yen)
Sources:
Operational:
Operating revenues7,351
Non-operating revenues71
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Subtotal7,422
Financial:
Long-term loans and bonds448
Others0
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Subtotal448
Estimated consumption tax192
Brought forward from the previous fiscal year357
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Total8,419
Applications:
Operational:
Operating expenses4,964
Non-operating expenses160
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Subtotal5,124
Financial:
Capital investments for property, plant and equipment1,920
Other financial expenses653
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Subtotal2,573
Closing account expenses266
Temporarily-paid consumption tax114
Carry forward to following year342
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Total8,419



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