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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Nippon Tel.& T. | LSE:NPN | London | Ordinary Share | JP3735400008 | NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 3,910.3704 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:1588J
Nippon Telegraph and Telephone Corp
01 March 2005
March 1, 2005
For Immediate Release
Submission for Approval of Business Operation Plan
for Fiscal Year Ending March 31, 2006
Nippon Telegraph and Telephone Corporation (NTT) today submitted its business
operation plan for the fiscal year ending March 31, 2006 to the Minister for
Internal Affairs and Communications for approval.
For more information, please contact:
Department I
Nippon Telegraph and Telephone Corporation
Tel: +81-3-5205-5153
E-mail: jigyou@hco.ntt.co.jp
Business Operation Plan for Fiscal Year Ending March 31, 2006
In the building of an advanced information and telecommunications network
society, information and communications are expected to make a substantial
contribution to invigorating and raising the efficiency of socioeconomic
activities, enhancing lifestyle convenience, and so on. Today, the public and
private sectors in Japan are working together to make such a society a reality.
The information and telecommunications market has been changing dramatically
with the intensification of competition resulting from the rapid expansion of
broadband services, the diversification and upgrading of mobile phone services,
and the launch of fixed telephone services by new common carriers that use dry
copper lines (unused telephone lines).
To help ensure that universal services are maintained amid this information and
communications environment, NTT intends to provide all necessary advice,
mediation, and other assistance to Nippon Telegraph and Telephone East
Corporation and Nippon Telegraph and Telephone West Corporation ("the regional
companies"). It will also endeavor to promote research and development in
telecommunications technology in order to respond to society's requirements for
the development of an advanced information and telecommunications network
society.
-1-
--------------------------------------------------------------------------------
In addition, NTT intends to foster active Group management for the sound
development of the entire Group based on the NTT Group's Medium-Term Management
Strategy issued in November 2004 as a step to realize its "Vision for a New
Optical Generation."
In the management of business operations for the fiscal year ending March 31,
2006, NTT will aim to improve the management efficiency of its Group operations,
including those of the regional companies; to develop new businesses for
enhancing the information-sharing industry, including expanding the ubiquitous
broadband market; and to continue to strengthen research and development that
will contribute to the advancement of telecommunications. In this way, NTT will
seek to ensure the stable development of Group operations in the future, and to
return the fruits of these efforts to customers, shareholders, and the community
at large.
Based on this thinking, under the business operation plan for the fiscal year
ending March 31, 2006, NTT will conduct its business management by giving
priority to the following activities, and will do so in a flexible manner so as
to respond to changes in the operating environment.
1. Advice, Mediation, etc.
For the regional companies, NTT will provide all necessary advice, mediation,
etc. to ensure the maintenance of high-quality and stable universal services.
These will include planning and coordination relating to the quality and
upgrading of telecommunications networks, deployment of control and coordination
capabilities when natural disasters and other emergencies occur, efficient
fund-raising, and formulation of policies for materials procurement. NTT will
also exercise its shareholder rights, as necessary, in order to assure the
smooth flow of dividends to shareholders.
For all NTT Group companies, including the regional companies, NTT's activities
will include management support for such operations as business expansion and
provision of assistance with the development of the human resources that form
the core of the NTT Group. NTT will also use its combined strengths to actively
build the ubiquitous broadband market to help achieve the e-Japan Strategy and
the u-Japan Initiative, and will strive to increase corporate value and achieve
sustained growth.
-2-
--------------------------------------------------------------------------------
2. Promotion of Basic Research and Development
One prerequisite for responding to the social requirements for the formation of
an advanced information and telecommunications network society is the harmonious
and coordinated development of network-based technologies, technologies that
provide the basis for new services and applications, and advanced and basic
technologies in general. NTT will conduct research and development activities to
realize "a communication environment where entities such as people and objects
are interactively connected by broadband and ubiquitous networks anytime,
anywhere and with anyone or anything, and people enjoy superb usability that is
secure, reliable, and simple."
In conjunction with these efforts, NTT will continue to actively disseminate the
results of its research and development and conduct active technology exchanges
with institutions both within Japan and overseas, including ongoing
contributions to standardization activities, industry standardization of
research and development results, and research and development in collaboration
with other research institutions.
To ensure the continuous execution of this basic research and development, NTT
will seek to further increase research efficiency, and research costs will be
borne by the regional companies and other NTT Group companies, which in turn
will benefit from these efforts.
Specifically, priority will be given to the following areas in NTT's research
and development activities:
-3-
--------------------------------------------------------------------------------
(1) Infrastructure-related research and development
To build a safe, secure, and convenient communications network environment and
broadband access infrastructure, while achieving a seamless migration from fixed
line to IP telephone services and from metal wire systems to optical fiber as
defined as one of the management objectives of the NTT Group's Medium-Term
Management Strategy, NTT will promote research and development in the sphere of
base network technologies, including technologies for configuring economical and
diverse access networks, technologies for building networks that can cope
flexibly with diverse network services, node architecture technology, optical
multiplexing technology, and next-generation IP network technologies. At the
same time, NTT will pursue basic research in the field of operating systems to
improve the reliability of telecommunications networks and the quality of
customer services. Additionally, considering the sharp increase in energy
consumption accompanying the development of the advanced information and
telecommunications network society, NTT will promote research and development on
reducing electric power consumption and on other measures to promote the
preservation of the global environment.
(2) User-related research and development
NTT will pursue research and development activities on infrastructure for
providing customers with diverse telecommunications services, including
e-commerce, contents sharing, and community collaboration with a view to using
sophisticated telecommunications networks to realize an advanced information and
telecommunications network society in which the electronic exchange of
information, goods, and currencies among people, corporations, and objects is
further enhanced. Specifically, this will include research and development in
such areas as security technologies to secure information and communications;
e-commerce-related technologies for billing, validation, and authentication;
information-distribution technologies that can cope flexibly with diverse
network environments; media-processing technologies, such as those for the
compression, recognition, and sharing of graphic and voice data; multimedia
database technologies for the storage and search of a variety of media; and user
interface technologies for the achievement of seamless services that are more
convenient and beneficial to everyone.
-4-
--------------------------------------------------------------------------------
(3) Research and development in basic technologies
NTT will devote its efforts to the creation of a photonic network that makes it
possible to achieve ultra high-speed, ultra high-volume terabit and
petabit-level communications, in preparation for an age in which massive volumes
of digital information circulate through networks with a view to securing
leadership in the basic and advanced technologies that will underpin the future
of telecommunications, and to contribute to the inventive enhancement and
development of telecommunications in Japan. To this end, NTT will pursue
research and development activities on ultra high-density wavelength division
multiplexing and other new optical communications technologies as well as
optical amplification, optical wavelength multiplexers and demultiplexers,
optoelectronic fusion devices, and other new optical components technologies.
NTT will also pursue research in such areas as nanotechnology, which seeks to
realize the potentials of new materials with unique characteristics, and
Communications Science, which explores new possibilities in communications. This
will be combined with research on innovative new principles and new concepts for
the next generation.
The following tables present an overview of the capital investment plan for all
of these activities.
-5-
--------------------------------------------------------------------------------
Table
Capital Investment Plan for Fiscal Year Ending March 31, 2006
(billions
of yen)
Item Investment
-- Required
1. R&D Facilities 15
2. Other Facilities 6
Total 21
-6-
--------------------------------------------------------------------------------
Attachment 1
Revenues and Expenses Plan for
Fiscal Year Ending March 31, 2006
(billions of yen )
Item Amount
--
Revenues
Operating Revenues 308 (Note)
Non-Operating Revenues 64
Total Revenues 372
Expenses
Operating Expenses 169
Non-Operating Expenses 58
Total Expenses 227
Recurring Profit 145
------
Note: This includes basic research and development revenue and other revenues
together totaling 142 billion yen, and NTT Group management revenue of
20 billion yen.
-7-
--------------------------------------------------------------------------------
Attachment 2
Sources and Applications of Funds Plan for
Fiscal Year Ending March 31, 2006
(billions of yen )
Item Amount
--
Sources:
Operational: 352
Operating Revenues 288
Non-Operating Revenues 64
Financial: 788
Long-Term Loans and Bonds 362
Other Financial Income 426
Estimated Consumption Tax Receipts 9
Brought Forward from Previous Fiscal Year 89
Total 1,238
Applications:
Operational: 197
Operating Expenses 143
Non-Operating Expenses 54
Financial: 875
Capital Investments for Property, Plants, and Equipment 21
Other Financial Expenses 854
Account Settlement Expenses 112
Provisional Consumption Tax Payments 6
Carry Forward to Following Fiscal Year 48
Total 1,238
-8-
--------------------------------------------------------------------------------
March 1, 2005
Nippon Telegraph and Telephone Corporation
(NTT)
Summary of Business Operation Plan for
Fiscal Year Ending March 31, 2006
1. Basic Philosophy of Business Operation Plan for Fiscal Year Ending March 31,
2006
- NTT intends to foster active Group management for the sound development of
the entire Group based on the NTT Group's Medium-Term Management Strategy.
(1) Advice, Mediation, etc.
a. For the regional companies, NTT will provide all necessary advice,
mediation, etc. to ensure the maintenance of high-quality and stable
universal services.
b. For all NTT Group companies, NTT will support for such operations as
business expansion, use the combined strengths of NTT to actively build
the ubiquitous broadband market to help achieve the e-Japan Strategy and
the u-Japan Initiative, and strive to increase corporate value and achieve
sustained growth.
(2) Promotion of Basic Research and Development
To build a safe, secure, and convenient communications network environment and
broadband access infrastructure, while achieving a seamless migration from fixed
line to IP telephone services and from metal wire systems to optical fiber as
defined as one of the management objectives of the NTT Group's Medium-Term
Management Strategy, NTT will actively promote research and development in the
sphere of infrastructure- and user-related basic technologies, as well as
advanced and basic technologies in order to respond to society's requirements
for the development of an advanced information and telecommunications network
society.
--------------------------------------------------------------------------------
2. Capital Investment Plan for Fiscal Year Ending March 31, 2006
(billions of yen)
Item Investment Required
---
1. R&D Facilities 15 2*
Including: Infrastructure Experiment and Research Facilities 10 4*
2. Other Facilities 6 0*
Total 21 2*
------
* Change from the previous forecasts announced November 10, 2004
3. Revenues and Expenses Plan for Fiscal Year Ending March 31, 2006 (Attachment)
(billions of yen)
Item Amount
---
Total Revenues 372 (25)*
Operating Revenues 308 (20)*
Revenues from Basic Research and Development, License of Research Results and Other 148 (15)*
Sources
NTT Group Management Revenue 20 (1)*
Dividend Received 140 (4)*
Non-Operating Revenues 64 (5)*
Total Expenses 227 (20)*
Operating Expenses 169 (16)*
Non-Operating Expenses 58 (4)*
Recurring Profit 145 (5)*
------
* Change from the previous forecasts announced November 10, 2004
4. Sources and Applications of Funds Plan for Fiscal Year Ending March 31, 2006
(Attachment)
(billions of yen)
Item Amount
---
Sources: 1,238
Including: Long-Term Loans and Bonds 362
Applications: 1,238
Including: Repayment of Long-Term Loans and Bonds 418
--------------------------------------------------------------------------------
March 1, 2005
Submission for Approval of Business Operation Plan for
Fiscal Year Ending March 31, 2006
Nippon Telegraph and Telephone East Corporation (NTT East) today submitted its
business operation plan for the fiscal year ending March 31, 2006 to the
Minister for Internal Affairs and Communications for approval.
--------------------------------------------------------------------------------
Information and communications are expected to contribute enormously to
invigorating and enhancing the efficiency of socioeconomic activities, creating
new industries, and improving the living environment of citizens in order to
achieve the aim of the u-Japan Initiative: a ubiquitous network society.
Moreover, as needs grow steadily more sophisticated, diverse, and global in
character, the very structure of the information and telecommunications market
is undergoing dramatic change, characterized by surging demand for mobile and
Internet communications. The regional telecommunications market has also ushered
in an era of rapid structural change and full-fledged competition. In the fixed
telephone field, competition has intensified with the launch of fixed telephone
services by new common carriers that use dry copper lines. In the field of
broadband communications, charges for Internet access have also been falling
with the expansion of demand and the heightening of competition, and the use of
IP telephones has been spreading rapidly not only in the corporate market but
also the household market.
Amidst such a difficult and sharply fluctuating operating environment, Nippon
Telegraph and Telephone East Corporation (NTT East) will continue to strive to
provide high-quality, stable universal services, while also enhancing the
stability and strength of its management base. The company will lead the rapidly
growing and diversifying broadband market and provide new services employing
highly reliable and sophisticated infrastructure, with the aim of contributing
to a wide range of both corporate and individual activities. NTT East will
strive to fulfill its mission as a leading company in the IP era and will
contribute to its further development with the aim of fostering information
sharing. At the same time, in order to realize the NTT Group's Medium-Term
Management Strategy, the company will devote itself to efficiently building
optical access networks as an infrastructure for broadband services and to
ensuring reliability in the field of telecommunications. Through these
endeavors, NTT East will seek to make a real difference to the world.
-1-
--------------------------------------------------------------------------------
In the management of business operations for the fiscal year ending March 31,
2006, based upon this fundamental concept, NTT East will make every effort to
ascertain customer opinions and demands swiftly and accurately, and to improve
services accordingly. In the face of today's difficult operating environment,
the company will also endeavor to further raise the efficiency of management.
Moreover, NTT East will devote its full energy to the expansion of demand for
broadband communications that match user needs, including providing safe and
secure high value added services that are sure to lead the broadband market,
such as the full-fledged development of optical IP services. NTT East will also
strive to return the fruits of these measures to customers, the community, and-
through the holding company-to shareholders, and will promote the ongoing
development of stable operations in the future.
In line with this concept, for the fiscal year ending March 31, 2006, NTT East
will give priority to the following categories in the conduct of its business
management, and will do so flexibly so as to respond to changes in the operating
environment.
-2-
--------------------------------------------------------------------------------
1. Voice Transmission Services
(1) Subscriber Telephones
NTT East will respond to all demand for subscriber telephones, including the
relocation of existing lines. The number of subscribers is projected to total
approximately 22.58 million by the end of the fiscal year ending March 31, 2006.
Item Planned
--- Number
(subscribers)
Additional Installations (2.26) million
Relocations 4.94 million
(2) Social-Welfare Telephones
The advance of the welfare society has been accompanied by a greater social
requirement for telecommunications services in the sphere of welfare. To respond
to this need, NTT East will continue to promote the installation of
welfare-related products, such as its "Silver Phones Series" (Anshin (Relief),
Meiryo (Clearness), Hibiki (Sound), and Fureai (Communication)).
Item Planned
--- Number
(units)
Silver Phones
Anshin (Relief) 400
Meiryo (Clearness) 100
(3) Public Telephones
While securing a minimum level of public means of communication, NTT East will
review public telephones which are in low use today. The company will strive to
improve social welfare facilities and public services by continuing to promote
the installation of wheelchair-accessible public telephone boxes. All IC card
public telephones will be replaced by magnetic card public telephones by the end
of the fiscal year ending March 31, 2006.
Item Planned
--- Number
(units)
Public Telephones (23,000)
(4) INS-Net Digital Services
INS-Net digital services can be provided in all regions in which demand is
forecasted. The numbers of INS-Net 64 lines and INS-Net 1500 lines are projected
to total approximately 3,418,000 and 33,000, respectively, by the close of the
fiscal year ending March 31, 2006.
Item Planned
--- Number
(circuits)
INS-Net 64 Subscriber Lines (559,000)
INS-Net 1500 Subscriber Lines (2,000)
-3-
--------------------------------------------------------------------------------
2. Data Transmission Services
To respond to heightening demand for broadband services, NTT East will endeavor
to enhance access services, expand service areas, and provide new services,
focusing mainly on the full provision of optical IP phone services.
Item Planned
-- Number
(circuits)
B FLET'S 1 million
3. Leased Circuit Services
In the field of leased circuit services, NTT East is planning to install the
facilities needed to cater to the increasingly varied demand for circuits,
including for high-speed digital transmission and voice and image transmission.
Item Planned
-- Number
(circuits)
Conventional Leased Circuits (38,000)
High-Speed Digital Transmission Circuits (42,000)
4. Telegraph Services
NTT East will continue to conduct the maintenance of systems and other
operations in order to further improve services and to promote increased
operating efficiency in its telegraph services.
-4-
--------------------------------------------------------------------------------
5. Improvements and Advances in Telecommunications Facilities
(1) Optical Access Network
The switchover to the use of optical fiber in the access network will be
actively promoted in accordance with factors such as heightening demand for
broadband services.
Item Planned
-- Number
(million
fiber
km)
Optical Subscriber Cables 1.9
(Cover rate at the end of March 2006 will be 85%.)
(2) Telecommunications Network
In its telecommunications network, NTT East will not only meet demand for
broadband services, but at the same time will further upgrade network services
and improve network economy and efficiency.
(3) Disaster-Prevention Measures
NTT East will take all necessary measures in the sphere of disaster-prevention
measures. These will include disaster-prevention measures for telecommunications
equipment and facilities, measures to ensure emergency communications, and
measures to strengthen the structure for crisis management and the restoration
of systems if large-scale disasters occur, and to assist with the sharing of
information after a natural disaster.
(4) Installation of Underground Transmission Cables
With regard to the burying of transmission cables, from the standpoint of
improving the reliability of communications facilities, ensuring safe and
pleasant passage spaces, and enhancing the appearance of urban areas, NTT East
will work in cooperation with the national and local governments and with other
companies.
(5) Facility Maintenance
The maintenance of facilities will be directed at ensuring stable and
high-quality services, by, for example, replacing cables and other facilities on
an on-going basis. Through this, NTT East will aim not only to maintain customer
services, but also to ensure safe operations, harmonization with the social
environment, and the stabilization of communications systems.
NTT East will seek to minimize costs by making exhaustive use of existing
equipment and facilities in improving and upgrading communications facilities.
-5-
--------------------------------------------------------------------------------
6. Promotion of R&D Activities
To further stabilize and strengthen its management base, and to respond to the
rapid expansion and diversification of the Internet market and public demand for
the creation of an advanced information and telecommunications network society,
NTT East will promote research and development in the spheres of network systems
and access systems so as to upgrade telecommunications networks. In addition, to
position itself to give customers the choice of a diverse range of reliable and
convenient services through sophisticated telecommunications networks, NTT East
will also conduct research and development in such areas as information-sharing
applications and communications terminals of various types.
A summary of the business plans for the above principal services and capital
investment plans are outlined in the attached tables.
-6-
--------------------------------------------------------------------------------
Table 1
Principal Services Plan for Fiscal Year Ending March 31, 2006
Type of Service Plan
----------
Voice Transmission Services
Subscriber Telephones
Additional Installations (226 million) subscribers
Relocations 494 million subscribers
Social-Welfare Telephones (Silver Phones) 500 units
Public Telephones (23,000) units
INS-Net Digital Services
INS-Net 64 Subscriber Lines (559,000) circuits
INS-Net 1500 Subscriber Lines (2,000) circuits
Data Transmission Services
B FLET'S 1 million contracts
Leased Circuit Services
Conventional Leased Circuits (38,000) circuits
High-Speed Digital Transmission Circuits (42,000) circuits
-7-
--------------------------------------------------------------------------------
Table 2
Capital Investment Plan for Fiscal Year Ending March 31, 2006
(billions of yen)
Item Investment Required
---
1. Expansion and Improvement of Services (Note)
378
(1) Voice Transmission 242
(2) Data Transmission 45
(3) Leased Circuits 90
(4) Telegraph 1
2. R&D Facilities 4
3. Joint Facilities, etc. 18
Total 400
------
Note: This includes approximately 170 billion yen to be invested in the Optical Access Network.
-8-
--------------------------------------------------------------------------------
Attachment 1
(Reference)
Revenues and Expenses Plan for Fiscal Year Ending March 31, 2006
(billions of yen)
Item Amount
---
Revenues
Operating Revenues 2,012
Voice Transmission 1,223
Data Transmission 143
Leased Circuits 296
Telegraph 25
Others 325
Non-Operating Revenues 54
Total Revenues 2,066
Expenses
Operating Expenses 1,997
Operating Costs 1,495
Tax and Dues 75
Depreciation 427
Non-Operating Expenses 44
Total Expenses 2,041
Recurring Profit 25
-9-
--------------------------------------------------------------------------------
Attachment 2
(Reference)
Plan of Sources and Applications of Funds
for Fiscal Year Ending March 31, 2006
(billions of yen)
Item Amount
---
Sources:
Operational 2,744
Operating Revenues 2,690
Non-Operating Revenues 54
Financial 144
Long-Term Loans and Bonds 144
Other Financial Income 0
Estimated Consumption Tax Receipts 100
Brought Forward from Previous Fiscal Year 106
Total 3,094
Applications:
Operational 2,307
Operating Expenses 2,277
Non-Operating Expenses 30
Financial 564
Capital Investments for Property, Plant and Equipment 400
Other Financial Expenses 164
Account Settlement Expenses 34
Provisional Consumption Tax Payments 83
Carry Forward to Following Fiscal Year 106
Total 3,094
-10-
--------------------------------------------------------------------------------
Reference
The earnings forecast for the fiscal year ending March 31, 2005 announced in
autumn 2004 has been revised as follows.
Earnings Forecast for Fiscal Year Ending March 31, 2005
(billions of yen)
Item Operating Operating Recurring Net
--- Revenues Income Profit Income
Earnings Forecast 2,152 80 90 53
(Previous Earnings Forecast for Fiscal Year Ending March 31, 2005)
(announced November 10, 2004)
(billions of yen)
Item Operating Operating Recurring Net
--- Revenues Income Profit Income
Previous Earnings Forecast 2,128 75 85 46
-11-
--------------------------------------------------------------------------------
March 1, 2005
Nippon Telegraph and Telephone East Corporation (NTT East)
Outline of NTT East's Business Operation Plan
for Fiscal Year Ending March 31, 2006
1. Revenues and Expenses Plan for Fiscal Year Ending March 31, 2006
(billions of yen)
Item FY 3/ FY 3/ Change
-- 06* 05
Total Revenues 2,066 2,206 (140 )
(1) Voice Transmission (excl. IP services) 1,208 1,378 (170 )
(2) IP-related 295 213 82
(3) Leased Circuits (excl. IP services) 158 201 (43 )
Total Expenses 2,041 2,116 (75 )
(1) Personnel Expenses 195 204 (9 )
(2) Non-personnel Expenses 1,250 1,273 (23 )
(3) Depreciation 427 464 (37 )
Recurring Profit 25 90 (65 )
---------
* Figures for the fiscal year ending March 31, 2006 include a 28 billion yen increase over the previous year in
voice transmission revenue through end-to-end charging for calls from fixed telephones to mobile phones and a 28
billion yen increase in non-personnel expenses arising from access charges payable.
(Reference)
Operating Free Cash Flow 84 190 (106 )
2. Principal Services Plan
Type of Service FY 3/06 FY 3/05 Change
--------
IP Services
Broadband Access
B FLET'S 1,000,000 contracts 450,000 contracts 550,000
FLET'S ADSL 200,000 contracts 600,000 contracts (400,000 )
IP Phones
Optical IP Phone Services 1,000,000 channels 0 channels 1,000,000
Subscriber Telephones and ISDN (2,840,000 ) subscribers (850,000 ) subscribers (1,990,000 )
(1) Subscriber Telephones (2,260,000 ) subscribers (420,000 ) subscribers (1,840,000 )
Leased Circuits Services
Conventional Leased Circuits (38,000 ) circuits (29,000 ) circuits (9,000 )
High-Speed Digital Transmission Circuits (42,000 ) circuits (39,000 ) circuits (3,000 )
------
* Figures for ISDN subscriber lines are consisting of INS-Net 64 and INS-Net 1500. In terms of number of channels,
transmission rate, and line use rate(base rate), INS-Net1500 is in all cases roughly ten times greater than INS-Net
64. For this reason, one INS-Net 1500 subscription is calculated as ten INS-Net 64 subscriptions (INS-Net 64 Lite
Plan is included).
--------------------------------------------------------------------------------
3. Capital Investment Plan
(billions of yen)
Item FY 3/06 FY 3/05* Change
---
Expansion and Improvement of Services 378 370 8
(1) Voice Transmission 242 253 (11 )
(2) Data Transmission 45 34 11
(3) Leased Circuits 90 81 9
(4) Telegraph 1 2 (1 )
R&D Facilities 4 5 (1 )
Joint Facilities, etc. 18 35 (17 )
Total 400 410 (10 )
(400 )** (+/-0 )**
Optical Access Network Approx. 170 Approx.130 Approx. 40
(Approx. 140**) (Approx 30**)
------
* Figures based on the initial plan.
** Figures based on the revised estimates.
4. Principal Work to Improve and Upgrade Telecommunications Facilities
Item FY FY Change
--- 3/ 3/
06 05
Optical Subscriber Cables (million fiber km) 1.9 1.3 0.6
Optical Subscriber Cables Coverage at Fiscal Year-End 85 % 83 % +2 percentage
points
--------------------------------------------------------------------------------
March 1, 2005
Submission for Approval of Business Operation Plan
for Fiscal Year Ending March 31, 2006
Nippon Telegraph and Telephone West Corporation (NTT West) today submitted its
business operation plan for the fiscal year ending March 31, 2006 to the
Minister for Internal Affairs and Communications for approval.
--------------------------------------------------------------------------------
Information and communications are expected to play a key role in the process of
forming a ubiquitous network society by enhancing the efficiency and vitality of
socioeconomic activities and the convenience of national life. To that end, the
public and private sectors are working closely together under the u-Japan
Initiative to bring the network society to reality. At the same time, the
information and telecommunications market has been undergoing drastic
transformations affecting the structure of the market itself. These changes
include the growing sophistication and diversification of user needs, the steady
progress of globalization, and the explosive growth in demand for Internet
communications. The regional communications market is feeling the impact of the
progressive contraction in the conventional fixed-line telephone market as
consumers switch from fixed to mobile communications, and from voice
transmission to Internet and data communications, while IP telephony is expected
to expand rapidly. Further, new competition is emerging, triggered by the launch
by other companies of telephone services that do not rely on NTT's network. The
broadband market, the growing leader in telecommunications, continues to be the
scene of intense competition for greater market penetration among ADSL and
optical providers in both services and price.
In this intensely competitive environment, NTT West has identified the fiscal
year ending March 31, 2006 as critical to its strategy to achieve a dramatic
increase in users of its optical access and IP services. NTT West will actively
engage in the enrichment of its broadband services, including provision of
applications that take advantage of Fiber-optic IP Connection, and in the
development of high-value-added solutions businesses such as security services,
as the company endeavors to realize a resonant communications environment. As
well as contributing to provide stable, high-quality universal services, NTT
West has set up the following goals to fulfill the NTT Group's Medium-Term
Management Strategy:
- Migrate seamlessly from its existing network to the optical
and IP network.
- Enhance optical access network that constitutes the backbone for
its broadband services.
- Contribute to the development of a fair telecommunications market.
- Advance its research and development capabilities in applied fields.
- Work towards ensuring the reliability and public availability of
telecommunications services.
-1-
--------------------------------------------------------------------------------
As a reflection of these fundamental principles, NTT West will strive in its
business management during the fiscal year ending March 31, 2006, to offer
high-value-added services that cater to diverse modes of use by creating new
broadband services and technologies and improve its services by responding
effectively and quickly to customer needs and demands. Further, in the face of
the severe business environment, NTT West will make every effort to secure the
continued flow of profits through such management innovation programs as greater
improvements in business efficiency and trimming of costs, while still
responding to any changes in the market. In other areas, NTT West will implement
measures for maintaining smooth interconnection and open networks. It will seek
to promote its research and development position in applied fields, improve
disaster prevention measures, promote human resources development, and actively
pursue new business opportunities in cooperation with NTT group companies.
Through this line of action, NTT West will endeavor to achieve a stable course
of future development. NTT West stands ready to share the benefits of these
initiatives with its customers, local communities and the shareholders in the
holding company.
The above outlines NTT West's basic strategies for the fiscal year ending March
31, 2006. While special emphasis will be assigned to the matters summarized
below, NTT West will respond with appropriate flexibility to any changes in the
business environment.
-2-
--------------------------------------------------------------------------------
1. Voice Transmission Services
(1) Subscriber Telephones:
NTT West stands ready to respond speedily to all demand for subscriber
telephones, including the relocation of existing lines. The total number of
subscribers is projected to reach approximately 23.29 million by the end of the
fiscal year ending March 31, 2006.
Item Planned
--- Number
(subscribers)
Additional Installations (1.91 million)
Relocations 4.01 million
(2) Social-Welfare Telephones:
The progress of social welfare has generated demand for various
telecommunications services. To respond to welfare-related needs, NTT West shall
promote the installation of its "Silver Phones series" (Anshin (Relief), Meiryo
(Clearness), Hibiki (Sound) Fureai (Communication)) and other welfare-oriented
products.
Item Planned
--- Number
(units)
Silver Phones
Anshin (Relief) 2,500
Meiryo (Clearness) 100
(3) Public Telephones:
While maintaining public telephones to ensure a minimum level of access to
outdoor communications, NTT West will continue to review and to remove low-use
public telephones. On the other hand, in its commitment to improved services and
welfare, NTT West will promote the installation of public telephone boxes for
wheelchair users.
Item Planned
--- Number
(units)
Public Telephones (23,000)
(4) INS-Net Digital Services:
INS-Net Digital Services are now available in all areas with potential demand.
The total number of INS-Net 64 subscriber lines and INS-Net 1500 subscriber
lines is projected to reach approximately 3,276,000 circuits and approximately
20,000 circuits, respectively, by the end of the fiscal year ending March 31,
2006.
Item Planned
--- Number
(circuits)
INS-Net 64 Subscriber Lines (524,000)
INS-Net 1500 Subscriber Lines (1,000)
-3-
--------------------------------------------------------------------------------
2. Data Transmission Services
NTT West will reinforce its Fiber-optic IP Connection Service and other access
services as well as provide new services to respond to the expanding demand for
broadband services.
Item Planned
-- Number
(subscribers)
B FLET'S 800,000
3. Leased Circuit Services
Facilities for leased circuit services are scheduled to be installed to actively
respond to demand, including high-speed digital transmission services and voice
and image transmission services.
Item Planned
-- Number
(circuits)
Conventional Leased Circuits (49,000)
High-Speed Digital Transmission Circuits (71,000)
4. Telegraph Services
NTT West shall promote such measures as the maintenance of telegraph operation
systems to enhance services and raise efficiency.
-4-
--------------------------------------------------------------------------------
5. Improvements and Advances in Telecommunications Equipment
(1) Optical Access Network:
NTT West shall actively promote the deployment of the Optical Access Network in
coordination with expanding demand for broadband services.
Item Planned
--- Number
(million
fiber
km)
Optical Subscriber Cables 1.5
(Coverage rate at the end of March 2006 will be 84%.)
(2) Telecommunications Network:
NTT West shall enhance network services as well as improve network economy and
efficiency while meeting demand for broadband services.
(3) Disaster-Prevention Measures:
NTT West shall promote necessary disaster-prevention measures for
telecommunications equipment. To this end, it shall establish emergency
communication and crisis management measures, as well as procedures for
restoring systems and distributing vital information in the event of a
large-scale disaster.
(4) Installation of Underground Transmission Cables:
NTT West shall install underground transmission cables to aid transmission
stability, secure safe and comfortable passage spaces and improve the appearance
of urban areas in cooperation with the local and national governments or other
companies.
(5) Facility Maintenance:
NTT West shall implement facility maintenance, including the replacement of
cables, to maintain customer services, ensure safety and harmony with social
environments and stabilize communications systems.
NTT West shall pursue cost reduction by making exhaustive use of existing
equipment and facilities in improving and upgrading communications facilities.
6. Promotion of Research and Development Activities
The information and telecommunications market is at a significant crossroads.
NTT West shall promote research and development in the spheres of network
systems and access systems which create more sophisticated and reliable
telecommunications networks. In addition, to meet diverse public demand for
information and telecommunications, NTT West shall also promote research and
development in such areas as information distribution applications and
communications terminals of various types which expand the range of choices
available to customers in their selection of reliable and convenient services
through sophisticated telecommunications networks.
The summary of the business plans for the above principal services and the plant
and equipment investment plans are outlined in the attached tables.
-5-
--------------------------------------------------------------------------------
Table 1
Principal Services Plan
for Fiscal Year Ending March 31, 2006
Type of Service Unit Plan
----------
Voice Transmission Services
Subscriber Telephones
Additional installations million subscribers (1.91 )
Relocations million subscribers 4.01
Social-Welfare Telephones (Silver Phones) units 2,600
Public Telephones units (23,000 )
INS-Net Digital Services
INS-Net 64 Subscriber Lines circuits (524,000 )
INS-Net 1500 Subscriber Lines circuits (1,000 )
Data Transmission Services
B FLET'S circuits 800,000
Leased Circuit Services
Conventional Leased Circuits circuits (49,000 )
High-Speed Digital Transmission Circuits circuits (71,000 )
-6-
--------------------------------------------------------------------------------
Table 2
Capital Investment Plan
for Fiscal Year Ending March 31, 2006
billions of yen
Item Estimated
--- expenses
1. Expansion and Improvement of Services *
367
(1) Voice Transmission 237
(2) Data Transmission 44
(3) Leased Circuits 85
(4) Telegraph 1
2. R&D Facilities 3
3. Other Facilities 10
Total 380
------
Note: * This includes approximately 160 billion yen to be invested in the
Optical Access Network.
-7-
--------------------------------------------------------------------------------
Attachment 1
Revenues and Expenses Plan
for Fiscal Year Ending March 31, 2006
Item billions of yen
--
Revenues
Operating Revenues 1,966
Voice Transmission 1,221
Data Transmission 111
Leased Circuits 280
Telegraph 28
Others 326
Non-Operating Revenues 51
Total Revenues 2,017
Expenses
Operating Expenses 1,962
Operating Costs 1,481
Taxes and Dues 73
Depreciation 408
Non-Operating Expenses 40
Total Expenses 2,002
Recurring Profit 15
-8-
--------------------------------------------------------------------------------
Attachment 2
Plan for Sources and Application of Funds
for Fiscal Year Ending March 31, 2006
Item billions of yen
--
Sources:
Operational: 2,630
Operating Revenues 2,575
Non-Operating Revenues 55
Financial: 242
Long-Term Loans and Bonds 200
Others 42
Estimated Consumption Tax Receipts 101
Brought Forward from Previous Fiscal Year 107
Total 3,080
Applications:
Operational: 2,234
Operating Expenses 2,203
Non-Operating Expenses 31
Financial: 625
Capital Investment in Property, Plants and Equipment 380
Other Financial Expenses 245
Account Settlement Expenses 32
Provisional Consumption Tax Payments 82
Carry Forward to Following Year 107
Total 3,080
-9-
--------------------------------------------------------------------------------
Note that we have revised our forecast of earnings for the fiscal year ending
March 31, 2005 announced in autumn 2004 as follows.
(Revised Forecast) (Billions of Yen)
Operating Operating Recurring Net
revenue income profit profit
Year ending March 31, 2005 2,087 66 78 46
(Billions of Yen)
Operating Operating Recurring Net
revenue income profit profit
Year ending March 31, 2005 2,049 65 74 44
-10-
--------------------------------------------------------------------------------
March 1, 2005
Nippon Telegraph and Telephone West Corporation (NTT West)
Summary of the Business Operation Plan
for the Fiscal Year Ending March 31, 2006
1. Basic Concept of the Business Operation Plan for Fiscal Year Ending March 31,
2006
The information and telecommunications market has been undergoing drastic
transformations that affect the structure of the market itself. The regional
communications market is feeling the impact of the progressive contraction in
the conventional fixed-line telephone market as consumers switch from fixed to
mobile communications and from voice transmission to Internet and data
communications, while IP telephony is expected to expand rapidly. Furthermore,
new competition is arising, triggered by the launch of telephone services by
companies that are not using NTT's network. Meanwhile, the broadband market, the
growing leader in telecommunications, has been the scene of intense competition
for greater market penetration among ADSL and optical providers in both services
and price.
In this intensely competitive environment, NTT West will continue to provide
stable, high-quality universal services. The company has identified the fiscal
year ending March 31, 2006 as critical to its strategy to achieve a dramatic
increase of users of its optical access and IP services, and will actively
engage in the enrichment of its broadband services, including provision of
applications that take advantage of Fiber-optic IP Connection, as well as in the
development of high-value-added solutions businesses such as security services,
as the company endeavors to realize a resonant communications environment.
Through these services, NTT West will strive to ensure earnings while carrying
out such management innovation programs as continued improvements to business
efficiency and trimming of costs, with a view to maintaining a surplus for the
fiscal year ending March 31, 2006.
(1) Promotion of the fiber-optic broadband business
- We will increase fiber-optic IP Telephony Service sales by reinforcing
the product portfolio of the service currently provided for condominiums
(Hikari Denwa) and accelerating the introduction of other services for
detached homes and small and mid-sized enterprises.
- We will generate demand for our fiber-optic lines by providing such
attractive applications as Triple-Play Service and two-way video
communications, through stronger alliances within the NTT Group and with
content providers.
- We will achieve full-scale expansion in the fiber-optic broadband market
by strengthening the sales structure for broadband access lines and taking
advantage of the efficiencies of optical fiber in our marketing.
(2) Capital expenditures that support aggressive marketing of broadband services
- We will accelerate the construction of an innovative broadband optical
IP network using GE-PON, IPv6 and other advanced technologies, and take
aggressive measures to market our broadband services that include
expansion of the service areas for fiber-optic IP Telephony and FLET's
Hikari Premium. At the same time, we will ensure the quality and
reliability of our existing services and enhance the efficiency of our
capital investments.
1
--------------------------------------------------------------------------------
2. Principal Services Plan
Type of Service FY3/06 FY3/05
-----------
Subscriber Telephones + ISDN (2,440,000 ) subscribers (840,000 ) subscribers
Subscriber Telephones (1,910,000 ) subscribers (470,000 ) subscribers
INS-Net Digital Services (530,000 ) circuits (370,000 ) circuits
(INS
Net
1500
converted
to INS Net
64)
INS-Net 64 Subscriber Lines (524,000 ) circuits (362,000 ) circuits
INS-Net 1500 Subscriber Lines (1,000 ) circuits (0 ) circuits
Leased Circuit Services
Conventional Leased Circuits (49,000 ) circuits (28,000 ) circuits
High-Speed Digital Transmission Circuits (71,000 ) circuits (43,000 ) circuits
IP-based Services
B FLET'S 800,000 subscriptions 400,000
subscriptions
FLET'S ADSL 400,000 subscriptions 600,000
subscriptions
Fiber-optic IP Telephony Service 600,000 channel 0 channel
---------
* In terms of number of channels, transmission rate, and line use rate
(base rate), INS-Net 1500 is in all cases roughly ten times greater than INS-Net
64. For this reason, one INS-Net 1500 subscription is calculated as ten INS-Net
64 subscriptions. (INS-Net 64 Lite Plan is included).
3. Improvements and Advances in Telecommunications Equipment
Item FY3/06 FY3/05
---
Subscriber Optical Cable 1.5 million fiber km 1.7 million fiber km
Coverage rate at year-end 84% 81%
2
--------------------------------------------------------------------------------
4. Capital Investment Plan
(billions of yen)
Item FY3/06 FY3/05 YoY Remarks
-- Change
Expansion and Improvement of Services 367 372 (5 )
* Voice Transmission 237 262 (25 )
* Data Transmission 44 29 15
* Leased Circuits 85 79 6
* Telegraph 1 2 (1 )
R&D Facilities 3 3 0
Other Facilities 10 15 (5 )
Total 380 390 (10 )
* Optical Access Network Approx. Approx. Approx.
160 150 10
------
* Listed again
5. Revenue and Expense Plan (Attached)
(billions of yen)
Item FY3/ FY3/ YoY Remarks
-- 06 05 Change
Total Revenues 2,017 2,141 (124 )
* Voice Transmission (excluding IP-based Services) 1,213 1,367 (154 )
* IP-based Services 248 183 65
* Leased Circuits (excluding IP-based Services) 151 173 (22 )
Total Expenses 2,002 2,063 (61 )
* Personnel Expenses 182 196 (14 )
* Non-personnel Expenses 1,244 1,268 (24 )
* Depreciation Expenses 408 426 (18 )
Recurring Profit 15 78 (63 )
--------
* Listed again
Operating free cash flow 73 136 (63 )
3
This information is provided by RNS
The company news service from the London Stock Exchange
END
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