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| This English text is a translation of the Japanese original. The Japanese original is authoritative. |
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| March 1, 2006 |
Submission for Approval of Business Operation Plan for
Fiscal Year Ending March 31, 2007 |
Nippon Telegraph and Telephone East Corporation (NTT East) today submitted its business operation plan for the fiscal year ending March 31, 2007 to the Minister for Internal Affairs and Communications for approval.
Information and communications are expected to contribute enormously to creating a rich communications environment, invigorating and enhancing corporate activities, and generating new business opportunities toward the achievement of a ubiquitous network society defined in the u-Japan Policy and the IT New Reform Strategy. Moreover, the information and telecommunications market is undergoing dramatic change as illustrated by the formation of business alliances among telecommunications carriers, cross-industry alliances, and the fixed-mobile convergence (FMC) as well as the convergence of telecommunications and broadcasting backed by the rapid advancement of optical IP services. The regional telecommunications market has also ushered in an era of rapid structural change and full-fledged competition with the speedy expansion of optical access and other broadband services and the competition among by new common carriers of fixed telephone services that use dry copper lines and optical IP networks.
Amidst such a difficult and sharply fluctuating operating environment, NTT East will continue to strive to provide high-quality, stable universal services, and as a leading carrier in the IP era, the company will provide attractive products and services that are highly safe, secure, and reliable, thus contributing to the development of society. Through these endeavors, NTT East will seek to make a real difference to the world, while ensuring fair competitive conditions under the framework of existing laws, and build a next-generation network that realizes "fast and convenient," "safe and secure" connections "anytime, anywhere and with anyone or anything." This will enable us to provide versatile services and help achieve the NTT Group's Medium-Term Management Strategy.
With regard to the management of business operations for the fiscal year ending March 31, 2007, based on the concept mentioned above and in the face of today's difficult operating environment, NTT East will endeavor to further raise the efficiency of management and improve customer services by establishing business operation structure that responds to the era of optical IP networks. Specifically, the company will offer one-stop and flow-through services to ascertain customer opinions and needs swiftly and accurately. Building on this, NTT East will devote its full energy to the expansion of demand for broadband communications and provide services that are high value-added and user-friendly, including full-fledged optical access and IP telephony services and the development of FMC services and services that integrate telecommunications and broadcasting. NTT East will strive to return the fruits of these measures to customers, the community, and --through the holding company-- to shareholders, and will promote the ongoing development of stable operations in the future.
In line with this concept, for the fiscal year ending March 31, 2007, NTT East will give priority to the following categories in the conduct of its business management, and will do so flexibly so as to respond to changes in the operating environment.
1. Voice Transmission Services
(1) Subscriber Telephones
NTT East will respond to all demands for telephone subscriptions, including the relocation of existing lines. The number of subscribers is projected to total approximately 20.04 million by the end of the fiscal year ending March 31, 2007.
| Item |
Planned Number (subscribers) |
| Additional Installations |
(2.62) million |
| Relocations |
4.84 million |
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(2) Social-Welfare Telephones
As social welfare programs continue to expand and develop, there is a greater social demand for welfare-oriented telecommunications services. To respond to this need, NTT East will continue to promote the installation of welfare-oriented products, such as its "Silver Phone Series" (Anshin [Relief]), Meiryo [Clearness], Hibiki [Sound], and Fureai [Communication]).
| Item |
Planned Number (units) |
Silver Phones
Anshin (Relief)
Meiryo (Clearness) |
300
100
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(3) Public Telephones
NTT East will continue to meet the minimum requirement for public means of communications and review the installation public telephones which are currently in low use. The company will also strive to improve social welfare facilities and public services by continuing to promote the installation of wheelchair-accessible public telephone booths.
| Item |
Planned Number (units) |
| Public Telephones |
(9,000) |
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(4) Integrated Digital Communications Services
The numbers of INS-Net 64 lines and INS-Net 1500 lines are projected to total approximately 3,021,000 and 34,000, respectively, by the close of the fiscal year ending March 31, 2007.
| Item |
Planned Number (circuits) |
| INS-Net 64 Subscriber Lines |
(477,000) |
| INS-Net 1500 Subscriber Lines |
(0,000) |
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2. Data Transmission Services
To respond to the heightening demand for broadband services, NTT East will endeavor to enhance access services, expand service areas, and provide varied services, focusing mainly on the full provision of optical IP phone services.
| Item |
Planned Number (contracts) |
| B FLET'S |
1.50 million |
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3. Dedicated Services
The numbers of conventional leased circuits and high-speed digital transmission circuits are projected to total approximately 193,000 and 144,000, respectively, by the close of the fiscal year ending March 31, 2007.
| Item |
Planned Number (circuits) |
| Conventional Leased Circuits |
(23,000) |
| High-Speed Digital Transmission Circuits |
(33,000) |
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4. Telegraph Services
NTT East will continue to conduct the maintenance of systems and other operations in order to further improve services and to promote increased operating efficiency in its telegraph services.
5. Improvements and Advances in Telecommunications Facilities
(1) Optical Access Network
The switch-over to the use of optical fiber in the access network will be actively promoted in accordance with factors such as the heightening demand for broadband services.
| Item |
Planned Number (million fiber km) |
| Optical Subscriber Cables |
2.50 |
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(Cover rate at the end of March 2007 will be 88%.)
(2) Telecommunications Network
In its telecommunications network, NTT East will not only meet demand for broadband services, but at the same time will further upgrade network services and improve network economy and efficiency.
(3) Disaster-Prevention Measures
NTT East will take all necessary measures disaster-prevention measures. These will include disaster-prevention measures for telecommunications equipment and facilities, measures to ensure emergency communications, and measures to strengthen the structure for crisis management and the restoration of systems in the event of large-scale disasters, and also the assistance with the sharing of information after a natural disaster.
(4) Installation of Underground Transmission Cables
In furtherance of the goal to improve the reliability of communications facilities, ensuring safe and pleasant passage spaces, and enhance the appearance of urban areas, NTT East will work in coordination with the national and local governments and with other companies in installing underground transmission cables.
(5) Facility Maintenance
The maintenance of facilities will be directed at ensuring stable and high-quality services by, for example, replacing cables and other facilities on an on-going basis. Through such maintenance, NTT East will aim not only to maintain customer services, but also to ensure safe operations, harmonization with the social environment, and the stabilization of communications systems.
NTT East will seek to minimize costs by making exhaustive use of existing equipment and facilities in improving and upgrading communications facilities.
6. Promotion of Research and Development Activities
To further stabilize and strengthen its management base, and to respond to the rapid expansion and diversification of the broadband market and public demand for the creation of an advanced information and telecommunications network society, NTT East will promote research and development network systems and access systems so as to upgrade telecommunications networks. In addition, to position itself to offer customers choice of a diverse range of reliable and convenient services through sophisticated telecommunications networks, NTT East will also conduct research and development in such areas as information-sharing platforms and communications terminals of various types.
A summary of the business plans for the above principal services and capital investment plans are outlined in the attached tables.
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