Attachment 1

SUMMARY OF RESULTS

During the interim period ended September 30, 2002, while there were signs of recovery in certain areas, the Japanese economy continued to face severe conditions overall with sluggish export and production growth and flat personal consumption.

In the information and communications sector, amid dramatic advances in information and other technologies, the market structure rapidly changed with the wider adoption of broadband Internet access and the rapid popularization and expansion of mobile communications. Overseas markets remained chaotic with traditional mega-carriers in the doldrums and some carriers even going bankrupt because of intensified competition and excessive investment. Competition also intensified in all areas of the Japanese telecommunications market, as venture and other firms entered the market utilizing state-of-the art technologies such as VoIP and expanded their service areas from local to nationwide and international coverage. The rivalry among regional-based carriers also heightened. In addition to the full-scale entry of long-distance carriers and new firms providing IP services into the local call segment, electric power companies directly entered the fiber optics broadband-access business, and the cost-cutting and subscription competition heated up among DSL, fiber optics, wireless, and CATV 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 principles of operating as a customer-oriented company maximizing customer value, and faithfully and promptly responding to their needs. NTT East continued to promote innovation to become a dynamic and vigorous company with an open and flat administrative structure. NTT East is striving to develop new revenue sources and to reinforce its management strengths; to shift its business orientation from telephone-based businesses to information-sharing businesses; and to make a positive contribution to the Japanese government's "e-Japan Strategy," which has been designated as a national priority program.

The main efforts during the interim period ended September 30, 2002 are summarized as follows.

In the Internet access segment, NTT East endeavored to expand its flat-rate Internet access services and to lower its charges in order to respond effectively to the demand generated by the rapid shift to broadband and continued price reductions. Specifically, to begin with, the coverage areas of all the existing FLET'S services ("FLET'S ISDN," "FLET'S ADSL," and "B FLET'S") were expanded, and the four B FLET'S service menu options were augmented by the addition of a new "B FLET'S New Family Type" in June 2002. Meanwhile, to respond to the demand for still higher transmission speeds in the rapidly expanding DSL market, in September 2002, NTT East began accepting advance applications for its upcoming "FLET'S ADSL More" service, which will provide a maximum speed of 12 Mbps downstream. Efforts were also made to expand FLET'S ADSL market share by offering the limited-term service discounts "Imadake Waribiki" ["Discount 'Now'"] and "Moa Wari" ["'More' Discount"]. Moreover, to upgrade communications services for the coming broadband era, in June 2002, trials were launched on the new "M FLET'S" service, which utilizes wireless LAN technology to provide customers with the same Internet access environment that they enjoy at their homes from other locations, as well as remote access for corporate and other customers. In August, the FLET'S service menu was also expanded with the full-fledged initiation of "FLET'S Connect," which enables FLET'S customers to exchange diverse voice, image, and other data.

NTT East also upgraded the "L-mode" services which were launched in June 2001, to alleviate the digital divide and further expand the range of Internet users. The "L-Menu" service options list was broadened and efforts were made to gain compatibility with a wider range of terminals.

In the corporate customer segment, NTT East developed its "total solutions business" under the concept of "Team marketing solution" to accurately respond to increasingly sophisticated and diverse customer needs by collaborating with customers to construct advanced, efficient telecommunications networks positively employing cutting-edge data center technologies and to provide business-user fiber access services such as Mega Data Netz, Super Wide LAN, and Metro Ether. NTT East also opened an "E-Frontier" showroom in September 2002, mostly to introduce solutions for national and local electronic government initiatives and for educational IT applications.

In August 2002, NTT responded to concerns regarding possible disruptions in network services due to congestion from so-called "callback scams" by expressly stipulating, in its telephone service and Integrated Services Digital Network (ISDN) contracts, that users who engage in these practices may have their services suspended or their contracts cancelled.

In July 2002, NTT East established a new subsidiary, NTT BroadbandPlatform, Inc. (NTT-BP), to provide high-speed IP services utilizing wireless LAN technologies in response to the diversification of broadband access lines, in an effort to better utilize NTT East's accumulated technologies and know-how and to promote information-sharing businesses. In the same month, NTT East purchased an equity interest in JSAT Corporation, a telecommunications and broadcasting services company, and transferred its satellite assets to JSAT to provide stable telecommunications services, especially to distant islands.

In management rationalization efforts, NTT East devoted itself to implementing radical "Structural Reforms" to reinforce its management foundations in response to the rapidly changing business environment and to advance its shift from telephone-based businesses to information-sharing businesses. Specific measures included the introduction of more diverse employment formats and compensation systems and the outsourcing of works to "outsourcing subsidiaries" so that NTT East can concentrate on the core areas of strategic planning, group management, and responsibility of providing customer services. Under this new approach, a total of 51 "NTT Service Prefecture Co., Ltd.*1" (which are responsible for sales and customer reception works), "NTT-ME Prefecture Co., Ltd.*1" (which are responsible for facilities operations), and "NTT Business Associe Prefecture Co., Ltd.*1" (which are responsible for shared support functions) have begun operations, and the transition to this new administrative operating structure*2 was completed in May 2002.

*1. These are the common corporate names of three sets of 17 firms established at the prefectural level, all using their respective prefecture names in their corporate names.
*2. Along with the initiation of this new administrative operating structure, on May 1, 2002, some 27,000 NTT East employees retired and were re-hired by these 51 outsourcing subsidiaries (an additional 18,000 employees were reassigned to the outsourcing subsidiaries from existing NTT East subsidiaries).

As a result of these activities, NTT East's performance during the interim period ended September 30, 2002 is summarized by principle service category as follows.

In subscriber telephone services, as of the end of September 2002 the total number of lines installed was 24.99 million (a year-on-year decline of 40,000 lines) and the total number of INS-Net 64 lines installed was 5.2 million lines (a year-on-year decline of 100,000 lines).

In leased circuit services, as of the end of September 2002 the total number of HSD transmission services installed was 304,000 circuits (a year-on-year decline of 6,000 circuits).

For the period under review, NTT East posted operating revenues of 1,171.8 billion yen, (a year-on-year decline of 8.5%), a recurring profit of 49.3 billion yen (compared to a recurring loss of 16.6 billion yen in the same period of the preceding year), and a net income of 29.5 billion yen (compared to a net loss of 15.6 billion yen in the same period of the preceding year).



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