Table of Contents. Copyright (c) 2012 Nippon Telegraph and Telephone Corporation. Appendices (November, 2012)

Transcription

1 Appendices November, 2012

2 Table of Contents IR Presentation P.2 Evolution Towards Becoming a Value Partner on the Next Stage in Inter-Service Era P.3 Changes in Earnings Structure P.4 NTT Group s Global Business Development P.5 Doubling of Overseas Sales P.6 Spending Forecast P.7 Example of Big Data Use P.8 Reinforcement of Security Base ~Top Runner P.9 Increasing Corporate Value Overview of Consolidated Financial Results P.10 Trend in Consolidated Financial Results P.11 Transformation of Business Structure (Consolidated Revenue Composition Image) P.12 CAPEX Global Business P.13 Enterprise ICT Services in Global Market P.14 Overseas Sales Trend and M&A Development Fixed Communications Business P.15 Broadband Access Services in Japan P.16 Fixed Broadband Business P.17 Penetration of Video Services P.18 Profitability from FTTH services P.19 Measures to retain FLET S Hikari Subscribers P.20 Core Network Migration Mobile Communications Business P.21 Mobile Broadband Business P.22 DOCOMO s Competition Strategies P.23 Market Share of Smartphone Sold P.24 Xi crossy (LTE) Area Expansion Plans P.25 docomo cloud 3 key directions P.26 Aggregate ARPU of Mobile Broadband Business Shareholder Returns P.27 Shareholder Returns P.28 Share Buy Backs Others P.29 Changes in Consolidated Operating Revenue P.30 Changes in Consolidated Operating Income P.31 Changes in Number of Employees P.32 Age Distribution of Employees at NTT East, NTT West and Outsourcing Companies (As of March 31, 2012) P.33 NTT Group Overview 1

3 Evolution Towards Becoming a Value Partner on the Next Stage in Inter-Service Era NTT s Strength ~Over 10,000 global customers ~ Implementation Measure 1 Connect Services with Services Provide higher value-added services to service providers (authentication, settlement methods, etc.) Collaboration among Internet-based services and convergence between real-world and Internet-based services NTT Group Sites Internet services Collaboration sites Real-world services Cloud Video distribution Games HTML5 platform Music Big Data analysis Travel Retail Events Implementation Measure 2 Connect Users with Services User-friendly and stressfree user environment Service matching assistance (concierge function) NTT s Strength Dept. stores Real-world stores/ merchandise Restaurants Supermarkets ~Over 100 million NTT customers~ (FLET S, DOCOMO, OCN, Plala ) New customers 2

4 Changes in Earnings Structure Global Cloud Services as the Cornerstone of NTT s Business Operations Comprehensively Strengthen Network Service Competitiveness Solution + New Business IP business Legacy business (fixed voice/ mobile voice, etc.) Global Cloud Services Network Services Advisory Applications (Big Data, M2M, contents, etc.) SI, NI Cloud platforms (DC, IaaS, PaaS, etc.) Cloud access (Network for corporate users, etc.) Wi-Fi platform Fixed/mobile broadband, etc. Fixed/mobile voice, etc. Next Stage Before Cloud After Cloud 3

5 NTT Group s Global Business Development Existing IT Systems Advisory Services ICT Services Developed Countries Developing Countries ICT Management Applications Infrastructure Wi-Fi PF Global Network Mobile Network Business Analysis Cloud Security Mobility Big Data M2M On-premise Wi-Fi Off-presmise Migration of business applications to cloud Cross-industrial platform Cloud Platform Global Network Standardized Cloud, etc. Security Mobile Network Total system visualization from applications to devices Security Management Appealing to Customers Suggest combined business analysis and ICT services Provide flexible and high-quality ICT services, including services of other companies Provide end-to-end and secure ICT management Support customers business transformations as an ICT strategic partner 4

6 Doubling of Overseas Sales Double overseas sales by the fiscal year ending March 31, 2017 Attain at least 50% of corporate sales from overseas sales Onward to $20 billion Exceeded $10 billion $2 billion Fiscal year ended March 31, 2008 Reached $10 billion one year ahead of schedule Fiscal year ended March 31, 2012 Aiming to double earnings Fiscal year ending March 31,

7 IT Spending Forecast $360 billion $1,800 billion $1,440 billion (35%) (65%) (21%) Developing Countries (17%) Developed Countries 1, (83%) 1, (79%) 2011 Growth (E) SOURCE: Gartner IT Spending : Software, Hardware, IT Services Developing Countries : Latin America, Emerging Asia/Pacific, Greater China, Eastern Europe, Eurasia, MEA Developed Countries : North America, Western Europe, Mature APAC 6

8 Example of Big Data Use NTT aims to develop new markets through Big Data analysis, utilizing NTT s strengths in real-time processing (Jubatus) and machine learning processing Drug development / Medical Services / Finance Drug development times may be shortened through efficient analysis by combining a vast number of patterns of chemical substances to extract potential causality and correlations (machine learning 1) High-speed analysis of case reports collected from medical institutions in their encrypted and decentralized forms (secure dispersion / computation) Conduct product evaluations and malfunction monitoring and reputation monitoring in real time from a large amount of SNS data to protect brand value (Jubatus 2) Enables real time extraction of the correlation between changes in stock prices, exchange rates, etc. and market responses in mass media/social media to realize timely stock price and exchange rate forecasts (Jubatus + Machine learning 3) know-how using machines Replacing experience and 1Machine learning & Hadoop Hadoop Batch processing 3Machine learning & Jubatus 2Jubatus Real-time Streamlining and accelerating the analysis process using computers instead of human experience and know-how 7

9 Enhancement of Security Platform ~Top Runner NTT s Secure Computation Technology ranks among the highest level in the world,* which is highly competitive in expanding our Global Cloud Service. NTT has succeeded in putting it to practical use for medical statistical analysis for the first time in the world. Secret Sharing Technology Enables to encrypting data (dividing into some meaningless data sets) and stores them in separate servers among the cloud. Secure Computation Technology Enables computation of secretly shared data without decryption. Secret sharing (data saved in separate servers) save?? Enables statistical analyses without decryption computing request Original (Data File) draw Restoration of original file? Cloud output result Use of Data (Statistic Computing, etc) * World s No.1 sorting and multiplication capability 8

10 Increasing Corporate Value Fiscal year ending March 31, 2016 Fiscal year ended March 31, 2012 Fiscal year ending March 31, 2015 EPS EPS Cost reductions of at least 400 billion yen (fixed-line/mobile access networks) Capex to Sales 15% Share Buybacks 9

11 Trend in Consolidated Financial Results Creating steady operating income and operating free cash flow Operating Revenues (Trillion yen) Operating Income (Trillion yen) Net Income (Trillion yen) Operating FCF (Trillion yen) EPS (yen) Fiscal year ended/ing March 31 * 2008/3 2009/3 2010/3 2011/3 2012/3 2013/3E * Includes special factors such as the gain on the transfer of substitutional portion of the Employee Pension Fund. (Note) Due to the January 2009 stock split of one share of common stock into 100 shares, figures for 2008/3 have been retroactively adjusted. 10

12 Transformation of Business Structure (Consolidated Revenue Composition Image) Transformed from legacy-oriented business to IP, solution and new business field :Solution & New Business, etc. :IP Business :Legacy Business 52% 58% 61% 65% 70% 75% IP, solution & new business account for three-quarters Fiscal year ended/ing March 31 11

13 CAPEX Capex to Sales is substantially decreasing CAPEX / Sales (Billions of yen) 2, % 20.6% 2, , % 18.1% 18.5% 18.0% 20.0% 2, Others , , , , % 1,500 1, NTT DOCOMO % 500 NTT EAST + NTT WEST % 0 Fiscal year ended/ing March /3 2009/3 2010/3 2011/3 2012/3 2013/3E %

14 Enterprise ICT Services in Global Market NTT Group will provide high-quality, comprehensive ICT services to more than 10 thousands of overseas enterprise customers with end-to-end, global one-stop offering. EMEA Asia Australia Etc. Americas Advisory Service Application Solution Customers Managed ICT R&D Data center Network 13

15 Overseas Sales Trend and M&A Development Billion USD 13.0 Billion USD 2.0 Billion USD 2.6 Billion USD 2.9 Billion USD 4.8 Billion USD 2008/3 2009/3 2010/3 2011/3 2012/3 2013/3E (Fiscal year ended/ing March 31) (Note) Dates that the companies became subsidiaries of NTT 14

16 Broadband Access Services in Japan Fixed Mobile ~ ~ Access speed DSL Approx. 6.3M subs NTT market share Approx.35% ~50Mbps FTTH Approx. 22.8M subs NTT market share Approx.74% ~1Gbps CATV Approx. 6.0M subs ~160Mbps Mobile etc. Approx M subs including NTTDOCOMO LTE subs approx. 3.3M NTT market share Approx.45% ~75Mbps Public Wi-Fi ~54Mbps (Note1) Access speeds shown are numbers used for commercial purposes, and are the maximum output speeds achievable within the framework of the respective best effort services. (Note2) Mobile etc. includes subscriptions of data communications services plan, and those of WiMAX. (Source)Fixed accesses are MIC data, Mobile etc. is TCA data. (Some figures are based on financial results materials of the companies.) (As of the end of June 2012) 15

17 Fixed Broadband Business IP related revenues have largely grown with the increase in FTTH subscriptions ARPU has increased with the expansion of optional service (i.e. Hikari Denwa, Remote support service) Voice and IP-related Revenues (Sum of NTT East and NTT West) ARPU Voice Revenues + IP-related Revenues (Billions of yen) 2, , , , , ,683.0 (Change year-on-year) (-65.1) (-46.6) (-7.4) (-70.3) (-24.6) Basic Rate NTT East Additional Services 5,310 5,580 5,740 5,880 1,320 1,450 1,570 4,260 4,290 4,310 5,900 1,620 4,280 (Yen) 5,800 1,690 4,110 FTTH Subscriptions (thousands) 2,048.6 Voice Revenues 1, , , , ,406.9 IP-related Revenues 1, , , , , , ,564 15,059 8,777 11,134 13, /3 2009/3 2010/3 2011/3 2012/3 2013/3E (Fiscal year ended/ing March 31) NTT West (Fiscal year ended/ing March 31) 77% /3 80% ,460 5,620 5,780 5,890 84% /3 12/3 13/3E 1,330 1,460 1,580 4,290 4,320 4, ,930 1,650 4, ,860 1,690 4, /3 2009/3 2010/3 2011/3 2012/3 2013/3E <Hikari Denwa> Percentage of FTTH users Million channels 86% <FLET S TV> Million subscriptions 1.04 <Remote Support> Million subscriptions yen/month~ 650 yen/month~ 500 yen/month~ 10/3 11/3 12/3 13/3E 10/3 11/3 12/3 13/3E 16

18 Penetration of Video Services Number of Hikari TV + FLET S TV subscriptions reached 2.87 million by end of Mar Steady growth can be expected continuously. Million subscriptions Hikari TV + FLET S TV Hikari TV Service also available on smartphones and tablet PCs Tuner (STB) TV TV with Built-in tuner Smartphones, tablet PCs (Android,iPhone, ipad) PC/NotePC /3 2009/3 2010/3 2011/3 2012/3 2013/3E (End of Year/month) Car Navigation 17

19 Profitability from FTTH services Achieved profitability from FTTH services on a single-year basis in 2012/3 Profitability from FTTH services Fiscal Year ended March billion yen 2009/3 2010/3 2011/3 2012/ billion yen (88.9) (17.4) Improved by 59.1 billion yen billion yen (154.2) Improved by 71.5 billion yen billion yen Improved by 65.3 billion yen (Note) 2009/3 : Figures of designated telecommunications services except specified telecommunications services 2010/3 and thereafter : Figures of designated telecommunications services (FTTH access and other services) except specified telecommunications services. 18

20 Measures to retain FLET S Hikari Subscribers Retention & acquisition of light users by pay-as-you-go Launch of FLET S Hikari LIGHT, a two-tiered flat-rate charging system (Jun 2011: NTT East, Jan 2012: NTT West 2012) Cutting monthly charges of FLET S Hikari LIGHT Mansion Type (Sep 2012: NTT East and West) Monthly Charge s Communication Amount per month Promotion of long-term usage by discount menus Launch of Ninen-wari, a discount service with condition of continuous usage for 2 years (Mar 2012: NTT East) Together with points from FLET S Hikari Members Club, price is reduced to ADSL price level Acquisition of separately-dwelling families and high-speed users Launch of Community Discount, a discount service for registered group members (Oct 2012: NTT West) Launch of Super high-speed type Hayabusa (Cutting price of 1Gbps service) (Oct 2012: NTT West) Acquisition of smartphone & tablet users Launch of FLET S Hikari Wifi Access, a Wireless LAN access service for small-sized multi-dwelling unit apartments (Nov 2012: NTT East) 19

21 Core Network Migration Networks consolidation will realize CAPEX optimization and maintenance cost reduction IP Network Migration IP Networks will be consolidated to NGN To be completed by Mar 2013 PSTN IP Network Regional IP Network NGN PSTN NGN PSTN Migration PSTN (subscribed telephone network) will be consolidated to NGN To be done approx. from 2020 to User care is necessary for end-of-provision service - Coordination among inter-connected providers is necessary for smooth connection of IP networks PSTN NGN NGN 20

22 Mobile Broadband Business Packet revenues are steadily growing due to the growth of packet flat-rate service subscribers Aiming further growth of packet revenues by strengthening smartphone sales Cellular Services Revenues (Voice +Packet ) Smartphone Sales (Annual sales) Cellular Services Revenues (excluding Monthly Support )) (Billions of yen) 4, , , ,407.4 * * 3,424.9 * 3,492.0 (Change year-on-year) (-357.7) (-161.8) (-92.4) (+17.5) (+67.1) (Million units) million *Excluding Monthly Support The impact of Monthly Support (2011/3) (2012/3) (2013/3E) 2, /3 Initial Plan Voice Revenues 2,149.6 Packet Revenues 1,373.9 Packet flat-rate service subscriptions (thousands) 17,790 12,810 1, , , ,770 1, , ,920 1, , , /3 2009/3 2010/3 2011/3 2012/3 (Fiscal year ended/ing March 31) 2, , , /3E (End of year/month) (Million Units) (End of year/month) /3 2012/3 2013/3E Xi LTE Subscriptions(Cumulative) million 11/3 12/3 13/3E 16/3E (Note) Packet flat-rate services include subscriptions to Pake-hodai, Pake-hodai full, Pake-hodai double, Pake-hodai simple, Biz-hodai services, flat-rate data plans and Xi data plans Target as of 2012/5

23 DOCOMO s Competition Strategies DOCOMO will expand its Smartphone customer base by innovative approach, which is the source of competitiveness 22

24 Market Share of Smartphone Sold DOCOMO s market share of smartphones sold maintained higher than subscriber market share 100% :DOCOMO :Other Carriers 80% 60% 40% 45% 53% 50% 49% 55% 35% 20% 0% 1Q 2Q 3Q 4Q 1Q 2Q Fiscal year ended Fiscal year ending 2012/3 2013/3 (Apr.2011~Mar.2012) (Apr.2011~Mar.2012) * Market share distribution among top 4 carriers in Japan offering devices carrying any of the 4 OSs (Android/iOS/WindowsMobile WindowsPhone/BlackBerry) in the mobile phone category, based on survey of track record of sales at major mass retailers across Japan by GfK Japan (Tablet devices not included) 23

25 Xi crossy (LTE) Area Expansion Plans Population coverage : Approx. 30% at the end of Mar, Expand to approx. 75% by the end of Mar, 2013 Start providing Mbps download service in limited areas within 2013/3 24

26 docomo cloud 3 key directions Cutting-edge service development is a new source of revenue 25

27 Aggregate ARPU of Mobile Broadband Business Aim to expand Smart ARPU to achieve sustainable growth of business (Double in 2016/3 compared to 2012/3) 2012/3 2013/3 (Apr.~Mar.) Smart ARPU : Revenues from providing services that accompany our wireless services (revenues from content and cloud services, collection of charges, mobile phone insurance service, advertising and others) / No. of active subscriptions(*) (*) Sum of No. of active subscriptions for each month : ((No. of subscriptions at the end of previous month + No. of subscriptions at the end of current month) / 2) during the relevant period 26

28 Shareholder Returns Dividends per share have steadily increased by 1.8 times, from 90 (FY ended Mar 2008) to 160 (planned: FY ending Mar 2013) Resolved on share buy backs of 150 billion yen in total, by the end of FY ending Mar (Sep 19 th, 2012) (yen) Dividend Dividends per share Fiscal year ended/ing March 31 Approx % * Dividend per share % Pay-out ratio % 31.2% 38.2% 36.6% 2008/3 2009/3 2010/3 2011/3 2012/3 2013/3E *Excludes special factors such as the transfer of the substitutional portion of the Employee Pension Fund 50% 25% 0% Pay-out ratio Share Buy backs (Billions of yen) Fiscal year ended/ing March /3 2009/3 2010/3 2011/3 2012/3 2013/3E *NTT may repurchase up to 42 million shares, or up to 150 billion yen, of its common stock by the end of the fiscal year ending March 31, Up to 50.0 * Status as of October 31,

29 Share Buy Backs Cancellation Buy back from Gov t Cancellation Buy back from Gov t Buy Back from market Treasury Stocks <15.9%> 251mil. shares (*1) Gov t Owned Shares 530mil. shares Market floating shares 793mil. shares Excess Holdings 58mil shares Cancellation -125 mil. shares 125mil. shares Minimum for Gov t Owning 473mil. shares <33%> 793mil. shares <37%> 125mil. shares 58mil. shares Gov t Owned Shares 473mil. Shares <33%> Excess Holdings 42mil shares Cancellation -125 mil. shares 58mil. shares Minimum for Gov t Owning 431mil. shares <33%> <36%> 99mil. shares Gov t Owned Shares 431mil. shares <33%> 793mil. shares 793mil. shares 793mil. shares <>:share holding ratio Treasury Stocks <10.7%> Portion bought back from the market (Equivalent to 150 billion yen) 99mil. shares 42mil. shares Gov t Owned Shares 431mil. shares <33%> Market floating shares 751mil shares Mar. 31, 2010 Nov. 15, 2010 Jul. 5, 2011 Nov. 15, 2011 Feb. 8, 2012 Mar. 31, 2012E Total number of shares issued (million shares) 1,574 1,449 1,323 (Note 1) The basic policy on cancellation of all treasury stock owned by NTT as of March 31, 2010 (approx. 250 million shares) was resolved in May 2010, and one-half of such shares was cancelled in November The remaining half was cancelled in November (Note 2) Mandatory (minimum) number of shares to be held by the Government under the NTT Law = (total number of shares issued-30 million shares issued at the IPO in 2000) 1/3 *The number of shares issued after the initial listing are not to be included in the calculations. (NTT Law, supplementary provision 13) 28

30 Changes in Consolidated Operating Revenue Consolidated Operating Revenue (billion yen) :Regional communications business :Long distance and international communications business :Mobile communications business :Data communications business :Other business 10, , , , , , ,000 4, , , , , , , , , , ,000 4, , , , , , , , , , (Fiscal year ended/ing March 31) 1, , , , , /3 2009/3 2010/3 2011/3 2012/3 2013/3E (Note) Business segment operating revenues include intersegment transactions 29

31 Changes in Consolidated Operating Income Consolidated Operating Income (billion yen) 1,304.6 :Regional communications business :Long distance and international communications business :Mobile communications business :Data communications business :Other business 1, , , , , , (Fiscal year ended/ing March 31) /3 2009/3 2010/3 2011/3 2012/3 2013/3E (Note) Business segment operating income include intersegment transactions 30

32 Changes in Number of Employees Consolidated No. of employees :Regional communications business :Long distance and international communications business :Mobile communications business 219,343 :Data communications business :Other business 224, , , , , ,982 91,566 85,876 78, , ,679 13,177 22,100 22, ,236 98,697 13,923 14,176 21,831 22,297 31,238 34,543 29,330 22,954 49,991 31,162 34,350 23,289 24,250 58,668 62,150 0 (End of Year/month) 25,283 25,068 25,269 25,502 25,244 27, /3 2009/3 2010/3 2011/3 2012/3 2013/3E 31

33 Age Distribution of Employees at NTT East, NTT West and Outsourcing Companies (As of March 31, 2012) 8,000 Number of Employees 6,000 4,000 2, Age (Note) Figures for East Outsourcing Companies include the consolidated prefectural outsourcing companies (NTT EAST-TOKYO and others), NTT-ME and NTT EAST SOLUTIONS, while figures for West Outsourcing Companies include the consolidated regional outsourcing companies (NTT WEST-KANSAI and others), NTT MARKETING ACT, NTT NEOMEIT and NTT WEST-HOMETECHNO. Figures for those companies include the number of employees who retired or will retire at the end of a fiscal year and who were rehired or will be rehired at the beginning of the following fiscal year (at the age of 50 and 60 (fixed-term employment which will be renewed year by year)). 32

34 NTT Group Overview Operating revenues (consolidated):10,507.4 billion yen Operating income (consolidated): 1,223.0 billion yen No. of employees: 224,239 No. of subsidiary companies: 772 * Percentage figures show the percentage of voting rights (October 31, 2012) 100%* 100% * 100% * 100% * 66.6% * 54.2% * NTT East NTT West NTT Communications Dimension Data NTT DOCOMO NTT DATA Other group companies Regional communications business Long distance and international communications business Mobile communications business Data communications business real estate, finance, construction and power business Other business Operating Revenue: 3,764.8 billion yen 1,678.7 billion yen 4,240.0 billion yen Operating Income: No. of Employees: No. of Subsidiaries: 86.9 billion yen 86, billion yen 31, billion yen 23, (Note) Financial year ended March Operating revenue and operating income of each segment include intersegment transactions. 1,251.8 billion yen 71.5 billion yen 59, ,089.0 billion yen 56.9 billion yen 25,

35 The forward-looking statements and projected figures concerning the future performance of NTT and its subsidiaries and affiliates contained or referred to herein are based on a series of assumptions, projections, estimates, judgments and beliefs of the management of NTT in light of information currently available to it regarding NTT and its subsidiaries and affiliates, the economy and telecommunications industry in Japan and overseas, and other factors. These projections and estimates may be affected by the future business operations of NTT and its subsidiaries and affiliates, the state of the economy in Japan and abroad, possible fluctuations in the securities markets, the pricing of services, the effects of competition, the performance of new products, services and new businesses, changes to laws and regulations affecting the telecommunications industry in Japan and elsewhere, other changes in circumstances that could cause actual results to differ materially from the forecasts contained or referred to herein, as well as other risks included in NTT s most recent Annual Report on Form 20-F and other filings and submissions with the United States Securities and Exchange Commission. * E in this material represents that the figure is a plan or projection for operation. 34