ir presentation - ntt.co.jp · ntt. ntt. current status. status in fy2018.3q. new steps to make ntt...

IR Presentation

August 2018

Copyright 2018 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 1

* “E” in this material represents that the figure is a plan or projection for operation.** “FY” in this material indicates the fiscal year ending March 31 of the succeeding year.

This document is a translation of the Japanese original. The Japanese original is authoritative.

The forward-looking statements and projected figures concerning the future performance of NTT and its subsidiaries and affiliates contained or referred to herein are based on a series of assumptions, projections, estimates, judgments and beliefs of the management of NTT in light of information currently available to it regarding NTT and its subsidiaries and affiliates, the economy and telecommunications industry in Japan and overseas, and other factors. These projections and estimates may be affected by the future business operations of NTT and its subsidiaries and affiliates, the state of the economy in Japan and abroad, possible fluctuations in the securities markets, the pricing of services, the effects of competition, the performance of new products, services and new businesses, changes to laws and regulations affecting the telecommunications industry in Japan and elsewhere, other changes in circumstances that could cause actual results to differ materially from the forecasts contained or referred to herein, as well as other risks included in NTT’s most recent Annual Securities Report and in any other materials publicly disclosed by NTT on its website.

* “E” in this material represents that the figure is a plan or projection for operation.** “FY” in this material indicates the fiscal year ending March 31 of the succeeding year. *** “1Q” in this material represents the three-month period beginning on April 1 and ending on June

30, “2Q” represents the six-month period beginning on April 1 and ending on September 30,“3Q” represents the nine-month period beginning on April 1 and ending on December 31, and ”4Q” represents the twelve-month period beginning on April 1 and ending on March 31.

2

Overview of Consolidated Results


Both Operating Revenues and Operating Income increased Smooth start for the annual plan

Status of Consolidated Financial Results

Operating Revenues: ¥2,852.7B (+¥44.0B [ +1.6%] year-on-year)

Operating Income: ¥537.2B (+¥12.6B [ +2.4%] year-on-year)

Profit※1: ¥289.7B ( +¥0.5B [ +0.2%] year-on-year)

Overseas Sales: $4.97B (+$0.33B [ +7.2%] year-on-year)

• : $0.21B

※2: $0.27B (+$0.03B [+11.4%] year-on-year)

Cross-SellingOrder Volume

OverseasOperating Income

※1 Profit presented above represents the profit attributable to NTT, excluding non-controlling interests.※2 Operating Income excludes temporary expenses, such as M&A-related depreciation costs of intangible fixed assets.

Status of Consolidated Results for FY2018.1Q

Copyright 2018 NIPPON TELEGRAPH AND TELEPHONE CORPORATION 4※Includes adjustments such as elimination of inter-segment transactions.

2,808.7

(Year-on-year:+44.0)Regional

communicationsbusiness

Long distance and international

communications business

Mobilecommunications

business

(Billions of yen)

Datacommunications

business

Otherbusiness※

2,852.7

33.2

〔768.9〕〔541.2〕〔1,176.7〕〔505.2〕

17.8

2017.3期E

(Year-on-year:+12.6)

524.7537.2

〔142.0〕〔32.0〕〔309.9〕〔29.3〕

FY2017.1Q FY2018.1Q

〔FY2018.1Q〕

FY2017.1Q FY2018.1Q

〔FY2018.1Q〕

22.243.1

9.39.0

27.8

7.8

2.9 0.2

Operating Revenues

Operating IncomeRegional

communicationsbusiness



Mobilecommunications

business

Datacommunications

business

Otherbusiness※

Contributing Factors by Segment for FY2018.1Q

5

Towards New Mid-Term Management Strategies


Promote ESG management, and enhance the returns to shareholders to improve corporate value

Leveragetalent, technologies,and assets

Accelerateour own Digital Transformation

Supportour customers’Digital Transformation

Enhance competitiveness in global business Drive digital self-transformation in domestic

business

Reinforce and globalize R&D Create new lines of business (Real estate, Electric

power)

Promote B2B2X model for new value creation Rollout 5th-Generation Wireless System Provide personal services to support individuals’

lifestyle changes

Outline of New Mid-Term Management Strategies


① Establish a New Holding Company Focused on Global Business

(New)

(New)

NTT DATA

NTT Communications

Dimension Data

NTT Security

NTT Innovation Institute

NTT DATA ※

NTT Communications

Dimension Data

NTT Security

NTT Innovation Institute

Global Innovation Fund

Global Holding Company

NTT NTT

Status in FY2018.3QCurrent Status

New steps to make NTT more competitive and profitable in the global market

We will establish a new global holding company under NTT and transfer NTT Communications, Dimension Data, NTT DATA, NTT Security and NTT Innovation Institute by FY2018.3Q

We will consider integrating these businesses (except NTT DATA) into two new businesses by FY2019.2Q; one will look after our global business, and the other will cater to our domestic business in Japan

• Name: NTT, Inc.• Headquarters: Tokyo, Japan• CEO: Jun Sawada (President and

CEO of NTT)

※NTT DATA will continue to collaborate with other companies in the Group while retaining its present management structure, status as a listed company, and brand

Enhance Competitiveness in Global Business


With this new fund, we will activate investment in high-growth areas such as digital technology

We will intensify our R&D activities in global markets by using a global network of experts from advanced academic research institutions and venture-capital communities around the world

• Fund Name: NTT Venture Capital, L.P.

• Location: The United States of America

• Fund Size: Up to U.S.$500 million

② Establish a Global Innovation Fund

Enhance Competitiveness in Global Business


Promote B2B2X Model

Drive Digital Self-Transformation in Domestic Business

Signed the “Agreement for Comprehensive Collaboration for Realizing a Super-Smart Society by Utilizing Public and Private Data” with Yokohama and Yokohama City University (July 31, 2018)

Appointed Chief Digital Officers within NTT Group (August 1, 2018)

• Will work to further enhance the efficiency of business processes and to provide new value-added services

Establish IT Strategy Office at the NTT Head Office (scheduled for September 1, 2018)

• Will further enhance IT strategy and IT governance for NTT Group, boosting Digital Transformation within NTT Group

Other Initiatives

Copyright 2018 NIPPON TELEGRAPH AND TELEPHONE CORPORATION

ESG ManagementContribute to SDGs with low environmental load

Goals in 2025 Double the energy efficiency

of telecom business Reduce 10% of power

consumption of telecom business• Convert power facilities into

Direct-current• Saving energy in telecom

facilities

Plan to participate in EP 100

Goals in 2025 Convert 50% of general

domestic corporate vehicles to EV

15% cost reduction of vehicles

Transition to EV Energy efficiency

* **

***

Plan to participate in EV 100

*** Target in 2030100% Electric Vehicle Integration, -30% reduction of cost related company owned fleet.

* , ** Global Initiative driven by The Climate Group, British NPO farmEP100：Aiming to double the energy productivityEV100：Accelerating the transition to electric vehicles and making electric transport the new normal

10

Financial Forecastsfor the Fiscal Year Ending March 31, 2019

11


FY2018 Forecast Summary

Both Operating Revenues and Operating Income are expected to increase, and Net Income (excluding a non-recurring event*3) is expected to increase

FY2017Result

FY2018Forecast Year-on-Year

US-GAAP IFRS*1 IFRS IFRS

OperatingRevenues ¥11,799.6 billion ¥11,778.2 billion ¥11,830.0 billion +51.8 billion [+0.4%]

OperatingIncome ¥1,642.8 billion ¥1,641.8 billion ¥1,690.0 billion +48.2 billion [+2.9%]

Net Income*2

¥909.7 billion【¥859.7 billion*3】

¥898.7 billion【¥848.7 billion*3】 ¥880.0 billion (18.7 billion) [(2.1％)]

【+31.3 billion [+3.7％]】*1 Based on IFRS results which have not been audited, and are provided for reference only. These figures are subject to change, pending results of the independent financial audit.*2 Net income represents net income attributable to NTT, excluding noncontrolling interests. *3 Excludes the effects of the arbitration award received from Tata Sons Limited.

Plan for Consolidated Revenues and Income


3.1

FY2017［IFRS］

FY2018E［IFRS］

13

FY2017 Contributing Factors by Segment

11,778.2 67.811,830.0

55.2

〔3,140.0〕〔2,310.0〕〔4,790.0〕〔2,100.0〕

91.5

1,641.8

1,690.018.6

〔343.0〕〔130.0〕〔990.0〕〔142.0〕

39.0

〔FY2018 E〕

〔FY2018 E〕

3.8

11.231.5

8.6

(Billions of yen)

*Includes adjustments such as elimination

Regionalcommunications

business



Mobile communications business

Data communications business

Other business

*

Operating Revenues （Year-on-year: +51.8)

Operating Income （Year-on-year: +48.2)


business



Mobile communications business

Data communications business

Other business

*

FY2017［IFRS］

FY2018E［IFRS］

Appendix

14


Summary of Medium-Term Financial Targets

Medium-Term TargetsResults

*1 Excludes the effects of the arbitration award received from Tata Sons Limited.*2 Excludes NTT Com’s data centers and certain other assets.*3 Does not reflect the impact of the change in depreciation method.*4 Operating Income excludes temporary expenses, such as M&A-related depreciation costs of intangible fixed assets.

$22B/$1.5B$19.5B/$1.0B

¥204.9 billion

¥856.0 billion

¥456〔¥431*1〕

EPS Growth

Streamlining Capital Investment

[compared to FY2014](Domestic Network Business*2)

Cost Reductions*3

[compared to FY2014](in fixed-line/mobile access networks)

Overseas Sales/Operating Income*4

At least ¥400

At least ¥200 billion

At least ¥800 billion


EPS Growth

FY2011

183yen

391yen

FY2016FY2014

* Exclude the effects of the arbitration award received from Tata Sons Limited .** EPS is adjusted according to the two-for-one stock split effective on July 1, 2015.

Profit Growth

431*yen

FY2017(Result)

237yen

456yen

Share Buybacks

ReachedTarget


Optimize Domestic Network BusinessesStreamlining Capital Investment At least 200 billion yen

(Domestic network business, compared to FY2014)

Cost Reductions At least 800 billion yen*(Domestic network business, compared to FY2014)

Improve efficiency of facility use

Reduce procurement costs

Improve and optimize IT systems

* Excludes NTT Com’s data centers and certain other assetsFY2015

1,400billion yen

FY2016 FY20117(Result)

Reached Target

FY2014

(Domestic network Businesses* )

CapitalInvestment

1,300billion yen 1,260

billion yen 1,193billion yen

▲205billion yen

Review and reduce costs in order toimprove user services

Establish simple, highly efficient businessoperations in line with changes in ourbusiness model and environments

* Does not reflect the impact of the change in depreciation method

Reached Target

FY2015 FY2016 FY2017(Result)

Cost Reductions*

▲414billion yen ▲654

billion yen ▲856billion yen


Overseas Sales/Operating Income

* Operating Income excludes M&A-related temporary expenses, such as depreciation costs of intangible fixed assets.

FY2014 FY2015

Sales$15.6BSales

$15.0B

FY2016

Sales$16.9B

OperatingIncome*$0.69B

OperatingIncome*

$0.8B

FY2017(Result)

Sales$19.5B

OperatingIncome*$0.67B

OperatingIncome*

$1.0B


Direction of Initiatives for the B2B2X Model

Service Providers（Main Players）NTT

Group

パートナーパートナーPartnersLifestyle Change

Social Issue Resolution

ValuableSupporting

Player

Digital Transformation

ICT toolsAI,

Edge computingetc.

Needs

For the acceleration of new value creation, NTT Group drives collaboration with various service providers

Contribute to service providers’ digital transformation for lifestyle change and social issue resolution as a valuable supporting player

New Value Creation

New needs

Newservices


7月

Nov.

Oct.

Oct.

2017July

Feb.

Aug.

2018Jan.

Apr.

Commercially launched the FIELD System, which incorporates edge computing and other technologies

Started testing to utilize corevo® for labor reduction in the field of agriculture/water environment

Used Kirari! to provide new kabuki effects, such as the joint transmission of simultaneous real and virtual performances (hosted the “Miyako Musubi Yume no Renjishi” performance in Pontocho and Miyagawa)

Deepen digital marketing, including through new viewing experiences at stadiums

Released the “DATA-SMART CITY SAPPORO” ICT utilization platform in Sapporo

Initiated consortium formation for the network and computinginfrastructure of automotive Big Data

Successfully conducted joint testing of the application of edge computing and other technologies to IoT on ships

Began sales of cybersecurity technology providing safe operation of critical infrastructure control systems

Sports

Auto

Transport

Cities

Manu-facturing

Agri-culture

Enter-tainment

Infra-structure

Scheduled to begin joint field testing of public safety solutions in Las Vegas, United States

Enter-tainment May

May

Jointly staged commercial kabuki performances using the latest technology, including Kirari!, primarily at the Minami-za theater in Kyoto scheduled to re-open in autumn 2018

2018April

Signed the “Agreement for Comprehensive Collaboration for Realizing a Super-Smart Society by Utilizing Public and Private Data”

July

Cities

Began sales of cybersecurity technology providing safe operation of critical infrastructure control systems

Infra-structure

Cities

Yokohama City University

Major B2B2X Model Initiatives (FY2018)(Reference)


12.3% 13.0%17.1%

23.0% 19.5%

27.5%32.3% 31.2%

38.2% 37.2%

33.4%38.0%

31.4% 30.7%32.9%

37.7%

5%

25%

45%

65%

85%

0

50

100

150

200

FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018E[IFRS]

21

Changes in Dividend

170

25

Payout Ratio

(Yen)

* Dividend is adjusted according to the two-for-one stock split effective on July 1, 2015.

150


Record of Share Buybacks

0

100

200

300

400

500

600

*1:Market 48.0 billion yen, Gov’t 72.0 billion yen *2:Market 61.0 billion yen, Gov’t 39.0 billion yen *3:Market 250.0 billion yen, Gov’t 156.5 billion yen*4:Market 101.2 billion yen, Gov’t 236.9 billion yen *5:Market 106.7 billion yen, Gov’t 267.4 billion yen

(Billions of yen)

From MarketFrom Gov’t

FromMarket/

Gov’tFrom

Gov’tFrom

Market/Gov’t

FromMarket / Gov’t

FromGov’t

FromMarket

FromMarket

FromMarket/

Gov’tFrom

Market

94.4

200.0

381.7

150.0

406.5*3

366.5

100.0*2

338.1*4

93.686.2

120.0*1

374.1*5

539.4

235.2TBD

（Fiscal Year）

~2018/05repurchased

108.0

Over 3 Trillion Yen in Buybacks


Growth Strategy of Global Business

Managed Service Security

SD-Exchange

SD-LAN

InternetSD-WANClosed NW

NTT cloud

Business Applications

Advisory

Business Process Data Defined Business Model

3rd partycloudsCloud

DC

Cloud

DC

Application

ManagedServices

IT Infrastructure

Advisory

R&D

In-house IP Ecosystem

NTT Group to deliver enhanced IT capabilities and contribute to the success of clients’ digital transformation


NTT’s Capability in Global Business

Global capabilityLegend： Top Tier Specific capability Not competitive/Local 2nd Tier - Out of scope

NTT Telecom(A)

Cloud(A)

IT Vendor(A)

SIer(I)

Data Center(incl. colocation)

- -

Network Integration -

Network - - -

Apps(ERP)

Imple-mentation - -

AMO - -

CloudPublic -

HostedPrivate - -

Security - -

LeaderAttacker


Our Strengths in Global Cloud ServicesNetwork

データセンター

Scale：● Provides service in 190 countries/regions●World-class in Global IP backbone traffic (Source: Dyn Research)

Quality：● Lowest network latency between Japan / US /

major countries in Asia

Scale：●World-class （Source: October,2017 issue of “Colocation Database” by TeleGeography）

As of March 2018, total floor space: approx.1.4 million m², total sites: approx. 250

Quality：● High-quality lineup(TierⅣ sites)


Strengthen Provision of Global Cloud Services

Launch of construction of “JUPITER”, new high-colume, low-latency underwater fiber optic cables that will connect Japan, the U.S. and the Phillippines

Expansion of high-quality data center service to the Netherlands, the seventh country in Europe where services are offered

Launch of “Virginia Ashburn 3 (VA3) Data Center” and launch of construction of VA4 Data Center

Expansion of supply capacity of Frankfurt data centers by 1.5x

Launch of “Texas Dallas 1 (TX1) Data Center”, one of the largest in the world

Launch of the “Germany Rhein-Ruhr 1 Data Center”

Launch of data center services in South Africa

Launch of “Germany Munich 2 Data center”

Agreement to acquire 100% of the stock of Secure-24, a large-scale U.S. IT managed serviesoperator

Expansion of data center services in Mumbai and Bangalore

Primary Data CentersData Centers Under ConstructionUnderwater CablesMergers and Acquisitions


Strengthen NTT’s Global Business(Bringing together cloud IaaS capabilities)

Wholesale

Go-to-Market

Service Development and Operation

Wholesale company

NTT Holding Company

Service development and operationGo-to-

MarketCloudassets

Dimension Data Cloud Wholesale Services, Inc.

Completed the transfer of the wholesale company of cloud IaaS from Dimension Data to NTT Communications on March 29th, 2018. Strengthen competitiveness by bringing together cloud IaaS capabilities and

development capabilities of NTT Communications and Dimension Data. NTT Communications to handle development and operation of cloud IaaS and

leverage Go-to-Market capabilities of NTT Communications, Dimension Data and other NTT Group companies.

Clients


Expansion of Cross-Selling (Aggregate Contract Value)

Numbers are rounded.

990million USD

60million USD

150million USD

1,190million USD

2,560million USD

1,630million USD

3,400million USD

3,610million USD

290million USD

Aggregate contract value of Cross-Selling reachedapprox. 3.6 billion USD

Insurance

Public

Healthcare

Manufacturing(Motor vehicle)

Finance

Total IT solutiontriggered by Cloud Service

NorthAmerica

Worldwideincluding emerging countries

Expansion ofGlobal Account Management

Cross-selling of existing services, mainly IT infrastructure

～Mar. 2018～Mar. 2011 ～Mar. 2012 ～Mar. 2013 ～Mar. 2014 ～Mar. 2015 ～Mar. 2016 ～Mar. 2017 ～ Jun. 2018


Cross Selling Track Record

AMERICAS

FY2013.1Q

Texas Department of Transportation Cloud solution, Application, Maintenance ITO, Total security service

FY2013.4Q

Healthcare Manufacturer Transition of ERP to Cloud service ITO

FY2013.4Q

Heavy Industry Business platform construction ITO

EMEA Japan

FY2013.3Q

ANA Implementation and operation of

UCaaS（Could communication service）

APAC

May Bank

FY2014.2Q

Financial Institution Dater Center service DC equipment procurement, implementation

Dater Center service DC equipment procurement, implementation

FY2014. 4Q

Dairy Industry Cloud Solution Data Center service

FY2015. 1Q

Medical Devices Manufacturer Transition of Application to Cloud service Data Center service

FY2015.4Q

Financial Institution Application Management Outsourcing Business Process Outsourcing

FY2015.1Q

Medical Institution ITO NW equipment procurement, implementation Data Center service

FY2015.4Q

Manufacturer Cloud & DC management service Transition of Application to Cloud service

FY2015.4Q

HEIDELBERGER DRUCKMASCHINEN AG

Communication Service ITO

FY2016.1Q

ReAssure Data Center service ITO, Total security service

FY2016.1Q

Public Transport Victoria, Australia Development and Operation of

Smartcard ticketing system

(Manufacturer)

FY2017.3Q

Energy Industry SaaS（Cloud Application service）

FY2013.2Q

Improved brand awareness leads to more deals with global enterprises


Revenue and Employee by Region(excl. Japan)(USD)

RevenueEm

ployees

Total AMERICAS EMEA APAC*

$19.5B $7.7B $7.5B $4.3B

116,000 32,000 43,000 41,000

(FY2017)

(FY2017)* Exclude Japan

$19.5B $7.7B $7.5B $4.3B

32,000 43,000 41,000


Sports & ICT B2B2X Model Collaboration with a Sports League

Diagram of Collaboration Initiatives～Expansion of Customer Base through Digital Marketing～

• Fully leverage NTT Group’s assets to support the marketing activities of the J.League• Contribute to higher earnings for the J.League and its club teams and create new services and

business models for NTT Group

Contribution to the Development of the Sports Field into a Growth Industry with J.League Club Teams


Sports & ICT The Smartification of World Sports

Overseas

Japan

Universal design information(Web app) provision

Driving status and racers’ vital signsBall flight distance and trajectory; Tweet map (worldwide)

Racer position, speed, and time behind; combination of data and video

Virtual reality (VR) baseball coaching

system

Position #1

Athlete Tracking and Analysis（Technical verification）

*video: World Triathlon Series (2018/Yokohama)

The Open(U.K.)

Tour de France(France)

Indy 500(U.S.)

Tohoku Rakuten Golden Eagles (Pro Baseball)

World Triathlon Series (Yokohama)

Japan Walk(Tokyo/Osaka/Sendai)

*At Six Day London (a popular European track cycling event), monitoring of wheel speed and heart rate as well


Tourism・Trade & ICT B2B2X Model Collaboration with Local Governments and Companies

We have collected and analyzed real-world data related to travel, preference, and purchasing trends among domestic and overseas tourists. This information was used to deploy measures for stimulating consumption, including mutual customer referrals by hotels, tourist spots, and shopping facilities, and to help communicate the appeal of Sapporo City.

＜Overall Framework for Data-Based Marketing (Travel and Consumption)＞

Prior to visitIndustry-wide/

area-widemarketing to

inbound travelers

Local salesOf SIM cards

Distribution ofInformation via SNSs

(by country)

After returnDuring visit

Travel（base stations,

Wi-Fi,GPS）

×SNS

（twitter、facebook）

×Purchases（department stores,

Drug store, etc.)

Smartphoneapplications（travel guides, Wi-Fi verification,AR images, smart-phone payment）

Signage（multi-language）

Print media

Ongoingmarketinginitiatives

(Promotional campaigns,

cross-border e-commerce, etc.)

Hotels(multiple)

Sapporo SnowFestival

Commercialfacilities

Touristfacilities

Commercialfacilities

Touristfacilities

Sapporo city ICT utilization platform “DATA-SMART CITY SAPPORO”ーEstablishment of an environment that makes it easy to utilize public and private data

collected by Sapporo city and companiesー

Launched websiteon 2018/01/31

33

Contribution to ICT Community Development Utilized Publicly Available Data and Real-World Data through Collaboration with Sapporo City and Local Distribution Companies


For Resolution of Social and Economic Issues

Big Data

Open Data Promote Secondary and Tertiary Uses

Organizations

Local Governments“Digital Trust”

Healthcare“Smartification”

ofInfrastructure

Educationand

Childcare Support

Traffic and Transport ・・・・

Industrial Development, Disaster Prevention and Mitigation, “Smartification” of Public Infrastructure, and Others

Culture and Sports

CitizensBusinesses

TourismDisaster Prevention

andMitigation

Energy andEnvironment

Agriculture,Forestry and

Fisheries

Promote coordination of administrative services and social infrastructure with local governments as the hubs, and contribute to the resolution of social and economic issues of local regions (including local economic regions)


Improving energy efficiency of telecommunication buildings

AC & DC mixed Lead-acid battery

Replace to … HVDC Lithium-ion battery Construct power grid

DC380V

UtilityPower

Standbygenerator

AC100V

Lead-acid battery

UtilityPower

DC48V

UPS/Rectifier

Standbygenerator

CreateFree

Space

Building A

Building B

Connect in Grid

Lithium-ion battery

Rectifier(HVDC)

Promote energy saving and space saving by utilizing HVDC* system/lithium-ion battery. ※HVDC : High Voltage Direct Current


“Tsuchinikaeru Battery”Returns to the soil without any negative effect on the soil or organisms

No negative effect on the growth of plant life(Phytotoxicity test)

Tsuchinikaeru Battery

Commercial Batteries

Leafy vegetables komatsuna

Sensors everywhereAiming World

biologicalmaterial

Tsuchinikaeru Battery

Naturally friendly even remaining in the

environment


NTT DOCOMO: Toward Sustainable Growth

Execution of “Declaration beyond” andbusiness growth driven primarily by “members”

Strengthen customer base centered on “members”～ Further evolve billing plans, point program and service offerings to address the

needs of each customer ～

Step up growth investments～ Infrastructure investment to create new businesses for the 5G era and

further promotion of +d activities～

Drastic cost efficiency improvement～ Further improvement of network cost efficiency and operational reform

leveraging AI and other new technologies ～


NTT DOCOMO: “d POINT CLUB” Members“d POINT CARD” registrants

(Million members)

“d POINT CLUB” members

66.5262.32

25.13

14.841.7-fold

Up 7%

FY171Q

FY181Q

FY171Q

FY181Q

◆ “d POINT CARD” registrants indicate the number of users who can earn and use “dPOINTs” at participating stores by registering their personal information


NTT DOCOMO: “d POINT”“d POINTs” used “d POINT” partners

(Billion points)

Points used atpartners’

stores, etc.:18.22.4-fold

41.3

24.71.7-fold

7.5

273

1382.0-fold

No. of participating stores: Approximately 38,600

FY171Q

FY181Q

FY171Q

FY181Q

◆ “d POINT” partners represent the total number of brands/sites where users can earn or use “d POINTs”◆ “d POINT” partners and no. of participating stores are inclusive of planned launches


NTT DOCOMO: Basic Share Pack/Basic Pack

5GB 30GB15GB10GB ～～

128kbps

NEW×

×

1GB 3GB 5GB 20GB

～～

128kbps

NEW

【Basic Pack】◆ The monthly charges for “Data S/M Packs” represent the rates after applying the charges of “Kake-hodai Light Plan,” “sp mode,” the discounts of “Zutto DOCOMO Discount Plus (Platinum Stage)”

and “docomo with”. ◆ The monthly charges of “Basic Pack” represent the rates after applying the charges of “Simple Plan,” “sp mode,” the discount of “Zutto DOCOMO Discount Plus (Platinum Stage)” and

“docomo with”.

【Basic Share Pack】◆ The monthly charges represent the rates after applying the charges of “Simple Plan,” “sp mode,” the discounts of “Zutto DOCOMO Discount Plus (Platinum Stage)” and “docomo with”. ◆ The monthly charge per user is calculated by dividing the sum of the family’s monthly fees by three users (digits after the decimal point are rounded up).

“Share pack 5”¥2,013



¥1,980¥2,780

¥3,713

¥4,713

“Basic Share Pack”

“Simple Plan”

“docomo with”

“Basic Pack”

“Simple Plan”

“docomo with”

×

×

¥3,180¥3,980

¥2,480

¥5,980

“Data S pack”¥3,400（2GB）

“Data M pack”¥4,700


NTT DOCOMO: Smart Life Business & Other Businesses

Principal services

37.043.3

140.0

Up 17%

18年度（予想）

FY18full year(target)

Smart Life businessContent/Commerce

Finance/Payment

Lifestyle

Enterprise solutions

Support services for customers’ peace of mind, etc.

Other businesses

(Billions of yen)

FY171Q

FY181Q


NTT DOCOMO: The World Envisaged by 5G

5G

4K/8K video steaming

Autonomous driving

Agricultural ICTRemote medical services

AR/VR

Smart city, smart home

Stadium solution

High speed/Large capacity

Low latency Connection with numerous devices

* Requirements discussed under Standardization (Recommendation ITU-R M. 2083-0)

Transmission latency inRadio Access Network(RAN): 1ms or less*

Peak rate: 20Gbps*

No. of simultaneously connected: 10 6 devices / km2 *


5G standardization andNTT DOCOMO’s commercialization schedule

FY2016 FY2017 FY2018 FY2019 FY2020

Event

NTT DOCOMO

Domestic regulatory clearance

43

NTT DOCOMO will launch standard compliant 5G in 2020.New use cases will be created through 5G trials.

Requirements Specifications

Basic studies

Proposals

5G commercialsystem development

5G commercial launch

MIC Information and Communications Council etc.

Frequency allocation

Pyeongchang Olympic(February）

Tokyo Olympic(July）

specifications （Release15）

* Based on the "New-generation mobile communication system Committee (6th) Report Overview, Information and Communications Council, Ministry of Internal Affairs and Communications" held in September 2017

5G trials


The Current and Future State of Fixed-Line Telephone Services

Migration to IP Networks

44

Schedule for service changeovers and migration to IP networks

Charges and conditions for the fixed-line telephone services after the migration to IP networks

Aim to complete migration to IP networks before tandem/signal transfer switches in the PSTN＊

networks approach their limits of useful life

Outgoing calls from NTT’s fixed-line telephone services will be switched over to IP networks from January 2024 (scheduled completion by January 2025)

At the beginning of the migration of fixed-line telephone services, take over all of the contracts for analog telephone services and INS-Net services to the new fixed-line voice services with new rates

*PSTN (Public Switched Telephone Network): A network that provides analog telephone services and INS-Net (ISDN Information Network System)

Continue offering basic voice services and enable customers to continue using their existing phones and other devices without need for additional on-premises installation

Currently planned charges and conditions for the fixed-line telephone services after the migration to IP networks are as follows:• Basic monthly charges: Unless the market environment changes significantly, current basic monthly charges for analog

telephone services and INS-Net will remain the same • Call rates: By taking advantage of non-distance sensitive flat rates of the IP network, nation-wide call rates to fixed-line

telephones will be JPY 8.5 (excluding tax) per every 3 minutesNTT will provide international calls as well as Hikari Denwa services (with the option of selecting other service providers)

• Contracts: Provide all customers that use analog telephone services and INS-Net services with sufficient transition time through multiple notices before the migration, and take over their contracts to new fixed-line voice services after the migration

• MyLINE services: Guidance for handling MyLINE services (Dialing Parity / Pre-Selection Service) will be provided separately


The Current and Future State of Fixed-Line Telephone Services

Image of Migration to IP Networks

* A server that manages and controls telephone services using an IP network （SIP: Session Initiation Protocol)

Opticalfiber

Copperlines

Copperlines

Hikari Denwa

Opticalfiber

Fixed-line telephone(Analog telephone service, INS-Net)

Hikari DenwaFixed-line telephone(basic voice service)

IP networkPSTNSIP

server *

Current system Post-migration

●Migrate tandem/signal transfer switches to IP

●Connect to other carriersthrough IP

IP network

Conversiondevice

Gatewayrouter

Copper lineterminal

◎ ◎

Signal transferswitch

SIP server *

Tandemswitch

Core router

Other carriers

Other carriers

●Continue use of copperlines

Use local switches asCopper line terminals

Interconnection switch

Localswitch

Core router

Edge router

PSTN interconnection IP interconnection

Conversion device

Edge router


Broadband Access Services in JapanFixed

FTTH30.3M subs

DSL2.2M subs

CATV6.9M subs

Mobile170.1M subs

NTT DOCOMO

75.7M subs

NTT EAST andNTT WEST

20.5M subs

NTT EAST and NTT WEST*2

Approx.0.78M subs

Mobile

150M

100M

50M

30M

20M

10M

SoftBank

KDDI

*1 Figures for access speed are the speeds of typical commercial services, and are the maximum values of the best-effort traffic.*2 Stopped accepting applications from July 1,2016.（Source）MIC data (As of the end of March 2018)

NTT market shareApprox. 68％

NTT market shareApprox. 45％

Approx.

Approx.

Approx. Approx.

Approx.

Approx.

KDDI market shareApprox. 31％

SoftBank market shareApprox. 24％

～788Mbps ～320Mbps～10Gbps ～50MbpsAccess Speed*1

Access Speed*1


71.61 72.94 73.59 74.88 75.11 75.36 75.68 76.37 76.75

33.44 34.09 34.93 35.86 36.53 37.09 37.47 38.30 38.77

Subscriptions (Millions Subs) Total smartphone/tablet uses (Millions subs)

0.62%0.53% 0.56%

0.66% 0.67% 0.60% 0.62% 0.69%0.59%

0.49% 0.42% 0.43%0.53% 0.48% 0.47% 0.51% 0.57% 0.49%

Churn Rate(%) Handset churn rate(%)

47

Mobile Broadband BusinessDOCOMO Mobile telecommunications services

* Churn rate is calculated excluding the subscriptions and cancellation of subscriptions of Mobile Virtual Network Operators (MVNOs).

4QFY2016

1Q 2Q 3QFY2017

1Q 2Q 3Q 4QFY2018

1Q


Aggregate ARPU of Mobile Broadband Business

・FY2016 Full-year Aggregate ARPU 4,440 Yen （Mobile ARPU 5,350 Yen, docomo Hikari ARPU 210 Yen, Impact of discount programs ▲1,120 Yen）・FY2017 Full-year Aggregate ARPU 4,710 Yen （Mobile ARPU 5,310 Yen, docomo Hikari ARPU 370 Yen, Impact of discount programs ▲970 Yen）

：Mobile ARPU ： ”docomo Hikari” ARPU （Yen）：Impact of discount

MOU（min）

FY2016 FY2017 FY2018E

5,340 5,370 5,350 5,380 5,300 5,360 5,320 5,260 5,300 5,270

150 190 230 270 320 350 380 410 440 480

(1,150) (1,130) (1,120) (1,080) (1,000) (970) (950) (950) (940) (970)

4,340 4,5704,430 4,460 4,620 4,740 4,750 4,720 4,7804,800

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q

136 136 139 136 136 136 139 134 133 134

FY2018


Fixed Broadband Business FTTH Subscriptions

FY2018E

Total FTTH Service: Change from preceding Fiscal Year +0.60

HikariCollabo-rationModel

(1) Number of opened connections +3.45

Number of switchover lines +1.25

(2) Number of cancellations (1.45)

Net Increase (1)+(2) +2.00

FLET’S Hikari

(1) Number of opened connections +0.75

(2) Number of cancellations (2.15)

Number of switchover lines (1.25)

Net Increase (1)+(2) (1.40)

Reference:FY2018 Breakdown of FTTH Subscriptions

FTTH Subscriptions (Sum of NTT East and NTT West）

* “Sum of number of churn for each month of each quarter”/“Sum of number of active subscribers** for each month of each quarter”** Active subscribers = (number of subscribers at end of previous month + number of subscribers at the end of the current month) / 2

*

(millions subs)

FTTH Churn Rate* (Sum of NTT EAST and NTT WEST）

(millions subs)2,072

9.10

11.62

1,926

14.57

4.69

2,005

11.31

8.74

2,113

FLET’SHikari8.02

HikariCollaboration

Model13.12

2,053

9.42

11.12

FY2018EFY2015 FY2016 FY2017 FY2018.1Q

1.02%0.83% 0.80%

0.98%0.90%

0.79% 0.80%

1.00% 1.01%

0.88% 0.90%

1.03% 1.00%

FY20151Q 2Q 3Q 4Q

FY20161Q 2Q 3Q 4Q

FY20171Q 2Q 3Q 4Q

FY20181Q


NTT Group Overview

* Fiscal year ended March 2018. Operating revenue and operating income of each segment include inter-segment transactions.

Other group

companies

100％*54.2％*66.6％*100％*

* Percentage figures show the percentage of voting rights (March 31, 2018)



Data communications

business


business

Mobile communications

business

Other businessesreal estate, finance,

construction and power business

• Operating revenues(consolidated) ：¥11,799.6 billion

• Operating income(consolidated) ：¥1,642.8 billion

• No. of employees ：282,550• No. of subsidiaries ：922

Operating Revenue:

Operating Income:

No. of Employees:

No. of Subsidiaries:

¥3,232.9 billion

¥354.3 billion

67,60045

¥2,218.9 billion

¥93.6 billion

45,350373

¥2,043.1 billion

¥127.8 billion

118,000302

¥1,236.6 billion

¥78.6 billion

24,15093

¥4,769.4 billion

¥982.1 billion

27,450109

http://www.ntt.com/

http://www.nttdocomo.co.jp/


Trend in Consolidated Financial Results

51

■ OperatingRevenues（Trillion yen）

■ OperatingIncome（Trillion yen）

■ Net Income（Trillion yen）

■ EPS*（yen）

* EPS is adjusted according to the two-for-one stock split effective on July 1, 2015. ** Includes influence of 60 billion yen of non-operating revenues by The Otemachi 2-Chome Area Redevelopment Project *** Excluding the effects of the arbitration award received from Tata Sons Limited, net income is expected to be 860 billion yen, and EPS to be 431 yen.**** Excluding the effects of the arbitration award received from Tata Sons Limited, net income is expected to be 849 billion yen, and EPS to be 425 yen.

Based on IFRS results which have not been audited, and are provided for reference only. These figures are subject to change, pending results of the independent financial audit.

FY2011 FY2012 FY2013** FY2014 FY2015 FY2016 FY2017*** FY2017**** FY2018E

183 215 255 237

350 391456

1.22 1.2 1.21 1.081.35

1.54 1.64

10.5 10.7 10.9 11.111.5 11.4

11.8

0.47 0.52 0.59 0.520.74 0.80

0.91

[IFRS] [IFRS]

11.8 11.8

450 451

1.641.69

0.90 0.88


Changes in Consolidated Operating Revenues

1,089.0 1,251.9 1,328.5 1,272.2 1,294.5 1,282.3 1,236.6 1,214.3 1,290.0

1,251.8 1,303.5 1,343.9 1,511.0 1,616.8 1,718.7 2,043.1 2,044.8 2,100.0

4,240.0 4,470.1 4,461.2 4,383.4 4,527.1 4,584.6 4,769.4 4,758.5 4,790.0

1,678.7 1,657.9 1,809.9 1,998.6 2,250.9 2,129.3

2,218.9 2,242.2 2,310.0 3,764.8 3,659.8 3,572.3 3,505.5

3,407.9 3,308.2 3,232.9 3,231.5 3,140.0

0

5,000

10,000

FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2017[IFRS]

FY2018E[IFRS]

：Data communications business

10,700.7 10,507.4 10,925.2 11,095.3

：Regional communications business：Long distance and international

communications business：Mobile communications business

：Other business

* Business segment operating revenues include inter-segment transactions

11,541.0 11,391.0 11,799.6（Billion yen）

11,778.2 11,830.0

* Based on IFRS results which have not been audited, and are provided for reference only. These figures are subject to change, pending results of the independent financial audit.


Changes in Consolidated Operating Income

56.9 53.3 56.1 67.5 74.0 77.3 78.6 100.9 87.0 71.5 85.8 67.9 86.4 112.7 107.9 127.8 123.4 142.0

891.0 848.6 835.0 648.2

788.4 951.6 982.1 986.9 990.0

116.7 121.3 127.5

113.6

96.7

40.8 93.6 91.0 130.0

86.9 93.0 127.2

168.9

265.0

359.5 354.3 351.6 343.0

0

500

1,000

1,500


FY2018E[IFRS]* Business segment operating income include inter-segment transactions

1,223.0 1,202.0 1,213.7

1,084.6

1,348.1

1,539.81,642.8

：Data communications business：Regional communications business：Long distance and international


：Other business

（Billion yen）1,641.8 1,690.0



Changes in CAPEX

121.7 160.8 150.7 150.6 108.3 116.6 122.1 141.5 157.0 134.0 122.1 147.7 140.9 134.0 158.1 194.1 195.4 176.0

726.8 753.7 703.1 661.8 595.2 597.1 576.4 577.9 570.0

152.3 147.5 168.4 198.1 227.6 244.9 232.5 235.0 252.0

811.8 785.9 722.8 666.2 622.1 583.4 549.6 549.6 545.0

0

1,000

2,000


FY2018E[IFRS]* CAPEX excluding sales and investments related to real estate and solar power generation operations are as follows;

FY2011: 1,906.5 billion yen, FY2012: 1,907.5 billion yen, FY2013: 1,795.7 billion yen, FY2014: 1,702.9 billion yen, FY2015: 1,605.2 billion yen

（Billion yen）

1,946.6 1,970.01,892.8

1,817.51,687.2 1,700.0 1,674.8 1,699.4 1,700.0




：Other business


Changes in Interest-bearing Debt

4,274.0 4,036.0 4,200.0 4,406.7 4,163.3 4,088.2 3,854.8 3,964.6 3,800.0

54.2%

49.0% 49.3% 50.8%47.1%

45.2%

40.6%

0%

20%

40%

60%

0

2,000

4,000

6,000


FY2018E[IFRS]

* Debt Equity ratio = Interest-bearing debt / Shareholders’ equity x 100

Debt/Equity ratio*（Billion yen）



Changes in Number of Employees

25,250 27,150 26,000 25,800 24,800 24,350 24,150 25,250

58,650 61,350 75,000 76,650 80,550 111,650 118,000 123,950

23,300 23,900 24,850 25,700 26,150

26,750 27,450 28,150

31,150 33,450 38,050 42,250 43,750

43,850 45,350 45,600 85,900 81,300

75,850 71,200 66,200

68,250 67,600 81,850

0

100,000

200,000

300,000

FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018E

224,250 227,150239,750 241,600 241,450

274,850 282,550304,800



：Other business

(62,250)

(43,850)

(26,750)

(111,300)

(59,800)(59,100)

(45,350)(45,400)

(27,450)(28,150)

(117,100) (122,500)

(268,450)(273,650)

(279,400)

(24,300) (23,950) (24,250)

• Starting from FY2016, "No. of Employees" includes employees whose contracts were changed from fixed-term contracts to open-ended contracts.The figures in parentheses are the number of employees excluding employees whose contracts were changed from fixed-term contracts to open-ended contracts.


Age Distribution of Employees at NTT East, NTT West and “Outsourcing Companies” (As of March 31, 2018）

0

2,000

4,000

20 30 40 50 60 65

Num

ber of Employees

* Figures for East Outsourcing Companies include employees from the consolidated regional outsourcing companies (NTT EAST-MINAMIKANTO and others), NTT-ME and NTT EAST SERVICE, while figures for West Outsourcing Companies include NTT BUSINESS SOLUTIONS, NTT MARKETING ACT, NTT NEOMEIT, NTT FIELDTECHNO and NTT BUSINESS ASSOCIE WEST. Figures for those companies include the number of more than 60-year-old contracted employees.

Age


Share Buybacks and Cancellation

Gov’tOwnedShares738mil. shares

<36％>*

Buybackfrom market＜＞：share holding ratio

* Number of shares is adjusted according to the two-for-one stock split effective on July 1, 2015. * Mandatory (minimum) number of shares to be held by the Government under the NTT Act = （total number of shares issued－60 million shares issued at the IPO in 2000) ×1/3

(The number of shares issued after the initial listing are not to be included in the calculations. (NTT Act, supplementary provision 13))

2,646 2,273 2,096

Gov’tOwnedShares862mil.shares

<33％>*

199mil.shares

Treasury Stocks＜14.1％＞

Excess Holdings124mil. shares





<33％>*

276mil.shares

97mil.shares

1,585mil.shares

1,411mil.shares

Mar. 2012 Oct. 2013 Nov. 2013 Oct. 2015 Nov. 2015Total number of shares issued (million shares)

1,411mil.shares

Cancellation373 mil. shares


<39％>*

1,358mil.shares

Market floating shares

1,271mil.shares

Gov’tOwnedShares

738mil. shares<33％>*

177mil.shares

Excess Holdings

59mil. shares

Cancellation177 mil. shares

CancellationBuyback from

Gov’t and Market Cancellation

1,358mil.shares

May. 2018

Gov’tOwnedShares*679mil.Shares<33％>


146mil.shares

Buyback fromGov’t and Market

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