FY2020.3Q Financial Results-Key Points

In the mobile communications business segment, the Smart Life area is growing; in the regional communications business segment, fiber-optic services are performing well; and in the long distance and international communications business segment, the effects of cost reductions have started to become apparent. In addition, in the data communications segment, revenues have increased in the domestic public/social infrastructure and finance fields. Each segment is currently progressing well. Although the situation will continue to require close monitoring of any further restrictions on economic activity across the world resulting from COVID-19, we will work to exceed the full-year financial results forecast.

Although NTT Ltd. has had reductions in revenues primarily in the resale business in Asia and Europe, its shift to high value-added services is continuing to progress, and as a result of cost reductions from structural reforms implemented in the previous fiscal year, as well as cost reduction measures taken since the start of the fiscal year in anticipation of the effects of COVID-19 and other factors, progress has exceeded the annual financial results forecast. In addition to the structural reforms carried out by NTT Data in Europe beginning in the previous fiscal year, NTT Data is also implementing structural reforms in North America and strengthening its response to digital projects, and orders have been arriving. Looking ahead to post-COVID-19, we will continue to work to grow profits by further acquiring more digital projects, which are increasing worldwide.

As one method of improving NTT DOCOMO's competitiveness and growth, we are considering the transfer of NTT Communications and NTT Comware to NTT DOCOMO. As the first step, around the summer of 2021, we plan to make NTT Communications and NTT Comware subsidiaries of NTT DOCOMO, and will also strengthen the collaboration between the research and development capabilities of NTT and NTT DOCOMO. As the second step, around the spring or summer of 2022, we plan to implement a reorganization of the functions of NTT DOCOMO and NTT Communications and work towards a transformation into a new NTT DOCOMO group.

Although we anticipate that the effect of NTT DOCOMO's new billing plans on financial results will cause a temporary reduction in revenues beginning in FY2021, we are aiming to increase year-over-year profits by increasing the number of contracts, growing the Smart Life business, corporate business and 5G-related businesses, improving costs by optimizing network and operation efficiency, and other measures. In addition, the number of pre-applications for ahamo has exceeded 1,000,000^*1, and since the announcement of ahamo, there has been a net positive effect on the number of transfers through MNPs^*2. In the future, we will continue to carry out sales policies, including strengthening promotions.

^*1As of February 5, 2021.

^*2Mobile Number Portability.