November 24, 1999
NTT Communications Corporation

NTT Communications’ Financial Results
for Fiscal Half-Year Ending September 30, 1999

NTT Communications Corporation (NTT Com) had operating revenues of 357.6 billion yen, recurring profit of 34.2 billion yen and net income of 17.1 billion yen, based on Japanese accounting principles, in the new company’s first fiscal-half year from May 28 to September 30.

During the reporting period, the Japanese economy did not show signs of a full-scale recovery, and a rising rate of unemployment and many other factors were cause for continued concern, although a slight recovery in consumer spending was one of a few positive indicators.

Service diversification and cost reductions fueled competition in the domestic and international telecommunications markets. Also, telecommunication operators continued to reorganize on a global basis through tie-ups and joint ventures to create new synergy to meet the challenges of the evolving market.

NTT Com was established by the reorganization of Nippon Telegraph and Telephone Corporation (NTT) on May 28 to provide international and domestic (inter-prefectural) telecommunication and Internet access services. NTT Com, after inheriting operations from NTT, began operating on July 1 to challenge the global communications market with superior services that meet the diversified needs of customers on a global scale. The company structured itself to provide a full menu of services at quality and price levels that accurately meet customer needs. The company also prepared for entry into the international telecommunications market through subsidiaries and other arrangements.

NTT Com lowered the fixed charges of its Super Frame-Relay Service, a data transmission service for corporate users and enhanced the service with the addition of Arcstar 21, an Internet-protocol virtual private network (IP-VPN) service that enables closed group telecommunications with pre-designated partners. New access services were inaugurated for corporate users, such as the Arcstar Direct, which connects users directly to the NTT Com inter-prefectural network for lower telephone charges, and Arcstar Value Access, which integrates access networks for various services to lower network costs. NTT Com also expanded its range of discounts for corporate services. Premierplan was introduced for Members’ Net and Free Dial, allowing multi-office corporations that subscribe to these services under a single, nationwide contract to pay for communication charges on a discounted lump-sum basis.

For individuals, NTT Com added new discounts and enhanced its ability to deal flexibly with customer requests. In addition to the existing TeleChoice and TeleWise discount plans, the Shabericchi plan was added to provide discounts on calls to user-designated telephone numbers.

NTT Com increased its number of dial-up Internet access points to meet the rising demand for Internet access. As of September 1, OCN Dial Access service users can connect to the Internet at local-call rates from any location in Japan. NTT Com is the first company in Japan to provide this level of service. OCN Dial Access is available through NTT Com’s Open Computer Network of Internet access services.

The company was actively involved with the development of electronic commerce (e-commerce) services. Super Cash, an e-commerce service being developed in cooperation with 23 domestic banks, was tested in field trials in the Shinjuku area of Tokyo and over the Internet.

NTT Com provided total business solutions, comprised mainly of network sales, but also including consulting, system integration, network integration and outsourcing. E-commerce platforms were established and network-outsourcing services were expanded.

As part of launching an international telephone service, using the prefix 0033, on October 1, NTT Com merged with a subsidiary that had been providing international telecommunication services since 1997. The merger enables the company to seamlessly link domestic and international services, thereby enhancing its ability to compete with domestic and international carriers.

NTT Com concluded tie-ups with both domestic and international companies during its first half-year. The company reached a basic agreement to invest in Japan Satellite Systems Inc. (JSAT), a provider of domestic and international satellite telecommunications and domestic satellite-broadcasting services. The aim is to develop satellite-related business by effectively using the two companies’ satellites. Details are still being worked out. NTT Com also invested in HKNet Company Limited, a major Internet service provider in Hong Kong, to provide IP services in Hong Kong.

  1. NTT Communications Corporation NON-CONSOLIDATED BALANCE SHEET (Based on Japanese Accounting Principles)
  2. NTT Communications Corporation NON-CONSOLIDATED STATEMENTS OF INCOME (Based on Japanese Accounting Principles)
  3. NTT Communications Corporation BUSINESS RESULTS (Non-consolidated Operating Revenues) (Based on Japanese Accounting Principles)