NIPPON TELEGRAPH AND TELEPHONE EAST CORPORATION:NewsRelease

Attachment 1

SUMMARY OF RESULTS

The Japanese economy continued its mild-paced advance toward an autonomous economic recovery during the first half of the current fiscal term. While personal consumption remained sluggish, the corporate sector played a key role in pulling the economy forward as plant and equipment investment showed signs of improvement.

In the telecommunications market, the number of users of Internet and mobile communications services continued to grow at an accelerated pace against the backdrop of dramatic advances in information technologies. At the same time, significant structural changes are taking place in the rapidly growing telecommunications market with the transition from "voice-centered information transmission" to "digital information transmission." The development of GC interconnection is resulting in growing competition in intra-prefectural telecommunications market. Similarly, the level of competition in regional telecommunications market is being rapidly intensified as DSL and CATV businesses enter the field of local access networks. Consequently, conditions of intense competition are building up in the telecommunications market, covering regional, long-distance, and international communications.

In order to respond effectively to these structural changes and the increasingly competitive business environment, the Nippon Telegraph and Telephone East Corporation (NTT East) is taking measures to strengthen its corporate foundations, while also accelerating its transition from "telephone-based businesses" to "information sharing." In view of emerging market needs, NTT East has adopted as its basic business principle the timely provision of attractive services which are "inexpensive," "easy to use," and "reliable" and is undertaking various initiatives with these goals in mind.

The major initiatives and programs implemented during the six-month period under review are as follows.

First, NTT East has focused on responding to the various needs generated by the rapid growth of Internet use. In November 1999, NTT East launched a trial marketing of IP Connection Service featuring complete flat-rate Internet access for INS-Net customers. Based on the outcome of these trials, in May 2000, NTT East lowered the monthly flat-rate access fee and expanded the geographic coverage of the service. In July, the service was renamed "FLET'S･ISDN" and was formally launched as a full-fledged service. NTT East has also endeavored to respond to customer needs for inexpensive and more convenient communications services. In this area, NTT East has decided to lower its charges and expand its discount services. Specific measures implemented on October 1, 2000, include the lowering of charges on intra-prefectural long-distance telephone services, high-super digital leased circuit services, and ATM leased services. Simultaneously, the following discount services were introduced: "Kenta-kun" for discounts on intra-prefectural calls, "Wari-max" for discounts to entire companies, and "Wari-big" for discounts to individual places of business.

In the area of marketing to corporate customers, NTT East has developed its "Team Marketing Solutions" brand for expanding its presence in the total solutions business. Under this initiative, the company has collaborated with customers to solve their management problems. NTT East has also marketed a package of outsourcing services known as "Ephelio."

Furthermore, for effective use of its technological know-how and promotion of information sharing businesses, NTT East established Data Network Center Corporation in August 2000. Founded in response to the request from SKY Perfect Communications Inc. who is promoting the 110^o East Longitude CS Project, the new company studies feasible customer management systems for this project. In September, NTT East joined the Nippon Television Network Corporation in creating B-BAT, Inc., a planning company for examining the feasibility of launching a visual contents distribution business by TV broadcasting companies.

NTT East remains strongly committed to the goal of achieving management efficiency and rationalization. In accordance with the Mid-term Restructuring Plan announced in November 1999, NTT East has been pursuing various initiatives which include consolidation of local and regional offices, streamlining of head-office and back-office operations, and the large-scale reassignment of personnel by means of transfer to Group companies. These measures are designed to develop a management foundation capable of responding appropriately to the rapid changes in the business environment and are aimed at leading the way in a company-wide effort to complete the structural transition from "telephone-based businesses" to "information sharing." To create a more stable management foundation in view of the continued reduction of charges, NTT East has decided to carry out a voluntary retirement program during fiscal 2000 and 2001.

As a result of these activities, the performance of principle services during the six-month period under review is as follows. As for the subscriber telephone service, due to the increased sales of INS-Net services, the total number of lines installed stood at 26.48 million as of the end of September, representing a drop of 1.8 million lines compared to the same period in the previous year. On the other hand, the number of INS-Net 64 lines installed totaled 4.36 million as of the end of September, representing an increase of 1.63 million lines over the previous year.

Pursuant to these activities, NTT East's first-half results for the fiscal year ending March 31, 2001 were as follows. Operating revenues amounted to 1,383.8 billion yen and recurring profit amounted to 30.5 billion yen, while net profit for the six-month period came to 12.0 billion yen.