Attachment 1


SUMMARY OF RESULTS


During the fiscal year ended March 31, 2001, the Japanese economy was once again unable to extricate itself from the prevailing severe conditions. While personal consumption generally remained flat, the corporate sector continued to advance toward sustained recovery. However, the economy weakened and production declined toward the end of the fiscal year when exports suffered a setback in response to the slowdown in the U.S. economy.

Rapid changes were observed in the scale and structure of telecommunication markets as a result of dramatic advances in information and communication technologies fueling the accelerated spread and expansion of the Internet and mobile communications. Consequently, a structural shift is taking place from conventional "voice-centered information transmission" to the "digital information transmission." Parallel to this, competition has been intensified in all telecommunication markets, ranging from regional telecommunication services to long-distance and international telecommunications. Notably, the regional communications market has rapidly advanced toward a stage of full-fledged competition with long-distance carriers announcing their intention to enter the local call segment of the market, and as a result of a series of new entries into the local-access network by CATV, DSL and fiber carriers.

Under these circumstances, Nippon Telegraph and Telephone East Corporation (NTT East) has adopted as its basic business principle the timely provision of attractive services which are "inexpensive," "easy to use," and "reliable." NTT East is undertaking various initiatives to strengthen its corporate foundations, to develop new sources of revenue by accelerating its transition from "telephone-based businesses" to "information sharing," and to make a positive contribution to the promotion of the IT Revolution in Japan.

In order to respond to the diverse needs generated by the rapid growth of Internet use, NTT East is expanding and upgrading its line-up of Internet-access services. Specific measures taken include the full-fledged launching in July 2000 of "FLET'SISDN," a flat-rate Internet-access service, followed in December with the start of "FLET'SADSL," and the launching of "Fiber-optic IP Connection Services" (temporary name), a fiber-optic access line with a maximum speed of 10 Mbps on an experimental basis in December 2000. In order to respond to customer needs for inexpensive and more convenient communications service, NTT East lowered its charges on intra-prefectural long-distance telephone services, high-super digital leased circuit services, and ATM leased services in October 2000. 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. As a further step, local telephone call charges were reduced in January 2001 (with a second round of reductions implemented in May 2001), and the "Super Kenta-kun" and "Kenta-kun Five" programs were introduced for discounts on intra-prefectural long-distance telephone calls.

NTT East is devising various new services designed to expand the cross-section of Internet users and to contribute to the resolution of the digital divide. For instance, the "L-Mode" service is intended to provide simple, convenient and inexpensive access to Internet-based information searches and the exchange of e-mail using household telephones. Currently, NTT East is working closely with content providers and communications equipment manufacturers to achieve an early launch of "L-Mode" services. NTT East submitted contract applications for approval in February 2001 (which were approved in April 2001 with partial modification to the original content). In March 2001, NTT East started experiments with a personal wireless broadband service known as "Biportable" based on fiber optics and high-speed wireless technologies (AWA).

In preparation for the start of the carrier pre-selection system in May 2001, "My Line" (Carrier Selection Service) and "My Line Plus" (Carrier Designation Service) were introduced as services of NTT East and Nippon Telegraph and Telephone West Corporation (NTT West). Customer application for these services was started in January 2001. Simultaneously, NTT East launched an active marketing drive to sign up customers for its local and intra-prefectural long-distance services. In other developments, following the adoption of the long-run incremental cost methodology of computing interconnection charges, NTT East decided to lower its interconnection charges progressively over the three-year period between fiscal years 2000 and 2002.

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, NTT East is collaborating with customers over the full range of the solutions business, from the building of systems and production of contents to maintenance, management and support services. In response to the expansion of the platform solutions market and growing outsourcing needs, NTT East is taking active measures to expand its presence in the information sharing markets. With this objective in mind, NTT East is marketing a package of outsourcing services known as "Ephelio" and is also engaged in establishing a series of marketing and data centers.

For effective utilization 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 Communication Inc. who is promoting the 100 East Longitude CS Project, the new company studies feasible customer management systems for this project. In September 2000, 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. In March 2001, NTT East established NTT Educational Initiative, Inc. as a platform management company for the distribution of educational contents.

NTT East is strongly committed to the goal of achieving management efficiency and 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 from "telephone-based businesses" to "information sharing," NTT East has been pursuing various initiatives in line with the Mid-Term Restructuring Plan announced in November 1999. These 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, and a freeze on new hiring. Furthermore, 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 years 2001 and 2002. In the area of plant and equipment investment, NTT East is making a concerted effort to cut costs through such measures as reducing the procurement costs of equipment and improving the efficiency of project design and ordering. At the same time, the company is investing in the improvement of equipment and facilities in line with current trends in demand.

With regard to environmental preservation, NTT East is promoting various programs in accordance with the "NTT East's Global Environmental Charter" announced in December 1999. These include programs and initiatives for the conservation of paper resources, the prevention of global warming, and waste reduction. NTT East is committed to fulfilling its corporate responsibility for the protection of the global environment through the introduction of environmental accounting, the development of environmental preservation technologies based on IT, and the issuance of "NTT East Environmental Report 2000."

Finally, in order to grow and to develop as a company which has the full confidence and trust of society, NTT East shall make a thorough and committed effort to protect the confidentiality of customer information.

Pursuant to the above activities, NTT East's business results for the fiscal year ended March 31, 2001 were as follows. Operating revenues amounted to 2,794.5 billion yen (an increase of 29.7% from the previous year) and recurring profit amounted to 14.1 billion yen (a decrease of 75.1% from the previous year), while net profit for the year came to 20 billion yen (compared to a recorded net loss of 157.2 billion in the previous year).

Note: Percentage changes from the previous year that are written inside parentheses are comparisons to the nine-month period from July 1, 1999 to March 31, 2000.


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