Financial Results for the Third Quarter of FY2024

Regarding China's DeepSeek, since NTT provides AI solutions directly to customers, we naturally consider it a competitor and are currently analyzing it through our research division. However, we do not have a clear understanding of its full details. As with other AI technologies, we will closely monitor developments and ensure that we build competitive services that can stand against them.

We understand that Crystal Intelligence is developed for corporate use, but there has not been a detailed explanation of its features, so we will be watching closely and considering how to respond.
Regarding tsuzumi, we have received more than 1,000 inquiries, and we have made proposal to more than 600 of them. There are about 100 companies that provide services that include tsuzumi and other AIs, and we recognize the need to evolve our services in to meet diverse customer demands.
Currently, tsuzumi is deployed as a lightweight service, but we have received the request from customers to increase the number of parameters. With these need in mind, we plan to launch a new service within this year, further enhancing its capabilities. We are committed to strengthening our services so that we remain competitive and can provide solutions that surpass those of other companies.

This fiscal year, NTT DOCOMO has been facing intensified competition, but we are committed to maintaining a market share of at least 35%. President Maeda of NTT DOCOMO shares this commitment, and sales efforts have been strengthened. Thanks to these efforts, MNP has been positive in the third quarter, showing tangible results.
However, achieving these results has required significant investment in promotional initiatives, which were not necessarily included in the initial budget. Despite this, we will continue our efforts in the fourth quarter without reducing competitive measures. We will also work to offset those costs through efficiency improvements in other areas. If this level of competition continues into the next fiscal year, we are fully prepared to respond accordingly.
From an overall perspective, we will announce the official forecast at the appropriate time, but our goal is to establish this physical year as the bottom and aim for growth next year. Our intention is to drive overall performance upward in the next fiscal year.
NTT DOCOMO aims to improve its performance compared to this year. NTT EAST and NTT WEST are expected to reach their bottom this year, setting the stage for recovery. NTT DATA Group remains strong and continues to perform well. Other businesses, such as real estate and energy-related sectors are also strengthening their ability to address challenges. While we cannot say whether next year's plans will be significantly forward, we are working to ensure that it demonstrates growth compared to this fiscal year.

As for the exhibition at the Osaka, Kansai Expo, we will share more details as the event approaches. However, at this stage, our vision is to implement a service equipped with photonic-electronic convergence devices, which can reduce power consumption to 1/8 of current levels, within the NTT Pavilion. That said, photonic-electronic convergence devices are not designed exclusively for servers. They have a wide range of applications. We plan to adapt to customers' needs by offering devices for those who want to build their own servers, fully assembled servers for those who require ready-to-run solutions, and transmission equipment incorporating photonic-electronic convergence technology for those focused on network infrastructure.
Our primary focus is to widespread adoption, and we aim to be flexible in meeting customer demands. In FY2025, we will concentrate on promotion and expansion, with actual product rollout expected about a year later. The upcoming year will be dedicated to ensuring customers can experience and utilize these devices and solutions effectively.

At least in the Kanto region, NTT DOCOMO increased the number of Sub6 base stations by approximately 15% by the end of last year. I believe it is important to work on these three points: increasing the number of base stations, fine-tuning the area coverage, and controlling the parameters.
For example, increasing the base stations require negotiation with the landowners, but things are going well and exceeding our initial plan. There are a lot of processes toward the end of the fiscal year, but we are committed to quality improvement.
The numerical results will come out later. For example, regarding Opensignal's "CQ" metric, improvements should be observable at the timing of each official report release.
We are enhancing our response system to promptly address areas where customers experience connectivity issues.
We believe that quality is the strongest aspect of our brand, and we will continue to work to maintain it.

Of course, the goal is as soon as possible. However, given the constraints related to workload and resources, as well as the need for cooperation from partner telecom construction companies, it is essential to proceed steadily and effectively. We are having thorough discussion to ensure a well-structured and realistic approach, aiming to implement improvements in a measured and systematic manner.

We are pleased to see that the transition from previous pricing plans to eximo has exceeded expectations, indicating a relatively smooth performance. Additionally, the increase in data allowance for ahamo has led to higher customer satisfaction and adoption. irumo is also progressing as planned, and overall, we believe things are moving steadily. The most intense competition is in sales through mass retailers. It is crucial to provide recommendations that align with customers' needs while offering careful and attentive service. Therefore, deploying highly capable sales personnel who can deliver this level of customer engagement is essential. We believe that our commitment to these efforts has directly contributed to our strong performance.

Currently, we operate 21 data centers in India. The largest concentration is in Mumbai, with 13 facilities, three in Bangalore and Chennai each, and two in Delhi. We plan to build an additional nine facilities in total, 6 in Mumbai and one each in Chennai, Bangalore, and Kolkata. We will build them over the next few years, and 19 of the total 30 buildings will be in the Mumbai area. Demand is overwhelmingly high in the Mumbai area, and these data centers are being built with confirmed customers in place.
The Mumbai area has some distance between data centers within the area. We are building an APN that will connect three key areas of Mumbai, allowing seamless operation as if all 19 data centers were in a single location. Additionally, a new cable from MIST is planned to be connected by summer, and these will be the core component of our business in India.
With this in mind, we will hold an event in India on March 17. Beyond data centers, we are actively expanding our SI business and BPO business. With approx. 40,000 employees, India is a key region for our growth. We plan to continue various investments with a strong focus on data centers. I plan to visit India and participate in the event.

The mobile industry is highly competitive, so it's quite difficult to simply raise the price. As we develop new plans, we must strike a balance for enhancing value for customers while ensuring that service providers can cover a reasonable portion of costs. NTT DOCOMO is working hard to find the right approach, and we recognize the need for continuous adjustments to the pricing.
On the other hand, regarding fixed-line services, if the NTT Law is revised in April, the discussion will arise on how to wind down fixed-line telephones. This could involve integrating fixed-line services with fiber-optic networks and leveraging mobile networks as an alternative. We aim to present a broad outlook on this matter as soon as possible.
Additionally, as fixed-line connection charges are expected to rise, we must design a pricing structure that facilitates a smooth transition. It will also be important to encourage customers to shift toward alternative communication methods.

We are currently considering it. If we change the name of Nippon Telegraph and Telephone Corporation, we need to amend the Articles of Incorporation, which requires approval at the shareholders' meeting. The proposal will likely be presented around the fiscal year-end financial results in May. Our goal is to establish a name that enhances global recognition and strengthens our presence.

First and foremost, I believe it is desirable for Fuji TV to restore its ability to conduct business as usual as soon as possible. To achieve this, I understand that an investigation is currently being conducted by the third-party committee. As a shareholder, it is important for us, as shareholders, to review the results of this investigation. If a decision needs to be made after evaluating the results, we will consult with NTT DOCOMO and determine the appropriate action. At this stage, the priority is to clarify the facts as soon as possible and work towards normal operation.
Additionally, beyond our roles as shareholders, this is not just about Fuji TV. Broadcasting companies, in general, create a variety of content, and there is potential for collaboration between NTT DOCOMO and these broadcasters, including in content production. Therefore, ensuring that this issue is resolved promptly is very important.

Mr. Takahashi, the current president, has been a strong competitor, so I feel a little sad that he will be stepping down. However, I look forward to competing with the new president in a new phase. If they introduce new ideas to grow the industry and take on new challenges, it will inspire us to respond with innovative solutions. I hope we can continue to push each other and grow together.

Regarding the trial offer, I am not fully aware of how NTT DOCOMO is currently considering this matter. Since this initiative was originally proposed by Rakuten Mobile, it would be natural for them to take the lead in implementing it. However, as I do not have a clear understanding of the current situation, I will refrain from commenting further.
As for smartphone pricing regulations, there have been ongoing changes in regulation overtime. Since the market environment and factors such as the adoption of millimeter-wave technology continue to evolve, I believe it is important to change the regulations according to the prevailing conditions at any given time, rather than continuing with the same regulation framework.

We are pleased to report that d Payment has been growing steadily, and the launch of the d Card PLATINUM has been met with highly positive feedback from customers, which we truly appreciate.
The financial payment sector is the fastest growing segment within our Smart Life business, and we aim to expand further in this area.
Many have inquired about NTT Group's potential entry into the banking business. We are carefully considering various aspects, guided by the principle that unnecessary functions are not needed while essential ones must be secured. As such, we are evaluating multiple options, including the possibility of establishing a new bank ourselves. We intend to reach a conclusion by the fiscal year-end financial results announcement in May.
It is important to have functions that match the business model of the new era. Acquiring the necessary functions is a key focus, as having functions that are not suitable could be a burden. We will take these factors into account as we move forward in our consideration.

We have already invested in Monex, Inc. and Orix Credit Corporation, and we are also supplying insurance through OEM. Therefore, we believe that it is essential to have functions that allow our customers to manage these functions smoothly. Basically, we seek functions that allow for simple transactions. With this in mind, we will proceed with our considerations.
Time is also a key factor. If the necessary functions already exist in the market, we will consider acquiring them. If such functions are not readily available, we may develop them ourselves. We intend to reach a conclusion within a defined timeframe. We will carefully evaluate the approach in close collaboration with NTT DOCOMO President Maeda before concluding.

It is important to first receive the report from the third-party committee, and I believe that any decisions should be made after reviewing its contents. Of course, I understand that the investigation will take a certain amount of time, but I believe that it is important that the investigation is conducted as quickly as possible.