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New Value Creation

Strategy for Creating New Value

The NTT Group is committed to the B2B2X business model, which aims to create new value and solve social issues in collaboration with various partners to enhance the customer experience. Should the progress of the B2B2X model not proceed as expected, it could adversely affect our market competitiveness, thereby potentially impacting NTT Group's financial standing and business performance. Risks

To mitigate such risks, we have established a Marketing Strategy Committee, chaired by the President, to facilitate project expansion while ensuring alignment within the NTT Group. Additionally, we strive to grow our B2B2X business through intra-Group conferences, which serve to share best practices among our various companies. Addressing Risks

With regard to opportunities, we believe that combining the expertise and customer bases that our partners possess with the NTT Group's digital services and data management technologies will allow us to offer new value to our partners' customers (users). Specifically, we are implementing initiatives across the full breadth of the NTT Group in areas such as 1) the evolution of industrial value chains, 2) advancements in customer relations, 3) the utilization of mobile data, and 4) the development of community-rooted services and urban planning. Opportunities

Indicators and Targets Related to New Value Creation

(Note)The scope of B2B2X earnings includes the Integrated ICT Business Segment, the Regional Communications Business Segment, and the Global Solutions Business Segment.

Initiatives Related to New Value Creation in the New Medium-Term Management Strategy
(Establishment of manufacturing company for photonic-electronic convergence devices, Acceleration of IOWN research and development/commercialization)

In light of the increased energy consumption accompanying the widespread adoption of AI, we established NTT Innovative Devices Corporation in June 2023 to expedite the commercialization of photonics-electronics convergence devices that achieve low energy consumption. The company was launched with an initial investment of 30 billion yen, and we are considering subsequent capital increases.

Our aim is to broadly provide photonics-electronics convergence products to hyperscalers and IT/communication equipment vendors. In addition to recruiting external talent and gathering the necessary resources for development, we will integrate NTT Electronics Corporation, which possesses hardware manufacturing capabilities, to accelerate the development of products and services.

For the accelerated R&D and practical application of IOWN, including 6G, we plan to invest approximately 100billion yen in fiscal 2023. We will continue to invest funds and accelerate the practical application of servers and digital twin computing, among other technologies.

(Please see page 58-61 for more details on IOWN.)

Initiatives Related to New Value Creation in the New Medium-Term Management Strategy
(Strengthening the personal business, Strengthening the Use of DX/Data in Society and Industry, Expansion and Upgrade of Data Centers)

To strengthen our personal business centered around individual customers, we will boost NTT DOCOMO's Smart Life business and actively invest more than one trillion yen over the next five years.

For instance, we will focus on expanding and enhancing services in various sectors like finance and healthcare/medical. Through the analysis of diverse data obtained via these services, we aim to deliver highly personalized and optimal services.

For our corporate clients, we will leverage technologies such as AI, robotics, IOWN, digital twins, and security to offer solution and platform services on a global scale, thereby transforming industries that underpin daily life and society.

Over the next five years, we intend to invest more than three trillion yen in this area.

We are actively expanding the data center infrastructure of the NTT Group, which currently ranks as the third largest in the world*1. Additionally, we plan to further expand this infrastructure and enhance its capabilities through the introduction of IOWN technologies. Toward this goal, we will invest over 1.5 trillion yen in the next five years*2,doubling the current data center capacity of 1,100 MW.

Additionally, we will continue our efforts to achieve carbon neutrality for our data centers by fiscal 2030*3.

※1Recalculated from the Structure Research 2022 Report while excluding Chinese operators

※2Investments in facilities using third-party capital are not included

※3Reduction targets: GHG protocol Scope 1 (own direct emissions of GHG) and Scope 2 (indirect emissions from using electricity, heat and steam supplied by other companies) emissions at data center

※4As of March 2023, power capacity in specialized data center buildings owned by the NTT Communications Group and NTT Ltd. Group (including JVs with third parties)

Initiatives Related to New Value Creation in the New Medium-Term Management Strategy
(Creating Circular Economy-Oriented Businesses)

We will also work towards a sustainable society by promoting the reuse of waste across various industries and enabling resource circulation.

With the application of technologies like IOWN, 5G/IoT, and AI/Robotics, we will improve the efficiency and value-addedattributes of primary industries, thereby contributing to industrial development and regional revitalization.

Initiatives Related to New Value Creation in the New Medium-Term Management Strategy
(Fusion of Research and Development with a Market-Focused Strategy, Strengthening of Services that Emphasize CX)

We established a new Research and Development Market Strategy Division by integrating and strengthening our research, marketing, and alliance functions as an R&D organization with marketing capabilities.

In addition to strengthening product-out R&D, we will collaborate with customers and partners globally to carry out everything from R&D to product delivery, promoting alliances with a variety of partners.

We will consider all stakeholders to be customers and partners and prioritize customer experiences.

By constantly improving and updating our services in an agile manner, we aim to exceed customer expectations and provide new experiences and excitement in an effort to be the NTT Group that continues to be people's choice.