NTT Communications Corporation (NTT Com) announced today that its non-consolidated financial results for the fiscal year ended March 31, 2011 saw net income increase 13.6% year on year to 68.9 billion yen, operating revenues decrease 4.2% to 1,033.4 billion yen and operating income decrease 4.4% to 93.2 billion yen. Operating expenses shrank 4.2% to 940.1 billion yen.

All results are based on Japanese accounting principles.

BACKGROUND

During the reporting year, as Japan's economic recovery slowed under the weight of deflation and the yen's renewed strength, many companies attempted to develop new businesses not only in Japan, but also emerging markets overseas, especially in Asia, as they further globalized their operations. The economy also suffered a tremendous blow from the earthquake and tsunami that struck northeastern Japan on March 11. In the ICT market, a next-generation extra-high-speed mobile communication service was launched in Japan, reflecting the continued proliferation of wireless as well as fixed broadband. Smartphones and tablet PCs continued to proliferate and data center management technologies advanced, signs that both ubiquity and cloud computing further crystallized.

BUSINESS STRATEGIES

NTT Com's basic policy was to offer seamless, high-quality, cost-competitive services to worldwide customers. Improvements were introduced in increasingly advanced, one-stop, area-free ICT solutions for enterprise business, expanding network and data-center services for global business, and initiatives to package Group-wide capabilities in diverse services and customer platforms for Internet-based business.

Furthermore, NTT Com improved business processes and controlled costs more effectively throughout the corporation, resulting in more sustainable efficiencies based on productivity benchmarks.

The 2010 fiscal year was the final year of NTT Com's Vision 2010 growth strategy, which was introduced in 2006 to support the corporation's primary mission ? expressed in the slogans, ?bridge" and ?continue to bridge" ? in seven core business domains: Solutions, Network Management, Security, Global, Ubiquitous, Portal/engine and Managed-quality Operations. During the year NTT Com further transformed its business structure by concentrating more corporate resources on these domains and on training and developing professionals equipped with the knowledge and skills required in such fields. NTT Com also pursued more proactive sales, upgraded delivery processes, enhanced the quality of operations and created new services.

Services for business customers were strengthened with high value-added, one-stop solutions incorporating seamless global services and BizCITY, a suite of secure, high-quality cloud services for high-value solutions in diverse businesses and fields. By meeting key needs for network efficiency, ICT infrastructure outsourcing, telecommuting and business continuity, NTT Com enabled customers to better respond to changing business environments by concentrating their resources on core business and expanding operations overseas.

In global business, NTT Com responded to the needs of multinational companies by strengthening its provision of high value-added ICT total solutions, which combine network-integration services with data-center, security and server-management services. In addition, efforts to enhance service capabilities included the start of construction on the Asia Submarine-cable Express, a high-capacity optical submarine cable that will link the Asian region, the establishment of new premium data centers in Singapore and Hong Kong, and the acquisition of Emirio Globe Soft Pte Ltd, a provider of global IT outsourcing services focused on Asia.

In Internet-based businesses, NTT Com's OCN- and Plala-brand Internet access services expanded subscriptions to a combined 11.3 million users as of March 31, 2011, reflecting stronger sales of fiber-optic and diverse services. In addition to the introduction of value-added services such as OCN premium support and NTT ID log-in service, NTT Com subsidiary NTT Resonant collaborated with NTT Group's mobile service arm, NTT DOCOMO, to offer customers improved mobile-search functionality. NTT Plala's Hikari TV service reached its target of more than 1.4 million users by March 31, 2011, attracting new customers with more high-definition content and an expanded service area for IP re-broadcasts of BS-satellite broadcasts.

Overall, NTT Com further stabilized its revenue structure by responding to increasingly diverse and sophisticated market demands, enhancing its on-site customer-support capabilities and the interpersonal skills of frontline personnel, and focusing on customer needs.

OPERATING RESULTS

Operating revenues continued to decline in the 2010 fiscal year. Voice transmission services revenues decreased 6.8% to 353.3 billion yen, data communications services revenues fell 7.3% to 111.3 billion yen, and solution services revenues declined 2.7%, to 181.4 billion yen. IP services revenues, which had risen in previous years, fell 1.0% to 361.1 billion yen. Total operating revenues decreased 4.2%, to 1,033.4 billion yen.

Tighter cost controls lowered expenses for purchases of goods and services by 5.2% to 454.7 billion yen. Access charges decreased 1.8% to 263.9 billion yen due to lower mobile phone transmission service charges. Total operating expenses declined 4.2% to 940.1 billion yen.

As a result, operating income declined by 4.4% to 93.2 billion yen. Although the corporation booked special losses on reduced stock valuations and was impacted by the March 11 earthquake, net income increased 13.6% to 68.9 billion yen due to decreases in corporation taxes and other expenses.