Network Solution Business
June 12, 2023
Yukinobu Noguchi, Senior Vice President
NEC Networks & System Integration Corporation（TSE: NESIC, 1973)© NEC Networks & System Integration Corporation 2023

Self Introduction

Yukinobu Noguchi
Senior Vice President, Executive General Manager,
Network Solutions Business Unit

Career summary⚫ Joins the Company in 1987
⚫ Successively held various experiences regarding network
infrastructure including construction of central switching systems
for Japan/overseas markets, SE of network solutions field andresponsible post of telecom. carriers and social infrastructures
business.
2⚫ Assumed his current position in 2023
© NEC Networks & System Integration Corporation 2023

Overview of the Network Solutions (NWS) BusinessBusinessvision

We offer advanced technologies with high specialty .
to connect society from the floor of the ocean to the far reaches of outer spacein optimal forms to help realize a digital society
with greater security and convenience.
Main customers
and markets

Carrier related
business

Socialinfrastructurebusiness
3

Strengths of the business⚫ Telecommunications
carriers⚫ NCCs⚫ Providers⚫ Advanced technologies capabilities(networks, IT, security, etc.)⚫ Multi-vendor SI capabilities⚫ Wireless technology capabilities(Wi-Fi, 4G, 5G, local 5G, etc.)⚫ Space and defense⚫ Marine⚫ Media⚫ Industry know-how through collaboration with NEC⚫ Customer base cultivated over many years⚫ Specialized technological capabilities(satellite communications, marine communications/observation, etc.)© NEC Networks & System Integration Corporation 2023

Medium-Term Management Plan and Progress of Business Results (NWS)
We aim to achieve the targets of the Medium-Term Management Plan bystrengthening the social infrastructure business where investment is growing,at a time when telecommunications carriers have curbed investment and delays inthe social implementation of local 5G have become apparent.
97.0(¥ Bn.)

Net sales

81.9⚫ Space and defense
Entered the NW/IT-SI fields⚫ Marine
Received first orders for wind power-related cablelanding conduit work, and business negotiations
picked up steam

85.0

79.2

Socialinfra.

Issues

Careerrelated/others
Operating
10.8
income

14.0
11.0

9.8
InitialFY22/3(Result)
4Results

FY23/3(Result)© NEC Networks & System Integration Corporation 2023

Review

FY24/3(Forecast)

InitialReviewFY25/3(Medium-termtarget)⚫ Carrier related business
Enhancing solutions targeting areas of continued
investment⚫ Social infrastructure business
Exploring new fields through the repurposing oftechnology, and the development of humanresources

Carrier Related BusinessDespite a difficult business environment, we will improve our response to areas receiving
continued investment, and maintain or expand business growth.
Business
environment

5

Telecommunications carriers continue to be reluctant
to make infrastructure investments.
However, investment in business challenges, such as corporate services,
network toughening and improve operating efficiency continues.

Infrastructure BusinessLocal 5G

Focus on areas receiving continued or
expanded investment

Pre-emptive introduction from mission-critical areas that
require high levels of security and stability

Megacarriers

Coordinate with KNSI to provide
solutions for streamlining operations

NCCs

Measures to deal with increased traffic(improvements to optical networking)Power plants

Railways©※NCCs：Communication
NEC Networks & System Integration
Corporation
2023 other than 4 mega carriers, such as electric power group carriers and ISPs
serviceproviders

Airports andmarine ports

Healthcareetc.

Carrier Related Business: Examples of the Implementation of L5G in Society
Growing expectations for autonomous operation, robot remote control, highresolution imagery, etc. in the area of critical infrastructure(1) Power plants• Remote operation of drones• High-resolution video
monitoring
Low latency

High speed andlarge capacity(3) Airports and marine ports

Security© NEC Networks & System Integration Corporation 2023

High speed andlarge capacity• Detection of abnormal objects
along the rail line
• Remote real-timecommunication
Security(4) Healthcare• Improved logistics efficiency andautonomous operation• Video-based physical security

6(2) Railways

Low latency• Remote control of medicalrobots• High-resolution video fromambulances
Security

Resistance tointerferenceSocial Infrastructure Business: Business Environment⚫ In addition to measures to handle increased traffic volume (network
toughening), marine-related budgets have expanded in the area of security(Ministry of Education, Culture, Sports, Science and Technology, Ministry of Economy, Trade and Industry,
Ministry of Land, Infrastructure, Transport and Tourism, etc.)

Marine• Marine-related Budget (Cabinet Office)FY2023 902.3 billion yen (including FY2022 amendments; up 23.8% year on year)• Digital Garden City Digital Highway (Ministry of Internal Affairs and Communications)
FY2023 50 billion yen• Global sizes of the submarine cable market
FY2025 3 billion dollars (roughly equal to 420 billion yen)

⚫ Market resurgence due to increased security and space budgets
Spaceanddefense
7• Defense-related expenses (budget for "first year" of fundamental reinforcement of defensecapabilities)
FY2023 6.6 trillion yen (up 27.4% year on year)• Space-related (focus on security / improving national land resilience)
FY2023 611.9 billion yen (up 17% year on year)© NEC Networks & System Integration Corporation 2023

Social Infrastructure Business: Marine
Leveraging marine-related experience spanning more than five decades andtechnological capabilities to expand into a newly growing markets
Existing businesses

Communication

Observation

Ability to manage large-scale
projects cultivated throughcooperation with NEC8System development• Earthquake prediction• Submarine communications
extension equipment

System construction• Route surveys• Cable landing station
construction• Laying of communication
cables© NEC Networks & System Integration Corporation 2023

Growth of new markets

Market Size inFY2024⚫Improving the resilience of nationallands (disaster prevention andmitigation)
200 billion yen⚫Resource exploration /Ministry of Education,Culture, Sports, Science
expansion of undersea
and Technology, Ministryof Economy, Trade andsurveillance
Industry, , etc.

Development of new businesses
Development and rollout of new
observation systems(Participation in seabed researchdevelopment research)⚫Development of multi-route submarine
cables⚫Protection and multi-regionalization of
50 billion
cable landing stations

Utilizing construction expertise,expanding direct sales⚫Responding to the global increase intraffic volume(Increasing cable lengths and100 billion yen
introducing multiple cores)
Mainly private sector

Coordination with NEC and global
expansion

Ministry of Internal Affairsand Communications(Expansion into the offshore wind
power generation market)(From route surveys and cable laying
to operational areas)

Social Infrastructure Business:
Example of a Seabed Observation and Communications System
Track record of being the only domestic provider of fully integrated marine
services cultivated through collaboration with NEC
Development of submarine seismometer
network

Participation in large-scale submarine cableproject

Utilization of NESIC-developed Seabed Observation

Comprehensive Project Management for theSystem⚫Observation systemdevelopment⚫Surveying and construction
placement locations⚫Laying of cables⚫Construction of cablelanding stations⚫Onshore and submarine
maintenance and operation

Action to develop more sophisticatedinformation collection capabilities
9© NEC Networks & System Integration Corporation 2023

Ocean, from Domestic to Global Endeavors

Routesurveys

Cable landing
construction

Laying of seabed cables

Expanding into new areas such as offshore
wind power generation

Social Infrastructure Business: Space and Defense
Accelerate business expansion leveraging the security sector andstrengthening national land resilience as tailwinds
Key Points of Business Expansion

Existing businesses

Installation, setup
and operation of
proprietary NECproducts• Antennas• Control facilities• Proprietary defenseproducts• Ground station
monitoring• Operation andmaintenance
10NEC's Areas of Focus
Advanced security / ICT

Repurposing ofcarrier technologies

Entry into New
Network/IT-SI Fields

National Defense Strategy
to strengthen defensive
capabilities

Product expertise via
participation in thedevelopment process ofNEC

Pursuing businesses
in greater depth inexisting businessdomains

Multi-vendor skills

Providing one-stop
services from design
to operation

Entry into new domains
Utilization of spacerelated private sector© NEC Networks & System Integration Corporation 2023

Social Infrastructure Business:
Examples of Space and Defense (Satellite and Terrestrial)
A vast track record of projects involving the public and private sector withintegrated handling from ground stations to satellites
GroundControl

Satellite

Earth-station design andconstruction
Rocket launch support (monitoringand operation)

Planning / operational verification/ base construction

Design, development and satellite
operation

General commandbuilding controlroomTanegashima
Space Center

Telemeter Antenna
Ogasawara
Downrange Station

ISS Experiment
Module KIBO

Hayabusa 2

Advanced Land
Observing
Satellite
Image provided by JAXA

11© NEC Networks & System Integration Corporation 2023

Cultivating Advanced and Specialized
Human Resources

Advanced
DX professionals

2023/321

2025/350

Beyond 5G 2023/3
professionals 605

2025/3700

Personnel supporting businesses, improvements tosafety, quality, and productivity● Develop DX and beyond 5G
network engineers
DX personnel that use AI, IT and data
to solve different problems

Human resource
development● Advanced and specialized humanresources in FY2025/3
Target: 750 (up 124 from FY2023/3)• Advanced DX professionals• Beyond 5G professionals- PM human resources- Network engineers(Marine, Space and Defense, Carrier Networks)

Safetyand quality
Realize
Safety 2.0

Productivityimprovements● Improve safety and quality
Safety and quality based on the use of DX(data utilization, remote management and AI determination)
12© NEC Networks & System Integration Corporation 2023

: 50 (+29): 700 (+95): 270 (+30): 430 (+65)● Accelerate streamlining withthe use of DX
Business streamlining through AI andautomation, developing personnel into
strategic staff by improving their digital literacy

Cautionary Statement
Forecasts and targets of results mentioned in this document are future estimates and are thus
inclusive of risks and uncertain factors since they are not based on definite facts. Please be aware that avariety of factors could cause actual results to differ significantly from those projected. The major
factors affecting actual results include the economic climate and social trends surrounding the businessof this Company’s group, consumer trends vis-a-vis systems and services provided by this Company’sgroup, as well as pressure to lower prices and ability to cope with the market in response to intensifiedcompetition.

Factors affecting results are not limited to the ones mentioned above.
There was segment change in April 2022. Segment information for the FY 2022/3 have beenrecalculated to reflect the change in the content of business segments.

13© NEC Networks & System Integration Corporation 2023

https://www.nesic.co.jp/english/ir/