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March 27, 2019

Nippon Telegraph and Telegraph Corporation

NTT Group's New Smart Energy Business

NTT Corporation (Head office: Chiyoda-ku, Tokyo; President & CEO: Jun Sawada) will promote a new smart energy business with the aims of creating new business utilizing the NTT Group's human resources, technologies, and assets and achieving mid- and long-term sustainable growth. In the first half of fiscal 2019, the company plans to establish an energy business promotion company in order to speedily provide new solutions. It also aims to increase the sales of energy-related businesses in the NTT Group to 600 billion yen by fiscal 2025.

1.Background of Initiative

Based on its medium-term management strategy, Your Value Partner 2025, NTT Group (hereinafter, "the Group") is striving to resolve social issues in corporation with our partners by helping customers using ICT to achieve digital transformation.
Accordingly, the Group will provide new "smart energy solutions" to complement existing AC networks in response to social issues related to the environment and energy. Smart energy solutions consist of the Group's communications technologies, power technologies such as DC power supply, telecommunications building resources such as storage batteries, and DC area grids making optimal use of the Group's technologies, know-how and assets. These will provide new value such as the enhancement of energy efficiency, global warming countermeasures and utilization of renewable energy, and the improvement of disaster resistance.

2.Future Initiatives

Up to now, the Group's energy-related business operations have been conducted centering on the Group companies NTT Facilities, Ennet, and NTT Smile Energy, and we have expanded sales to 300 billion yen through collaboration with electric power and gas companies. The newly-launched smart energy business will conduct five projects in the three areas of power generation, power transmission/distribution and storage, and retail/wholesale. The Group aims to double the sales of its energy-related businesses by fiscal 2025.

Power Generation

(1)Green power generation business: Power supply solutions using renewable energy

Power Transmission/distribution and Storage

(2)VPP business: Supply and demand coordination solution through control of dispersed power sources*; *Functions such as generation by solar, water and wind power, power supply by electric discharge from storage batteries (including EV), and control of supply and demand by power storage in storage batteries.

(3)Advanced EV station business

Advanced EV charging infrastructure solutions using storage batteries and chargers*

*Plan to provide services in the future combining power supply from EV to buildings and grids (V2B: Vehicle to Building; V2G: Vehicle to Grid)

(4)Backup power source business

Optimal emergency power supply solutions according to the disaster situation

Retail and Wholesale

(5)Electric power retail and wholesale business: Electric power supply with low environmental impact

3.Business Promotion Structure

To promote our smart energy business, NTT Corporation will establish an energy business promotion company in the first half of fiscal 2019 and, through the strengthening of group company governance and optimization of service development, provision and operational resources, plans to build a business structure that can ensure the swift provision of new solutions. The energy business promotion company will develop the B2B2X business model through collaboration with partner companies and, in coordination with Group companies such as NTT Urban Solutions, will promote the strengthening of competitiveness and growth of profits in the energy business field.

Conceptual Chart of Smart Energy Business Promotion