Press Release

May 14, 2002

NTT Com Announces Financial Results
For Fiscal Year Ended March 31, 2002

TOKYO, JAPAN –– NTT Communications Corporation (NTT Com) today announced its non-consolidated financial results for the fiscal year ended March 31, 2002. Operating revenue was 1,275.1 billion yen (down 5.9%, or 80.3 billion yen, year on year) and recurring profit was 75.1 billion yen (down 7.9%, or 6.4 billion yen). The company recorded a net loss of 410.7 billion yen, compared to net income of 42.2 billion yen in the previous year, due to the posting of an extraordinary loss on the revaluation of overseas investments.


The global depression, after triggering the dot-com crash and IT slump in previous years, gradually subsided mainly in the U.S. and Asian regions. The Japanese economy, however, continued to decline and structural reforms remained insufficient.

Competition in the telecommunications industry remained fierce. Efforts to survive the ongoing shakeout included the formation of new partnerships between telecom carriers and Internet service providers (ISPs) on a global basis.

The telecommunications industry also continued the transition away from conventional telephony toward the IP environment. The IP-based IT Revolution, the equivalent of a second Industrial Revolution, has triggered the creation of new industries and firmly established the Internet as a key element of social infrastructure.

The fiscal year saw the introduction of the Myline carrier-selection service, which prompted severe competition for customers in the fixed-telephone-services market. The rapid shift to broadband, meanwhile, was reflected in the popularization of ADSL services.


NTT Com actively developed its overall business under the corporate slogan of “Creating a new world of the Internet”. The company positioned fiscal 2001 as the turning point in the creation of its goal to become a “Global IP Company” within FY2002. The company also focused on broadband to expand the market for IP-based services.

NTT Com products and services are tied together under the “e-theater” concept, which turns IP networks, global data centers and global platforms into an “electronic stage”. During the year, these various elements were more closely integrated to provide one-stop IP-based services for corporations and individuals.

In the global field, the company integrated sales and operations with Verio Inc., which was acquired in September 2000. Verio pursued restructuring and cost-reduction measures to cope successfully with its drastically changing business environment.

The Myline service introduction was viewed not just as a competition to register customers and slash charges, but also as an opportunity to win customer trust by providing superior services based on NTT Com’s fundamental service capabilities. NTT Com enhanced its competitiveness by launching new, reasonably priced telephone services, including packages bundled with IP-based services. A telephone service offering seamless dialing to all areas, from local to international, was launched in the metropolitan areas of Tokyo, Nagoya and Osaka, where corporate demand is high.


NTT Com pursued its business activities centered around the “e-theater” concept to meet the needs for global IP-based services. New services for individuals included telephone packaged with IP, broadband and the “Safety Pass” service for secure online transactions. Managed IP services were among the new global-scale total solutions offered to corporations.

The successful marketing of these services resulted in a 1:1 ratio between revenues from data/IP and voice services (D/V ratio), a benchmark of NTT Com’s ongoing evolution. Despite the global economic depression and stagnant telecom market, NTT Com made steady progress toward its goal of becoming a “Global IP Company”.

Data and IP service revenues

Data and IP revenues totaled 682.8 billion yen (up 14.1%, or 84.1 billion yen), thanks to the full-scale implementation of the company’s “e-theater” concept.

1. “OCN” Service Revenues

Charges for the “OCN ADSL Service 1.5M (A)” were cut sharply in September and the “OCN ADSL Service 8M (A)” was launched in November 2001. The company also launched:

- “OCN ADSL Access IP1/IP8/IP16 ‘Flet’s’ Plan” and “OCN Optical Fiber Access IP1/IP8/IP16 ‘B Flet’s’ Plan”. Both offer fixed global IP addresses using the “Flet’s ADSL” and “B Flet’s” services of NTT East and NTT West.
- “Virus Check” for e-mail services.

As part of launching these services, special discount campaigns were implemented for the “OCN ADSL Service 8M (A)” and “OCN ADSL Access IP1/IP8/IP16 ‘Flet’s’ Plan.”

OCN service subscribers totaled more than 3 million at the end of the fiscal year. Revenues came to 101.9 billion yen (up 37.0%, or 27.5 billion yen).

2. Leased Circuit and Data Revenues

In response to rising corporate demand for low-cost corporate networks and broadband , the company launched the following services centered around IP-VPN:

- “Arcstar IP-VPN Ether Access”, using the company’s high-speed optical-fiber network.
- “Arcstar IP-VPN ‘Flet’s’ ADSL Access” (using “Flet’s ADSL”) and “Arcstar IP-VPN ‘B Flet’s’ Access” (using “B Flet’s”).
- “e-VLAN”, a low-cost, wide-area LAN access service using Ethernet technology.

NTT Com also introduced the following services with Verio:

- “Global IP Network Transit”, which uses a globally integrated backbone with globally unified autonomous system numbers.
- “Global Security Gateway” for global IP-VPN and “IPv6 Gateway (trial service)”, thus paving the way for commercialization of advanced IPv6 technology.

Revenues came to 423.0 billion yen (up 3.5%, or 14.3 billion yen).

3. Solutions Revenues

As a result of enhancing the outsourcing solutions lineup, orders received and average value per order both rose for the year, generating sales of 106.7 billion yen (up 15.5%, or 14.3 billion yen).

4. Data Center Revenues

NTT Com expanded its Otemachi building, its main center for domestic business, and commenced construction of a new data center in Tokyo. In addition, the following were launched and enjoyed steadily increasing sales:

- More value-added service lineup, including the packaging of data center services with the “Managed Service” (center monitoring and operations).
- Data center services in Thailand, Singapore and Indonesia.

Voice transmission service revenues

Revenue was 592.3 billion yen (down 21.7%, or 164.5 billion yen), the result of introducing more competitive charges and discounted service to acquire customers for Myline services. The company attracted approximately 60% of the nation’s total subscribers both for inter-prefectural and international call services. New voice traffic was generated through the commencement of new services such as “Communications Choice”, which offers discounts on communication between designated mobile-phone and fixed-telephone numbers, and the “V Portal” service, which offers voice-activated information retrieval.


1. NTT Communications Corporation
(Based on Japanese accounting principles)

2. NTT Communications Corporation
(Based on Japanese accounting principles)

3. NTT Communications Corporation
(Based on Japanese accounting principles)


(Based on Japanese accounting principles)

6. NTT Communications’ New Board of Directors
(subject to shareholders’ approval)

About NTT Communications Corporation (NTT Com)
NTT Com, a Tokyo-based subsidiary of Nippon Telegraph and Telephone Corporation, provides long-distance and international services for voice, video and data communication reaching more than 200 countries. NTT Com also provides world-class IP services under the NTT/VERIO brand, as well as managed data, multimedia and additional services under the Arcstar brand. For details, please visit