Nippon Telegraph and Telephone : NTT East Financial Results for the Fiscal Year Ended March 31, 2024 and Changes in Board of Directors and Executive Officers

Financial Results for the Fiscal

Year Ended March 31, 2024

(25th Term)

May 10, 2024

Nippon Telegraph and Telephone East Corporation

Copyright © NIPPON TELEGRAPH AND TELEPHONE EAST CORPORATION. All rights reserved.

Financial Results

In FY2023, achieved increased revenues and profits; 12th consecutive year of increased profits, setting a new record high In FY2024, plan to increase revenues excluding the impact of the streamlining of non-core assets conducted in FY2023

(Units: Billions of yen, except Hikari Subscriptions)

IFRS

(Consolidated)

Operating Revenues

Operating Profit

Profit*

EBITDA

Capital Investment

Net increase (decrease) in

Hikari Subscriptions

(Number of Subscriptions)

FY2022

Results

1,702.2

285.4

202.4

493.9

248.9

+170,000

(13.33 million subscriptions)

FY2023

Results Year-over-year

1,710.5 +8.3

298.6 +13.2

206.9 +4.5

498.8 +4.9

243.8 (5.0)

+40,000 (130,000)

(13.37 million subscriptions)

FY2024

Forecast

1,655.0

210.0

147.0

414.0

245.0

+50,000

(13.42 million subscriptions)

Year-over-year

(55.5)

(88.6)

(59.9)

(84.8)

+1.2

+10,000

* Represents profit attributable to NTT East.

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1/9

Initiatives to Restore Earning Ability

		298.6			(Billions of yen)
	285.4
Operating	Streamlining	FY2024 as the
Non-Core	baseline before
Assets	profitability
			shifting towards
Profit			210.0			1
						2
						３
						４
	２０２２	２０２3	２０２4	２０２5	２０２6	２０２7

Migrating Legacy Services to Alternative Services,

1 and Improving Customer Engagement through CX×DX

Developing Optical Demand to Capture High-Speed

1. Needs
2. Turning Regional Customers in Loyal Customers
3. Strengthening Networks to Support Increasing Traffic

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2/9

① -1 Migrating Legacy Services to Alternative Services

Maximizing the approx. ¥200.0 billion Legacy Service Revenues Base

Legacy Services			Alternative Services
 Telephone Subscriptions			 Hikari Services, Hikari Denwa
 INS-Net			 Optical Line Phones
 FLET'S・ADSL	Maximize		 Wireless Landline Phones
 FLET'S・ISDN		 Wireless Services
 STM (Dedicated Lines)	Migration		 I-WAN and VPN Services
 Telephone Books			 Digital Lead

Minimize Metal Cable Costs

• Avoiding the need to install new metal cables by using wireless landline phones and optical line phones
• Using construction opportunities, such as obstacle removals, to transition to wireless landline phones and optical line phones
• Bulk migration of telephone exchange offices (trial)

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3/9

① -2 Improving Customer Engagement through CX×DX

Creating a simple business

flow that aims to both improve

customer engagement and optimize business efficiency

• Leveraging generative AI and other cutting-edge technologies
• Redeveloping operations systems

Develop business flow experts, and promote self-sufficiency and in-house development of business systems

•	Migrating outsourced business
	systems to in-house infrastructure
	(cloud)
•	Expanding the scope of in-house
	system development and operation

Accelerate the early-stage

transition of paper- and people-

based services into digital

services

• Updating phone books into digital
  services（(Digital Lead, iTownPage)
• Reducing environmental impact by eliminating paper forms

Manual

Shift to Web/ Tech Touch

Automated

Flow-Through

In-House

OperationData-Driven

CX Improvement through DX

Promotion

Cumulative from FY2024～FY2027

approx. 3,000 Positions Created

Third-PartyCompany's

InfrastructureInfrastructure

Cumulative from FY2024～FY2027

approx. ¥30.0 billion in Reductions

Paper Forms

Web-Based

Cumulative from FY2024～FY2027

approx. ¥10.0 billion in Reductions

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4/9

• Developing Optical Demand to Capture High-Speed Needs

Net Change

in Optic

Lines

FY2022

170k

Lines

Hikari 10 Gbps

Apartments

FY2023	FY2024	FY
				2025
Lines Opened		(Year-Over-Year)
	approx. 4x	Expanding the Hikari Cross (10Gbps)	Supporting high-speed needs in
			collaboration with partner businesses
	(Compared to Time of	coverage area to cover all of eastern Japan
Collaboration Partners	Launch)	(further expanding service areas)
approx. 2x
for Hikari 10Gbps		* Hikari Cross coverage
			rate: 70%
Apartments			Collaborating with developers to	Accelerating fiber optic installations in
	(88,000)	efficiently expand fiber optic	new developments
Net Change		connections to apartments and	⇒ Expanding installations in existing
			redeveloped buildings	properties

		Decline in fiber optic demand and
		increase in cancellations due to	Temporary
		the end of the COVID-19	increase in
		pandemic	cancellations
			from due to end
			of Hikari Light
		40k	50k
		Lines
	30k	Lines
Number of		120k
Hikari Cross	4x
Lines	Lines	Lines
Opened

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5/9

• Turning Regional Customers into Loyal Customers

Operating Revenues from Hikari-

Related Businesses

Supporting the Digitalization of Local Governments and Public Institutions

• One-stop provider of regional problem-solving and

(Billions of yen)

336.0

Income from ancillary contract services

Income from high value added services

Income from Hikari Denwa

(Basic fees + call charges)

Annual revenue increases	Loyal Customer
of approximately	Creation
¥10.0 billion
＋5.5
342.0
+9.5

+2.5

(5.5)

value creation, AI and digitalization needs from wide-

ranging perspectives

Local Development / Renewable Energy / Smart Agriculture

Ministries	Local Government	Education	Medical
Government	Cloud	GIGA	National Medical
Solutions Services Integration Platform	School	Information Platform
	5th Generation

LGWAN

Network /	Disaster Prevention /	BPO
Delivery	Operation and Maintenance	Zero Trust

Total Support for Small and Medium-Sized Enterprises

• Proactive and total support for office ICT environments through multi-channel collaboration

2022	2023	2024	2025	Total support for the home environment	Multi-channel
Copyright © NIPPON TELEGRAPH AND TELEPHONE EAST CORPORATION. All rights reserved.		customer support	6/9

④-1 Updating Existing Assets (to Profitable Assets for the AI Era)

				IOWN×REIWA
	5,000 Digital			300 R&D Personnel				400 Urban
							Development
	Human			World-Leading
						Consultants
	Resources
11,000		Information Superhighway		3,000 Regional
Communications
							Consultants
Engineers
Region-Supporting	Existing Assets	Community-Based
Engineering Groups	Urban Development
							Experts

Sharing

Updating to Next-Generation	Leveraging Assets to
Create New Businesses and
Digital Infrastructure	Diverse Services

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7/9

④-2 Strengthening Networks To Support Increased Traffic

Network Infrastructure to Handle Increased Traffic

Attracting IX Operators	DC Exchange and
	Connection Point for
	the Kanto Area
	IX
	CDN
Ikebukuro
	Kuramae
DC Connectivity
	Marunouchi
NTT East's DCs	Kayaba-Kabuto
Other Companies'	DC Operators to be Connected
DCs

Kanagawa

Optimizing connectivity by

connecting a variety of operators

Future (Making Japan Asia's Data Hub)

Europe

North

AsiaAmerica

Australia

Leveraging IOWN-APN to increase connectivity

with landing stations and local operators

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8/9

Major Topics and Collaborations

• 【National Agriculture and Food Research Organization and Mirai Co-Creation Farm Akita】Launched the data-drivenRemote Farming Support Project (June)
• 【Plantio and Tanita】Entered into collaboration for new urban farming business (July)
• 【Ichii and Okayama University of Science】Conducted demonstration experiments for the commercialization of land-based aquaculture

Smart Agriculture

of sockeye salmon in a complete closed-circuit system using optimal environmental water© (July)

• 【Osaka University】Launched a freshness preservation consulting service to establish optimal preservation methods for local products (December)
• 【Tsuno in Miyazaki Prefecture, and Okayama University of Science】Successfully bred high-endfish Kue-Tamaand Tamakai in the world's first completely closed-circuit land-basedaquaculture system (February)
• 【NEC and Kajima】Completed the world's first successful demonstration experiment for construction vibration detection using communication optical fibers (August)

	IOWN	• 【TV Tokyo】Conducted the world's first live broadcast using APN IOWN 1.0. on TV Tokyo and BS TV Tokyo for the "Tokyu Silvester
			Concert 2023-2024" (December)
		• 【Mitsubishi Electric and NEC】Opened the "IOWN Lab" to create use cases using IOWN technology (January)
		• 【18 5G Vendors】Launched a new co-creation project to accelerate social implementation of local 5G systems (November)
	Local 5G and	•	【JIG-SAW】Became the first Japanese telecommunications company to join the Connectivity Standards Alliance (CSA) and entered into
		a business alliance for the development of services to encourage widespread adoption of smart homes using the "Matter" standard
	Wireless
		(November)
		• Opened the "Local 5G Smart Factory and Logistics Lab" (January)
	Creating a	• 【Yokohama】Signed an agreement related to promoting "urban development aimed at creating a city where people want to live, continue
	Recycling-Oriented		living, and is chosen by others" (September）
	• 【University of Tokyo】Signed an industry-academia collaboration agreement with the aim of creating a next-generation digital network
	Society		infrastructure and social entrepreneurs in order to achieve a regional recycling-oriented society (FY24, April)
	Other	•	To prevent fraud, number display and number request services were made free for senior citizens (May)
	• Bulk banning of phone numbers owned by scam call-forwarding companies (July)
		9/9
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