News Release:November 17, 2000

November 17, 2000

NTT Communications' Financial Results
for Fiscal Half-Year Ending September 30, 2000

NTT Communications Corporation (NTT Com) announced today its non-consolidated financial results based on Japanese accounting principles for the period from April 1 to September 30, 2000. Operating revenue was 664.8 billion yen, recurring profit was 20.4 billion yen, and net income was 6.5 billion yen.

BACKGROUND

NTT Com began operating in July 1999 with the corporate mission to create and provide the best global services to benefit customers as a challenger in the info-communications market. This March, NTT Com officially announced new business vision, the "dot-com declaration," which includes the primary goal of strengthening the company's corporate structure to provide global IP services.

NTT Com's plan to rapidly evolve into a "Global IP Company" within the next two years got fully under way with the acquisition of U.S.-based Verio, Inc. in September. Verio is a Tier 1 provider with a high-capacity IP backbone network and is also the world's largest operator of Web sites for businesses with its main focus on the U.S. market. By combining NTT Com's Asian IP network and Verio's U.S. IP network, the acquisition enables NTT Com to now offer wide-ranging customers a single global network called the "One Network" and comprehensive e-business solutions in the Asian-Pacific region. Moreover, as part of becoming a ‘Global IP Company,' NTT Com has began to review all aspects of its business, including service/product development, sales and other delivery systems, management structure and human resources, with the aim of fundamentally reforming its conventional "legacy" methods and practices to those suitable for an IP company.

During the half year NTT Com launched its comprehensive e-business solutions, metaphorically called the "e-theater," which is the core concept behind the firm's evolution into a "Global IP Company." "e-theater" combines the key elements of an IP backbone, Internet data centers and IP platforms, and is designed to create a "stage" upon which users will create new business models and lifestyles through IP technology.

During the year NTT Com also strengthened sales and services by offering consumers an expanded range of services and rate plans. Through OCN, NTT Com supported individual users to make the most of "dot-com" communications. In addition, sales channels were diversified for increased convenience.

NTT Com continues to reform its corporate culture based on "Our Business Philosophy" (OBP), stipulating corporate mission and employee's code of conduct. NTT Com is reengineering its ways of doing business to transform itself into a "dot-com" company.

OPERATIONAL RESULTS

In the half-year reporting period, IP services were strengthened by enriching OCN services and constructing both domestic/international data centers and new platforms. The company also lowered domestic and international call charges and implemented almost all other activities planned for this period.

OCN Service

For individual users, NTT Com introduced the OCN Dial Access Komi de Plan, which packages Internet access and telephone charges. More choices were added to the popular OCN PC Pack, which packages a PC and Internet access.

For corporate users, NTT Com significantly strengthened its hosting services through the acquisition of Verio. It launched the OCN Mail & Web hosting service for SOHOs. The company also introduced the OCN Cisco Pack, which combines NTT Com's Super OCN service for corporate users and routers and other telecom equipment made by Cisco Systems, targeting small and medium-size offices.

"e-theater"-Related Services

Arcstar Data Center Service
NTT Com in April began offering the Arcstar Data Center Service domestically and overseas. This one-stop solution combines server, platform and housing operations to meet the needs of corporations wishing to outsource their IT operations in order to concentrate resources on core business. The Arcstar Smart Content Delivery, an international Internet service enabling safe and speedy content delivery, also commenced.

IP Backbone Service
The Arcstar IP Backbone Service, originally provided to Internet service providers (ISPs) only, from August became available for e-commerce and video/music content delivery sites via the Arcstar Data Center Service. Users can now directly access this international Internet backbone for high-speed communication. In the future, the service will be offered at a single network combining NTT Com's network in Asia and Verio's network in the United States.

Platform Services
NTT Com introduced the following platform services for advanced supply chain management and cross-industry transactions via networks:

- . com Market (online shop construction)
- Electronic Catalog Aggregation Platform (electronic catalog distribution)
- AutoWeb International File Transfer Service (car design data transfer)
- CAD Collaboration Service (collaborative 3D design)
- Web Site Approval-Guarantee System (online shop certification guarantee)
- MRO Electronic Procurement Marketplace (supports e-transactions between multiple vendors/suppliers)
- ApparelArc Platform Service (process standardization for fashion business)

IP-VPN Services
NTT Com contributed to the expansion of the IP-VPN market, in part by commencing Super VPN, a highly secure IP-VPN service using MPLS technology to realize high-performance, low-cost corporate IP networks. The firm also launched OCN Business Pack VPN II, which combines RALS, a VPN service for remote dial-up access to corporate LANs, and various set-up and maintenance support services.

Telephone Services

From April, NTT Com simultaneously lowered its call charges for inter-prefectural and international calls. International services were expanded to 232 countries. New discount services included Arcstar Business Discount and NTT Communications Home Discount, both of which discount total charges for inter-prefectural and international calls.

Arcstar Data Network Series

The service area for the firm's Managed Frame Relay Service was expanded to include two more countries, bringing the total to 52.

Ultra high-speed 45 Mbps and 150 Mbps circuits for Arcstar High-Speed Digital International Leased Circuit Services were introduced in China, Hong Kong, Taiwan, South Korea, Singapore and the Philippines.

The Arcstar Global ATM Service was expanded to two more countries, bringing the total to seven. In addition, the service also became accessible through 50 domestic access points of the Super Relay CR service.

As part of providing such services, NTT Com is participating in joint construction of optical fiber submarine cable networks, including the Asia Pacific Cable Network 2 (APCN2) and the Australia-Japan Cable Network (AJC).

Global Investment and Partnerships

The firm's major undertaking during the term was its September acquisition by TOB of U.S.-based Internet solution provider, Verio, Inc. to strengthen NTT Com's global IP services. This acquisition greatly improves NTT Com's capability to provide advanced IP and other global services for the long-term growth and development of the company.

MANAGEMENT REFORMS

Changes in the company's corporate culture included the company-wide introduction of a mission tree, which identifies each employee's mission, direct communication between employees and the president via email, and the revision of the OBP. In terms of human resources, the firm adopted a performance-based employee evaluation system and a system for employing professionals. Programs for in-house training in IP technology were also introduced.

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