NTT Communications Corporation (NTT Com) announced today the non-consolidated financial results for its fiscal year ended March 31, 2000. Operating revenue was 1,075.3 billion yen, recurring profit was 127.7 billion yen, and net income was 72.8 billion yen.
The telecommunications market witnessed continued proliferation of the Internet and further shifts in market structure from fixed to wireless connections and from voice to data communication. Competition took place across industries and national borders. The industry remained in the midst of an information technology (IT) revolution of unexpected proportions, spurred by the Internets growth. This led to impressive gains in productivity and new business opportunities, helping to stimulate corporation activity in what is being called a new economy. Education, entertainment and even daily life underwent great changes, while government institutions and public services became more efficient and transparent.
The Japanese and other Asian economies generally showed signs of recovery that were partly driven by IT investment.
BUSINESS ACTIVITIES IN FISCAL 1999
NTT Com began operating on July 1, 1999 as a new challenger in the global telecommunications market, aiming to provide high-quality, global-scale services for a broad customer base.
The three main goals of the company have been to expand Internet-protocol (IP) services via the Internet and company networks; b) develop global business by constructing networks and providing services worldwide, and c) strengthen competitiveness in existing service areas, such as telephone.
For IP services, NTT Com constructed and provided new information distribution platforms by actively partnering with domestic and international companies.
As part of global business development, the company provided seamless, one-stop solutions in the domestic and international markets under the Arcstar brand name.
NTT Com strengthened the competitiveness of its existing services, mainly telephone, by improving quality and reducing charges. Also, the firm expanded opportunities for direct contact with its customers by opening call centers and establishing a sales agency network. International telephone services were commenced.
NTT Com announced its dot-com declaration in March 2000 to clarify the companys basic strategy for future IP services. The strategy emphasizes IP services and developing new models for business and lifestyles for its customers.
Our Business Philosophy (OBP) was announced to clarify the firms mission, values and standards of behavior. In the OBP, customer values and benefits were made the first priority, and seven key values, including creative self-innovation and professionalism, were shared with all employees. These values also define the behavior of NTT Com employees toward their customers, partners and the local communities they serve.
NTT Com began internationalizing its human resources management through measures such as performance-based evaluation and hiring skilled professionals.
RESULTS IN FISCAL 1999
The company accomplished most of its business goals for the year, such as the diversification and reduction of charges for its Open Computer Network (OCN) Internet connection service, tie-ups and investments involving other carriers and IP operators for IP and international telephone services, commencement of the 0033-prefix international telephone service, expansion of Arcstar services coverage, discount of leased-line services, and creation of a new corporate culture.
Charges were reduced for the OCN Dial Access service and a new charge plan, OCN Natural, was introduced under OCN services, the foundation of the companys future IP services development. The Housing Connection Service was launched to host and manage customer servers at NTT Com facilities. Monthly rates were reduced for the OCN Economy, Super OCN and Business OCN services, and startup charges for the OCN Dial Access service and other services were eliminated. NTT Com also introduced OCN PC Pack to help customers begin using the Internet easily and inexpensively, which helped to increase Internet users. OCN Dial Access users surpassed one million in February 2000.
NTT Com introduced Arcstar 21, an Internet-protocol virtual private network (IP-VPN) service for intra-group communication with registered partners via the Super Relay FR and Super Relay CR services. In addition, Internet connection via Arcstar 21 was commenced.
NTT Com introduced Arcstar Direct, an ISDN access service that realizes low-cost communications by connecting customers domestic and international leased lines to NTT Coms inter-prefectural networks directly.
In September 1999, NTT Com introduced a new Arcstar Voice Network service plan for corporate users, called Premierplan, which enables users to combine various discount plans based on distance and time zone, contract term and usage volume.
NTT Com launched the Shabericchi service to provide 40% discounts on telephone calls (regardless of time/day) to two user-designated telephone numbers outside of the users prefecture. The monthly fee for the service is 200 yen.
The Service Level Agreement (SLA) was introduced for the High-Speed Digital Leased Circuit, ATM Mega Link, Super Relay FR, and Super OCN services. The SLA guarantees service quality, including network quality and repair time.
NTT Com began its international telephone service using the dialing prefix 0033 from October 1999. As of the end of March 2000, the service was connected to 231 countries and regions.
Since September 1997, global telecommunications services have been provided to enterprises under the Arcstar brand. Services were available for 47 areas as of the end of March 2000.
In view of increasing demand for low-cost leased-line services due to the growth of the Internet and corporate networks, NTT Com reduced charges for its long-distance High-Speed Digital Leased Circuit and ATM Mega Link services in October 1999, and for the medium- to high-bandwidth ATM Mega Link service in March 2000. Service areas for the High-Speed Digital International Leased Circuit Service were expanded to 16 this February.
The company focused on the formation of global-scale partnerships. It carried out investments and strategic partnerships, including business tie-ups, with companies including HKNet Company Limited, a major Internet service provider in Hong Kong, Philippine Long Distance Telephone Company (PLDT), the Philippines largest telecommunications carrier, and the Davnet Limited Group, an Australian IP-based service provider. NTT Com began the joint preparations for one-stop outsourcing of design, construction, information system management with companies including Computer Associates International, Inc., IBM Corporation and Tivoli Systems Inc. In March 2000, NTT Com invested in and transferred satellite ownership to Japan Satellite Systems Inc. (JSAT Inc. as of April 2000) to develop business in the satellite field.
Management Reform Results
Our Business Philosophy was introduced for all employees, new personnel and evaluation systems were put in place, professionals were hired, and new employee education programs were adopted, all of which served to establish a foundation for a new corporate culture in tune with the global business environment.
All financial information stated in this release have been prepared on the basis of Japanese accounting principles.
- NTT Communications Corporation NON-CONSOLIDATED BALANCE SHEET (Based on Japanese accounting principles)
- NTT Communications Corporation NON-CONSOLIDATED STATEMENT OF INCOME (Based on Japanese accounting principles)
- NTT Communications Corporation NON-CONSOLIDATED STATEMENT OF CASH FLOWS (Based on Japanese accounting principles)
- PROPOSAL OF APPROPRIATION OF UNAPPROPRIATED RETAINED EARNINGS
- BUSINESS RESULTS (NON-CONSOLIDATED OPERATING REVENUES) (Based on Japanese accounting principles)
- NTT Communications New Board of Directors (subject to shareholders approval)