NIPPON TELEGRAPH AND TELEPHONE EAST CORPORATION:NewsRelease

Attachment 1

SUMMARY OF RESULTS

During the fiscal year ended March 31, 2002, the Japanese economy continued to face difficult conditions as the domestic recession continued. Moreover, responding to the slowdown in the global economy, export and manufacturing levels declined, while plant and equipment investment and corporate earnings registered negative growth. Personal consumption also remained sluggish. Nevertheless, there were some signs at the end of the fiscal term indicating that the economy may be bottoming.

In the telecommunication markets, rapid change continued in the scale and structure of the markets as a result of dramatic advances in information and communication technologies fueling the accelerated spread and expansion of the Internet and mobile communications. On the other hand, a global "IT recession" was very much in evidence as the intensification of competition eroded the standing of traditional mega-carriers and sent other telecommunication enterprises into bankruptcy. Competitive conditions were also intensified in all domestic markets, ranging from regional telecommunications services to long-distance and international telecommunications, with the aggressive entry of foreign telecommunication enterprises and start-up companies utilizing VoIP and other new technologies. Notably, competitive conditions in the regional communications market have heated up very rapidly with the full-scale entry of long-distance carriers into the local call segment of the market, while a fierce price-cutting and subscription competition has been engendered by the entry of new enterprises providing IP telephone services. The direct entry of electric power companies into the broadband-access network and a series of other entries has also stepped up the competition from DSL, CATV, wireless, and fiber carriers.

Under this severe business environment and rapidly changing market structure, Nippon Telegraph and Telephone East Corporation (NTT East) remains committed to its basic business principle of providing timely and attractive services which are "inexpensive," "easy to use," and "reliable." As a "service providing company" with close ties with local and regional customers, NTT East is implementing various initiatives to strengthen its corporate foundations, to develop new sources of revenue by accelerating the transition from "telephone-based businesses" to "information sharing," and to make a positive contribution to the promotion of the "e-Japan Strategy" which has been identified as a national priority program.

NTT East has endeavored to expand its flat-rate Internet access services and to lower its charges in order to respond effectively to Internet-access needs generated by the rapid shift to broadband and continued price cutting. Specifically, the coverage areas of the current "FLET'S

ISDN" and "FLET'S

ADSL" services have been extended and charges have been lowered. Furthermore, the "FLET'S

ADSL" service was expanded in December 2001 with the introduction of a maximum 8 Mbps service. The "Fiber-optic IP Connection Services" launched on an experimental basis in December 2000 was renamed "B FLET'S" and went into full-fledged operation in August 2001. At the same time, charges were reduced and service menus expanded in line with the growing demand for optical services. In November 2001, "FLET'S ON-DEMAND "was launched as a system enabling content distribution via local IP networks to users of FLET'S access services. Other expanded services include discount packages for "FLET'S

ISDN" and "FLET'S

ADSL" in combination with "MYLINE PLUS," and the introduction of a limited-time special discount package for "FLET'S

ADSL."

"L-Mode" was launched in June 2001 as a service providing simple, convenient, and inexpensive access to Internet-based information searches and the exchange of e-mail using household telephones, and is designed to alleviate the digital divide and to further expand the range of Internet users.

In May 2001, "MYLINE" (Carrier Selection Service) and "MYLINE PLUS" (Carrier Designation Service) were launched as NTT's response to the start of the carrier pre-selection system. As part of this initiative, local telephone charges were reduced in January 2001, followed by a second round of reductions of local telephone charges combined with the expansion of discount services implemented in May 2001. These measures represent company-wide efforts to improve customer convenience and to win subscribers to "MYLINE PLUS."

NTT East is taking active steps to stay abreast of the broadband age. Between March and August 2001, the Company conducted experiments with a personal wireless broadband service known as "Biportable" based on fiber optics and Advanced Wireless Access (AWA), a high-speed wireless technology. This system is designed for the distribution of rich content and is capable of providing a wide range of applications. In response to the rapid growth of demand for ultra-high-speed broadband services and content for optical services, NTT East is engaged in the development of new technologies and the verification of related applications. In pursuit of these objectives, in September 2001, NTT East jointly launched a content distribution trial for optical services with Intel K.K. and Hewlett-Packard Japan, Ltd.

NTT East is committed to maintaining fair competition and has reduced interconnection charges based on the long-run incremental cost methodology of computing interconnection charges introduced in fiscal 2000. Similarly, NTT East is disclosing information related to its optical fiber network, and has also started low-cost interconnection programs.

In the area of marketing to corporate customers, NTT East has been making active use of the "Team Marketing Solutions" concept to nurture collaborative relations with customers for the provision of a full range of solutions businesses through the building of advanced and efficient information-sharing networks utilizing cutting-edge data center technologies and optical access services for corporate customers. In a related move, the Business Communications Headquarters was reorganized in December 2001 to facilitate flexible responses to increasingly sophisticated and diverse customer needs in the rapidly emerging broadband age. Specifically, a function-based organizational structure was established and marketing capabilities reinforced with such aims as promoting platform businesses based on data centers, developing and marketing products for high-speed optical networks, and the provision of advanced solutions for the IP and broadband markets.

NTT BizLink, Inc. was established in July 2001 in a move to ensure speedy action on NTT East's full range of outsourcing needs, including such top-layer services as ASP and e-commerce business support services for data centers for the broadband age. The new company will participate in collaborative businesses to support the overall competitiveness of NTT East. In September 2000, NTT East joined the Nippon Television Network Corporation in creating a planning company for examining the feasibility of launching a visual content distribution business by TV broadcasting companies. This entity was reorganized as an operating company in September 2001 and named B-BAT, Inc.

NTT East is actively exploiting the possibilities provided by the expanded use and sophistication of the Internet in order to improve customer convenience. As part of its efforts to improve customer services, the Company launched "@Billing," an Internet-based billing service, in December 2001.

NTT East is strongly committed to the goal of management rationalization. In order to create a management system capable of effectively responding to the dramatic changes in the business environment, and to accelerate the transformation of the Company's business structure, NTT East has been following up on a series of initiatives from the previous fiscal year aimed at ensuring the steady implementation of the Mid-Term Restructuring Plan. These company-wide efforts include consolidation of local and regional offices, streamlining of head-office and back-office operations, the large-scale reassignment of personnel by means of transfer to NTT Group companies, cutbacks in plant and equipment investment through further promotion of cost reduction, and additional calls for voluntary retirement. Furthermore, in view of the extremely challenging business environment resulting from rapid changes in market structure and competition, NTT East has decided to implement a new management and operations system which calls for fundamental "Structural Reform" in the Company's businesses aimed at creating a strong management foundation and a viable springboard for the development of future businesses. Under this system, NTT East will henceforth concentrate on corporate planning, group management, and the provision of customer services with an eye to expanding its IP and broadband-related businesses. Parallel to this, new outsourcing companies have been established in each prefecture to take over management and operations and to function as operating companies with strong local ties. Finally, employees aged 51 and above have been retired and re-employed under diverse terms of employment in a bid to achieve a thorough and fundamental outsourcing of operations combined with substantial reductions in personnel expenses. The transition to the new management and operations system has been accomplished through the following procedures. A series of "NTT Service companies" (note 1) were established as wholly owned subsidiaries of NTT East in charge of sales and customer reception functions. Similarly, a series of "NTT-ME companies" (note 1) were established jointly by the NTT Group companies and through the acquisition of the shares of existing companies. These "NTT-ME companies" are in charge of the operation of facilities. Finally, a series of "NTT BUSINESS ASSOCIE companies" (note 1) were established and placed in charge of shared support functions. A total of 51 subsidiaries were launched on May 1 (note 2).

In the area of environmental preservation, NTT East is promoting various programs in accordance with the "NTT East's Global Environmental Charter" announced in December 1999. These include the conservation of paper resources, the prevention of global warming, waste reduction, and other programs and initiatives for the reduction of the environmental burden. NTT East is committed to fulfilling its corporate responsibility for the protection of the global environment through such measures as the implementation of life-cycle assessment (LCA) in the field of information and telecommunications, the introduction of the "Dynamic Eco" label for environmentally friendly communications equipment, the full-scale introduction of environmental accounting, and the publication of the NTT East Environmental Report 2001.

Notes:
1. The newly established companies consist of three sets of 17 companies located in each prefecture in eastern Japan. The names of these companies combine the common functional name with the name of the prefecture.

2. Following the launching of the new management and operations system, on May 1, 2002, roughly 27,000 employees were retired from NTT East and re-employed by the various outsourcing subsidiaries (51 companies). (The total number of employees transferred amounted to roughly 45,000 including persons transferred from previously existing subsidiaries.)

Pursuant to the above activities, NTT East's business results for the fiscal year ended March 31, 2002 were as follows. Operating revenues amounted to 2,573.6 billion yen (down 7.9% from the previous year) and recurring profit amounted to 7.5 billion yen (down 46.9% from the previous year).

For the year, NTT East registered a net loss of 186.7 billion yen (compared to a net profit of 20.0 billion yen in the previous year). This reflected special losses of 327.2 billion yen related to business restructuring expenses.