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ANNUAL REPORT 2022

https://group.ntt/en/C

ONTENTSNTT ANNUAL REPORT 2022

Forward-Looking Statements

2
10

Message from our CEO
Value Creation Story
10 NTT at a glance
12 Value Creation Process

14

Growth Strategy
14 Medium-Term Management Strategy
20 Message from our CFO
24 Message from our CTO
26 Research & Development
R&D that helps to enhance corporatevalue
36 Operations in Review

The forward-looking statements and projected figures concerning the future performance of NTT and
its subsidiaries and affiliates contained or referred to in this report 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 the economy, the telecommunications industry in Japan, 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 inJapan and elsewhere, and other changes in circumstances that could cause actual results to differ materiallyfrom the forecasts contained or referred to in this report.
Editorial Policy
This is an integrated report that combines information that is important to shareholders and investors,
including not only such information as growth strategies and financial results but also sustainability-related
information. The report focuses on explanations of NTT Group’s initiatives targeting increases in corporate
value over the medium to long term. The report is intended to help readers better understand NTT Group,
which is accelerating its self-transformation to become “Your Value Partner” and working to increase corporate
value by contributing to the realization of a sustainable society.
LegendIn this Annual Report, “NTT DOCOMO” refers to NTT DOCOMO, INC., “NTT Communications” refers to
NTT Communications Corporation, “NTT COMWARE” refers to NTT COMWARE CORPORATION, “NTT East”
refers to Nippon Telegraph and Telephone East Corporation, “NTT West” refers to Nippon Telegraph andTelephone West Corporation, “NTT DATA” refers to NTT DATA CORPORATION, “NTT Urban Solutions” refers
to NTT Urban Solutions, Inc., and “NTT Anode Energy” refers to NTT Anode Energy Corporation.
Other Materials
Presentation Materials

44

NTT Group Sustainability

Securities Report

44 Our Vision for a Sustainable Society
48 Reducing Environmental Impact
54 Reinforcement of Disaster
Countermeasures
56 Reinforcing Security
58 Maximizing Well-being for All
68 Corporate Governance78

https://group.ntt/en/ir/library/presentation/index.html

https://group.ntt/en/ir/library/yuho/

Shareholders’ Meeting Materials
https://group.ntt/en/ir/shares/shareholders_meeting/

Sustainability Reporthttps://group.ntt/en/csr/data/report.html

Data Section

ANNUAL REPORT 2022

1

Message from our CEO

Value Creation Story

Growth Strategy

NTT Group
Sustainability

Data Section

Message from our CEO

CEO

Message

My name is Akira Shimada, and I was appointed as President and CEO of NTT in June this year.
As the successor to former CEO Jun Sawada, I will advance our business operations by continuing on the pathof the NTT Group's transformation undertaken thus far. As the future economic situation and business environment
remain unclear, we hope to create a path forward by responding to changes, or, at times, by pre-empting changes
and transforming ourselves.
The NTT Group, which continues to dynamically transform itself, will work to its utmost ability to deliver new
experiences and value to our customers.

Q

Now that former CEO Sawada has passed you the torch, how will you run the NTT Group
going forward? Please tell us about your policies.

I will steadily implement reforms to make the NTT Group grow even more. The NTT Group's businesshas been changing. Forty years ago when I joined Nippon Telegraph and Telephone Public Corporation,
we only had our telephone business, but now voice related service revenues account for just 15% of
our operating revenues. I will take swift action to reconfigure our resources and add new ones with afirm focus on global changes.
A major policy on business restructuring was decided during President Sawada's term. The concrete
implementation of the policy and the creation of results is just beginning. I believe that our mission for
the time being is to be sure the policy yields results. In order to produce those results, it is important tocreate an organization and structure that will generate innovative outputs one after another, and I will
strive for management to achieve that.

I think that the process of implementing a policy poses different challenges than theQprocess of creating one. Can you tell us about your past experiences and the work thathas left a lasting impression on you?

I think one of the unique aspects of my experience is that I have had a variety of careers, including

Akira Shimada
President and Chief Executive Officer
Representative Member of the Boardin sales, development, corporate planning, finance, and general affairs. My experience also includes
working overseas for about eight years. When you work on the same team alongside people withdifferent backgrounds and nationalities, diversity and inclusion generate new innovations and help
provide services that exceed customers' expectations. I still fondly recall the many such experiences I
have had.

2

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Message from our CEO

Value Creation Story

Growth Strategy

NTT Group
Sustainability

Data Section

Message from our CEO

One of my most memorable experiences was the establishment of the international communications

Moving onto the next question, it was announced in May that the businesses of NTT

business at NTT Europe. It was a great opportunity to learn about the physical aspects of network
construction, such as where to place nodes when starting up from scratch with no facilities suchas data centers. For example, water is the archenemy of communications. Water leak detectors are

DATA and NTT Ltd. will be integrated in order to strengthen the competitiveness ofQ

our global business. In terms of the investment ratio of the new overseas operating

therefore necessary for air conditioning equipment installed with communication facilities, and we hadcompany, NTT owns 45% while NTT DATA owns 55%. Please explain the approach todiscussions on how to install them. I believe that reliable services are created through the consistentglobal business, including on this point.

and diligent completion of such steady work.

The investment ratio for the overseas operating company was set with NTT DATA at 55% in order toclearly establish NTT DATA’s leadership. This is the result of consideration on our ideal business models.

Business Strategy

NTT DATA has a market-oriented business model that includes consulting for customers, while the

The NTT Group is currently undergoing a major transformation. I would first like to ask

Qabout the new DOCOMO Group. NTT DOCOMO became a wholly owned subsidiary,
and a new structure including NTT Communications and NTT COMWARE was launched
in July. What are the aims of this and what results do you expect it will lead to?

business model of NTT Ltd. is selling components such as data centers and communication networks.
NTT DATA’s business model offers the greatest business opportunities, so we decided to put thecompany in the lead position in order to highlight its strengths in providing total solutions to customers.
This business integration will create a unique ICT and SI company unlike anything else in the world withfull stack coverage, from industry-specific apps and system integration to data centers, networks, andother infrastructure. There are also of course customers that require components, and their needs differ
from country to country. It is therefore important that NTT Ltd.'s services are ranked among the top in

The aim is to strengthen our enterprise business, improve network efficiency, and enhance oursoftware development capabilities. With this new structure, I believe that the DOCOMO Group will
have an enhanced system for enterprise business. Solutions are the forte of NTT Communications,

the world. For example, our data centers are ranked third in the world, even amidst the expansion of theoverall market. This means that we can meet all needs.

while NTT DOCOMO’s strength is its mobile services. Because software development capabilities arealso needed to provide services, we will combine the strengths of the three companies, including NTT
COMWARE, and thereby greatly increase the competitiveness of the NTT Group's enterprise business.
I believe that the future growth drivers for the DOCOMO Group will be enterprise business and smart
life business. Firstly, for enterprise business, we will build a sales structure enabling provision of onestop services to all customers, and aim to achieve revenue of over two trillion yen in fiscal year ending
March 31, 2026. For the smart life business, in addition to further growth in finance, payment, andmarketing solutions, we will work on electricity, medical, and XR businesses as new areas, and double
profits in fiscal year ending March 31, 2026 compared to fiscal year ending March 31, 2022.
Moreover, due to the circumstances during the establishment of NTT DOCOMO, both NTT DOCOMO
and NTT Communications own their own core networks, which has of course meant there are double
the facilities and operations. We must eliminate this kind of waste. We will promote integration not only
to reduce costs, but also to improve customer service.

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Message from our CEO

Value Creation Story

Growth Strategy

NTT Group
Sustainability

Data Section

Message from our CEOof the NTT Group. Moreover, we will of course increase our own investment in key data centers thatare expected to generate significant demand, but we will also combine this with the use of third-party
capital to rapidly scale up the business.
We are naturally conscious of the need to improve our balance sheet efficiency. For example, we
expect the balance of credit receivables, etc. to reach 720 billion yen by the end of fiscal year ending
March 31, 2023. We will also achieve our ROIC target and meet the expectations of our investors.

Corporate Value / Sustainability

Q

What do you want to emphasize and what in particular do you want to work on as you
proceed with the various business reforms you have mentioned so far?

The main theme is “Making NTT Group continue to dynamically transform itself and deliver new
experiences and value to our customers.” I would like to promote three initiatives to achieve this.
The first is to create better customer experiences (CX) through better employee experiences (EX). In
order to create new value, experiences, and excitement for our customers (meaning CX), we need tomobilize the collective strength of the NTT Group's approximately 330,000 employees and have each

You are pursuing a two-pronged approach of not only providing full-stack services, butQalso having strong services that are recognized worldwide.
That being said, I believe that a large amount of capital investment is needed to actively
develop infrastructure business such as data centers. What are your thoughts on this?

of them take on challenges with a sense of excitement. My mission is to firstly build a solid EX structure
and loop this to CX to make our customers happy.
The second initiative is to decarbonize through technology. The decarbonization of society is amatter of utmost urgency. I believe it is the mission of those of us living in the present to ensure thatour descendants can live sustainably on the planet. The NTT Group has set a goal of achieving carbon
neutrality by 2040. In order to realize it, we are working to drastically reduce our power consumption
through the promotion of IOWN, and to develop and expand our use of renewable energy.

Market demand is still strong in many parts of the world, so the NTT Group will firmly expand its
provision capabilities. We will expand our investment in the data center business both on an aggregate
basis (total self-investment and use of third-party capital) and on a self-investment basis. We will invest
about 300 billion yen (including about 180 billion yen of self-investment) in fiscal year ending March
31, 2023 compared to our investment of about 180 billion yen (including about 145 billion yen of selfinvestment) in fiscal year ending March 31, 2022. In addition, we will capture demand by promoting
utilization of NTT DATA's customer base and sales capabilities, as well as the provision of data centerswith direct cable connections by leveraging its position as a network operator, as unique strengths

66

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

The third initiative is to ensure connection of infrastructure and critical IT systems even in the eventof major disasters. Looking into the past, disasters have occurred that were beyond anything we
imagined. Preparation is the key to staying connected. We therefore need to flex our imaginations
and continuously anticipate and consider disaster scenarios. There can be no way forward if we thinksomething is just “good enough.”

ANNUAL REPORT 2022

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Message from our CEO

Value Creation Story

Growth Strategy

NTT Group
Sustainability

Data Section

Message from our CEO

I think that all these initiatives are highly significant for society as well.

Q

What kind of results can we achieve from an investor’s perspective in taking on theQ

Lastly, I would like to ask you about your approach to shareholder returns.

challenge of these three initiatives?

The promotion of these three initiatives is an opportunity to contribute to the realization of a

The enhancement of shareholder returns is among

sustainable society and also provides a chance for the NTT Group to generate revenue. It is also

NTT’s most important management issues. Our medium-connected to themes such as ESG and non-financial capital. It is of course important to contributeterm business strategy is to pursue ongoing increases

to society, but I believe it is also necessary to show both internally and externally how our efforts are

in dividend payments, and flexible share buybacks arelinked to the enhancement of corporate value. For example, NTT DATA is working to digitize valuable

conducted to improve capital efficiency.

materials held by the Vatican Library and Koyasan University. In addition to the social significance ofIn fiscal year ending March 31, 2023, we plan tocontributing to research and culture around the world, we are turning this into a business by providing

increase dividends for the 12th consecutive year, and thesolutions for the long-term preservation of valuable documents and collections through digital archiving.

dividend per share will be 9.6 times higher than in fiscal

We will continue to disclose information on these themes and unique initiatives that are of great interest

year ending March 31, 2004. In addition, with regard toto investors, along with the NTT Group's approach, indicators, and other information.

share buybacks in FY2022, we repurchased shares in the

It is also vital to utilize technology to more efficiently promote such initiatives. We have already had

amount of about 360 billion yen in September.

cases of the use of drones for early-stage recovery after disasters. I believe that by promoting initiatives
utilizing technology in various fields, we can not only achieve our goals while avoiding unnecessary
costs, but also generate opportunities to propose new services to our customers. I am aware that
an issue for the NTT Group is our tendency to provide nearly perfect services that take too muchtime. I believe it is important to make our processes agile and improve them through interaction withcustomers.

Q

I will continue to strive to further enhance the corporate
value of the NTT Group.
I would like to ask for the continued support of ourshareholders and investors.

How would you like to shape the NTT Group going forward?

I want to make it a “company that connects data.”
In addition to making additions to our existing business areas, we must also link completely new
business areas to our existing businesses. I believe that data is the key to this. It is important for us tocreate new added value by leveraging our strong ability to accumulate and analyze information. For
example, in our efforts to support the medical field and primary industries such as agriculture, livestock,and fisheries with ICT technology, we can acquire a variety of new data and structure it for analysis
purposes, thereby connecting data and creating new value.
We need to apply our technology and know-how to many fields and collaborate with our partners
in various fields to solve problems. I want to further expand our business base as we create new
businesses and advance solutions to social issues, which is the mission of the NTT Group.

8

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Message from our CEO

Value Creation Story

NTT Group
Sustainability

Growth Strategy

Data Section

NTT at a glance
Consolidated Financial Highlights (IFRS)

Who we are

What we do

NTT Group is a leading company in thetelecommunications business. We operate in awide range of domestic and overseas markets
by utilizing the customer base and expertise incommunication networks and ICT that we havecultivated over our history.

As “Your Value Partner”, we aim to work
together with our partners to solve social issues
through our business activities. We work to makethe world a place where all people can enjoy thebenefits of ICT so that they may be able to live
and work more comfortably and happily.

(Unit: Billions of yen)

FY2019FY2020

FY2021

Operating revenues

11,899.4

11,944.0

12,156.4

Operating profit

1,562.2

1,671.4

1,768.6

855.3

916.2

1,181.1

23,014.1

22,965.5

23,862.2

9,061.1

7,562.7

8,282.5

231.21

248.15329.29Ratio of profit attributable to NTT (ROE) (%)

9.3

11.0

14.9

ROIC (%)

6.6

7.2

7.5

2,995.2

3,009.1

3,010.3(1,852.7)(1,424.5)(1,699.2)

Free cash flows (Cash flows from operating activities + Cash flows from investing activities)

1,142.5

1,584.5

1,311.1

Cash flows from financing activities(1,041.3)(1,689.5)(1,438.1)

Profit attributable to NTT
Total assets
NTT shareholders’ equity*1

Operating Revenues* Operating Profit*(FY2021)¥12,156.4 billion(FY2021)¥1,768.6 billion

Earnings per share (EPS) (yen)*2 *3Cash flows from operating activities
Services and Main Companies

Business*4

Cash flows from investing activities*4

Integrated ICT
Business*1 NTT shareholders’ equity does not include the portion attributable to non-controlling interests.

The principal services in the Integrated ICT
Business are mobile phone services, domestic interprefectural communications services, international
communications services, solutions services, andsystem development services and related services.

*2 EPS is calculated based on the average number of shares outstanding during the fiscal year, excluding treasury stock, and BPS is calculated based on the number of

41.7%

shares outstanding at the end of the fiscal year, excluding treasury stock.

(¥5,870.2 billion)*3 NTT conducted a two-for-one stock split of its common stock with an effective date of January 1, 2020. The figures reflect the impact of this stock split.
*4 Amount excluding the impact of the last day of the previous fiscal years having been a non-business day

59.7%(¥1,072.5 billion)

Regional
Communications
Business

To allow for the strategic utilization of resources and assets as well as swift decision-making across NTT Group, theGroup has reviewed its corporate organization, such as by making NTT DOCOMO a wholly owned subsidiary in December
2020 and making NTT Communications and NTT Comware subsidiaries in January 2022. This brought NTT Group's
segments from five to four from the fourth quarter of fiscal year 2021.
The principal services in the Regional
Communications Business are domestic
intraprefectural communications services andrelated ancillary services.

Fiscal year ended March 31, 2022 NTT consolidated Operating revenues 12,156.4/Operating profit 1,768.6
Business Segments Prior to Change

GlobalSolutions Business

Reference <Business Segment Review>

22.8%(¥3,207.6 billion)

NTT Ltd.

The principal services in the Global Solutions
Business are system integration services, network
system services, cloud services, global data center
services, and related services.

DOCOMO

East

WestLong Distance andInternational Communications
Business Segment

Communications

Data Communications
Business
Business Segment

Ltd

Data

Other Businesses
Business Segment

COMWAREInter-segment
Transaction
Elimination

Real Estate,
Energy, andOther Businesses

24.5

25.6

%
(¥3,615.2 billion)

11.7%

Other Group companies

Others include the real estate business, energy
business and others.

Regional Communications
Business
Business Segment%(¥440.0 billion)

9.9%(¥1,396.0 billion)(¥210.5 billion)

Business Segments After Change

Other Businesses(Real Estate, Energy
and Others)

Mobile Communications
Business
Business Segment(Unit: Billions of yen)

DOCOMO

Communications

Operating revenues

5,870.2

Operating profit

COMWARE

East

West

Ltd

Data

3,207.6

3,615.2

1,072.5

440.0

210.5

Integrated ICT BusinessBusiness Segment

Regional
Communications BusinessBusiness Segment

Global Solutions
Business Segment

Real Estate, Energy, andOther Businesses

1,396.0
72.5
Other Businesses(Real Estate, Energy
and Others)(1,932.5)(27.0)
Inter-segment
Transaction
Elimination

4.1% (¥72.5 billion)*Percentage of simple sum of each segment(including intersegment transactions)10

NIPPON TELEGRAPH AND TELEPHONE CORPORATIONANNUAL REPORT 2022

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Message from our CEO

Value Creation Story

NTT Group
Sustainability

Growth Strategy

Data Section

Value Creation Process
Contribute to Realization of
Smart World/Society 5.0

Cycle to Realize Ongoing Improvements of Corporate Value
The Company’s attributes include a solid customer base in Japan and overseas, global brand power, humanresource capabilities, and world-class research and development capabilities. We will leverage these tosustainably increase our corporate value in a manner unique to NTT through digital transformation together
with our partners.

Toward a sustainable society/SDGs

Input

OutcomeMedium-term Financial Targets

R&D

Societal Issue Resolution

through Business Operation

New Targets(Announced in
October 2021)

Prior Targets(FY2022 Targets)

EPS

Human

DigitalTransformation

CSR

Resources¥370(FY2023)¥320

Approx(FY2023)

Overseas Operating Profit Margin*1

7%

7%(FY2023)

Management
Resources,
Expertise<7.0%>(Expected to achieve target one
year early)(FY2023)

Cost Reductions*2 (in fixed-line/mobile access networks)
at least¥(1,000.0) billion(FY2023)

Brand Image

Directionality of NTT Group’s

As a Public
UtilityTransformation

Infrastructure

A New Management Style Suitable for a

Decentralized Network Society

at least¥(800.0) billion(FY2023)8%

8%(FY2023)

Major sustainability targets

Advancement of Digitalization / DX

Enhance Domestic andBase

Carbon neutral

Global Business(FY2022 Targets)(FY2023)through ESG Initiatives

Collaboration with Various

Partners(Down 34% from FY2013)<¥600 billion>(Expected to achieve target one
year early)

Ratio of women newly promoted to management positions

Continue at 30% every year

Customer<3.075 million tons or less>

B2B2X earnings¥600 billion

Realization of a Well-Being Society

Enhancement of Corporate Value

Base<7.6%>

Greenhouse Gas Emissions*3(FY2040)

Financial<¥(930.0) billion>

ROIC Return on invested capital(FY2023)Society During COVID-19 and Post-COVID-19

ICT

and a Private
Company<¥340><30%>*1 T he scope of aggregation is the subsidiaries (NTT DATA International Business, NTT Ltd., NTT
Communications International Business, etc.) belonging to NTT, Inc. when the Medium-Term
Management Strategy was established. Calculation of overseas operating profit margin excludes
temporary expenses, such as M&A-related amortization costs of intangible fixed assets.
*2 Figures show cumulative reductions since FY2017.
*3 Target: GHG protocol Scope 1 + 2

Enhancement of Management Resources
12

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Message from our CEO

Value Creation Story

NTT Group
Sustainability

Growth Strategy

Data Section

Medium-term Management Strategy

About Medium-Term Management Strategy
In November 2018, we announced NTT Group's medium-term management strategy, "Your Value Partner
2025.” Based on the vision of working together with our partners to solve social issues through our businessactivities as “Your Value Partner,” we have been making progress with our digital transformation as anenterprise with both public and corporate elements.
To respond to future changes in the operating environment, such as the advancement of digitization andDX, in October 2021, we refined the NTT Group medium-term management strategy announced in November
2018 in order to accelerate our transformation into an open, global, and innovative new NTT.
Based on social and economic trends, we have been advancing nine initiatives in accordance with the threeframeworks of: transformation to a new management style, enhancement of domestic and global business,and enhancement of corporate value.

Changes in EPS, Consolidated Operating Renevues, Profit*1● Major Initiatives and EPS
(Yen)
400

220

212*2

231

●

● Directionality of NTT Group’s Transformation and New Strategic Frameworks

NTT Group’s Directionality

New Strategic Framework

Society During
COVID-19
and PostCOVID-19

A New Management
Style Suitable for a
Decentralized Network
SocietyTransformation toa New Management
Style

Advancement
Enhance Domestic/of Digitalization/DX Global BusinessInitiatives to Achieve the Strategy

・New style premised on remote work

2018

2019

2020

2021

2022E

2023E

(Fiscal year)● Operating Revenues/Profit

・Growth and strengthening of the newly formed
DOCOMO Group・Promotion of the IOWN development/rollout plan
・Enhance competitiveness in global business・Promote B2B2X model・New Environmental and Energy Vision

Enhancement ofCorporate Value

Announced revision of
medium-term management
strategy● Announced Environment and Energy
Vision, new management style, andSustainability Charter● NTT Communications and NTT
COMWARE consolidated as subsidiaries
of NTT DOCOMO*1 A 2-for-1 stock split of common stock, effective January 1, 2020, is taken into account for EPS.
*2 Excluding the impact of the arbitration award received from Tata Sons Limited.

(Billions of yen)
15,000・Disaster countermeasure initiatives■ Operating Revenues

11,782.1

Profit11,879.8

11,899.4

11,944.0

12,156.4(Billions of yen)
2,000

12,600.0
1,500

10,000・Strengthening of new businesses

Enhancement ofRealization of a
Corporate Value throughWell-Being Society
ESG Initiatives

Organizational restructuring of the
NTT DOCOMO Group
Global business reorganization0
2017

Enhance Domestic/
Global Business●●

NTT DOCOMO
becomes a wholly
owned subsidiary● 5G service,
ahamo launched●

Medium-Term Management Strategy announced
NTT, Inc. and NTT Urban Solutions established

●

2021

2020
2018

370

2022

248

200

●

Social/Economic Directionality

340

329

1,181.1
897.9

854.6

855.3

1,190.0

916.2

1,000

5,000
500

・Enhancement of returns to shareholders
0

0
2017

With regard to our medium-term management strategy, NTT has consistently positioned EPS as one of its main financial
indicators to achieve steady profit growth and enhance shareholder returns, and it has set a target of 370 yen for the fiscal year
ending March 31, 2024. To achieve this target, we will:● Strengthen domestic and global operations and generating synergies (boost earnings by approximately ¥100.0 billion in the fiscal
year ending March 31, 2024)● 
Further promote DX and other initiatives as part of our transformation to a new management style to achieve ongoing cost
reductions (over ¥200.0 billion in the fiscal year ending March 31, 2024), thus achieving the target primarily through profit growth.
● Initiatives for Accomplishing the ¥370 EPS Target

14

FY2023
Boost earnings by ¥100.0 billion

Transformation to a New Management
Style (Further Promotion of DX)

FY2023
Cost Reductions over¥200.0 billion

New Environment and Energy Vision

FY2023
Minimal Impact on Costs

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

2019

2020

2021

2022E

2023E

(Fiscal year)*The profit displayed is profit attributable to NTT less profit attributable to non-controlling interests.

Contribution to the Achievement of a Sustainable Society

Effect of Synergies in the Newly Formed
DOCOMO Group2018

FY2023
EPS ¥370
achieved

Medium-term Financial Targets/Progress
Initial Target<Announced November 8, 2018>

Current Target<Announced October 25, 2021>

FY2021 Results

Earnings Forecast for
FY2022

Attainment Levels

Approximately¥320(FY2023)¥370(FY2023)

¥329

¥340

Initial target
scheduled to be achieved
two years ahead ofschedule

Overseas operating
profit margin*1

7%(FY2023)

7%(FY2023)

6.3%

7.0%

Targets expected to beachieved a year ahead ofschedule

Cost reductions*2

At least¥(800.0) billion(FY2023)

At least¥(1,000.0) billion(FY2023)¥(840.0) billion¥(930.0) billion

Initial target
scheduled to be achieved
two years ahead ofschedule

8%(FY2023)

8%(FY2023)

7.5%

7.6%

Making steady progress

13.5% or less
(FY2021)

13.5% or less
(FY2021)13.1%—

FY2021
Target achieved

EPS

ROIC

Capex to sales*3*1 The scope of aggregation is subsidiaries of NTT, Inc. at the time the medium-term plan was established (NTT Data's overseas operations, NTT Ltd., NTT Communications' overseas operations, etc.).
Overseas Operating Income excludes temporary expenses, such as M&A-related depreciation costs of intangible fixed assets.
*2 Fixed-line/mobile access networks. Figures show cumulative reductions since FY2017.
*3 Domestic network business (excluding NTT Communications data centers, etc.)

ANNUAL REPORT 2022

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Message from our CEO

Value Creation Story

NTT Group
Sustainability

Growth Strategy

Data Section

Medium-term Management Strategy

Growth and Strengthening of the Newly Formed DOCOMO GroupA New DOCOMO Group Structure for Becoming an Integrated ICT Company
The new DOCOMO Group, formed when NTT
Communications and NTT Comware were made into
subsidiaries in January 2022, launched a new structurein July 2022 to integrate functions and clarify business
responsibilities.
In terms of our enterprise business, we will integrate it
into NTT Communications to strengthen our sales structure
across both large corporations and regional and small-tomedium-sized corporations, as well as expand our wiredand-wireless convergence services and solutions. In our
Smart Life Business, NTT DOCOMO and NTT Plala's video
businesses will be integrated to enhance content andstrengthen cost competitiveness.
Through the three major synergies of the expansionof enterprise businesses, the development of a morecompetitive network, and strengthening the power of service
creation and development and promoting DX, this Group

Integration of NTT DATA and NTT Ltd.

will target earnings of ¥100.0 billion in the fiscal year ending
March 31, 2024, and more than ¥200.0 billion in the fiscal
year ending March 31, 2026. Such ongoing increases inearnings are anticipated to drive the rapid growth of the new
DOCOMO Group.

In May 2022, it was announced that global business forbusiness users conducted by NTT DATA and NTT Ltd. will
be consolidated under the NTT DATA umbrella, and that bothcompanies will operate their businesses in a more integrated

manner.
An overseas operating company will be jointly established in
October 2022, with NTT owning 45% and NTT DATA owning55%.

● The goals of global business integration
STEP

January 2022

DOCOMONTT Communications and
NTT COMWARE become
subsidiaries of DOCOMO

1
STEP

NTT
66.6％

subsidiaries

Communications

33.4％(1) Enhancing global
governance

COMWARE■Integrate NTT Group's global human resources, providing autonomous management
under leadership with expertise in global governance■Achieve a stable profit structure by expanding business portfolio

Integration
July 2022

Integration offunctions andbusiness
esponsibilities
clearly defined

2

100%

Plala

DOCOMO
Telecommunications Business

100%

Global Businesssubsidiaries

R&D

Network

MVNO/
ISP
Resonant

DOCOMO
Systems

Smart life business

Integration

Enterprise

Communications

COMWAREEnterprise business

Software development/operation● FY2022 Initiatives for Achieving the Medium-termManagement Strategy(2) Strengthening global
business capabilities forbusiness users■Business consulting and a full stack of service operations, from IoT devices to cloudcomputing■Aim to be a valued partner that can implement a digital platform capable of being
leveraged by multiple customers and industries

We will combine NTT DATA's system integration capabil-necessary for DX that encompasses the domain of con-ities (the power to create), primarily in consulting and appli-

nectivity so that we can meet the increasingly diverse and

Implement a combined mobile-fixed line-cloud service

cation development, with NTT Ltd.'s Edge to Cloud service

sophisticated needs of our customers on a global level. Over

Provide a one-stop service that allows all customers to combine mobile, fixed-line, and cloud services as they please

operation capabilities (the power to connect), primarily in data

the long term, we will also develop innovative services that

centers, networks, and managed services, to provide Edge

utilize IOWN technology at a global scale.

■ Expand growthEnterprise Businessareas such as
mobile and cloud
solutions■ Leverage
DOCOMO
Communications’
strengths toprovide value
to customers
as a one-stop
service, fromlarge corporations
to small- andmedium-sizedenterprises

Enhance Competitiveness in Global Business

Speeding up and centralizing mobile access andcloud connectivity(Provided late March 2022)

Mobile-Fixed Line Voice Call Service Packages(Provided late October 2021)

Data
centers

Cloud PBX
Fixed call fee

Fixed-line network(IP voice)

Azure

Cloud connection (FIC)

Mobile network(DOCOMO phones)

Controllers

Mobile closed network (access premium)Controllers

Corporate internal network
Operations

AWS

Secure access

Branches

Remote work

Centralized
management
via portalPC

to Cloud services that leverage data and a number of points

Furthermore, integrating NTT Group's global human re-of contact with customers to create a new social platform

sources will allow for prompt decision-making tailored tothat transcends corporate and industry boundaries.

business and customer characteristics in overseas regions,

We will not limit ourselves to consulting and application

as well as strengthen global governance.

development, but also develop the integrated service lineup

IoT

Business Integration
2022.10

NTT DATABusiness expansion initiatives

NTT Ltd.

Obtain additional growth through utilization of membership base and data

Smart Life Business■ Additional

expansion offinancial, billing,
and marketing
solutions■ Expand new
domains such as
Denki, medical,
and XR

Expansion of Marketing Solutions

Increased growth of financial business

Provision of DOCOMO Denki
200,000 applications(as of April 24, 2022)

Promotion/CRM support
Franchise stores(d Points/d Pay)

New Membership Program

Promotion optimization
via on/off cross-section data

Consulting and SI capabilities (primarily AP services)

Edge to Cloud service operation capabilities▶ Long-Term relationships with advanced customers▶ In-depth understanding of business and consulting skills
for clients from a variety of industries▶ SI capabilities and technical capabilities (primarily
application services)▶ Innovation creativity in digital business▶ Data centers/NW infrastructure-related businessexperience▶ Capabilities such as SI and managed services▶ A broad customer base, including hyperscalers▶ Providing services that span approximately 190 countries+

Repeat/cross-selling

Accelerated provision of bank accounts,
insurance, loans, and other financial
services, and strengthened monetization

Manufacturers
DOCOMO customer base(89 million people)

Consumer Communications
Business■ New 5G services

and expansion ofcustomer basewill place thecompany on a
growth trajectory■ Maintain andincrease profits
through structuralreform of sales
channels andnetwork

Expand customer base by promoting billing plans that satisfy a diverse array of customer needs and cross-selling
lifestyle-related services

Enhancement of paid plans

NIPPON TELEGRAPH AND TELEPHONE CORPORATIONNTTNTT DATA General Shareholders

Number of 5G contracts(Unit: 10,000)

2,250

Omo riNTT DATA

Domestic businesses

55%
1,153

Cross-sales with life-style related services

45%

NTT DATA, INC (October 2022)

309
FY202016● Business integration scheme

Customer base expansion

FY2021

FY2022E

Domestic Group companies

Overseas Group companies

NTT Ltd.

ANNUAL REPORT 2022

17

Message from our CEO

Value Creation Story

NTT Group
Sustainability

Growth Strategy

Data Section

Medium-term Management Strategy

Transformation to a New Management Style
To transform to a new management style, NTT will

initiatives, we will introduce a cloud-based system to installadvance process reform, DX, system revision, and workplace

IT infrastructure that will enable any employee to work inenvironment cultivation initiatives in order to promote

any location at any time. At the same time, we will digitize

remote work and facilitate work-in-life (health management),

processes to facilitate automation and standardizationand thereby realize work processes that are more open,

while expanding the application of digital marketing sales

global, and innovative. In terms of process reform and DX

approaches.

Transformation to a New Style Premised on Remote Work

Transformation ofBusiness/DX

Promotion of Remote Work

Re-examination of Systems/
Environment Improvement

Promotion of “work-in-life” (health management)
Open, global and innovative business operations

Strengthening of New Businesses
Capital alliance formed with Genesis Healthcare Co.
In the healthcare and medical business domain, NTT
Group is working to achieve Smart Healthcare that leads
to a well-being society by promoting comprehensive DX,
from healthcare to medical care, through the use of datafor individual consumers, as well as by supporting theadvancement of medical care in a data-driven manner.
Genesis Healthcare is a pioneer in genetic testing andresearch in Japan. In addition to "GeneLife," a genetic testfor general consumers, the Company offers "GenesisPro,"a genetic analysis service commissioned by medical
institutions, and "GenesisGaia," a bioinformatics and data
science (genome AI) service for pharmaceutical companies●

 ife Sciences (LS) gene database enhanced with data from Genesis
L
Healthcare (GH)● ombining LS's data analysis and genetic testing technologies withC
GH's technologies improves analysis and testing quality

Key Initiatives and Results
Genetic testing, etc.

Implementing
zero-trust
system■ Development of an IT Environment that Enables Employees to Work From
Anywhere(Staff/Sales): Scheduled to complete introduction in FY2022(NTT Communications, NTT DATA, NTT: complete; NTT East/West, NTT DOCOMO:
scheduled to be completed in FY2022)

Promotion of female
managers■ % of new manager appointments: 29.1% (FY2021 target: 30%)
(Six companies: NTT Docomo, NTT Communications, NTT East, NTT West, NTT
Data, NTT Holdings)■ Increase the ratio of female directors, Audit & Supervisory Board Members, andexecutive officers to more than 30%

Promotion ofwork-in-life(health management)
through theworkplace-residence
proximity■ Remote work ratio: 74% (FY2021 average)■ Creating an environment that offers greater choice of work location● Remote work that does not require approval on a case-by-case basis, eliminationof restrictions on residential areas for employees who can work remotely, andsharing costs and other expenses associated with commuting to work fromremote locations (FY2022 onward)● E xpand the number of organizations that support remote work through DX(establish security requirements at major contact centers, begin introducing tools
to prevent peeping)● Satellite offices: 496 sites (March 31, 2022)■ Decentralizing of organization from metropolitan areas to regional areas (core cities)

Decentralization of
the organization

18

NIPPON TELEGRAPH AND TELEPHONE CORPORATION● Trial run for dispersing the organization across regions is scheduled to begin at
the holding company (starting in October 2022)● From the standpoint of resilience, we will aim for sustainable business operations by
opening offices in Takasaki City and Kyoto City and promoting staggered work hours● Introduce a working style based on telework in which employees engage in head
office operations while residing in a distant location● Introduce a “hometown double work” program to contribute to the revitalization of
local communities and areas associated with the Company while continuing current
assignments

and research institutions.
The two companies agreed to enter into a capital andbusiness partnership with the aim of accelerating theacquisition, analysis, utilization, and distribution of medical
and healthcare data, including genetic data, by leveraging
and complementing each other's broad knowledge baseand expertise. They also aim to contribute to the creationof a healthy society that respects humanity and recognizes
diversity rooted in genetics, as well as one where each
person can benefit from personalized, optimized precision
services.

Genetic data

Genetic data

Analysis/
inspection
technology

Analysis/
inspection
technology

Pharmaceuticalcompanies

Supportmedical/healthcare
advances

Genetic testing for consumers

Medicalinstitutions
Healthcare
Service provider

Genetic research/diagnosis

Individual
customers

R&D platform

NTT EDX, a company working to advance higher education, newly established
NTT West, Dai Nippon Printing, and NTT East have beenworking together to accumulate know-how in the digitizationof education using ICT, with the aim of enhancing cooperation
with publishers of textbooks and teaching materials andexpanding the effectiveness of their collaborative efforts.
For previous efforts, we provided individual solutions toinstitutions of higher education, but we deemed it necessary
to provide this service as a platform service so that we canprovide more advanced functions at a reasonable price,and to expand the service to institutions of higher education
nationwide as soon as possible. In addition, a number of
institutions of higher education, publishers of textbooks andteaching materials, and bookstores that have sold textbooks
for many years have requested that we commercialize thisservice and make students’ education more convenient andresolve issues related to textbooks and teaching materials.
We established our joint venture to address these requests.

Electronic
distributors

Electronic
distributors

NTT EDX
Publishers
Publishing agents

Bookstores, etc.
Businesses aimed at publishers

Institutions of higher
education

Businesses aimed at institutions ofhigher education

E-textbook/teaching material delivery service
E-textbook distribution/distribution support service

Support service for developing original teaching materials

Learning data utilization service

Business expansion
Creating online/remote environments
in institutions of higher education

Using data to achievelearner-oriented education

Achieving diverse learning(promoting learning after graduation)

ANNUAL REPORT 2022

19

Message from our CEO

Value Creation Story

NTT Group
Sustainability

Growth Strategy

Data Section

Message from our CFO

Achievement of the medium-term financial targets
and sustainable enhancement of corporate value
by resolving social issues
through business operation■■ Medium-term Financial Targets/Progress

Senior Executive Vice President
and Chief Financial Officer

Takashi Hiroi

Good progress is generally being seen for the financial
targets set forth in the NTT Group Medium-Term Management
Strategy.
EPS, the most important indicator, was achieved in FY2021
two years ahead of the original financial target (announced in
FY2018; same below) of approximately ¥320 in FY2023 (+50%
compared to FY2017). We will achieve the new EPS targetof ¥370 for FY2023 (a 75% increase over FY2017) primarily
through profit growth by steadily implementing our MediumTerm Management Strategy, in addition to share buybacks.
With regard to cost reductions, we also achieved our initialfinancial target of -¥800 billion or more by FY2023 in FY2021,
two years ahead of schedule. To achieve the new target of -¥1

trillion or more in FY2023, we will accelerate additional efforts
to promote DX.
ROIC improved by 0.3% year on year to 7.5% in FY2021
and is on track to reach the 8.0% target in FY2023. In addition,
Capex to Sales for the domestic network business was 13.1%
in FY2021, allowing us to achieve our target of 13.5% or lessin FY2021.
Finally, the overseas operating profit margin improved by
3.3% year on year to 6.3% in FY2021, primarily due to theimpact of structural reforms as well as the increase in NTT
DATA's revenue. We plan to attain 7.0% in FY2022, aiming
to achieving our target of 7.0% by FY2023 one year ahead ofschedule.

● EPS Growth and Share Price● ROIC and Operating Profit■ EPS (yen)
400

329

340

370

Share
price (yen)
4,000

ROIC
（%）

■Operating profit(billion yen)
2,000

10

1,641.1

1,693.8

7.4

7.4

248
200

■■ Contribution to Realizing a Sustainable Society and Profit Growth
The NTT Group aims to contribute to the realization of asustainable society by promoting its own transformation in
response to the direction of society and the economy, andsolving various social issues through its business operation.
Under the three frameworks of “transformation to a new
management style,” “enhancement of domestic and global
business,” and “enhancement of corporate value” in the
NTT Group Medium-Term Management Strategy which wasannounced to have been revised in October 2021, we areaccelerating specific initiatives to simultaneously contributeto the realization of a sustainable society and achieve profit
growth, as well as to achieve our medium-term financial targets.
In regard to our FY2021 consolidated financial results, ouroperating revenues and operating profit increased year on year,
mainly due to an increase in SI revenue from NTT DATA, which
took advantage of strong growth in demand for digitization.
Profit exceeded ¥1 trillion for the first time, mainly due toan increase in operating income and the impact of taking a

P44-

For more information on specific initiatives, see here

FY2021 Results

YoY

Earnings Forecast for FY2022

YoY¥12,600.0 billion+¥443.6 billion(+3.6%)

Operating revenues¥11,944.0 billion¥12,156.4 billion+¥212.5 billion(+1.8%)

Operating profit¥1,671.4 billion¥1,768.6 billion+¥97.2 billion(+5.8%)¥1,820.0 billion+¥51.4 billion(+2.9%)¥916.2 billion¥1,181.1 billion+¥264.9 billion(+28.9%)¥1,190.0 billion+¥8.9 billion(+0.8%)

Profit

2017

2018

0

minority interest in NTT DOCOMO, which was made a wholly
owned subsidiary. In addition, with regard to the three key
indicators set for contributing to the realization of a sustainable
society, our greenhouse gas emissions toward carbon neutrality
in FY2021 were 2.9 million tons (a 38% reduction comparedto FY2013), B2B2X revenue was 544.1 billion yen (the target
for FY2022 was 600 billion yen), and ratio of women newly
promoted to management positions was 29% (the target for
FY2022 was 30%). These results indicate that we are making
steady progress with our initiatives.
As we confront a number of risks, such as the increasingly
tense global situation and the impact of COVID-19, we intend
to make FY2022 the year for steadily developing measuresthrough expanded synergy within the new DOCOMO Group,
growing our overseas business, and further promotion of digitaltransformation (DX). In order to further promote sustainability,
we will also incorporate the above three indicators into theperformance indicators for officer compensation from FY2022.

● FY2021 Results and Earnings Forecast for FY2022
FY2020 Results

212

220

※2

231

2019

2020

2021

2022E

2,000

5

0

0

1,671.4
7.2

6.6

1,768.6

1,745.0

7.5

7.6

8.0
1,000

0

2017

2023E (Fiscal year)

1,562.2

2018

2019

2020

2021

2022E

2023E (Fiscal year)
Announced
2018

October 2021 revised target:¥320 → ¥370

*1 For EPS, a 2-for-1 stock split of common stock, effective January 1, 2020, is taken
into account.
*2 Excluding the impact of the arbitration award received from Tata Sons Limited.

● Capex to sales (Domestic network business)● Overseas operating profit margin

（%）

（%）

13.9

7.0

13.8

7.0

6.3

13.7
13.6
13.5 or less
3.1

3.2

2017

2018

2.4

3.0

13.1

2017

2018

2019

2020

2021
Targetachieved

2021 (Fiscal year)
Target

2019

2020

2021

2022E

2023E (Fiscal year)

Scheduled to beachieved a year aheadof schedule

Announced
2018*Excluding NTT Communications data centers, etc.

It is essential to grow and strengthen the new DOCOMOGroup in order to achieve our EPS target of ¥370, and thedrivers of this growth are the Enterprise Business and Smart
Life Business. Under the new structure, NTT DOCOMO
and NTT Communications have integrated their enterprisebusinesses, which has finally made it possible to create asales structure that can be compatible with the characteristics

of all types of customers, from large corporations to smalland medium-sized enterprises. Using this sales structure
as a base, we believe that the key to future growth will lie inthe ways we can provide new services that combine mobile,
fixed-line, cloud, and other services. In addition to revenue
growth, we expect the enterprise businesses to become adriver of profit growth through efforts for fundamental cost

*The net income displayed is net income attributable to NTT less net income attributable to non-controlling interests.

20

NIPPON TELEGRAPH AND TELEPHONE CORPORATIONANNUAL REPORT 2022

21

Message from our CEO

Value Creation Story

NTT Group
Sustainability

Growth Strategy

Data Section

Message from our CFO

efficiencies, such as integrating and standardizing back officeand other business processes. In the Smart Life Business,
NTT DOCOMO will further expand its financial business anddevelop marketing solutions by leveraging its customer baseof approximately 90 million customers and data, one of its
strengths, which will contribute significantly to profit growth.
In May 2022, to reinforce the competitiveness of our global
operations, we announced the integration of NTT Data's
global operations and NTT Ltd. The two companies will
cooperate to provide new value by combining NTT Data's
consulting and app development capabilities with NTT

Ltd.'s expertise in high-value-added services, such as data
centers, networks, and managed services. In addition, bybringing the NTT Group's global human resources together,
we will achieve prompt decision-making that is compatible
with business and customer characteristics in each overseas
region and enhance our global governance. As of FY2023,
the final fiscal year of our medium-term financial target, we
expect higher integration costs due to the effects of synergy,
but we will increase synergy effects to approximately ¥30
billion in FY2025 afterwards.

● Average Number of Shares During Period(Excluding Treasury Stock)● TSR(Millions of shares)

(%)

3,587

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021 (Fiscal year)

283

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021 (Fiscal year)*Dividends per share and Average Number of Shares Issued have been adjusted to reflect the two-for-one stock split carried out on July 1, 2015, and two-for-one stock split carried out inJanuary 1, 2020.

■■ Capital Allocation

Growth area investment and asset efficiency
We recognize that active investment in growth areas isan essential component of sustainable development of the
NTT Group. Between FY2019 and FY2021, we invested
approximately ¥380 billion in 5G, the foundation of ourtelecommunications services, with the goal of achieving
a population coverage rate of 90% or higher by the endof FY2023. We are also investing in new areas such as
healthcare, medical, and XR to create new services thattake advantage of the high-speed, high-capacity, andlow latency features of 5G. In our data center business
which is continuing to see extremely high demand, we areaccelerating construction of data centers in various regions of
the world. We are quickly responding to the expanding data
center market by actively expanding our own investments,
as well as utilizing third-party capital from Century Tokyo
Corporation, Macquarie Asset Management, and others.
At the same time, investments in existing businesses
will be streamlined, and overall capital expenditures will becarefully controlled so that they do not exceed current levels
by a significant amount.
We are also working to secure cash and improve capitalefficiency while reducing assets through disposal of inefficient
assets and idle facilities, as well as curbing investments
through facility sharing. NTT DOCOMO announced that it willsell up to 6,002 of its telecommunication towers to JTOWER
Corporation in March 2022. Such efforts will enable NTT
DOCOMO to reduce tower maintenance and operation costs
and promote the development of 5G networks.

455

5,102

2011

NTT Group’s businesses provide it with a steady cash
flow. With this cash flow, in addition to investing in growth
opportunities, we are working to enhance shareholder returns
through continuous dividend increases and flexible sharebuybacks, while also ensuring a sound financial position by
reducing interest-bearing debt.

NTT
TOPXDVNET

Enhancing Shareholder Returns
The enhancement of shareholder returns is among the
NTT Group’s most important management issues. Our basic
policy is to pursue ongoing increases in dividend payments,and flexible share buybacks are conducted to improve capitalefficiency.
The planned dividend for the fiscal year ending March 31,
2023 is ¥120 per share, a ¥5 increase year-over-year which
will make for the 12th consecutive year of dividend increases.
The planned payout ratio is 35.3%.
With regard to share buybacks, we resolved to buy backup to ¥400 billion’s worth of shares in FY2022, and boughtback ¥360.3 billion's worth of shares on September 15.
In addition, in November 2021, we canceled approximately
280 million shares of our treasury stock acquired thus far. The
cumulative number of shares canceled to date has led to an
approximately 30% decrease in the total number of issued
shares, and has significantly contributed to improving thebalance of supply and demand for our shares.
The Company’s total shareholder return, which accounts
for dividends and stock price fluctuations, was 455% overthe past 10 years, outperforming the TOPXDVNET index,
which is calculated post-tax and including dividends.

● Dividends(Yen) ■ Dividends per share

Payout ratio (%)

120*U.S. GAAP were applied for fiscal years up to and including the fiscal year ended March 31, 2018, while International Financial Reporting Standards (IFRS) have been applied for fiscal years
from and including the fiscal year ended March 31, 2019.

Interest-bearing liabilities
The NTT Group's policy is to ensure sound finances basedon the entire Group’s stable profitability and ability to generatecash flows. Interest-bearing liabilities were ¥7.3643 trillion at
the end of FY2021, down ¥260.1 billion year on year, and thedebt-to-equity ratio was 88.9%, indicating a sound state. For
our rating level as well, we have obtained a stable single-A
rating due to our sound financial state, and believe we areable to raise funds while keeping borrowing costs low. As
for fundraising, NTT Group Green Bonds have been issued
to achieve our new environment and energy vision, "NTTGreen Innovation toward 2040,” which was announced in
September 2021. We are committed to and will continue toboldly advance efforts to make a sustainable society a reality,
including in terms of finances.
For more information on Green Bonds, see here

● Interest-bearing liabilities, D/E ratio■ Interest-bearing liabilities● D/E ratio¥7.6 trillion

101%¥4.7 trillion¥7.4 trillion

89%¥7.3 trillion

85%

52%

2019

2020

2021

2022E (Fiscal year)

P51■■ Enhancing Dialogue with Investors, Analysts, and Shareholders
Due to the spread of COVID-19, we have also taken theopportunity to foster dialogue by holding online meetings
and using other forms of indirect communication. We willcontinue to have a cycle in which feedback obtained throughcommunication with everyone is taken seriously, incorporated
into NTT Group's management strategies in a timely
manner, and channeled into enhancing corporate value. In
addition, the NTT Group's business is undergoing significant
changes, including the reorganization of the DOCOMOGroup and global business, so we will continue our efforts

to communicate information to everyone. Moreover, we willconsider enhancing disclosure of non-financial information,such as investments in intellectual property acquisition andhuman capital, which have been attracting increasing interest
from investors recently, as important information that will
enhance the NTT Group's corporate value.
We look forward to continuing meaningful dialogue withyou as we work toward achieving sustainable growth of the
NTT Group.

35.3
35

2011

22

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021 2022 (Plan)(Fiscal year)

ANNUAL REPORT 2022

23

Message from our CEO

Value Creation Story

Growth Strategy

NTT Group
Sustainability

Data Section

Message from our CTO■■ The Value that IOWN Provides and Collaborating with Our Partners

Societal Issue Resolution by
NTT Group's Technology

Additional utilization of optical technology is important for
implementing the IT infrastructure with both high performanceand low power consumption that IOWN is aiming for.
We will introduce optical technology, which can handle
signals while using less power than electricity, not only fortransmission, but also for processing. This will enable us toachieve advanced fusion of light and electricity (photoelectric
merging technology), in which optical technology isapplied in extremely close proximity to the parts whereoperations are performed. Incorporating this technology into
semiconductors will fundamentally solve the aforementioned
issues. Photoelectric merging technology is an area inwhich NTT excels, given the optical-related technologies it
has amassed. At present, Japanese companies possess
significant technology and manufacturing capabilities inthe semiconductor value chain. However, we have not
yet achieved the kind of presence a global stakeholder
should have. Our goal is for Japan to spearhead IOWN
in collaboration with our global partners and become an
indispensable global player in the semiconductor value chain.
Established in the United States in 2020, the IOWN Global
Forum has already attracted more than 100 members from
Europe, the United States, and Asia. This forum is uniquein that it is not limited to the IT and telecommunicationsindustries, but also encompasses the automotive, plant,
and financial industries, as well as academic institutions. We
believe that we can work hand in hand with the members of
the forum to create a value chain that utilizes IOWN in every
industry.

■■ Investing in Intellectual Property Acquisition, Human Capital, and More

Senior Executive Vice President andChief Technology Officer

Katsuhiko Kawazoe

N T T h a s t r a di t i o n a l l y a c c u m u l a t e d re se a rc h a n d

NTT Research, Inc. in 2019, is the No. 1 expert in the world

development of technologies for the next generation. R&D

of cryptography, and he was honored at Crypto 2022, one

expenditures for FY2021 were ¥248.0 billion, but this figureof the leading international conferences on cryptographic

is limited to expenses spent from the basic and fundamental

research, in August. He received the sole Best Paper Award

research phase through R&D for practical applications. For

at this year's conference. More than 20% of the papers

example, we invest in the development phases of the series

recognized at the conference originated from the NTT Group.

of processes for creating new services and providing them to

The NTT Group is the leader in the world of encryption

our customers, and we naturally promote ICT utilization andtechnology. With the emergence of quantum computers,

DX initiatives in addition to R&D. If we take these into accountthe possibility of conventional encryption technology being

as well, I am proud to say that NTT Group's investment inbreached has increased dramatically, but NTT Group's

intellectual property is on par with that of the world's largest

encryption technology can offer security that is free fromcompanies.

breaches. Encryption technology is also closely intertwined

I believe that investors are interested in whether theseinvestments in intellectual property acquisition will lead to■■ Using Technology to Address Societal Issues

24

Providing customers with reliable telecommunications ser-aimed to commercialize the concept around 2030, a number

vices is the most important role for NTT Group to fulfill. Forof social issues have emerged, including the aforementioned

NTT, it is necessary not only to prevent serious failures, but

rapid increase of network load, the global situation regarding

also to strive for additional technological innovation as we

carbon neutrality, the expansion of traffic due to a spike in re-look toward the future.

mote usage spurred by COVID-19, and soaring oil prices. For

As IoT becomes more widely used and the services thatthese reasons, NTT Group will move its 2030 target forward

are essential to our daily lives diversify, the amount of traffic

and aim for practical implementations at an earlier date. Aftercontinues to grow, and we are approaching various limits in

we have put some technologies to practical use by the end

terms of data volume, latency, and power consumption.

of FY2022, we would like to show everyone the results of our

The innovative technology that will break through these

IOWN-related efforts at the 2025 World Exposition in Osaka,

limits and usher in fundamental change is the IOWN concept

Kansai in particular, as well as implement these innovations at

in which NTT Group is engaged. While NTT Group initially

NTT Group facilities by 2026.

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

with security, and we believe that we can make strong
contributions in this domain as well.

further enhancement of NTT Group's corporate value. We

Going forward, we will need excellent researchers not only

intend to further strengthen information disclosures as wein encryption technology, but also in the energy and othercommunicate our R&D activities and results so that investors

fields. To this end, we will aim to make NTT Group morecan gain a better understanding of our activities.

attractive, not only in terms of compensation, but also in

Of course, investment in human capital is essential as well
if we wish to continue producing research results. We needterms of prestige, the research environment, and many otheraspects so that people wish to work here.

the best talent in the area, and we would love to have themjoin NTT Group. For example, Dr. Brent Waters, who joined

ANNUAL REPORT 2022

25

Message from our CEO

Value Creation Story

NTT Group
Sustainability

Growth Strategy

Data Section

Research & Development
R&D that helps to enhance corporate value
We will continue to advanceresearch and development
so that the fruits produced
by IOWN can be quickly
delivered far and wide to
everyone.

NTT R&D: History and Initiatives
At NTT, approximately 2,300 researchers have conducted a broad, diverse range of research, from basic research to R&D that
underpins business development, giving rise to world-leading technologies and services and contributing to the development ofsociety, industry, and academia. Beginning with the creation of networks to support telephone services that connect people, wehave brought about an evolution in networks to create high-speed broadband optical and wireless networks that connect people
to information, and this culminated in the information-based society of today.
Creation of new networks is also supported by the fruits of research and the development of basic and core technologies suchas optoelectronics, microelectronics, and basic materials science, which transcend the limits of conventional signal speeds andtransmission capacity.

● Vision

1950

1960

1970

●

1990

INS

●

2010

●

Microelectronics

●

2020
●

Multimedia● Information circulation● New generation
vision for optics

IOWN
P28

● Basic/core technologies●1T digital coherent

Ge junction transistors●

Higher large-scale integrated
circuit (LSI) integration, speed,and functionality

Optical fiber, semiconductor
lasers, optical switches, opticalamplifiers, optical connectors,
etc.

●

DSP-LSI
LSI memory with a storage capacity of over 64 kilobits● Optical transistors that use● Low-power MTCMOS LSI
the least amount of energy● Codec LSI for HDTVs (on a single chip)in the world● 400G digital coherent DSP-LSI

1.3μm-band laser●

KTN crystalline material● Manufacturing technology for optical fiber base material (VAD method) ● PLC-LN optical modulator for digital coherent system●

VAD method opticalfiber base material
manufacturing
equipment● Polarizing TeO2 crystals

Basic materials science

Quartz planar lightwave circuit (PLC) basic technology● 1.55μm-band fiber optic amplifier● SC-type optical connector       ● Squeezed light generation in semiconductor lasers● Oxide superconducting single-crystal thin film

Ultra-fine processing ofsemiconductors, exploring new
semiconductor materials, generation
technology, etc.

Atsuko Oka

2000

VI&P

VisionOptoelectronics

Executive Vice President,
Head of Research and Development Planning

1980



● Discovery of spin selection rules for

artificial atoms on semiconductors● High-sensitivity detection technology
for micromachine strain● Creation of new insulator,

Sr3OsO6, with highest
ferromagnetic transition
temperature● Network technology●

Digital transmission● ATM system
PCM-24 (short distance)● 1
 00 Gbps● DC-100M (medium distance)● Wavelength multiplexing 400 gigabit ultra-high-speed highwireless transmission● DAT-IC
capacity optical transmission(OAM multiplexing)● Digital data transmission method● 100G-PTS   ●

ICT is making remarkable progress, developing a wide
range of services and leading various transformations.
ICT is also changing styles of living and working, creatinga new common sense. Individuals can now easily sendout information, and diverse values are spreading. At theheart of these changes is DATA (information). The worldis transforming into a data centric society where data
create values and all activities are decided in a datadriven approach.
Due to this, the volume of data continues to expand
rapidly. To process data, large amounts of computing
resources are being deployed. As a result, power
consumption is dramatically increasing. It is expected thatthe amount of data will continue to grow in the future.
Efforts to reduce power consumption are being made invarious areas, but we are approaching to the limits.
To address this issue, NTT announced the IOWN
initiative in 2019. This is an initiative for creating a nextgeneration communication infrastructure characterized byultra-high capacity, ultra-low latency, and ultra-low power
consumption, utilizing innovative optical technologies.
Optical technologies have been widely used in the fieldof communications, so-called optical fiber. Compared toelectricity, optical technologies consume very little power

regardless of the communication distance and speed(frequency). The IOWN initiative brings about changes incomputing as well as communication by utilizing opticaltechnologies.
IOWN will create a wide variety of services and newvalue not only in the telecommunications field, but also
in transportation, medicine, finance, education, andmany other fields. Collaboration with partners in eachfield is imperative for the realization of IOWN. It is alsoessential to make IOWN products available to the public
as quickly as possible. To achieve this, NTT will soon
provide the IOWN testing environment, jointly develop
IOWN-compatible services with partners and aim tocommercially deploy these services. At the 2025 World
Exposition in Osaka, Kansai, we will showcase a uniqueexperience, the beginning of the new era powered by
IOWN, to the people around the world. I hope you will
look forward to the progress of IOWN initiatives whichpaves the way to the next generation.

Fiber optic cable

GI fiber optic cable● SM fiber cable●

Digital switching

D60
● D70

●

ISM
●

equipment●

Communications satellite

CS<Sakura>● CS-2

Bend-resistant fiber optic cord
● Fine-diameter, low-friction indoor fiber optic cable● M ultifilament high-density optical cables● Transparent fiber optic cables

Upgraded D60● Upgraded D70● New nodes

CS-3

●

N-STAR a● N-STAR b●●

Operations●●

Gas pressure remote monitoring system
● TCS
● EOS
● FITAS・AURORA

N-STAR c● N-STAR d●

B-PON NE-OSS       ● ESNOSS

The results we have achieved in research and development in various fields, such as the communications technology and basic
technology that we have cultivated, have developed into photoelectric merging technology, among others, which has culminated in
IOWN.

Space integrated computing network
To establish sustainable economic and social activities, it will
become ever more important to effectively maximize the useof stratospheric and near-Earth space as an ICT infrastructure
platform in a diverse array of fields such as energy, environmentand climate change, disaster prevention, marine infrastructure,and security.
Based on the "Space Integrated Computing Network
Concept," NTT will take on the challenge of building new
infrastructure, beginning with an optical wireless communication
network to be constructed in space and a mobile network to
be constructed in the stratosphere.

BeforeIntermittent and limited
transmission capacity
for short periodsof timeGeostationary
orbit satellite

High-capacity, semi-real-time datatransmission

After
High-capacity,semi-real-timedata transmission

Observation satellite(Low Earth orbit)

Data/image acquisition
Existing groundstation service:
Approx. several
hundred Mbps

Optical data relay service:
5 Gbps or more

Copyright 2022 NIPPON TELEGRAPH AND TELEPHONE CORPORATION & SKY PERFECT JSAT CORPORATION26NIPPON TELEGRAPH AND TELEPHONE CORPORATIONANNUAL REPORT 2022

27

Growth Strategy

NTT Group
Sustainability

Message from our CEO

Value Creation Story

Q1

Why is IOWN necessary? What benefits does it offer?

Data Section

Research & Development ― R&D that helps to enhance corporate value

The Bibleof IOWN

An in-depth analysis of IOWN!
I will answer the questions
we have received from our shareholders
and investors!
Head of NTT IOWN Integrated
Innovation Center

Hidehiro Tsukano

Our next-generation communication platform concept being developed with the goal of practical application in 2030

IOWN (Innovative Optical and Wireless Network)
Framework involving devices, networks and information

technology; a Digital Twin Computing (DTC), which

processing infrastructure built on optical and otherenables advanced, real-time interaction between objects

innovative technologies, to deliver high-speed andand people in cyberspace; and a Cognitive Foundation

high-capacity communications, and vast computing(CF), which deploys various ICT resources efficiently,

resources. IOWN consists of three main components:

including the aforementioned.

an All-Photonics Network (APN), which applies optical
Cognitive Foundation

The development of digital technology has brought about
a number of technological innovations, such as ultra-highdefinition images, but we believe that we must change ourmindset to achieve further evolution. With IOWN, we believe
it is important to try to grasp phenomena and information
as they are through a more diverse set of values andperceptions, as opposed to filtering them through humanonly values. Dr. Jakob von Uexküll, a German biologist,
proposed the concept of the "self-centered world" ("Umwelt"
in German), which states that all living things have a speciesspecific perceptual system, and that each has a world
based on its own species-specific perception and acts as its
own subject. The IOWN concept is based on the idea thatdifferent subjects see things in different ways, and that the
information being conveyed and the processing method willvary according to the values of each subject. Thus, it aims toconvey and process every bit of information in accordancewith the values of each subject.
While dramatically low latency, enormous bandwidth,and very small latency fluctuations are required to make

Digital twin computing
API

Ctrl

Cloud

Ctrl

Edge

API

Network services
API

Ctrl

Business A

Business C

Business B

Ctrl

Ctrl

DeviceAgent

API

Mult iorchest rat or

Achieve rapid ICT resource deployment andcalibration optimization

Limitations of Increasing Resolution

Combining ICT resources for end-to-end collaborationAPI

All-photonics network

Ctrl

The Energy Consumption Problem
Public network

PrivateOptical processor(Photon fusion type)Low power consumption
Power efficiency:

Transmission capacity:

End-to-end delay:

125 times higher*

1/200*

Transmission
media

Optical fiber
cablesTransmission
systems

Light (wavelength)throughout
Photonics-electrics
convergence devices●

Wavelength (optical signal)

Independent Light

Light

Light/Light●

Transmission per wavelength
No queueing●

No data compression

●

Light
A
B
C
D

Wavelengths

Wavelengths

A

High-capacity video(uncompressed)
No latency

Optical fiber

1000

Wavelengths

B“Transmission”
via opticaltechnology“Processing”
via electronic
technology

SpeechVarious information communication
services are provided using 1/100th ofpower consumption

In an instant (0.3 sec), 10,000 two-hourmovies can be downloaded (with 5G, one movie
can be downloaded in three seconds)

Video is transmitted in real-time without thelatency experienced with digital TV or
satellite broadcast* Target power efficiency for the photonics part

*Target transmission capacity per fiber optic
cable* Latency target value in video traffic not requiring
compression in the same prefecture

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

these new ideas a reality, the current internet is reaching its
limits in terms of both transmission and processing power.
Furthermore, power consumption continues to increase intandem with the enormous amount of information being
processed, and the increase in CO₂ emissions has become aserious global issue.
NTT Group's vision of a high-capacity, low-latency,
low-power-consumption infrastructure that can handle
information as-is requires an end-to-end, full-stack redesignand optimization that breaks away from individually designed
layers, from networking to computing.
The key to this is "photoelectric merging" technology.
Conventionally, optical signals
and electronic signals have
had their roles completely
The Latency Problem
separated into "transmission"and "processing,” respectively,
and the task of converting thetwo types of signals is inefficientand consumes a lot of power.
If we tightly integrate optics
and electronics, we can apply
optical technology to the entire
system, down to the processor
The CO2 Emissions Problem
level, and we can rethink thearchitecture (structure) from afull stack perspective.

Low latency

100 times higher*

Information
processing
platform

28

High quality and high capacity

A flower as seen by a human (left)/A flower as seen by a bee (right)

Close coupling of light and electrons (photoelectric merge-type processing)

ANNUAL REPORT 2022

29

Message from our CEO

Value Creation Story

NTT Group
Sustainability

Growth Strategy

Data Section

Research & Development ― R&D that helps to enhance corporate value
The Bible of IOWN
Q2What are the areas in which NTT is particularly strong or enjoys an advantage?

population changes depending on whether it is day or night,

balancing, which dynamically constructs optical paths, canso traffic volumes will inevitably vary. For this reason, load

be used to reduce power consumption.

● Photonic disaggregated computing

How will IOWN technology be implemented? What sorts of business models can you envision?

: Optical processing

Dynamic combination of CPU, GPU, storage, etc., depending on processing

Additional servers (by the box)

ServerInterfaceCPU +memoryGPU

Storage

Internal path

Optical IF

MemoryCPU

Optical IF

MemoryCPU

Optical IF

MemoryStorage

Optical IF

MemoryGPU

Low power consumption and high performance● All-photonics network (APN) characteristics

Existing network
Packet NW

Dark fiber

APN

Q3

: Electrical treatment[Conventional]

Optical datatransmission route

NTT in 2019, the first in the world to combine ultra-highspeeds with ultra-low power consumption. A transistor is aconversion device that can output an electrical signal in its
proper form by providing it with a control signal. Converting
signals is called switching. Conventional light-switching
devices are huge and cost several hundred billion yen, but
now that optical transistors have been created, they havebeen reduced to the size of a piece of chewing gum.
In addition, the research and development of opticaltransistors involves not only signal processing technology,
but also the creation of optical modulators. This requires
know-how regarding stabilization at high accuracy so as not
to disturb the spectrum of a certain wavelength, which is ananalog technology that is part of a cottage industry. The factthat we are now able to connect long distances with light islargely due to utilization of our technology.
To cope with the increase in data volume and power
consumption, a structural evolution from electronic processing
to optical transmission is essential, and the breakthrough inthe technology supporting this structural evolution hinges on
the higher precision, smaller size, and lower cost of opticaltransistors. Therein lies NTT’s advantage.

LAN (mainly electricity)

I think the optics-related knowledge that NTT has
accumulated over the years is a big advantage. Whateveryone is probably most familiar with is internet connection
services using fiber optic cables, but NTT has long been
researching the possibility of not only using fiber optic
cables as a transmission medium, but using optics asa basis for transmission equipment and information
processing. The results of these research projects are being
put on a development track that brings them closer tocommercialization, with the goal being practical applications.
In terms of recent achievements, the core of “photoelectric
merging technology" is the ability to perform optical-electricaland electrical-optical conversion at ultra-high speeds andwith ultra-low power consumption. In LSI, the input/output (I/O) consumes the most electricity, and the impact of replacing
this with light is quite significant. Moreover, with electricity,
power consumption increases rapidly as the distance overwhich signals are transmitted increases, but with light,
power consumption does not increase very quickly. Thus,
by utilizing light through photoelectric merging technology, it
is possible to achieve not only ultra-high speeds, an original
characteristic of light, but also ultra-low power consumption.
A typical example is the optical transistor developed by

Communication
node
Communication
node

Communication Optical
node
TRX

Communication
node

Packet network

Communication
node

Dark fiber

Communi-

Optical cation
TRX node

APN■

Increased delay & power consumption due toincrease in relay nodes (number of stages)■

High availability and dynamic load balancing are
not possible to achieve, difficult to improve
resource usage efficiency

Connect using wavelength paths between
communication nodes■ Dynamic control of wavelength paths for highavailability and dynamic load balancing■ Low-power data transfer achieved■

Photonic disaggregated computing

IOWN will be available in a variety of domains, but here are
two easy-to-understand scenarios.

One potential business model in this case would involve
selling optical transistors. In addition to the optical transistors

First, let’s consider the interior of a data center,themselves, products that incorporate photoelectric

disaggregated computing. A personal computer has a similarmerging technology and optical modulators into computer

APNs can also be used as lines linking data centers.

mobile fronthaul and networks between data centers; adata center business that provides distributed data centersstructure, but a server has an interface, a CPU, memory,

motherboards and semiconductor packages are also a

These days, it is difficult to set up large data centers thatand storage. The current trend is for the CPU to issue

possibility. Essentially, we would be selling key components.

require enormous amounts of power. In the future, small- andconnected by APNs; and a product business selling optical

instructions, temporarily store information in memory, andNext, we will expand the scope somewhat to include all-medium-sized data centers will be dispersed over a broadtransceivers to be installed in data centers edges.

then store the information resulting from its calculations inphotonics networks, which utilize light between networks,storage. The CPUs used to be run by electrical signals, but

and areas outside the data center. Optical transmissionarea, and it will be necessary to connect these distributedby directly connecting accelerators such as GPUs and DPUs

technology used in the core of relay systems that connect

via light and linking them with different wavelengths, it is no

cities and in metro networks that extend throughout cities

longer necessary for each server to have its own CPUs andcan be expanded to the end user's neighborhood, whichdata centers. Large-scale data centers require

memory. CPUs are located in one chassis and memory inwould allow for flexible configuration of ultra-high-capacity

enormous amounts of electricity, but if spread

another, and connecting them via light makes it possible tooptical paths, such as a “one wavelength per person” model,

out, they can also make use of renewable energy

create a situation in which it appears as if a very large amountfor each application. It would be like having a dedicated, on-of CPUs and memory are installed on a single server. This

demand, one-to-one optical line with no video compression

generated close to their locations, thus enabling

allows for a scalable computing infrastructure with ultra-low

and almost no delay in transmission and reception.

power consumption, high-speed processing, and the ability
to add as many parts as required.

APNs could be used for the mobile fronthaul portion thatlinks base stations and mobile antennas. In urban areas, thedata centers using light so that they can operate
at a level comparable to that of large-scale

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

Decentralized data centers
DatastationConvenience
store-type

Department
store-type

local production for local consumption of energy.
Potential business models for cases inwhich APNs are provided include: acting as an
infrastructure service provider, such as providing

30

Data Centers Thus Far

Extensive power consumption at a single large
consolidated site
Large-scale power generation and electricity
supply to a broad area are prerequisites

High-speed, low-latency coupling of small- to
medium-sized sites (data stations) via APNs

Support local production andconsumption of energy

ANNUAL REPORT 202231

Growth Strategy

NTT Group
Sustainability

Message from our CEO

Value Creation Story

Data Section

Q5

What are your schedule and milestones going forward?

Research & Development ― R&D that helps to enhance corporate value
The Bible of IOWN
Q4What are some use cases you currently have in mind?

While (1) providing interconnect solutions for data center
operators and (2) providing mobile networks for mobile
operators have already been introduced, (3) providing
networks for events (live broadcasts, cloud-based e-sports
broadcasts) is another potential use case.
We have already conducted demonstration tests for cloudbased e-sports event broadcasts. Competitive games via
the cloud are fought in real time, and it will be essential toexchange large amounts of 8k video data with a delay ofless than 20 ms. A delay of a few milliseconds compared
to a delay 10 times that amount will result in a different
attack timing. It is impossible to fight within a game in anenvironment where the timing of attacks is off due to delay.
The delay in the demonstration test was 20 ms, but we aremaking efforts to lower this to a few milliseconds, and we are
currently developing a system that can control the delay in
1-μs increments to enable synchronization.

● Virtual reproduction of real life (concerts, eSports)

Reproduction of events offering two-way exchange of high-definition video and audio within a virtual space●

Low-latency data exchange allows for those at remote locations to have the same experience as those at the venue

Concerts

eSports

Players

Same venue

Imagegeneration Encoding

Encoding-decoding
latencyServerGame
operationGame
operation

Venue LAN

Decoding

Highly compressed
image data (H.264, etc.)

Other
game
latency

Transmission
delay

Audience

Players
Decoding

Audiencemanner, combining some of the IOWN technologies weintroductions to users and areas that have a need for advanced

have mentioned thus far with existing technologies as well.

services, such as smart cities and critical infrastructure. Around

In doing so, we hope to present a new kind of value through2026, we will expand the scope of application, though it will

partnerships with various companies and organizations,still be limited to specific uses and areas. After 2030, we will

which will lead to these technologies subsequently being

expand the service nationwide and even globally by connecting

implemented throughout society.

Game
operation

In response to the interest from such organizations, weestablished IOWN Global Forum, Inc., a new industry forum
based in the United States, together with Intel Corporationand Sony Corporation in January 2020. This forum has
grown to boast membership by 101 organizations as ofAugust 2022.
IOWN Global Forum’s objective is to accelerate theadoption of a new communication infrastructure thatwill bring together an all-photonic network infrastructure
including silicon photonics, edge computing, and wireless
distributed computing to meet our future data and computing
requirements through the development of new technologies,
frameworks, specifications, and reference designs.

2024 onward

2026 onward

Demonstration andpartial introduction for users requesting
advanced services

Begin adoption with specificapplications and areas

Proof of capabilities through demonstration

ServerOther
gamelatencyGame
operation

IOWN
Uncompressed/
lightly compressed image
data (HDMI, etc.)(APN)

2030 onward
Expand in phases(connections between areas, etc.)

Expand areas
nationwide
and worldwide

Smart city

Expo Osaka, Kansai, Japan Creating followers around the world

Data center connection
network

Demonstration with partners
Advanced smart city

Decoding

Uncompressed/
lightly compressed image
data (HDMI, etc.)

IOWN GLOBAL FORUM Linking Companies and Academic Institutions
Across the GlobeNIPPON TELEGRAPH AND TELEPHONE CORPORATION

2024, we will proceed with field demonstrations and limited

Decoding

Image
generation Encoding

Remote location

Concertperformers

32

of our IOWN-based worldview in an easy-to-understandTransmission
delay

Uncompressed/
lightly compressedVideo/audio

the Osaka Kansai Expo 2025. We hope to convey a partand further refine the IOWN technology. Then, starting around

Highly compressed
image data (H.264, etc.)

Total latency(APN)

aforementioned use cases, receive feedback from customers,● IOWN Expansion Roadmap

Total latency

IOWN

Also, an important event coming up in the near future isareas where it has already been implemented.

●

Concert performers

We hope to conduct early demonstrations of the

Source: Expo 2025

Identifying issues with commercialization

Field demonstrations and technology provisionin collaboration with external partners

Smart government

Networks for streaming videos
such as eSports

Expand areas of application tovarious Smart X

Provide services nationwide andexpand globally as well

IOWN is a very broad concept, and many of its aspects
may be difficult to understand. IOWN is an innovative concept
based on light that communicates and processes things asis and helps to create a new smart society with low energy
consumption and sustainability that is not possible with ourcurrent internet. Of course, there are still a great many issues
to be resolved, but we are determined to work hard andshow everyone the results of our efforts.

ANNUAL REPORT 2022

33

Message from our CEO

Value Creation Story

NTT Group
Sustainability

Growth Strategy

Data Section

Research & Development ― R&D that helps to enhance corporate value
Providing security and safety for NTT Group's businesses and supporting
their growthIntellectual property strategy

We believe that for NTT Group to both grow and contribute to society, it is essential to protect the results of ourintellectual property investments properly and utilize them while respecting the intellectual property of others.

NTT Intellectual Property Center Activity Policy
N T T G ro u p , w h i c h e n g a g e s i n re s e a rc h a n ddevelopment, from basic to applied, in a wide range oftechnological fields, has accumulated intellectual property
investments (R&D investments) over the years as atelecommunications operator that are unparalleled aroundthe globe.
The NTT Intellectual Property Center has establishedan Activity Policy to provide security and safety to NTT
Group's businesses, which is on the verge of expanding
globally under the slogan of “Your Value Partner,” andto support its growth. The Center formulates intellectual

property strategies, provides appropriate protection
for the results obtained through intellectual property
investments, and promotes the use of intellectual property
while respecting that of others.
IOWN, which is generating significant expectations andinterest both at home and abroad, is not something thatNTT Group can achieve on its own. Through an array ofactivities in line with our Activity Policy, we will support
collaboration with our partners to address various social
issues from a global perspective.

Intellectual Property Portfolio
The results of R&D, which plays a major role in the creationof intellectual property for NTT Group, has translated into
ownership of approximately 18,000 patents around theworld.
The NTT Intellectual Property Center is not only responding
to NTT Group's global business by strengthening overseas
patent applications, but also working to obtain rights toa wide range of energy reduction technologies, such as
photonics-electronics convergence technologies that will
advance carbon neutrality, which IOWN aims to achieve by
FY2040.
● Number of patents held by NTT in energy reduction-related technologies
Other (ICT services, etc.)● Number of NTT patents held(Patents)

12%■Japan ■Overseas

20,000

Advanced materials
3,321

3,644

4,083

4,621

5,136

(5.5% of total)

13,87914,337

13,187

13,265

12,966

Network-related
74%
2017

Formulating and Advancing Our Intellectual Property Strategy① Strengthening our competitivenesswith strategic rights creation (build
an intellectual property portfolio)② Risk management that protects ourintellectual property rights
and respects the rights of others③ Develop business and partners
through broad deployment
of intellectual property rights

1 Transformation to a New
Management Style
2 Enhance Domestic andGlobal Business
3 Enhancement of Corporate
Value

society. When deploying the results of R&D in theiroperations, each company in NTT Group respects theintellectual property rights of other companies.
With our intellectual property strategy as the basis of these
activities, we take a three-pronged approach to formulating
and advancing our business strategies and R&D strategy,
based on our medium-term business strategy and vision:(1) develop strategic intellectual property rights, (2) manage
risks, and (3) deploy the intellectual property we own.

• Build an intellectual property portfolio through the strategic development of intellectual property rights fromfruits of R&D activities, based on technologies and anticipated business models

2018

2019

IOWN will not be achieved via a limited number ofCenter is working to enhance its Standard Essential Patents

companies whose core business is information and(SEP) in coordination with these activities. SEPs are patents

communications technology. In fact, companies andthat must be used in the manufacture and sale of products

organizations in various fields active around the world haveand provision of services that conform to certain standards.

gathered at the IOWN Global Forum to discuss use cases

The NTT Intellectual Property Center provides a secureand technical specifications for making IOWN a reality. In

platform for handling standardized technology rights bythese discussions, it is important to clarify open (cooperative)

participating in and establishing patent pools, whereby

and closed (competitive) areas while working toward thecompanies and organizations in collective possession ofsame goal. In open areas, for example, it is essential to define

SEPs manage patent royalties and other conditions, thereby

technology standards to achieve stable communication

maintaining relationships of trust with other companies andbetween devices from different vendors (standardization).

contributing to the safe and secure business operations of• Deploy intellectual property in business to help our customers and society, and to secure competitive
advantages in business• Proactively engage in activities to standardize intellectual property● Open & Closed Strategy SummaryIntellectual property strategy①Strategic rights creation(build an intellectual property portfolio)

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

2021 (Fiscal year)

Open & Closed Strategy (Initiatives related to Standard Essential Patents)②Risk management③Deploying intellectual property

NTT
Group’s Vision

While NTT laboratories play a central role in proposing

NTT Group.

NTT technologies as standards, the NTT Intellectual Property

NTT
Closed (competitive)
domainOpen (collaborative)
domainIOWN
GlobalForum,
etc.

Specification
development/R&D

Specification
development/R&D

Standardization(de facto)

Acquisition ofright/
Concealment

Acquisition ofright

R&D strategy
Secured as a differentiating factor for NTT

34

2020

• When Group companies deploy the results of R&D in their operations, we examine the intellectual property
rights of others inside and outside Japan up until the stage where R&D results are applied in order to avoid
infringing on the rights of third parties• Reduce business risk and comply with laws and regulations related to intellectual property rights, by sharing
among Group companies information about intellectual property trends and their impact, such as revisions tosystems around the world, cases of conflict and court decisions

Business strategy

Medium-term
management strategy

Approx.

1,000 cases

10,0000

The NTT Intellectual Property Center is NTT Group’s coreorganization for managing intellectual property. The Center
aims to secure competitive advantages by proactively andappropriately protecting and managing intellectual property
rights (i.e., patents), or internal expertise, from the results of
R&D, the source of all business activities.
NTT aims to share the benefits of its R&D by broadly
licensing out its technologies that help advance industry
and technologies can be standardized and used throughout

14%

SEPs
Obtained

ITU

Standardization(de jure)

3GPP

Standardization(de jure)

SEPs ObtainedIEEEStandardization(de jure)

SEPs Obtained

Patent pool

Patent pool

Patent pool・・・
SEPs and such held are deployed using fair andreasonable terms (utilizing patent pools, etc.)

ANNUAL REPORT 2022

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Message from our CEO

Value Creation Story

Growth Strategy

Operations in Review

NTT Group
Sustainability

Data Section

TOPICS

Integrated ICT Business

Launched SmartPRO®, a Data Collection Service that Improves the Accuracy of Clinical
Trial Evaluations

SmartPRO® (hereinafter "the Service"), which increases
the accuracy of clinical trial evaluations conducted bypharmaceutical companies and research institutions, waslaunched on May 20, 2022.
This service is an ePRO *2 that digitizes subjective
evaluations (hereinafter “PRO”*1) obtained directly fromsubjects and patients, and allows subjects and patients torelay their condition, such as “pain” or “feeling ill,” fromtheir own smartphones. Pharmaceutical companies andresearch institutions can view and download patient andsubject PROs on the Service. In addition, a logbook
function that allows subjects and patients to record all
health-related data after the clinical trial as well will be

provided as part of the Service by the end of FY2022. We
will also consider new healthcare services that contributeto improving subjects’ and patients’ quality of life by safely
and securely utilizing the data collected by the Service.
Through the Service, we will strive to achieve Smart
Healthcare that uses digital technology to contribute to
the development of healthcare.
*1 A PRO (Patient Reported Outcome) is a subjective evaluation of progress andsymptoms obtained directly from subjects or patients during clinical trials.
*2 An ePRO (electric patient-reported-outcome) are PROs that are filled out andcollected electronically.el

Launched XR World®, a Multi-device Metaverse

In the Integrated ICT Business, in addition to promoting sales of 5G services and “docomo Hikari,” etc., forcorporate business, we promoted initiatives for “docomo Business,” a corporate business brand unifying NTT
DOCOMO, NTT Communications, and NTT Comware, to support all corporate customers with one-stop
service. In the smart life area, we promoted collaborations with various businesses and worked to provide
new added value.

XR World®, a multi-device metaverse where visitors cancasually enjoy communication in a virtual space full of
excitement and surprises, became available on March 31,
2022. XR World is a service that allows customers toenjoy a wide range of entertainment content*1, includingmusic, animation, and dance, as well as sports, education,and sightseeing, while communicating with one anotherthrough avatars in a virtual space. This service can beenjoyed for free*2 with the exception of some content, andcan be used within a web browser without the need to

install an application *3. This means users can easily
experience the metaverse from a smartphone, tablet or
PC without a dedicated HMD (head-mounted display).
*1 The service began offering different genres of music on March 31, 2022, and it
will gradually expand to include other genres.
*2 Basic services are free of charge, but some content is available for a fee.
*3 Implemented using HIKKY Corporation's VR content development engine, “Vket
Cloud.”

Launch of Stand-alone 5G Service
Results for the Fiscal Year Ended March 31, 2022

¥5,870.2 billion

Operating
Revenues(Billion yen)

5,880.9

2020

CapitalInvestment(Billion yen)

734.3

2020

36

5,870.2

2021¥1,072.5 billion

Operating
Profit5,984.02022 (Outlook)(Billion yen)

1,060.0

1,072.5

1,084.0

2020

2021

2022 (Outlook)(FY)¥698.6 billion

3G

2021

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

4G

2022 (Outlook)

●

(FY)

2020

11,53064,21061,396

15,331

11,8262021*2 The maximum speed is the maximum value based on technical standards anddoes not indicate actual communication speed. The service is provided on a
best-effort basis, and actual communication speed will vary depending on thecommunication environment and network congestion. For more information,please check the DOCOMO website https://www.docomo.ne.jp/area/5g/ (inJapanese only).
*3 A feature unique to 5G SA that enables virtual network partitioning. This enables
the provision of an optimal network that meets various needs in a flexible
manner.

■ Transform our business portfolio to become an integrated ICT company and achieve sustainable growth

5G

713.0
3,091

*1 A service that combines 5G-Core (5GC), which is a 5G-dedicated core network
facility, and 5G base stations.

Key Initiatives

Mobile Communications Services Subscriptions(3G, 4G, 5G)(Thousands)

698.6

(FY)

DOCOMO has launched standalone "5G SA" *1 as an
optional service for customers who subscribe to DOCOMO's
5G-compatible rate plans beginning August 2022.
DOCOMO will support the use of 5G SA smartphones, andin addition to the Sub-6 band (3.7 GHz/4.5 GHz band), will
begin providing support for the 28 GHz millimeter wave
frequency band. The communication speed *2 reaches amaximum of 4.9 Gbps for receiving and 1.1 Gbps for sending,with both maximum values exceeding 1 Gbps.
We will continue to develop new services and technologies
through 5G SA, such as making the service even faster andproviding services and corporate solutions that make use of
network slicing technology*3, a 5G SA feature, as part of ourgoal to make our customers' lives more convenient andenriched.

22,48056,5438,645
2022 (Outlook)(FY)

Enterprise Business

Smart Life Business
Consumer Communications
Business

●

●
●
●
●

Expand growth areas such as mobile and cloud solutions
Leverage DOCOMO Communications’ strengths to provide value to customers as a one-stop
service, from large corporations to small- and medium-sized enterprises
Further growth in finance/payment and marketing solutions
Expand new areas such as electricity, medical, XR, etc.
Shift to a growth trajectory with new services and expansion of customer base through 5G
Maintain and increase profits through structural reform of sales channels and networks

ANNUAL REPORT 2022

37

Message from our CEO

Value Creation Story

Growth Strategy

NTT Group
Sustainability

Data Section

Operations in Review

Regional Communications Business
TOPICS
Establishment of New Company, NTT DX Partner
In January 2022, NTT East established a new company,

platforms, in a collaborative, joint development style. ThisNTT DX Partner, which will provide support for businesswill contribute to customers' success and address local

reform centered on DX consulting, create and provide aand social issues that arise as well.

cloud-based digital platform, and analyze customers’various operations and client data. NTT DX Partners will
also utilize NTT East Group's DX promotion know-how
and assets to provide one-stop support, ranging from DX
consulting to implementation and promotion of digital

QUINTBRIDGE Opens

In the Regional Communications Business Segment, we deployed the Hikari Collaboration Model, which
provides wholesale fiber-optic access services to various service providers, while also strengthening oursolutions business with the aim of revitalizing local communities and regional economies.

Results for the Fiscal Year Ended March 31, 2022

¥3,207.6 billion

Operating
Revenues(Billion yen)¥440.0 billion

Operating
Profit3,207.4

3,207.6

3,220.0

2020

2021

2022 (Outlook)

In March 2022, NTT West opened QUINTBRIDGE, a
co-creation space originating in Kyobashi, Osaka, topromote open innovation and help revitalize the overallmarket.
QUINTBRIDGE will support business co-creation andhuman resource development and aims to become aplace where companies, startups, local governments,
universities, and others can “learn, connect, gather, andcreate with one another.” In business co-creation, we donot stop at formulating ideas, but work with partners to
help these business ideas take shape and implement
them in local communities, as well as provide various
programs (interactive pitch programs, acceleration

programs, etc.) to support this effort.

(Billion yen)

QUINTBRIDGE

420.2

440.0

442.0

2020

2021

2022 (Outlook)

Key Initiatives
(FY)

(FY)

■ NTT East - Regional Collaboration Initiatives Capital
Investment¥501.1billion

Number of FLET’S Hikari Contracts(including Hikari Collaboration)(Billion yen)

NTT East(Thousands)

527.4

2020

501.1

2021

(FY)

2020

NIPPON TELEGRAPH AND TELEPHONE CORPORATION● Develop businesses to meet non-contact and labor-saving needs● Develop consulting business utilizing accumulated data and expertise● Generate new value through digitization

9,837

10,11010,360Develop new businesses
to solve regional social issues

12,727

13,156

13,556■ NTT West -Deploying Problem-solving Solutions -2021

2022 (Outlook)(FY)*FLET’S Hikari (including Hikari Collaboration) includes FLET’S Hikari Cross, FLET’S Hikari Next, FLET’S Hikari Light, FLET’S Hikari Lightplus and FLET’S Hikari WiFi Access provided by
NTT East, FLET’S Hikari Cross, FLET’S Hikari Next, FLET'S Hikari Mytown Next, FLET’S Hikari Light and FLET’S Hikari WiFi Access provided by NTT West, and the “Hikari Collaboration
Model” wholesale provision of services provided by NTT East and NTT West to service providers.

38● Establish private networks according to usage● Provide services to meet multi-access needs

NTT West

495.0

2022 (Outlook)

Building a Private Network
for a Smarter Community

Becoming a company that
continues growth as a social
ICT pioneer● As a pioneer in using ICT to solve various issues brought about by changes in thesocial environment, contribute to societal development and sustainable growth(SDGs), and continue to transform into a company beloved and trusted by thecommunity

ANNUAL REPORT 2022

39

Message from our CEO

Value Creation Story

Growth Strategy

NTT Group
Sustainability

Data Section

Operations in Review

Global Solutions Business

TOPICS
Reorganization for Strengthening Global Business
NTT Corporation, the global holding company of the NTT

By bringing NTT Group's global human resourcesGroup, and its wholly owned subsidiary NTT Limited, which

together, we will achieve prompt decision-making that is

operates the global telecommunications business, willcompatible with business and customer characteristics intransfer from October 2022 to the NTT DATA umbrella toe a c h o v e r s e a s re g i o n a n d e n h a n c e o u r g l o b a l

integrate the global businesses operated under NTT, Inc. andgovernance.

NTT Ltd. with the global businesses of the NTT DATA Group.

Initiatives to Expand the Data Center BusinessIn the Global Solutions business, we worked to enhance our ability to provide services in growth areas,
including the data center business and managed services, as well as to expand and provide various IT
services in a reliable manner, such as digitization proposals and system integration in response to market
changes.

We aim to further expand our data center businessdata centers in Europe and North America, enabling rapid

through collaboration with partners and enhancing

business expansion in these two key regions of the data

investment efficiency. As part of this, NTT Global Data

center business.

Center Corporation and Tokyo Century Corporation have

We will continue to provide high-quality services tostarted cooperation in the operation of data center businessdomestic and overseas companies by maximizing investment

in India. In addition, NTT and Macquarie Asset Management

efficiency and making further growth investments in the data

have agreed to enter into a strategic partnership for NTT’scenter business in the globally expanding DX market.

Order Received for an Anti-Money Laundering System for Japan Post Bank
Development of an anti-money laundering system forJapan Post Bank began in July 2021, and service is slated
to launch in 2024. The system will have four functions:monitoring, risk rating, screening, and customer
management. It will combine strict transaction monitoringwith the flexibility to adapt to regulatory changes to

Results for the Fiscal Year Ended March 31, 2022

¥3,615.2 billion

Operating
Revenues(Billion yen)

3,367.1(Billion yen)

3,870.0

3,615.2¥210.5 billion

Operating
Profitprevent money laundering and financing of terrorism. This
will secure the performance necessary for Japan Post
Bank, which has the largest number of accounts andcustomers in Japan, to continue providing services for alarge number of transactions.

244.0
210.5
147.3

Key Initiatives
2020

2021

2022 (Outlook)

2021

2020

(FY)

2022 (Outlook)(FY)■ NTT DATA New Medium-Term Plan Overview

CapitalInvestment¥347.2 billion(Billion yen)

327.9

347.2

Based on the outlook of the business environment andAs a Trusted Global Innovator, NTT DATA Group aims to

the challenges it faces, NTT DATA has formulated a Medium-

create value for the future and achieve a sustainable society

Term Management Plan for fiscal years 2022 through 2025.

along with its customers by forging connections between
various people and technology.

387.0

Overall Strategy

2020

40

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

2021

2022 (Outlook)

(FY)

●

Create new services by fusing IT and connectivity●

Strengthen consulting capabilities rooted in foresight●

Evolving toward an asset-based business model● nhance system development technologies and ability to utilize advancedE
technologies●

Maximize human resource and organizational capabilities

ANNUAL REPORT 2022

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Message from our CEO

Value Creation Story

Growth Strategy

NTT Group
Sustainability

Data Section

Operations in Review

Other (Real Estate, Energy and Others)
TOPICS
Agreement on a Development Plan for the Hoenzaka-kita Specified Block (former
location of NTT West's head office)NTT West, NTT Urban Solutions, and NTT Urban
Development have agreed on the basic development
details for the Hoenzaka Kita Specified Block, an Osaka
Urban Planning Specified Block that includes the former
location of the NTT West’s head office (3-15 Babamachi,
Chuo-ku, Osaka City), based on an urban planning
decision by Osaka City. This urban zone is locatedbetween Osaka Castle Park and Remains of Naniwa-noMiya Palace Park, and it offers a panoramic view of Osaka
Castle and downtown Osaka. Taking advantage of therelocation of NTT West's head office, this uncommon
location will be used to develop a pedestrian spacefeaturing lush greenery and a high-class hotel with highadded value. (Scheduled to open in Spring 2025)

Off-site PPA to Bring Renewable Energy
to DOCOMO Buildings that House Network Equipment

In the other (Real Estate, Energy and Others) category, with NTT Urban Solutions taking center stage, NTT
Group worked to promote urban development that leverages its comprehensive capabilities and to provide
smart energy services through NTT Anode Energy, among other initiatives.

Results for the Fiscal Year Ended March 31, 2022

¥1,396.0 billion

Operating
Revenues(Billion yen)

1,335.4(Billion yen)

1,510.0

1,396.0¥72.5 billion

Operating
Profit72.5

By utilizing an off-site corporate PPA* (hereinafter "offsite PPA") mechanism,.starting April 2022, NTT DOCOMO
and NTT Anode Energy (hereinafter "NTT AE") introduced
power derived from renewable energy, procured from NTT
AE's newly constructed solar power plant, into the NTT
DOCOMO Okayama Building, which houses network
facilities. This will be the first time for DOCOMO to
implement an off-site PPA and is part of the company's
efforts to reduce its greenhouse gas emissions to virtuallyzero by 2030. The new solar power plant, which will
supply electrical power exclusively to DOCOMO, will
ensure that the company has stable, long-term access topower even if Japan's energy market ever becomes
unstable. Greenhouse gas emissions (including non-fossil
certificates) at the NTT DOCOMO Okayama Building,where the new system will be installed,are expected to be
reduced by approximately 10,000 tons per year.

DOCOMO and NTT AE will continue to make full use of
NTT Group's assets to reduce greenhouse gas emissions
and contribute to the carbon neutrality of society as awhole.
*Corporate PPA (Power Purchase
Agreement) is a scheme in whichelectricity users conclude contracts
with power generation business
operators to procure electricity
derived from renewable energy
sources over the long term. Off-site
PPA, an abbreviation of Off-site
Corporate PPA, involves the use of
power generation facilities inlocations removed from users (theNTT DOCOMO Okayama Buildingin this case) to supply them withelectricity through the power grid.

NTT Anode Energy Power Plant (Tottori
City)

74.0

Key Initiatives

56.4■ Urban Development Vision

2020

2021

2022 (Outlook)

2021

2020

(FY)

2022 (Outlook)(FY)

NTT Urban Solutions supports every city's goal of creating unique, vibrant urban environments based on the four values below. This will help
to achieve the SDGs and bring bout Society 5.0, which entails helping to balance economic development in local communities with solutions
to social issues and creating a human-centered society where people can enjoy comfortable, stimulating, and high-quality lifestyles.
Community
Innovation

CapitalInvestment¥140.7billion

Diversity
Resilience(Billion yen)

138.7

2020

42

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

140.7

2021

Provide attractive spaces and offerings to create unique and vibrant communities
Use cutting-edge technology to contribute to addressing issues in urban spaces, creating new
industries, and improving corporate productivity.
Develop an urban environment that accommodates the diverse lifestyles of people who gather,work, and live there
Create cities where people can live with peace of mind with a reduced impact on the environmentand disaster resilience■ Smart Energy Business

155.0

NTT Anode Energy will promote the smart energy business.

2022 (Outlook)(FY)

Green Power Generation Business

Strengthen capability to develop renewable energy power plants

Regional Grid Business

Expand the use of NTT’s assets to enhance local production and consumption of renewableenergy and resilience

Consumer Energy Business

Promote carbon neutrality among customers by offering decarbonization solutions

Construction/MaintenanceOperations Business

Improve quality and efficiency by strengthening power engineering functions (construction,
maintenance, and monitoring)
ANNUAL REPORT 2022

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Message from our CEO

Value Creation Story

Growth Strategy

NTT Group
Sustainability

Data Section

NTT Group Sustainability

Our Vision for a Sustainable Society

Process for Selecting Material Issues―NTT Group Global Sustainability Charter―

Material issues (materiality) are selected using the following

NTT’s Vision
for aSustainable
Society(BasicPhilosophy)"Self as We"

Complementary Policies, etc.

Coexistence with
NatureAddressing Environmental
Challenges

Environment andEnergy Vision

Improving
Prosperity for
All People andCulturesAddressing Social Issues

A New
Decentralized
Network Society

Maximizing
Well-being
for All

Addressing Human Rights
and Diversity & Inclusion
Challenges

Human Rights Policy

ColumnSTEP3 Confirming validity & approval● Ensuring the positive coexistingof nature and humanity● Improving prosperity for all people and cultures

44

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

NTT also incorporates the opinions of third parties from a
global perspective, which are then deliberated by the
Sustainability Committee and approved by the Board of
Directors.
*These are reviewed regularly (once/year) and revised when necessary.

Organization for Implementation
In November 2021, NTT Group moved to a new organizational
structure by establishing the “Sustainability Committee” underthe Board of Directors, chaired by the Chief Executive Officer.
The committee reviews and discusses strategies concerning
sustainability, the status of implementation of activities, andinformation disclosure, and implements relevant initiatives.
The Sustainability Committee includes the Corporate Ethics
Committee, Human Rights Committee, and Green Innovation
Committee to handle the individual topics relevant to each

sub-committee. Efforts toward sustainability throughout
the entire Group are also implemented by holding Group
Sustainability Committee meetings (with senior executive
vice presidents of major group companies). The meetings
are for sharing common challenges and successful examples
from each Group company, and for monitoring progress on
sustainability implementation with respect to PDCA cycles
and further promoting a sense of unity throughout the group.

●New Organizational Structure (from November 10, 2021)

Board of Directors

corruption, and they must make continuing efforts to enforce
these principles. Going forward, we will comply with the 10
principles put forth by the UNGC and advance measures
to further inculcate sustainability so that we can make asustainable society a reality.
*The 10 principles of the UN Global Compact, divided into
the four areas of human rights, labor, environment, and anticorruption, are all recognized by the international community
as universal values that have been adopted and agreed
upon worldwide.

● Maximizing Well-being for All

Growth as a company

Joining the UN Global Compact
Our company and NTT DATA have signed a statementof endorsement of the United Nations Global Compact(hereinafter UNGC) proposed by the United Nations, and theyregistered as participating companies in June 2022 and July
2022, respectively. UNGC is the world's largest sustainability
initiative, in which the United Nations and the private sector(companies and organizations) join forces to forge a healthy
global society. Companies and organizations that sign
the UNGC must endorse the 10 principles* related to theperservation of human rights, the elimination of unfair labor
practices, environmental responsibility, and the prevention ofUsing evaluation organizations like third party institutions,
ISO26000 and GRI Standards, global trends, internal
workshops, and materiality at other companies as a guide,
we identify material issues through comprehensive reviewof new problems related to sustainability, in order todiscuss and select important issues that NTT should
address on a global scale.

NTT assesses the priorities to be addressed based on
their impact on two aspects, “Growth as a company” and“Solving social issues.” To achieve management thatsimultaneously helps resolve social issues and achievebusiness growth, NTT assesses priorities by incorporating
the opinions of outside experts.

NTT Group Global Sustainability Charter (Revised November 2021)
NTT Group Global Sustainability Charter

STEP1 Identifying material issues

STEP2 Setting priority
Solving social issues

In today's society, there exist conflicting phenomena that cannot be understood in a black-and-white manner,
whether it be global versus local, environmental versus economic, or human rights issues. It is also true that asingle phenomenon can have a different meaning and significance based on the perceiver.
NTT believes that realizing a paraconsistent society, in which these opposing concepts and phenomenon are
included and diverse values are accepted, will contribute to the realization of sustainable society.
The concept of “Self as We” will form the basis of NTT Group’s efforts to contribute to the realization of such asustainable society.
Through this concept, people are encouraged to find themselves within the “We” and to realize that we aresupported by the connections between diverse people, things, and technologies. We look to implement various
initiatives founded on the principles of altruistic co-existence through which people will seek to increase theirhappiness along with the happiness of others.
The “Self as We” concept casts light on the need to contribute to the realization of a sustainable society
through initiatives for ensuring the positive coexisting of nature and humanity, improving prosperity for all people
and cultures, and maximizing well-being for all.

steps based on the GRI materiality standards and processes.

Sustainability Committee
Committee chairperson:
President and Chief Executive Officer,
Representative Member of the Board

Members
Representative Member of the Board, Senior Vice
President of Corporate Strategy Planning Department,
Senior Vice President of Technology Planning
Department, Senior Vice President of Research andDevelopment Planning, Senior Vice President of Financeand Accounting Department, Senior Vice President ofGeneral Affairs Department, Senior Vice President of
Global Business Office, Senior Vice President of Strategic
Business Development

Group Sustainability Committee
Members: Senior executive vice presidents
of major group companies

Corporate Ethics Committee
Human Rights Education Committee
Green Innovation Committee

https://www.unglobalcompact.org/what-is-gc/mission/principles

ANNUAL REPORT 2022

45

Message from our CEO

Value Creation Story

NTT Group
Sustainability

Growth Strategy

Data Section

NTT Group Sustainability

Sustainability Initiatives
In FY2021, the Sustainability Committee met once and the NTT Group Sustainability Committee met three times to discuss(1) establishing various KPIs for sustainability, (2) promoting our environment and energy vision, (3) promoting respect for humanrights, and (4) measures for encouraging acceptance of sustainability, the details of which were reported at the Board of Directors
meeting.​

NTT Group Global Sustainability Charter
The NTT Group Global Sustainability Charter defines nine challenges and 30 activities based on three themes.
Three Themes

Nine Challenges

Moving toward adecarbonized society

Coexistence with
NatureImproving Prosperity
for All People andCulturesAddressing Environmental
Challenges

Addressing
social issues

Medium-termtargets

Fiscal year
achieved

80% reduction
100% reduction

2030
2040

2030: 100% EV adoption in Japan

50%
100%

2025
2030

2025: 2x power efficiency (compared to FY2017)
2030: 10x power efficiency (compared to FY2013)

2x

2025

99% or above

2030

30 Activities

1) Promoting energy conservation
2) Reducing power consumption by introducing IOWN technologies
3) Developing and expanding the use of renewable energy
4) Providing new services that contribute to carbon neutrality
5) Creation of innovative environment and energy technology

Indicator
2040: Carbon neutrality for the entire NTT Group*1(2030: Greenhouse gas emissions reduced by 80%*1: Greenhouse gas emissions, carbon neutrality: GHG protocol: Scope 1 and 2 emissions

A commitment todecarbonized society6) Increasing the reuse and recycling of communications equipment, mobile
terminals, and other technologies
7) Reduction in plastics use and promotion of recycling
8) Proper treatment, storage, and management of hazardous waste
9) Appropriate and efficient management of water resources

2030: Recycling rate of waste*2 99% or above

A future where people andnature are in harmony

10) Thoroughly implementing environmental assessment
11) Contributing to natural ecosystem conservation

Number of projects/amount expended/
number of participants in projects on biodiversity conservation

Sharing ethical standards
with stakeholders

12) Establishing and thoroughly complying with ethical standards13) Appropriately managing conduct risk
14) Thoroughly reinforcing corporate governance and compliance15) Sharing high ethical standards with business partners

Prepare for a new futurewith the power of digitaltechnologies

Participation rate for corporate ethics policy training

Maximizing Well-being
for All

Addressing Human
Rights,DiversityandInclusion

Diversity & Inclusion

Creating newwork style models

46

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

100%

Every year

0

Every year¥600 billion

2023

More than in theprevious fiscal year—

Cases of legal action for anti-competitive behavior, bribery 0*Conduct risk indicators will be discussed in the future

B2B2X earnings

17) Protection and respect for intellectual property

Number of patent applications18) Contribution to the revitalization of local communities and economies

Development rate of 5G infrastructure maintenance

97%

2023

Number of major accidents 00Every year

99.99%

99.99% or above

Every year20) Strengthening information security and personal information protection

Suspension of telecommunications services due to cyberattacks 00Every year21) Establishing a decentralized structure based on remote work

Major personal data leaks 00Every year

100%

Every year

Number of confirmed cases of human rights violations

0

Every year

Ratio of direct dialogue with important suppliers 100%

100%

Every year

Ratio of women newly promoted to management positions

30%

Every year

Ratio of female managers

15%

2025

25-30%

2025

Ratio of outside personnel

30%

2023

Remote work ratio

70%

2022

Number of accidents causing injury or death during construction work 00Every year

Employee engagement (percentage of positive responses)

65%

Every year

Paper consumption reduction8

0

2025

Stable service provision rate

Human rights training and attendance 100%
Respect for human rights

Publish— results every year16) Promoting the B2B2X model

19) Ensuring the stability and reliability of communication services
Moving toward a safe,
secure, and resilient society*2: Includes thermal (incineration)22) Compliance with the NTT Group Global Human Rights Policy23) Encouraging society as a whole to respect human rights

24) Utilizating diverse human resources and promoting their advancement
25) Promoting diverse work styles
26) Fostering an inclusive culture27) Promoting remote work and other workplace models28) Achieving zero fatal accidents as well as maintaining and promoting
employee health29) Supporting autonomous capacity development
30) Promoting paperless operations

SDGs

Ratio of female directors (directors + audit and supervisory board members + senior vice presidents)

ANNUAL REPORT 2022

47

Message from our CEO

Value Creation Story

NTT Group
Sustainability

Growth Strategy

Data Section

NTT Group Sustainability

Reducing Environmental Impact―Achieving Carbon Neutrality―

NTT Group aims to simultaneously achieve zero environmental impact and economic growth by reducing
the environmental impact of its business activities and coming up with breakthrough innovations. We have
implemented a number of policies in accordance with the “NTT Green Innovation toward 2040” that NTT
Group announced in September 2021, with the aim of achieving zero environmental impact.

Specific Initiatives for Achieving Carbon Neutrality
In addition to the Green of ICT, which will curb the environmental impact of NTT Group by introducing IOWN technologies and increasing
the use of renewable energy, we will also work on Green by ICT, which will contribute to reducing the environmental impact of society as awhole.
Reduction of Environmental Impact
through Business Activities



Creation of Breakthrough Innovation

Reducing society’s environmental impact
Green byICT

New Environment and Energy Vision

NTT Green Innovation toward 2040

Reducing
society’s
environmental
impact2040

Carbon Neutrality
Green of
ICT

2030

80%

Greenhouse gas
emissions
Mobile (NTT DOCOMO)
Data centers

Reducing NTT’s
Own
Environmental
ImpactReduction(compared to FY2013)

Illustration of Transition Trends in NTT Group’s
Energy Consumption (Domestic + Overseas)*2
1・Increased use of renewable energy: Reduce greenhouse gas emissions by 45% ■・Lower energy consumption with IOWN technologies: Reduce greenhouse gas emissions by

Energy Consumption Outcome: will be approximately doubled by FY2040
1
・Approximately half of energy consumption will be reduced by introducing IOWN  ■*
2・Renewable energies will be introduced for the other approximate half ■( 860)
Outcome

▲55%

IOWN

(Reduction in
EnergyConsumption)

▲45%

2

400
▲45%

▲
Greenhouse
Gas Emissions

95

2020
Introduction of internalcarbon pricing system

1

2030
Mobile, Data Centersto be
Carbon Neutral

2040[ Fiscal year ]NTT Group to be
Carbon Neutral*1 GHG protocol: for Scope 1 and 2*2 Estimated Introduction of Renewable Energy (including actual renewable energy through Non-Fossil FuelCertificates) FY2020: 1.0 billion kWh; FY2030 to FY2040: around 7.0 billion kWh
The introduction of renewable energy will have the optimal types of energy determined on the basis of eachcountry’s energy composition, etc.
Approximately half of the domestic renewable energy usage is anticipated to be from energy sources
owned by NTT (FY2030).
*3 Estimated Reduction of Energy Consumption through the Introduction of IOWN (Comparison to Outcome) →FY2030: (2.0) billion kWh ((15)%); FY2040: (7.0) billion kWh ((45)%)
Percentage of Introduction of IOWN (Photonics-electronics Convergence Technologies, etc.) out of Total
Energy Volume → FY2030: 15%; FY2040: 45％

48

8.3 billion
kWhFrom Fossil Fuels
Electricity Derived[Reduction ofEnergyConsumption]

IOWN

1

Renewable
Energy2

Offsets2022
2013

Renewable
Energies(Introducing
renewableenergies, etc.)

Approx. 2x (compared to FY2013)

EnergySavings

Energy Consumption

465

Outcome▲EnergySavings

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

2013

2020

▶︎ Use of 4D digital platformTM for future predictions/
optimal use of urban assets*1*2▶︎ Optimal operation of fusion reactors (ITER/QST)
Lightning
charging▶︎▶︎ Applied genome-editing technology for “Green”(Collaboration)*1 Energy, transportation, logistics, etc.
*2 ITER: International Thermonuclear Experimental Reactor
QST: National Institutes for Quantum Science and Technology

Achievement of Ultra-Low Power Consumption▶︎ Reduction of energy consumption through the introductionof IOWN▶︎ Expansion of the development and usage of renewableenergy▶︎ Introduction of an internal carbon pricing system▶︎ IOWN All-Photonics Network

Creation of Decentralized Technology▶︎ Photonic disaggregated computing▶︎ Space integrated computing network▶︎ Issuance of green bonds

Integrating Power-related Operations to Accelerate Expansion of Smart Energy Business

Illustration of NTT Group Greenhouse Gas Emission *1
Reductions (Domestic + Overseas)(10,000 tons)

Introduction of IOWN and Expansion of
Renewable Energy

Creation of innovative environment and energy
technology

Carbon Neutrality* Scope of reduction targets
GHG protocol: Scope 1 (own direct emissions of GHG),
and Scope 2 (indirect emissions from using electricity, heat and steam supplied by other companies)
Mobile: 15 companies in NTT DOCOMO Group (as of September 28, 2021)

2
45%*3 ■

▶︎ Further acceleration of DX and promotion of Remote World▶︎ Promotion of regional urban development and theintroduction of new social infrastructure development▶︎ Promotion of greenhouse gas reduction across the entire
supply chain▶︎ Provision of new services that contribute to carbon
neutrality▶︎ Contribute to local production and consumption of energy,
through smart grids based on battery farms▶︎ Expansion of green electricity retail

2030
Mobile, Data Centers to be
Carbon Neutral

2040[Fiscal year]
NTT Group to be Carbon Neutral* Estimated Introduction of Renewable Energy (including actual renewable energy through Non-Fossil
Fuel Certificates) FY2020: 1.0 billion kWh; FY2030 to FY2040: around 7.0 billion kWh
The introduction of renewable energy will have the optimal types of energy determined on the basisof each country’s energy composition, etc.
Approximately half of the domestic renewable energy usage is anticipated to be from energy
sources owned by NTT (FY2030).

In July 2022, NTT FACILITIES' power engineering andother power-related operations, primarily design andmaintenance of solar power plants and power supply facilities
for telecommunications, were transferred and integrated into
NTT ANODE ENERGY. Through this integration of powerrelated operations, NTT Anode Energy will promote fourbusinesses: the green power generation business, regional
grid business, consumer energy business, and construction
and maintenance operations business. By linking these fourbusinesses into a single integrated value chain, the company
will develop a smart energy business.

● Overview of NTT Anode Energy's Post-integration Smart Energy Business● Green Power Generation Business:		Development of renewable energy power plants● Regional Grid Business:	Promote expansion of the use of NTT Group’s assets
to enhance local production and consumption ofrenewable energy and resilience● Consumer Energy Business:	Promote carbon neutrality among customers byoffering decarbonization solutions● Construction/Maintenance Operations Business:	Aim to improve quality and efficiency by enhancing
power engineering functions (construction,
maintenance, monitoring)Consumer Energy Business

Achieve carbon neutrality for society as a whole

Provide new services
through NTT Groupto promote carbon neutrality
among local governments,
companies, and other entities

Promote NTT’s style
for achieving carbon neutrality

NTT Anode Energy Group’s
Smart Energy BusinessGreen Power Generation
Business

Regional Grid Business

Construction/MaintenanceOperations Business

Collaborate with partner companies
based on technologies and solutions possessed by NTT
Group companies

Introduction of NTT Group Internal Carbon Pricing System
To achieve carbon neutrality, a resolution was passed at
the Executive Committee meeting in May 2022 to gradually
implement an "Internal Carbon Pricing System" within Group
companies. This system encourages reducing our impact on theenvironment by virtually converting CO₂ emissions into costs.

● Overview of Internal Carbon Pricing System to be Implemented by NTT GroupInternal
carbon price¥6,500/t-CO₂

Scope ofapplication/
MethodWhen it comes to decarbonization-related projectdecisions and procurement (product selection,etc.), decisions are made while taking CO₂
emission costs into consideration.

ANNUAL REPORT 2022

49

Message from our CEO

Value Creation Story

NTT Group
Sustainability

Growth Strategy

Data Section

NTT Group Sustainability

ColumnProviding a Renewable Energy Menu
in Data Centers(Started April 1, 2022)

NTT Communications is the first largescale commercial data center in Japan toutilize renewable energy supplied by NTT
Anode Energy to offer*1 a renewable energy
menu that enables customers (subscribers
who use cages or rooms) to select theelectricity used by their ICT equipment *2.
In addition, information on the power plant
and the amount of electricity used will be
provided on an individual basis as a typeof "environmental value" utilizing non-fossil
certificates*3.
Renewable Energy Menu for Customers

NTT Anode Energy GroupNTT Communications

LNG natural gas, thermal
power, etc.
Renewable Energies(Green electricity)

Data center services

Customers

NTT Group has formulated the NTT Group Green
Electricity

Space/power/security/connectivity/remote hands, etc.

FIT, non-FIT, solar, wind, hydro,
geothermal, and biomass

Environmental
value

Environmental
value

Value without CO2
emissions(utilizing Non-Fossil FuelCertificates)

Environmental value

Providing services tosupport customers'
ESG management

Matching the environmental
value to the electricity
is considered equivalent
to using renewable energy(including actual
renewable energy).

Target Data Centers (as of April 2022)
Yokohama Data Center No. 1, Saitama Data Center No. 1, Tokyo
Data Center No. 5, Tokyo Data Center No. 8, Tokyo Data CenterNo. 11*1: Results of a survey of publicly available information about providing a menu thatenables customers to select the type of renewable energy, and the provision of"environmental value" using non-fossil certificates according to the type of renewableenergy, at large commercial data centers in Japan that receive extra-high voltage
while providing renewable energy (survey conducted by NTT Communications/NTT
Anode Energy, March 2022).
*2: Provision of the service may entail equipment modification costs, such as power
supply installation.
*3: Certificates issued by separating the value from electricity originating from sourcesthat do not emit CO₂. This will achieve virtually 100% renewable energy.
*4: FIT electricity refers to electricity generated from renewable energy sources andpurchased by electric utilities under the feed-in tariff system established by thegovernment (the Amended FIT Act). Because FIT electricity is financed bycontributions imposed on electricity users (the public), its environmental value alreadybelongs to the public. By contrast, non-FIT electricity that does not rely on the FIT
system is viewed favorably because it contributes to the expansion of renewableenergy implementation while reducing the burden on the public.
*5: Electricity generated from solar energy, geothermal energy, and biomass can be
specified. (As of April 2022)*6: Off-site PPA (Power Purchase Agreement) is a scheme in which electricity users
conclude contracts with power generation business operators to procure renewableenergy over the long term. Off-site PPA, an abbreviation of Off-site Corporate PPA,
involves the use of power generation facilities in locations removed from users to
supply them with electricity through the power grid.

Promoting the Green Innovation Business to support customers' CO₂ reduction efforts, from consultations
to visualization
NTT DATA provides comprehensive consulting services
that work closely with customers to analyze their internaland external environments, formulate green management
and business strategies based on this analysis, and help
them to execute on these strategies. Further, to automate
the emissions visualization process, we will create a systemthat combines cloud services, low-code platforms, and edge
environments featuring sensing and so on. The greenhousegas emissions visualization platform provided by NTT Data

offers a "visualization process construction method" thatfacilitates the creation of calculation methods suitable foreach company based on its business characteristics and thedata it possesses. It also offers a "supplier-specific calculation
method" that incorporates the emissions reduction efforts ofsuppliers into the same reductions at procuring companies.
This allows for efficient and effective visualization of emissions
specific to each company.

● Taking the lead in securing competitive advantages in green businesses for individualcompanies and carbon neutrality across industries through the three cores ofconsulting, SI, and platform provision

2. Green SI

Design the path a customer will taketo achieve carbon neutrality

Finance Framework with the goal of strengthening

Developing a system with a low
environmental impact

CO2 reduction

Information
disclosure

ActionVisualization

Companyspecificsupport

Provide green consulting services
to individual companies/industries

Reducing customer
CO2 emissions

CompanyspecificsupportCollaborate with individualcompanies and visualize emissions

Achieve carbon neutrality
across the supply chain

3. Green platform● G reenhouse gas emissions visualization

platform(Example)funds raised will be invested in projects that contribute tosolving environmental issues at Group companies.

its commitment to Group-wide efforts to achieve a

When raising funds, NTT FINANCE will evaluate andsustainable society and promoting them vigorously,

select investment projects based on conformity with theincluding from a financial perspective. Since its

NTT Group Sustainability Charter. It will also centrally

establishment in June 2020 as the NTT Group Green

manage procured funds and confirm their appropriation for

Bond Framework, this framework has been revised inprojects. The Group will report annually on the allocationaccordance with the Group's initiatives for making aof funds and the project’s environmental impact.

sustainable society a reality.

Actual renewable energy utilizing non-fossil certificates(1) Renewable energy that comes with a set of tracked non-fossil
certificate information indicating the location of the power plant
and the power source type (not possible to specify the powersource type or FIT/non-FIT)*4)(2) In addition to (1), customers can specify the power supply
type*5.
(3) In addition to (2) above, customers can specifically request
non-FIT.
Providing Renewable Energy from New Power Plants(4) Off-Site PPA*6(NTT Anode Energy will provide power plants with additionality tomeet individual customer requests)

1. Green consulting

Procurement Through NTT Group Green Finance

The Green Finance Framework as well as FundNTT FINANCE, the Group's core financial company, will
issue green bonds or procure funds through green loans

Allocation Reporting and Impact Reporting are available
on the NTT FINANCE website.

in accordance with the Green Finance Framework. The(https://www.ntt-finance.co.jp/eng/ir/greenbonds/index.html)

Eligible projects within framework
Procured fundloans

Investments/
Loans

Investors/
Financial
Institutions

Centralized management ofprocured funds● Evaluation/selection of
investment projects based on
conformity with the NTT Group
Sustainability Charter

NTT
Group
companies●

Fund allocation
reporting/
Impact reportingannounced

Investment
in eligible
projects

Sharing of fundallocation status/
project
implementation
status

5G

FTTH

IOWN

Green
buildings

Data centers

Renewable
Energies● Green Bond Issuance Status
June 2020¥40 billion total

October 2021

¥300 billion total

December 2021

EUR 1.5 billion total

July 2022

USD 1.5 billion total

Eligible projects: Green buildings
Eligible projects: 5G-related investments, FTTH-related investments, R&D for achieving the IOWN concept,
is considered equivalent● Green Finance Framework Target Projects
Eligible projects:

Specific projects

Impact reporting item

5G-related
investments

Development and installation of energy-saving 5G base stations/installation ofcommercial base stations and development of base stations capable of conserving electricity by automatically switching to sleep mode, such as during theevenings and time of low traffic・Number of 5G base stations installed

FTTH-related
investments

Construct and operate optical fiber networks (FTTH) as foundation for a remoteworld, to help reduce amount of electricity used compared with the Company’s
conventional equipment

・Number of subscribers (households)

R&D to make IOWN
a reality

Roll out/aim to commercialize by 2030 photonics-based connections between
bases at endpoint devices, such as handsets and computers, R&D to make possible an optical disaggregated computing architecture that should sharply reduce
electricity usage through the use of photonics connections (optics inside LSI)
when transmitting signals between chips on circuit boards

Highly efficient andpower-conserving
data centers

Construction, renovation, acquisition, and operation of new and existing data
centers with a Power Usage Effectiveness (PUE) of less than 1.5

・CO2 emissions (t-CO2)

Green buildings

Construction, renovation, and acquisition of various environment-related building
certifications and evaluations for properties to be acquired・Green building building names, certification level,acquisition/re-acquisition period
・CO2 emissions (t-CO2)

Renewable energies

Construction, renovation, acquisition, and operation of renewable energy projects(solar power, wind power, etc.) NTT Group is involved in・Desired effects
・R&D progress

・Generation capacity/generated electricity (GWh)・Amount of CO2 reduced (t-CO2)Standardize emission metrics to facilitate visualization and cross-industry
collaboration

50

NIPPON TELEGRAPH AND TELEPHONE CORPORATIONANNUAL REPORT 2022

51

Message from our CEO

Value Creation Story

NTT Group
Sustainability

Growth Strategy

Data Section

NTT Group Sustainability

TCFD
Corporate GovernanceRisk Management

NTT Group recognizes that environmental issues are one of
the most important challenges for management, and items ofpar ticular impor tance such as creating environmental targets
for the entire Group are decided based on discussions
held with directors. An example that highlights this is NTT’s
environment and energy vision “NTT Green Innovation toward2040” announced in September 2021—this was establishedfollowing discussions with all directors, including outside
directors, held three times throughout the fiscal year. The
Board of Directors made the decision in November 2021
to include non-financial KPIs such as GHG emissions into
the business plans of each Group company, with thoseattainment levels to be reflected in the compensation of
directors as critical indicators. The supervision system fordirectors consists of the Sustainability Committee (chaired by
the President) established in November 2021 directly underthe Board of Directors, with the Green Innovation Committee
established as an internal unit under the Sustainability
Committee.
A s y s t e m w a s c re a t e d w h e re p o l i c i e s re l a t e d t osustainability (the Charter and creating and abolishingaccompanying policies, particularly deciding criticalindicators) will be decided by the Board of Directors via the
Sustainability Committee, and other matters will be decided
by the Executive Officers Meeting.
The role of the senior executives is to identify environmental
issues and risks, and promoting businesses while taking into
consideration these situations.

Board of Directors

Nomination Committee
Compensation Committee
Sustainability Committee
Green Innovation Committee

President (Executive Officers Council)

Business Risk Management Committee
High Performance Energy Use Promotion Committee

Strategy
The NTT Group carried out scenario analysis based on its own
processes for selecting key environmental issues. The results
revealed various risks, particularly those related to policies, regulations and social demand aimed at transitioning toward a decarbonized society.
To combat these risks, the medium-term management strategy
STEP 1

was revised with a focus on addressing environmental issues asa key priority. These will be linked to businesses via activities such
as “Enhancement of corporate value through ESG initiatives,”“Reducing power consumption with innovation such as IOWN,”
and “Developing and expanding the use of renewable energy,” tohelp develop a sustainable society.

Scenario Definitions

Scenario

Overview

Reference Methodology for Scenario

Transition Risk
Scenario

Scenario in which the decarbonization of society is achieved rapidly.
………………a future in which the target increase of 1.5°C has been attained

IEA World Energy Outlook 2021

Physical Risk
Scenario

Scenario in which physical risks materialize………………a future in which the average temperature has risen by 4°C

IPCC Sixth Assessment Report, Climate Change 2021: Summary for
Policymakers (SPM) Based on Natural Science

STEP 2The NTT Group strives to minimize the impact of losses
that could result from the materialization of risk by
anticipating and preventing the occurrence of potential risks,and has established Risk Management Regulations withthe aim of defining fundamental policies concerning risk
management. The Business Risk Management Committee,
chaired by the Senior Executive Vice President, and Group
Business Risk Management Committee have also been
established. The Committee takes a 2-pronged approach byanalyzing risks from their degree of influence on business
operations and frequency of occurrence, and identifies risks
with the potential to have the greatest impact as material
risks.
The degree of impact that climate change will have is also
analyzed by the degree of influence on business operations
and frequency of occurrence, and as such, measures totackle climate change like reducing greenhouse gas
emissions were identified as a material risk. Should theNTT Group’s efforts to tackle climate change or disclosureof related information be viewed as lacking, there is thepossibility that it could affect business management due to

Indicators and Targets
NTT Group has set the target of an 80% reduction in
Scope 1 + 2 by fiscal 2030 (compared to fiscal 2013 levels),with the aim of becoming carbon neutral by the year 2040.
This target was subsequently approved as the 1.5°C level by
SBT in December 2021. Of electricity purchased during fiscal
2021, switching to renewable energy sources for more than
1.8 billion kWh (approx. 23% of purchased electricity, approx.
150% compared year-on-year) used by the entire Group
reduced greenhouse gas emissions by 2.90 million tons, a
reduction of 38% compared to FY2013 levels.

Indicator

Risks and Opportunities Identified with Scenario Analysis (Overview)
Scenario *1
1.5℃
4℃

Type

Timeframe*2

Response

Increase in costs for decarbonization,
renewable energy charges,
and renewable energy implementation

Loss
▼

—

Transition risk
(policies, regulations)Long-term• Initiatives for realizing the IOWN concept• Introducing and expanding the use of renewable energy• Promotion of energy conservation, high-efficiency data centers

Social criticism related to fewer efforts
toward ESG (drop in market share)

▼

Minor

Transition risk
(market, criticism)

Long-term• Proactive disclosure of information on environmental initiatives

Expanding sales of services that help
reduce society’s environmental impact▲▲▲
ProfitOpportunity (products andLong-term
services, energy)• Creating new services that contribute to carbon neutrality• Increase in green electricity retailAchieve the IOWN concept▲▲▲

Opportunity (investment
Long-term
toward R&D)

• Acceleration of DX and promotion of remote world• Reduction of greenhouse gases across the entire supply chain

Disasters caused by heavy rain and typhoons—▼

Physical risk (acute)

Short-term• Provide disaster response and disaster prevention training—▼

Physical risk (chronic)

Long-term• Promoting energy conservation

Increased air-conditioning costs due to increasing temperatures

1

Moving toward
a decarbonizedsociety52

NIPPON TELEGRAPH AND TELEPHONE CORPORATION[Assumptions and basis for calculations](1) Carbon pricing ($130/t-CO2) x FY2030 target emissions (reduction of 80% in FY2030 basedon actual Scope 1 + 2 emissions of 4.65 million tons in FY2013)<Carbon pricing: Estimated unit price for FY2030 on IEA World Energy Outlook 2021,
Advanced economics: USD 130>(2) R enewable energy charges in FY2030: ¥4.1/kWh, FY2021: ¥3.36/kWh
Estimate assumes certificates cost ¥1.0/kWh(3) Estimated impact from repairs to damage caused by heavy rainfall and typhoons from FY2019
to FY2021(4) Estimated air conditioning costs increase based on domestic electricity consumption in FY2021

Entire NTT Group

Scope 3 emissions in fiscal 2021 were 20.82 million tons, a
6% reduction compared year-on-year*1.
Furthermore, in addition to these targets, various metrics
like EP100 and EV100 were incorporated into Group
company business plans, highlighting the commitment of theentire Group for tackling climate change.
*1 E stimated based on the Ministry of the Environment’s “Basic Guidelines on
Accounting for Greenhouse Gas Emissions Throughout the Supply Chain.”

Fiscal year ended
March 31, 2021

Fiscal year ended
March 31, 2022

3.99 million tons,
14% reduction

2.90 million tons,
38% reduction

2025

2030

2040

CarbonNeutral

80% Reduction(compared to FY2013)(compared to FY2013)(compared to FY2013)

Mobile(NTT DOCOMO)(incl.) 1.41 million tons(incl.) 1.25 million tons

Carbon-Neutral

Data centers(incl.) 1.05 million tons(incl.) 0.45 million tons

Carbon-Neutral

8%

15%

50%

(compared to
FY2017)2

Ratio of EV adoption
in Japan3Power efficiency per datatransmission of
telecommunications services

1.7x (compared to FY2017)
6.2x (compared to FY2013)

1.9x (compared to FY2017)
7.1x (compared to FY2013)

4

Amount of contribution to
the reduction of greenhousegas emissions of all society

10.5x

11.3 x

10x

A commitment toa resource-recycling
future5

Recycling rate of waste

98.4％

97.8％

99% or above

A future where
people and nature
are in harmony

6

Actively implementing initiatives through activities as part of ecosystem conservation efforts*1 Degree of impact with 1.5°C scenario and 4°C scenario in FY2030 *2 Timeframes refer to Short-term (less than 3 years), Medium-term (3-6 years), Long-term (6 years or more). Degree of impact expressed in 3 levels (▲: Low; ▲▲: Medium; ▲▲▲: Large)*Estimated impact on annual profits:(1) –¥16 billion if carbon pricing introduced(2) Increased cost of renewable energy charges and implementation of renewable energy (approx.
–¥10 billion)(3) Repairs for damage caused by heavy rainfall and typhoons(FY2019: approx. -¥8 billion, FY2020: approx. -¥5 billion, FY2021: approx. -¥0.2 billion)(4) Higher air conditioning costs as temperatures rise (-¥0.6 billion if outdoor temperatures rise 1
degree)​Greenhouse gases *2

Overview

an insufficient level of understanding amongst customers,
partner shareholders, employees, the local community, andother stakeholders. Furthermore, there could also be anincrease in costs if new laws and regulations are enacted orintensified, which has the possibility of impacting the NTT
Group's business performance and financial conditions.
Given these risks, NTT Group formulated its NTT "Green
Innovation toward 2040" environment and energy vision andis advancing initiatives to reduce its environmental impact
to achieve carbon neutrality by 2040. Besides promoting
renewable energy usage as part of its own efforts to promote
green power, the company is also working to enhance its
environmental energy initiatives by promoting IOWN researchand development aimed at achieving extremely low power
consumption, disclosing information in accordance with the
TCFD (Task Force on Climate-related Financial Disclosures),and utilizing green bonds.
The Sustainability Committee, under the supervision andmonitoring of the Board of Directors, discusses the creation
and review of sustainability-related policies and the progress
made with efforts to achieve carbon neutrality.

2x

100%
10x (compared to FY2013)*2 GHG protocol: for Scope 1 and 2

ANNUAL REPORT 2022

53

Message from our CEO

Value Creation Story

NTT Group
Sustainability

Growth Strategy

Data Section

NTT Group Sustainability

Reinforcement of Disaster
Countermeasures―Ensuring the Stability and Reliability of Services―
Policy and Approach
NTT Group has defined three key themes for disaster countermeasures—improving the reliability of communications networks, securing criticalcommunications systems, and promptly restoring telecommunications services. We have been strengthening efforts based on these themes since the Great
East Japan Earthquake. Specifically, we are taking measures to improve the reliability of our telecommunications infrastructure. To ensure that our
telecommunications services operate without interruption at all times, we employ transmission trunk line multi-routing, have enacted blackout
countermeasures for communications buildings and base stations, and are making communications buildings more disaster resistant. In addition, we are
expanding the assortment of power supply vehicles and other disaster response equipment that we have positioned throughout Japan and are continuously
conducting training to prepare for major natural disasters. Furthermore, we are making a daily effort to guarantee that, in the event of a disaster, we are able
to immediately set up a Disaster Countermeasures Office, implement other emergency preparations, and make the necessary emergency and criticalcommunications as a public institution as designated by the Basic Act on Disaster Control Measures. In recent years, natural disasters have been becoming
more frequent and causing wider, bigger, and more lasting damage. Recognizing the potential for natural disasters to have greater impacts on
telecommunications facilities and services and for recovery efforts to be prolonged, NTT is increasing the resilience of its facilities and taking steps toexpedite recovery efforts.

Securing critical communications

Building disaster-resistant facilities andtransmission trunk line multi-routing

Disaster!

24/7 network monitoring
and control, etc.

Additional efforts in light of thegrowing intensityof disasters in recent years● 
Introduction of medium zone basestations with enhanced disaster
resilience compared to existingbase stations● 
Looking into placing cables
underground, wireless fixed-line
phones, etc.

(1) Initiatives for Improving Disaster Resistance ofTelecommunication Facilities
Countermeasures for Earthquakes, Fires, andFloodsNTT's communications buildings and towers are designed
to be sufficiently earthquake-resistant to avoid collapse evenin the event of an earthquake with a seismic intensity of
7, and were built to our own strict standards to be able towithstand the worst disasters Japan has ever experienced.
For fires, communications buildings and other buildings
were made noncombustible and fireproof, fireproof shuttersand doors were installed in communication machinery rooms,
and fireproof sealing was applied to through holes.

Blackout Countermeasures at Communications
Buildings and Base Stations

Improving communications
network reliability

Countermeasures strengthened
since the Great East Japan
Earthquake● 
Enhanced disaster resistance(damage prediction, hazard map
utilization)● 
Stable provision of
telecommunications services(improving trunk line reliability, etc.)● 
Introduction of large-zone basestations to provide backup forbroad disaster relief in densely
populated areas

Initiatives for Improving Network Reliability

Disastercountermeasures

three key
themesSecuring emergency service communications,e.g., 110 and 119, andcritical communications
Installing emergency-use public phones andproviding safety status checking services

Countermeasures strengthened since theGreat East Japan EarthquakeM easures for securing criticalcommunications● E
 nhancements of disaster message
services● E arly resolution of communications
blackouts● F urther Information Station
implementation●

Prompt restoration of
telecommunications services
Early restoration of services by utilizing disastercountermeasure equipment, procurementof materials, equipment, and manpower for
restoration purposes, etc.

Countermeasures strengthened since
the Great East Japan Earthquake●

Building up stock of disaster response

equipment● Exercises and practice for a major
earthquake● Enhancement of organization fordisaster countermeasure operations● Training of crisis management personnel
and utilization of knowledge and skills

Additional efforts in light of the growing
intensity of disasters in recent years
C entralized management and operationof Group-owned power supply vehicles● A dvance launch of restoration system
based on damage estimation madeusing AI● A
 ppropriate information dissemination(service availability, recharging spots,
availability of public phones fordisasters, etc.)● C onsultation about problems in disasterstricken areas (113 on-site visits)●

Communications buildings and wireless communications
base stations are equipped with batteries, engines, and otherauxiliary power supplies that can be used as a prolonged
source of electricity in the event of a blackout.
Moreover, we are enacting the lessons learned from theGreat East Japan Earthquake by implementing blackout
countermeasures for engine generators and having batteries
available for use around the clock at its roughly 1,900 basestations in important areas, such as those where municipal
disaster response headquarters or city offices are located.
In addition, mobile power supply vehicles and portable

Transmission Trunk Line Multi-Routing andDistributed Location of Important Communications
Buildings
Our nationwide network of trunk lines has been designed
to secure communications and prevent disruption of services
over the network as a whole by automatically divertingtransmission through other routes when a certain route isdamaged. Meanwhile, if communications buildings (important
communications buildings) fitted with transit switches suffer
disaster damage, communications via such buildings may
be severed. Distributing important communications buildings
in different locations helps avoid the risk of multiple buildings
suffering disaster damage at the same time.

Considering our disaster response based on unexpected scenarios for possible futurecatastrophic disasters, such as a massive earthquake or eruption at Mt. Fuji

54

● Faster: Predictive support for complex troubleshooting that exceeds human judgment throughDX, such as AI and data utilization● Stronger: Utilizing self-supplied energy, such as battery-equipped electric vehicles and on-site
renewable energy generation● Safer  : Implement BCP measures such as diversifying supply chains and dispersing businesslocations and employee residences

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

Window sealing

Water-resistant doors

power generators will be deployed in each area as backup toprovide support over a wide area to disaster-stricken regions
as the situation requires.

Large-scale power supply vehicle forpowering communications buildings

Improvement of reliability throughmulti-routing nationwide Distributed
building locations in preparation forlarge-scale disasters

Transmission routeTransit switch

Connection to global network(2) Initiatives for Stable Telecommunications Service Operation
Real-time Network Monitoring and Control

Further Enhancing Our Ability to Respond to Severe Disasters

To prepare for tsunamis and floods, we have taken
location-appropriate measures to prevent communications
buildings from being flooded, such as replacing building doors
with flood doors,
Ventilation relocation
closing windows andother openings, andreinforcing walls with
Critical room
concrete to withstand
Projected
the water pressure flooding levelfrom a tsunami.

The nationwide communications network monitors andcontrols operational status in real time, 24 hours a day, 365
days a year, and responds immediately to breakdowns anddisasters.
To respond immediately to emergencies and othercontingencies, the monitoring system is reinforced as
required in response to social conditions.

Further, lessons gleaned from past disaster responses are
deployed across the organization to implement measures toprevent recurrences, review action procedures, and ensurethat basic operations are thoroughly implemented.

Improved Response to Disasters and Major
FailuresTo enable prompt and appropriate recovery measuresin the event of a disaster or unexpected equipment failure,training and drills are conducted as required to train the
personnel involved in network maintenance and operation.

ANNUAL REPORT 2022

55

Message from our CEO

Value Creation Story

Growth Strategy

NTT Group
Sustainability

Data Section

NTT Group Sustainability

Reinforcing Security

T OPICS 1―Preparation for the Zero-Trust, Cloud-Native Era―

Advanced Security (1) Protection and Resiliency (Resiliency)
Resiliency: A Blend of Knowledge, Cutting-edge Technology, and People PowerTo resolve social issues through its business operations, NTT Group works together with its partners as “Your Value
Partner.” Based on this approach, we are contributing to the healthy development of a digital economy and remotesociety by exercising our responsibility as a supplier of safe and secure ICT infrastructure to guarantee effective
information security.

Reinforcing Information Security
With the progressing digitalization of society and the economy and changes in international circumstances, security
threats are becoming more serious and sophisticated, particularly cyber-attacks. Within this environment, NTT Group has a
responsibility to protect ICT service infrastructure and customers’ basic rights, freedoms, and information assets, as well as
to provide a sound foundation for the growth of the digital economy. Based on our medium-term management strategies
formulated in 2018, we made it our mission in terms of security to contribute to the building and development of a free,open, and safe ICT platform for supporting the infrastructure of the digital economy. We also made it our vision to realize thedigital transformation of both customers and NTT itself, and for that reason, we will be chosen by customers.
In order to realize these, we will strive to engage in research and development that leverages the scale of the Group,
realize superior abilities for early detection and rapid response, cultivate human resources who share the values of sincerity
and advanced skill, and transcend profit-focused principles to transmit pioneering knowledge to society. Furthermore, toachieve the transformation to a New Management Style outlined in the medium-term management strategy refined in
October 2021, NTT Group is implementing security measures capable of facilitating the shift to remote work styles. As amember of the global community building the digital society, NTT Group will contribute to solving social issues through our
security business.
The concept of cybersecurity is no longer just an aspect of crisis management that reduces negatives to zeroes, but isnow entering an era in which it is a positive driving force that offers stabilizing support for the prosperity that technology
provides. As we progress through the era of Zero Trust and Next Zero Trust, NTT Group will continue to investigate the valueof security as we confront never-ending cyber risks.

NTT Group's Security Governance Goals

Group CISO Committee
Board ofDirectors

President (Executive
Officers Council)

Committee chairperson: CISOMembers: CIO, Head of Technology Planning, Head of
Research and Development Planning, Headof General Affairs, Head of Internal Audit,
Group CISO

Information Security Liaison Meeting

NTT-CERTInternal Audit Department

SupportGroup companies

NTT DOCOMONTT East
NTT West
NTT DATANTT Urban Solutions
NTT Security Holdings

Audit organization (Third Line)56

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

T2: Total Security Solutions

Within a complex ICT operation environment. NTT selected safe and secure equipment and organizeda Cyber Hygiene environment. NTT also employed its proprietary technology Wide Angle MSS todetect and respond to risk factors early. This equipment and technology were put to use at the
security operation center for the event, in collaboration with a wide range of specialists from both
inside and outside the company.

T3: Talent, Mind & Formation

The development of a prevention and maintenance mindset was also as important for security
program personnel as learning advanced knowhow and technologies. NTT enhanced the staff's
capabilities through preliminary training programs and red teams. At the event operation center, NTTclarified the roles for each team and how their movements should be coordinated, with a focus tomaximize human capabilities.
Everyone had to form one team because the event was so large. The strongest-ever defense would
not have been possible without this. ICT service operators and providers inside and outside Japan,
key infrastructure organizations, government, the Tokyo 2020 Organising Committee... NTT collaborated with all stakeholders to bring a wealth of wisdom and technological integration, leading theevent to a success.

T4: Team 2020
(Stakeholder Management)

TOPICS 2
Reinforcing the Security Business
The time has come to consider security even in cyberspace. Given the circumstances, we especially want to strengthen
our threat analytics, which are the cornerstone of cybersecurity. For this reason, we reorganized NTT Security in April 2022
to strengthen its service development, client support, security governance and managed services.
We established NTT Security Holdings as a new wholly owned subsidiary. Practical development functions weretransferred from NTT Laboratories, SE functions were transferred from NTT Communications, and operational functions
from NTT were transferred to support the group's CISO functions.
In addition, security services will be merged and integrated with NTT Ltd.'s managed services, and consulting functions
in each region will be transferred to NTT Ltd. These moves will strengthen NTT Ltd.'s managed services.
Further, in July 2022, NTT East, Trend Micro Incorporated, and Tokio Marine & Nichido Fire Insurance Co., Ltd. jointly
established NTT Risk Manager Corporation, to develop a wide range of risk management businesses, with a focus on
the cybersecurity domain.

Overhaul of Security-related Regulations
are taking steps to prepare not just for the zero-trust era, but beyond.

Head Office

Securitypromoting organization(Second Line)NTT meticulously evaluated case studies on past events as well as the latest threat information,
thoroughly developing scenarios in advance, monitoring every item of threat information, whether
it came from internal or external systems. The key was NTT's ability to put together information in
partnership with global ICT service operators and security providers.

From FY2021 to FY2022, we have been proceeding with a company-wide overhaul of security-related regulations. We

Audit

NTT Group's Security
Governance Goals
Workplaces (First Line)

T1: Threat Intelligence &Monitoring

Advanced Security (2) Responding to Change (Agility)

NTT Group enforces information security management under the charge of the Chief Information Security Officer (CISO),and is thorough in its information security management. We have also established a Group CISO Committee, and areworking to formulate Group information security management strategies, plan and implement related measures, undertake
human resources training, and otherwise engage in activities in collaboration with companies across the Group.
We are also advancing efforts to maintain and improve security defenses within the Group based on the idea of a “threeline organization.”

Organization for Implementation

The international sporting event held in Tokyo in 2021 was subjected to the largest cyberattack ever seen. However,there were no cyber incidents during the events that disrupted operations. Behind the victory was the expertise andcutting-edge technologies of NTT, who has been thinking about communication and information security for the last 30
years, combined with the capabilities of human beings armed with wisdom and resolve.
In particular, the following "4 T's" supported our efforts.
These are ingrained far and wide in NTT Group's overall cybersecurity resiliency maintenance and improvement.

Business divisions, Group companies

Secure execution of duties

・Company-wide rules provided
・Shared security assurance
measures・Verification of important matters,
etc.

Verification

Secure execution of duties

・Rules established for individualcompanies
・Measures for ensuring security ateach workplace・Compliance inspections, etc.

(1) Clarification of governance targets• Clarify the scope of CISO responsibilities to include commercial services, customer SIs, and partners•B esides the minimum baseline to be followed by the Group as a whole, craft additional rules based(2) U tilization of risk-based
managementon the risks faced by each company•A dopt the National Institute of Standards and Technology (NIST) methodology as a risk-based
approach*NTT Group actively provided comments during the NIST-Cyber Security Framework (CSF) revision process(3) Rules based on the assumptionof remote work

• Give new consideration to system construction work
• Reinforce precautions and other procedures during normal operations• Create a structure that takes the readers into consideration and prevent it from becoming a formality

Verification

ANNUAL REPORT 2022

57

Message from our CEO

Value Creation Story

Growth Strategy

NTT Group
Sustainability

Data Section

NTT Group Sustainability
Su s t a i n a b l e C o r p o r a t e Gr o w t h

Maximizing Well-being for All

E n h a n c i n g W o r k I n L i f e , W e l l - B e i n g , a n d E n g a g em ent―Advocating Work-in-Life with Work Style Reforms―

Check: Employee Engagement Survey

Diversity: Securing and Developing Diverse Human Resources

Creating a society that recognizes diverse cultures, understands different values and coexists together is vitalfor maximizing well-being. We believe that our overall well-being is linked to respecting human rights based on
the concept of altruistic coexistence (people seek to increase their happiness along with the happiness of others),
as well as understanding and accepting differences, and being inclusive without casting them aside. The NTT
Group formulated its D&I Statement last year.

We aim to achieve sustainable growth by recognizing our differences as valuable strengths for our business.
Our society is full of diversity and is constantly changing. We will continue to have events occur globally that will
have an impact on our employees and the clients and communities we serve. NTT will continue to evolve our
focus and programs to sustain our commitment to diversity and an inclusive culture at NTT. NTT will continue to
evolve our focus and programs to sustain our commitment to diversity and an inclusive culture at NTT.

Our commitments:• Based on international standards, we aim to be an organization where all individuals, regardless of theircharacteristics and values*, are accepted for who they are, have equal opportunities, take on challenges
without fear of failure, and continuously grow through mutual improvement. We will also work to enhance thewellbeing of each individual, improve engagement, and realize work-in-life.
Regardless of ethnicity, race, nationality, origin, class, religion, belief, language, culture, gender, sexual
orientation, gender identity, age, disability, disease/health status, appearance, values, family status, lifestyle,or any other social or personal characteristics.
• With social responsibility in mind, we contribute to create a more diverse, inclusive and sustainable society
through connecting precious resources such as people, the environment, and culture to the future.

Women

Global humanresources

Diverse work styles

・Allowing choices for working time, working place,and residence
・Promoting digital transformation

People withdisabilities

Mid-career hires

Re-examination of personnel
systems and application

・Assigning the right person to the right job
regardless of their gender, years employed, or age(job-based system)
・Re-examining evaluation standards
・Presenting diverse career paths

LGBTQ people

Employees with restrictive
circumstances (childcare,nursing care, medical
treatment, etc.)

Fostering an inclusive
culture・Ensuring psychological safety
・Fostering an open, flat, and flexible organization
cultureEmpowerment KPIs+
Hiring KPIs+
Promotion of environment
improvement andunderstanding

NTT Group D&I Statement

Inclusion: Expanding Opportunities

Promotion of “Work-in-Life”
Employee Opinion Survey on Work Styles● Remote Work Implementation Status andProductivity

In line with the promotion of remote work, we regularly conduct
the Employee Opinion Survey on Work Styles. In FY2021, we
conducted the "Questionnaire on the Implementation of Remote
Work" and received responses from approximately 113,000 Group
employees in Japan.
The results showed that employees with a higher implementation
rate of remote work tended to be more likely to respond that theirproductivity had increased.

Remote work productivity(% of positive responses)

Status of Remote Work

Further, to reflect diverse opinions in its business operations, NTT Group has set targets and is making efforts tosecure and develop diverse human resources and foster a culture of diversity.
Ratio of female managers *1

Ratio of newly appointed
female managers *1

17.7 %

8.7 %

29.1 %

32.5 %(July 2022)(FY2021)(FY2021)(FY2021)

TargetTarget New

Target New

Ratio of female directors *1

Diversehuman
resources

Target New

25–30% by fiscal year
ending March 31, 2026

・

Diversework styles

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

30% by fiscal year
ending March 31, 2024

Employee engagement *5
Male employees taking leave
Percentage of positive responses
for childrearing *2 4・77.3 %

63.1 %

57 %(4Q FY2022)(FY2021)(FY2021)

Changing workstyles will lead to more opportunities for a diverse array human resources to play an active role and increase theirjob satisfaction and ease of working. As a result, we believe this will make employees more engaged and lead to increased
innovation. In particular, we are making efforts to promote changes in how employees work, with a focus on developing
compensation and environments appropriate for a work style centered around remote work.

Remote Standard

While we already introduced a system for remote work that does
not place restrictions based on "time" or "place" in fiscal year 2020,
in July 2022, we introduced the "Remote Standard" system to implement a work style that is not restricted by one's place of residence. Through this initiative, we aim to eliminate work styles that
require relocation or solo transfer assignments.

Home

Travel expenses

・Any residence in Japan is acceptable
・Any reasonable transportation method to and from work that canTravel expenses

be considered travel expenses (lodging expenses provided asTargetTargetTarget

70% by fiscal year ending
March 31, 2023

100% ratio of male employees taking
time off for childrearing by the fiscal
year ending March 31, 2023

Percentage of positive
responses 65%*1 Targets and current conditions at six main companies (NTT, NTT East, NTT West,NTT Communications, NTT DATA, NTT DOCOMO)*2 Only NTT (holding company)*3 Work-from-home ratio (excluding essential workers)*4 Percentage of total number of male workers using paternity leave or leave forpurposes of child raising (items disclosed by companies with “Platinum Kurumin

58

30% from fiscal year
ending March 31, 2022

15% by fiscal year
ending March 31, 2026

Remote work ratio *2 3

Ratio outside personnel *1

Introduction of the Remote Standard System

Certification”)(Number of employees with children not yet enrolled in elementary school in thefiscal years ended March 31, 2021 and 2022 who took time off work for childraising ÷ number of employees who gave birth (or whose partners gave birth) in
the fiscal years ended March 31, 2021 and 2022.)*5 Domestic Group companies

Relocation allowancewell) is acceptable
・No need to relocate to a remote location if the new location is an

OfficeReturndestination

Returning from working
away from homeHomeorganization that accepts the Remote Standard

We also increased the number of satellite office locations to 496
by the end of FY2021, with the goal of 260 or more by the end of
FY2022, in order to establish places to work outside of the homeand office.
ANNUAL REPORT 2022

59

Message from our CEO

Value Creation Story

Growth Strategy

NTT Group
Sustainability

Data Section

NTT Group Sustainability

Initiatives for Diverse Work Styles (Balancing Work and Life)To enhance work-in-life among its employees, theNTT Group promotes active participation in childcare. In
accordance with the revision of the Act on Childcare Leave,
Caregiver Leave, and Other Measures for the Welfare ofWorkers Caring for Children or Other Family Members, NTT
Group revised its childcare leave system on April 1, 2022,
prior to the revision of the Act, and enhanced the leavesystem for the period up to eight weeks after childbirth.
In addition, to provide an opportunity for employees tounderstand the childcare leave system and receive support
for taking this leave, supervisors who receive a report of apregnancy or childbirth hold face-to-face sessions to explain
the childcare leave system.
Starting in the fiscal year ending March 31, 2022, NTT
has held seminars to encourage employees to participate
in childrearing, and through panel discussions featuring
explanations of the system and talks by employees who tooktime off, strive to create a workplace culture that encourages
childrearing. Other support tools include interview sheets andmanuals that explain the system, a revised Communication
Handbook that covers the necessary procedures for life
events, and posters to encourage employees to takechildcare leave.

Developing Human Resources and Improving the Company Environment
NTT Group has been working to review its personnel
system to achieve self-guided career formation and place
the right individuals in the right positions. For management
positions, a job-based system was introduced in October
2021 to assign personnel more suitable for posts regardlessof time at the company, age, years of experience, or otherfactors.

Further, for general staff, we will also promote a shift fromcompany-driven career development to a system that allows
employees to direct the development of their own careers.
We will clarify the specifics and the level of knowledge andskills required in different fields of work, as well as create asystem that enables employees to choose and advance theircareers by taking the initiative to improve their expertise.

Developing Senior Management Personnel
For future management candidates, we select various individuals regardless of age, gender, or field of expertise.
Through education at the NTT University, which was started as a program for developing management
candidates, we target diverse people who are full of desire to lead our transformation. (Training launched forapprox. 150 employees in FY2022 (30% women))

Employee Engagement
In FY2021, NTT Group revamped its existing Employee
Satisfaction Survey, which focused on questions related
to ease of working, and added questions related to job
satisfaction. It also conducted a Group-wide Engagement
Survey to quantify employees' attachment to and trust in
the company to which they belong as an “engagementscore.” Approximately 132,000 Group employees in Japan
responded.
By understanding current levels of engagement among
NTT Group employees and the issues that need to be
improved, and by taking action to make improvements, wehope to increase the number of highly engaged employees
who identify with the company's and organization's policies
NTT Group’s Four KPIs
Willingness to make voluntary
contributions① I am motivated to contribute morethan is required to get the job doneat the company

and strategies, as well as feel pride and take initiative in theirwork.
The survey method was based on the Group-widesystem Experience PF (Qualtrics), which was adopted byapproximately 100 Group companies in Japan. By surveying
questions used widely around the world and NTT Group's
original questions, it became possible to compare them with
global standards and other companies in Japan, as well as
identify and analyze issues for each individual organization.
Four indicators for measuring engagement have been
established as NTT Group Key Performance Indicators (KPIs).

● The Average of the Four KPIs
65%
57%

Attachment to and pride in thecompany② I am proud to work at this company③ I would recommend our company
as a great place to work to those I

know
Job satisfaction④ I gain a sense of personal
accomplishment through my work

60

NIPPON TELEGRAPH AND TELEPHONE CORPORATIONAll of NTTG

Japan average

NTT Group's employee engagement score(the average of the four KPIs) was 57%, 8%
lower than the Japanese average of 65%,
with the item showing the largest discrepancy
being "④ I gain a sense of personal
accomplishment through my work.” The
results of the assessment are published on thecompany's intranet, and every company andorganization has begun analyzing the items
that have a high correlation with engagement
so that improvements can be made.

Mid-career Hiring Initiatives
To reflect a diverse array of perspectives in its business
operations, NTT Group has set a mid-career hiring target
rate of 30% for fiscal year 2023. Thanks to aggressive hiringof external personnel, we achieved our mid-career hiring

target rate of 32.5% for the six main companies in fiscal
year 2021. Going forward, we will continue our efforts tohire external personnel to ensure a diverse workforce.

Empowerment of Women in the Workforce
The NTT Group set a new target in fiscal year 2021 forauditors, and executive officers was over 30%.

incorporating diverse opinions into its decision-making

The NTT Group endorses the goals of the Women's

process. In July 2022, the percentage of female directors

Empowerment Principles (WEPs), which establish action

was 17.7% (+6.3% year-on-year). With regard to fiscal year

principles for actively supporting the advancement of women

2021 results, the percentage of new managers was 29.1%

in the workplace for fiscal year 2022, and has signed a(+16.6% year-on-year), and the percentage of managers wasstatement in which it pledges to act in accordance with these

8.7% (+1.4% year-on-year).

principles. In addition, in an effort to achieve sustainable

On a non-consolidated basis, the holding company
achieved its goal of having 34.6% of directors be women.

growth for the company, the Group joined the 30% Club,
which aims to increase the percentage of female officers.

Further, the percentage of female directors, corporate

ANNUAL REPORT 2022

61

Message from our CEO

Value Creation Story

Growth Strategy

NTT Group
Sustainability

Data Section

NTT Group Sustainability

Targets and Results

Initiatives for Employing People with Disabilities● Ratio of Women at the Six Main Companies*1

Officers *2
Manager Ratio

Managers

New Manager
Appointment

General Employees

FY2019FY2020

FY2021

FY2022

New Target

7.1%

10.6%

11.4%

17.7%

25 - 30%

(11)

(17)

(20)

(32)

(FY2025)

6.7%

7.3%

8.7%

(1,378)(1,506)(1,830)

―

―

―

21.9%
(10,867)

29.1%

15%
(FY2025)

30%

(418)

―

(FY2021 onward)

22.7%

23%

(11,166)(11,436)――

Increase in Employment Opportunities for People

NTT Art Contest

with Disabilities

In fiscal year 2021, we held the “NTT Art Contest Depicting
our ’Connections’” as part of initiatives aimed at promoting
activities for people with disabilities based on the concept of“Showcasing individuality with the power of art—Disability
or not, everyone can make the world brighter.” We received
196 entries from Japan and abroad, and we held an award
ceremony on December 3, which is International Day of
Persons with Disabilities. The award ceremony showcased the
20 best entries and honored the top five contestants. In fiscal
year 2022, we plan to hold the contest in collaboration withJapan Airlines Co., Ltd. which endorses the concept behind
this contest, and expand the number of eligible entries.

In addition to direct hires, NTT Group established a special
subsidiary in order to provide more opportunities for people
who have disabilities. NTT Group currently employs around3,700 people with disabilities, representing 2.47% (up 0.02%
from the previous fiscal year) of its workforce as of June
2022. Examples of work that are performed by people withdisabilities include web accessibility diagnosis, lectures forbetter understanding people with disabilities (barrier-freemindset seminars), production of hand-made paper fromrecycled paper, and office massages.

*1 Targets and current conditions at six main companies (NTT, NTT DOCOMO, NTT East, NTT West, NTT Communications, NTT DATA) *2 Officers refers to Board Members, Audit & Supervisory Board Members,
and Senior Vice Presidents

Initiatives for Skills and Career Development
NTT is stepping up initiatives to groom more female
employees for decision-making management positions andpositions for providing guidance.
Specifically, for female employees interested in management
positions, we are implementing women career developmenttraining programs Groupwide and programs for building up
necessary leadership skills and awareness through dialogues
with upper management and exchanges with other companies.
Moreover, we will expand training opportunities with the aimof increasing the ratio of women participating in internal andexternal training programs, mainly for managers. NTT Groupalso offers mentoring by female directors and a human network
program for strengthening vertical and horizontal connections
for women within the Group, spanning all positions and ranks.
In addition to off-the-job training, we provide on-the-job
training, including putting employees in tough assignments,

Fostering understanding among supervisors and otherpeople is also essential for empowerment of women in theworkforce. For this reason, we implement for all genders
unconscious bias training for supervisors and other people,
D&I mindset change training, seminars for supervisors
returning from maternity leave, seminars for active participationin childcare, and seminars on infertility treatment.positions forproviding guidance.

Foster understanding of surroundings

Human networks(Board Member class)*Team Self as We

Board Members

Mentoring

Human networks(Executive Manager
class)
Human networks(Deputy Manager
class)

Careerdevelopmenttraining

General Employees

62

Fostering the understanding of supervisors and other people

Employee skills and mindsets

By rank

Managers

with the intention of training women with the skills, mindsets
and experiences necessary for promotions.

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

Human networks(Chief Manager
class)

Seminar for
returning
employees
after childrearing
leave(for managers)

Human
networks(groupwide)
Seminar for
returning
employees afterchildrearing
leave(for employees)

Seminar forencouraging
participationin childrearing

Award ceremony held at the Avatar Robot Cafe DAWN ver.β on December 3,
2021

Grand Prize winner: “Airplane”

Use of OriHime Remote-Controlled Robot
The NTT Group is using OriHime in a variety of scenarios.
Sports:

Project for ICT x sports x regional co-creation
E Cheer Up! Joint experiment

Culture:Collaborative agreement with a Kyogen comedy troupe about
making DX a reality (Nomura Mansai II (Mansaku no Kai))

Education:

OriHime and NTT R&D offer well-being classes at elementary
schools

Research:

At robot café DAWN, conduct experiments with remote robot
control based on based on IOWN

Reception/Show Case: Introduction to NTT Group reception areas, showrooms, etc

D&I
training
Unconscious
bias training

Seminar on
infertility
treatment

ANNUAL REPORT 2022

63

Message from our CEO

Value Creation Story

Growth Strategy

NTT Group
Sustainability

Data Section

NTT Group Sustainability

Initiatives for LGBTQ

Promotion of Health Management

Systems

Policy and ApproachWith respect to the approximately 200,000 employees of NTT Group companies in Japan, in April 2018 we began theapplication, in principle, of all systems for spouses to same-gender partners who have the equivalent of spousal relationships with
employees.

Health management is pursued as a key corporate strategy with the understanding that initiatives for maintaining and improving
employee health also enhance motivation and productivity and ultimately lead to higher corporate earnings.
We also believe that giving due consideration for the health of our employees as well as their families will motivate and invigorateeach of them and lead to the growth and development of the Group as a whole.

SalaryAllowance for dependents, allowance for working away from home, expenses of returning home, relocation expenses (family relocation
expenses)Work

Special leave (marriage, bereavement), life plan leave, nursing care leave, short-term leave for nursing care, childcare leave, long-term careleave, shorter working hours to provide childcare or nursing care, limit on or exemption from overtime work, limit on nighttime work, shift
work on an individual unit basis to provide childcare or nursing care, reemployment of employees who resigned due to childcare, nursing
care, or the relocation of their spouse’s job

WelfareCongratulatory/condolence payments (special payments for marriage, condolence payments), company housing, NTT Benefits Package,
M3PSP (health consultations with specialist physicians, “best doctor” referrals, and healthcare policy proposals)

Overseas
Assignments

Family members included in the calculation of cost-of-living in their home country, spouses in receipt of empty home allowance, handlingof relocation expenses of family members of employees working overseas

Major Initiatives
NTT Group voices its approval of LGBTQ-related initiatives.
To deepen understanding of LGBTQ issues, NTT Group
stands with LGBTQ people by participating in the Tokyo
Rainbow Pride parade and the DIVERSITY CAREER FORUM,
one of the largest career forums in Japan related to diversity.
This fiscal year, we held an online ALLY meeting twice
for the entire NTT Group, inviting external lecturers to givepresentations and lead discussions. 21 companies in the NTT
Group were awarded gold ratings in the PRIDE Index 2021,
an evaluation index for LGBTQ initiatives in the workplacedeveloped by the organization work with Pride, whichindicates achievement in all five indicators of the certification
criteria.

Main Initiatives
Below, we introduce key initiatives being undertaken in NTT Group on various fronts to help employees maintain and improvetheir health.

ーPromoting health activities and behavioral changes with "d Healthcare" at the core (health care portal)ー
We are working to implement effective measures through central management and analysis of various information on healthpromotion measures that have been individually developed. As part of these efforts, we implemented initiatives to maked Healthcare into a portal for an array of healthcare services.
Health measures linked to d Healthcare(1) ”Pulse Survey” for promoting self-care and line care <Improving convenience>
The Pulse Survey, a system that encourages employees to monitor and manage
their own health conditions (self-care) and communicate with their superiors (linecare) through basic medical interviews conducted on a periodic basis, is now
available through “d healthcare,” thus making it more convenient.
(2) Viewing the results of periodic health checkups (including physicalexaminations), etc. [Promoting Health Activities and Behavioral Change]
Results of health checkups and information about daily activities (life log) fromthe time one joined the company up to the present can be viewed, making it
easy to keep track of how one’s health is progressing.
(3) Stress checks <Improving convenience and promoting health activities andbehavior change>
Healthcare Portal Concept Image
We enabled viewing of both the implementation of statutory stress checks andthe results (including recommendations), improving convenience and expanding access to d healthcare.

Promotion of Global Diversity

ーData analysis for effective health promotion measuresー

Each year, we conduct Group training for senior managers

By collecting and analyzing a variety of data (PHR, work information, and more) held by the company, we can grasp
factors related to mental illness and health issues (specific health guidance, etc.), implement highly effective health promotion
measures, and support efforts to further improve employee health, which includes early detection and early treatment.

of NTT Group in Japan and overseas, called Global
Leadership Development Program Leadership Excellenceand Accelerating Diversity (GLDP LEAD). This training isdesigned to foster leadership among managers aiming tomove to higher positions.
This training is designed to foster leadership among
managers aiming to move to higher positions. This training,in which more than half of the participants are female,emphasizes diversity and innovative culture as organizational
capabilities of topmost importance. In the fiscal year
ended March 31, 2021, 42 employees from nine countries
underwent this training in an online format.

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NIPPON TELEGRAPH AND TELEPHONE CORPORATION

2022 Certified Health & Productivity Management Outstanding Organization(Large Enterprise Category [White 500])
We were chosen as a 2022 Certified Health & Productivity
Management Outstanding Organization (Large Enterprise Category[White 500]) by the Ministry of Economy, Trade and Industry and the
Nippon Kenko Kaigi. We will continue to strengthen our efforts tofurther encourage health management.
*Certified Health & Productivity Management Outstanding Organizations Recognition Program:A program that recognizes corporations, including both large and small-to-medium-sizedcorporations, that practice particularly excellent health and productivity management based on
initiatives that address local health issues and the health promotion initiatives supported by the
Nippon Kenko Kaigi.

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Message from our CEO

Value Creation Story

Growth Strategy

NTT Group
Sustainability

Data Section

NTT Group Sustainability

NTT Group Global Human Rights Policy

Value Chain Management

Background of NTT Group Global Human Rights Policy and Approach

Requests to Suppliers on Environmental and Social Concerns

NTT is committed to respecting global humanrights and believes it is an important corporate social
responsibility. NTT Group will strive to correctly
understand and recognize each country and region'slaws, cultures, religions, and values. We aim to createa safe, secure, prosperous and sustainable society byfulfilling this responsibility. We also replaced NTT Group's
existing Human Rights Charter with the new NTT Group
Human Rights Policy. We included the NTT Group Global

With the increased globalization and complexity ofsupply chains in recent years, responding appropriately to
global issues, such as disasters/pandemics, environment,
human rights, and security, has become an important
issue.
In light of this, we formulated the NTT Group Supply
Chain Sustainability Promotion Guidelines in 2022 that
contain detailed requirement items in the seven areasof human rights/labor, health/safety, the environment,
fair trade/ethics, quality/safety, information security, andbusiness continuity plans to guide our efforts as we work
together with suppliers to create and maintain a safe andsecure supply chain and achieve a sustainable society. The

Human Rights Policy, the Environmental Vision, and the
New Management Style in the new NTT Group Global
Sustainability Charter established in November 2021.
While supporting international covenants and treaties as
a company with global operations, NTT Group internallyand externally discloses its global human rights policy. This
policy applies to all employees and board members on
NTT Group, and we ask all of our suppliers and business
partners to support this policy and respect human rights.
NTT Group Global Human Rights Policy

https://group.ntt/en/newsrelease/2021/11/10/211110c.html

Webguidelines also clearly and directly lay out the responsibility
for suppliers to communicate the guideline details with
their upstream suppliers and encourage them to comply
and verify their compliance status. In addition, we havealso published the NTT Group Green Procurement
Standards as a supplement to our environmental
guidelines and are requesting that continued efforts bemade to reduce greenhouse gas emissions throughout
the supply chain. We have published these Guidelines
in Japanese and English, seeking to communicate to abroad range of the NTT Group’s suppliers both in Japanand overseas, and we have incorporated them into
supplier contracts to ensure compliance.

Due Diligence
Based on the UN Guiding Principles of Business andHuman Rights, we will use the human rights due diligenceprocess to identify, prevent, mitigate, and correct humanrights issues globally. And we will strive to improve
human rights awareness and human rights management
throughout NTT Group.
In addition, due diligence will be conducted among thestakeholders in the entire business value chain, and a
direct dialogue will be the basis of our efforts, especiallywith major suppliers.
The status will be disclosed on our website, in our
Sustainability Report, and in our Human Rights Report toevaluate and improve the process continuously.

Risk
identification
and assessment

Penetration
into thebusiness

Human Rights Due
Diligence Process
Disclosure andevaluation

Confirmationof viability andeffectiveness

Addressing Human Rights Issues ofParticular Importance
NTT Group identifies serious human rights issues tomonitor from the four following perspectives:

Theme 1

Promotion of “Diversity & Inclusion,” a concept that recognizes diverse cultures and values(Prohibition of discrimination, respect for freedom and rights, fairness in the workplace,economic disparities and poverty)
Aiming to create new value, NTT Group believes it is essential to respect the diverse values andindividuality of its employees in order to address the diversifying needs of its customers.

Theme 2

Theme 3

Theme 466

NIPPON TELEGRAPH AND TELEPHONE CORPORATIONNTT Group Basic Procurement
PolicyBasic procurement activity policy to achieve a sustainable society

NTT Group
Supply Chain Sustainability
Promotion Guidelines

Requests to suppliers regarding social issues establishedbased on the Basic Procurement Policy

NTT Group Green Procurement
Standards

Our latest environmental policies, target figures,
specific laws and standards suppliers must reference, procurement evaluation
items, etc.

Technical Requirements

Specific technical requirements, including reducing environmental impact,
to procure products that take quality, safety, and the environment into
consideration

Supplier Engagement Initiatives
We a s s e s s s o c i a l a n d e n v i ro n m e n t a l r i s k s b y
conducting the Supply Chain Sustainability Survey thatsurveys, NTT Group is promoting supplier engagement
activities, including direct dialogues with suppliers.

Promotion of “Technology that is based on high ethical standards,” which balances both highethical standards and technology(Technology, data bias, privacy, personal data protection, and security)

covers about 160 confirmation items, including the seven

Furthermore, in July 2022, the company took part inareas of human rights and labor, health and safety, thethe Joint Audit Co-Operation (JAC), *1 which involves

New technology will be necessary to strike a balance between people and nature. We believe it
will therefore be necessary to pursue R&D and the social implementation of technologies while
maintaining a high level of ethics.

environment, fair trade and ethics, quality and safety,

conducting CSR audits of ICT suppliers around the world.

information security, and social contributions, to confirm

We were the first telecommunications operator in Asia

the status of compliance with these guidelines and so on.

to participate. Through these activities, NTT Group will

Promotion of “Healthy work in daily life”(Diverse work styles, prohibition of forced labor and child labor, workplace safety, freedom of
association and the right to organize, living wage, enhanced benefits)

The survey targets all of the NTT Group’s critical suppliers

help make a sustainable society a reality by building andthat account for at least 90% of total procurement value,

maintaining a safe and secure supply chain.

We believe it is important to create safe and secure work environments and promote diverse work
styles so that employees can work in physical and mental health with enthusiasm and motivation.

suppliers of essential components, and suppliers of non-*1 https://jac-initiative.com/

substitutable products. Also, based on the results of these

Promotion of “Appropriate expression, speech, and display” in consideration of human rights(Freedom of expression and respect for human rights in advertising and other presentations)
As the Internet becomes more and more widespread, companies are required to be more
appropriate in their communications than ever before. The NTT Group will take actions thatabsolutely refrain from discriminatory expressions, speech, and displays.

ANNUAL REPORT 2022

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Message from our CEO

Value Creation Story

NTT Group
Sustainability

Growth Strategy

Data Section

NTT Group Sustainability

Corporate GovernanceMembers of our Board*As of the end of June 2022

―Reinforcement of Governance for Sustained Growth―

Basic Views of Corporate GovernanceWe believe that strengthening the system of corporate governance in accordance with the purposes of eachprinciple of the “Corporate Governance Code” of the Tokyo Stock Exchange is an important management issue
for maximizing corporate value while meeting the expectations of various stakeholders, including shareholders
and other investors, as well as customers, business partners, and employees. Therefore, we are working tostrengthen corporate governance based on our fundamental policies of ensuring sound management, executing
appropriate decision-making and business activities, clarifying accountability, and maintaining thoroughcompliance.
Overview of Corporate Governance Structure
NTT believes that an auditing system based on Audit & Supervisory Board Members, including outside
independent Audit & Supervisory Board Members, is an effective means of supervising management. Accordingly,
we have adopted the model of being a company with a Board of Company Auditors (Audit & Supervisory Board).
In addition, through the election of outside independent Members of the Board, NTT has strengthened thefunction of appropriately supervising business execution. Furthermore, through its adoption of an executive officer
system, NTT intends to clearly separate management-related decision-making and supervisory functions frombusiness execution functions and improve its management flexibility. Additionally, NTT has voluntarily establisheda “Nomination Committee” and a “Compensation Committee,” each of which consists of five Members of theBoard, including three outside independent Members of the Board, to further increase the objectivity andtransparency of decisions relating to appointment and compensation. NTT has determined that governancefunctions based on a Board of Corporate Auditors (Audit & Supervisory Board) are sufficiently effective to achieve
this purpose.

Jun Sawada

Akira Shimada

Katsuhiko Kawazoe

Takashi Hiroi

Akiko Kudo

Chairperson and Executive
Director

President and Chief
Executive Officer

Senior Executive Vice
President

Senior Executive Vice
President

Member of the Board

Ken Sakamura

Yukako Uchinaga

Ryoji Chubachi

Koichiro Watanabe

Noriko Endo

Outside Member of theBoard

Outside Member of theBoard

Outside Member of theBoard

Outside Member of theBoard

Outside Member of the
Board

Members of the Audit & Supervisory Board*As of the end of June 2022

Keiichiro Yanagi

Kanae Takahashi

Kensuke Koshiyama

Takashi Iida

Hideki Kanda

Kaoru Kashima

Full-Time Audit & Supervisory
Board Member

Full-Time Audit & Supervisory
Board Member

Full-Time & Outside Audit &Supervisory Board Member

Outside Audit & Supervisory
Board Member

Outside Audit & Supervisory
Board Member

Outside Audit & Supervisory
Board Member

Skill Matrix

Governance Chart

Field
Name

General Meeting of Shareholders

Decision-making/supervisory functions

Nomination Committee

Election/removal

Audit

Board of Directors

Supervision

Audit & Supervisory Board

Group
companies

Compensation Committee

SupportSustainability Committee
Business executionfunctionsElection/removal
and supervision

Reporting

ReportingNTT(holding
company)

President (Executive Officers Council)
Proposal/reportingon important matters

Accounting audit

Delegation of executive authority
instruction/supervision

Outside independent directors and outside independent Audit & Supervisory Board Members

Cooperation Evaluation

Coordination

Cooperation

Internal audit

Supervision

Independent Auditor

Instruction/
ReportingCorporate Officer
Business Sections

Office of Audit &Supervisory Board
Members

Members of the Board

Election/removalInternal Audit
Department

Inside directors and inside Audit & Supervisory Board Members

Cooperation

Members of the Audit & Supervisory Board

Election/removal

Business Administration

Marketing/Global Business

IT/DX/R&D●

Jun Sawada●●

Akira Shimada●●

Katsuhiko Kawazoe●●

Takashi Hiroi●●

Akiko Kudo

●

●

●

Ken Sakamura

●

●

●

Yukako Uchinaga

●

●

●

Ryoji Chubachi

●

●

●

Koichiro Watanabe●●

Noriko Endo●

Keiichiro Yanagi
Kanae Takahashi
Kensuke Koshiyama●

Law/Risk Management/
Public Policy

HR
●

●

●

●

●

●

●

●

●

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

●

●
●

●
●

●
●

●

●

●

●

●

●

●

●

Takashi Iida

●

●

●

Hideki Kanda

●

●

●

Kaoru Kashima

●

●

●

See the background and experience of the Members of theBoard and Members of the Audit & Supervisory Board here

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Finance

P98

ANNUAL REPORT 2022

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Message from our CEO

Value Creation Story

Growth Strategy

NTT Group
Sustainability

Data Section

NTT Group Sustainability

Board of Directors

Audit & Supervisory Board

The Board of Directors has ten Members of the Board, fiveoutside independent Members of the Board (including two
women) and five inside Members of the Board (including one
woman), which brings the total percentage of outside Membersof the Board to 50%. In addition, the introduction of an executive
officer system that clearly separates the management decisionmaking and oversight functions from the business executionfunction ensures closer supervision of execution and enhanced
management flexibility. In principle, the ordinary meetings of theBoard of Directors are held once per month, and extraordinary
meetings are held as needed. The Board of Directors discusses
the group management strategies and makes decisions on
matters stipulated by laws and regulations and on importantmatters related to company management and group management.
Moreover, through such means as periodic reports from Membersof the Board and Executive Officers on the status of businessexecution, the Board of Directors supervises the businessexecution of Members of the Board and Executive Officers.
Each outside independent Member of the Board has extensive
experience and a high level of integrity and insight. We believethat the outside independent Members of the Board will help
strengthen the supervisory function for business execution and
expect to incorporate the opinion they provide from their wideranging managerial perspective.
With the objective of further strengthening the independence,
objectivity, and accountability in decisions with respect toappointments and compensation of officers and related mattersmade by the Board of Directors, the Company has voluntarily
established a Nomination Committee and Compensation
Committee, each consisting of five Members of the Board, of
which a majority (three) are outside independent Members of theBoard, as preliminary review institutions of the Board of Directors,
thereby increasing the effectiveness of governance.
Moreover, in recognition of the fact that response tosustainability issues is an important management challenge, theCompany has voluntarily established a Sustainability Committeethat reports directly to the Board of Directors. The committee
will work to further promote initiatives after important issues
and indicators have been decided by resolution of the Board of
Directors.

● Breakdown of Agenda Items Presented to the Board of Directors
Corporate GovernanceManagement Strategy

42%

Number of Agenda
Items Presented to
the Board of Directors in
the fiscal year ended
March 31, 2022

General Meeting of Shareholders-related● Evaluation of the effectiveness of internal control
systems● Operational status of internal whistleblowing
system● Human resources● Policy on even stronger governance, etc.
●

(Number of Board of
Directors’ Meetings heldin the fiscal year ended
March 31, 2022: 15)

Capital Policy

9%

49%
●

NTT Group operations●

Review of NTT Group operational structure●

Global strategy●

M&A matters of operating companies●

Report on the status of execution of duties●●

Approval of Annual Reports and financial
statements
Research and development plans, etc.

Returns to shareholders(share buybacks and dividends)● Financing and loans, etc.
●

Evaluation of the Effectiveness of the Board of Directors
Overview of Evaluation
Participants

All 8 directors and all 5 corporate auditors

Evaluation
Implementation

April 2021

Questionnaire Format
Major Subjects
Results Aggregation andAnalysis Method

Anonymous surveys comprised 26 questions involving 4-level rankings as well as openended questions
Roles and responsibilities of Members of the Board and of the Board of Directors itself,
composition of the Board of Directors, operation of the Board of Directors,
support systems for outside Members of the Board
After aggregation by third-party organization and analysis by Board of Directors’ organizing
office, the results are shared and issues and improvement measures are discussed at Boardof Directors’ meeting

Evaluation Results
The FY2021 evaluation results confirmed that the Board was
sufficiently fulfilling its important role and responsibilities, with amajority of positive opinions for all of the questions.
In addition, as a result of the enhancement of governancerelated issues, such as holding meetings to exchange opinions tostimulate strategic discussions, and enhancement of discussions
on important issues such as sustainability, all members expressed
positive opinions. Therefore, we have evaluated that theeffectiveness of the Board of Directors is being ensured.
At the same time, regarding efforts to deepen understandingof increasingly complex proposals, while a certain degree of

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NIPPON TELEGRAPH AND TELEPHONE CORPORATION

recognition was received, there were also some opinions that
there is still room for improvement, so we will continue efforts toachieve improvements by aiming for more efficient operation of theBoard of Directors through enhancing supplementary explanations
related to the background of the deliberation items in advance andfurther expanding opportunities for exchanges of opinions with theexecutives of the major subsidiaries.

The Audit & Supervisory Board comprises four outside independent
Audit & Supervisory Board Members (including one female member),
who have experience and knowledge in a range of fields—as a lawyer,
university professor, and Certified Public Accountant—and two internal
Audit & Supervisory Board Members (including one female member).
NTT conducts effective audits by combining the independenceof outside Audit & Supervisory Board Members with the superior

information collection capabilities of internal Audit & Supervisory Board
Members. Among the Audit & Supervisory Board Members, Auditor
Kensuke Koshiyama has experience developed through his workat the Board of Audit of Japan, while Auditor Keiichiro Yanagi is acertified member of the Securities Analysts Association of Japan, andAuditor Kaoru Kashima is a Certified Public Accountant, all of whom
have considerable knowledge in the areas of finance and accounting.

Activities of the Audit & Supervisory Board
For the fiscal year ended March 31, 2022, amid continued
significant changes in management, including the strengthening of
global business competitiveness, initiatives to integrate functions
within the new NTT DOCOMO Group, the Audit & Supervisory Board
conducted an efficient and effective audit in collaboration with theInternal Audit Department, Accounting Auditors and Group company
corporate auditors on both audit matters required by law and onother matters such as the progress of the Medium-Term Management
Strategy and initiatives to maintain and improve corporate governance,on the basis of the audit plan.
Audit & Supervisory Board Members, including independent
outside Audit & Supervisory Board Members, attend meetings of theBoard of Directors and other important meetings. In addition, Audit& Supervisory Board Members meet with Representative Membersof the Board and independent outside Members of the Board to
exchange ideas and opinions, as well as hold meetings to exchange
ideas and opinions for certain topics with representative Membersof the Board and Audit & Supervisory Board Members of Group
companies, including overseas subsidiaries, in order to maintain anunderstanding of the status of the execution of duties by Membersof the Board and Executive Officers, and to provide their opinions asneeded.
In the fiscal year ended March 31, 2022, Audit & Supervisory Board
Members met to exchange ideas and opinions with Representative
Members of the Board, independent outside Members of theBoard and others 43 times. In particular, based on the results ofthe evaluation of effectiveness of the Audit & Supervisory Board forthe fiscal year ended March 31, 2021, NTT significantly increased
opportunities to exchange opinions with independent outside
Members of the Board during audits of the management, and held
discussions regarding management issues and responses, among
other topics. In the fiscal year ended March 31, 2022, the Audit &Supervisory Board met 26 times (with Mr. Takao Maezawa, Ms. Kanae
Takashi, Mr. Takashi Iida, Mr. Hideki Kanda and Ms. Kaoru Kashimaeach attending 26 out of 26 meetings).
Moreover, separate from meetings of the Audit & Supervisory Board,
the Audit & Supervisory Board Members Preliminary Deliberation
Meeting was held 40 times. These meetings provide a venue forthe sharing of information. For example, at these meetings Audit &Supervisory Board Members receive explanations from corporate
officers of matters to be discussed at the Executive Officers Meeting.
Furthermore, the Audit & Supervisory Board Members work closelywith the Accounting Auditors and the Internal Audit Department.
The Audit & Supervisory Board Members exchanged opinions withAccounting Auditors 11 times and with the Internal Audit Department
10 times, and received explanations of audit plans and reports on thestatus of internal control systems and provided advice as needed.
In initiatives related to Group companies, in order to improve
the Group audit structure and on the basis of materiality andrisk approach, NTT aligned risk awareness between the Audit &Supervisory Board Members of major Group companies and thenconducted audits through the Audit & Supervisory Board Membersof major Group companies. In the fiscal year ended March 31, 2022,
the Audit & Supervisory Board Members held meetings to exchange
opinions with the Representative Members of the Board and Audit &Supervisory Board Members of Group companies 53 times to inquire
about and hold discussions on the status of progress on the MediumTerm Management Strategy, the status of corporate governments andinitiatives to maintain and improve it, among other topics. In addition,
the Audit & Supervisory Board Members of each Group company
received reports and held meetings to exchange opinions on audit
results for audit matters based on their unified risk awareness. In
addition, the Audit & Supervisory Board is implementing initiatives
that contribute to enhancing the auditing activities of the Audit &Supervisory Board Members of major Group companies, including
holding liaison conferences for major Group companies and between
the Audit & Supervisory Board Members of major Group companies toshare risk awareness.
Through these activities, the Audit & Supervisory Board Members
support the sound, steady growth of NTT and Group companies
from an independent perspective that differs from that of executives.
In addition, Audit & Supervisory Board Members contribute to thestrengthening of corporate governance systems and the fostering ofawareness of compliance matters.
Furthermore, despite the continued spread of the COVID-19
pandemic, through the cooperation of related audit organizations
and the active utilization of web conferencing for site visits, theeffectiveness of the audit was not impaired.

● Opinion Exchange Meetings Held
Opinion exchange with Representative Membersof the Board

43

Audit & Supervisory Board

26

Audit & Supervisory Board Members Preliminary
Deliberation Meeting

40

Opininon exchange meetings with Accounting
Auditors

11

Opininon exchange meetings with Internal
Control Office

10

Opinion exchange meetings with Representative
Members of the Board of Group companies

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Message from our CEO

Value Creation Story

Growth Strategy

NTT Group
Sustainability

Data Section

NTT Group Sustainability

Messages from Outside Independent Members of the Board

Message

Outside Independent Member ofthe Board

Ken Sakamura
Assumed the position of Outside
Member of the Board of theCompany in June 2019

Outside Independent Member ofthe Board

Yukako Uchinaga
Assumed the position of Outside
Member of the Board of theCompany in June 2022

I have been involved in the research and development of open architecture focused around TRON*
for over 40 years and contribute to making ubiquitous computing and the IoT a reality. Based onthese experiences, I shared my thoughts at NTT's Board of Directors meetings, primarily in the area oftechnology, to push for the realization of the Medium-term Management Strategy.
In addition, besides offering advice on measures to be taken in light of the revised Corporate
Governance Code from the neutral position of an outside director, I share my views on the selectionof officers, succession planning, and the ideal compensation system as a member of the Nomination
Committee and Compensation Committee. I also supervise management as it formulates strategies
and executes its duties and make appropriate judgments and evaluations.
At the 37th Ordinary General Meeting of Shareholders, as an outside director, I answered a question
from a shareholder about how to create new technologies going forward in Japan, a country that isbehind when it comes to digital technology. I believe that there will be many opportunities to compete
globally with technology originating in Japan, and IOWN can serve as a game changer. By offering
advice and supervision, I hope to contribute to the continued growth of the NTT Group, which willcontinue to rise to the challenge of new technologies and develop new operating systems andinformation platforms that can help solve global issues.

Outside Independent Member ofthe Board

Ryoji Chubachi
Assumed the position of Outside
Member of the Board of theCompany in June 2022

*TRON (The Real-time Operating system Nucleus): An OS originating in Japan that boasts a market share of over 60% in the IoT field. It is
recognized as a standard by the Institute of Electrical and Electronics Engineers (IEEE) of the United States.

I became the first female Board Member at IBM Japan, which I joined right out of university. While at
IBM Japan, I established the NPO Japan Women's Innovative Network to promote establish diversity
management at companies. I have also been involved in business administration for five years as
CEO of Berlitz Corporation and have served on the Board of Directors of a number of publicly traded
companies, providing advice from a managerial perspective.
If Japanese companies are to overcome this era of significant global upheaval, innovation thattranscends conventional values is essential. I believe that utilizing human resources with diverse values
and creating new business models based on mutual understanding and respect, as well as promoting
diversity and inclusion (D&I) to invigorate the organization, is an important catalyst for innovation andserves as an effective management strategy.
NTT Group has taken a major step toward advancing D&I, including the launch of a remote work
standard that allows greater freedom of residential location. I greatly appreciate that the company has aclear vision when it comes to employee diversity and work styles and has linked this vision to improving
employee motivation and hiring excellent personnel. I expect it to become a leader in the promotion
of D&I in Japan. I will help to enhance corporate value by drawing on my past experience to offer
highly effective supervision and support for appropriate risk-taking from an independent and objective
standpoint.

Outside Independent Member ofthe Board

Koichiro Watanabe
Assumed the position of Outside
Member of the Board of theCompany in June 2022

Outside Independent Member ofthe Board

Noriko EndoI joined Sony as an engineer and worked in development before becoming involved in the company's
management in the midst of rapid globalization and digitalization. Later, as President of the National
Institute of Advanced Industrial Science and Technology (AIST), a national research institute, I havebeen working to bring about innovation and serve as a bridge to the industrial world, with the missionof “bringing technology to society.”
During my time at Sony, the company's founder, Masaru Ibuka, taught me that on a scale of 1 to 10,
if the amount of effort required to come up with an idea is considered a 1, mass production requires 10
times the effort, and making it into a profitable business requires another 10 times the effort. The changes
in technology are becoming more complex, sophisticated, and diverse with each passing day. It is
important not only to create innovations that will serve as a source of growth for the company, but also tocollaborate with different companies, universities, and research institutions on practical applications.
NTT Group is engaged in a wide range of R&D activities, from basic research to practical applications.
We are convinced that IOWN technology, which we aim to achieve by 2030, is an important technologythat will contribute to enhancing Japan's industrial competitiveness, as it is a revolutionary nextgeneration network that is also eco-friendly.
I hope that NTT Group's medium- to long-term plans are in line with the demands of society and that wewill continue our sustainable growth as a company. I will make the most of the knowledge and experience
I’ve accrued thus far to contribute to NTT Group’s development and enhance its corporate value.

I worked at The Dai-ichi Life Insurance Company in the management planning, human resource
development, public relations, and research departments, among others. After becoming president
in 2010, I implemented various reforms to respond to global changes and needs in a flexible manner,such as converting the company into a joint stock corporation, making us the first major life insurancecompany to do so.
The world is constantly changing, and responding to these changes requires reform. Reform will
inevitably bring about friction, but my motto is "change creates friction, and friction creates progress.”
Overcoming this friction will usher in significant development.
NTT Group has always reinvented itself, and I believe that we are now in a period of significant
change that will mark a milestone in our history. All of the initiatives in the revised Medium-termManagement Strategy, including shifting toward a new management style, achieving carbon neutrality,
and strengthening domestic and global operations, are reforms that will have a significant impact. I am
confident that we will achieve great progress after adapting to these changes and overcoming friction.
I am aware that NTT Group has many issues to tackle during this transition period. By providing
advice on these issues and supervising appropriate decision-making and business execution based on
our past experience, I will help NTT Group to sustain growth and enhance its corporate value over the
medium to long term.

I am engaged in research projects on energy policy and economic security at Keio University. The
aim is to help solve the issues confronting Japan in a drastically changing security environment, such as
geopolitical risks and security governance. I am also involved in public policy deliberations concerning
nuclear energy, science and technology, commerce and trade, space, and public finance.
As a leading company group in Japan, NTT Group is expanding the use of renewable energy andpromoting IOWN-related research and development, with the goal of becoming carbon neutral by
2040. I deeply appreciate the company's commitment to pursuing sustainability for itself and society by
tying together business activities aimed at corporate growth and initiatives to reduce the environmental
impact to zero.
I believe that one of my key roles as an Outside Independent Member of the Board is to encourage
the medium- to long-term growth of NTT Group. As an editor of economic media and a researcher ofindustrial, science, and technology policy, I have been exposed to situations where the competitiveenvironment for companies is drastically changing and business models are transforming due to atransformation in the industrial structure brought about by technological innovation. I will apply myknowledge to advise the NTT Group so that it can achieve growth in the global marketplace, as well as
oversee the execution of NTT Group's business operations.

Assumed the position of Outside
Member of the Board of theCompany in June 2022

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Message from our CEO

Value Creation Story

NTT Group
Sustainability

Growth Strategy

Data Section

NTT Group Sustainability

Nomination Committee and Compensation Committee Composition and Activities
With the objective of further strengthening independence, objectivity,
and accountability in decisions made by the Board of Directors with respect
to appointments and compensation of the Members of the Board andofficers, the Company has voluntarily established a Nomination Committee
and a Compensation Committee, each consisting of five Members of theBoard, of which a majority (three) are Independent Outside Members of
the Board, as preliminary review institutions of the Board of Directors,
thereby increasing the effectiveness of governance. Furthermore, from andafter August 6, 2021, a majority of committee membership consisted ofIndependent Outside Members of the Board, increasing independence.
From and after November 10, 2021, the Company decided to separate
and transfer the functions of the existing Appointment and Compensation
Committee into the separate Nomination Committee and Compensation
Committee based on their applicable functions, and further delineated theauthority and role of each committee. The membership of each committee
consisted of Akira Shimada (Representative Member of the Board,
President), Takashi Hiroi (Representative Member of the Board, Senior
Executive Vice President), Ken Sakamura (Outside Member of the Board),
Yukako Uchinaga (Outside Member of the Board) and Koichiro Watanabe(Outside Member of the Board), with Akira Shimada (Representative
Member of the Board, President) serving as chairperson to oversee theproceedings of each committee. In each committee, resolutions are madewith the approval of the majority of the attendance of more than half ofNomination
Committee

Preliminary
Deliberation Items

SpecificallyDelegated Items
Compensation
Committee

Preliminary
Deliberation Items● Monthly salary (base compensation): The base salary is a fixed compensation paid monthly on the basis of the scope of each Member of theBoard’s roles and responsibilities.
● Bonus (short-term performance-linked compensation): The bonus is paid in June each year, taking into account NTT’s business results forthe current fiscal year. The amount of this bonus is based on the achievement of indicators based on targets in the Medium-Term Management
Strategy.
● Stock compensation (medium- to long-term performance-linked compensation: Members of the Board make contributions of a certain
defined amount or more every month for the purchase of NTT shares through the Board Members Shareholding Association. Purchased sharesare to be held by the Members of the Board throughout their terms of office. For the stock compensation, a trust, established by NTT is used.
The Members of the Board are granted points corresponding to their role in June each year and a performance-linked coefficient corresponding
to the level of achievement of the performance indicator is determined in June of the year following the final fiscal year of the Medium-Term
Management Strategy, and the number of shares to be granted to each Member of the Board is calculated by multiplying the performance-linked
coefficient by the number of points that has been accumulated. The granted shares are delivered to the Member of the Board upon retirement.

the committee members.
In the fiscal year ended March 31, 2022 * , the Appointment andCompensation Committee met six times, the Nomination Committee
twice, and the Compensation Committee once. In addition, membersof each committee held meetings to exchange opinions, where active
discussions were held, regarding the form of the compensation system, theappointment of Members of the Board and officers, succession plans, andmeasures in consideration of amendments to the Corporate Governance
Code, among other topics.

● N omination Committee and Compensation Committee
Composition

2

InsideMembersof the Board

5

3

In order to maintain a high level of independence, compensation of outside Members of the Board consists of a monthly fixedcompensation only, and is not linked to NTT’s business results. Compensation of Audit & Supervisory Board Members is determinedby resolution of the Audit & Supervisory Board and consists of a base salary only, for the same reasons as those cited above withrespect to outside Members of the Board.

OutsideIndependent
Members of the Board

Fixed compensation: Approx. 50%

5* During the fiscal year ended March 31, 2022, the membership of each committee consisted of
Jun Sawada (former Representative Member of the Board, President), Akira Shimada (former
Representative Member of the Board, Senior Executive Vice President), Katsuhiko Shirai (former
Outside Member of the Board), Sadayuki Sakakibara (former Outside Member of the Board) and
Ken Sakamura (Outside Member of the Board), with Jun Sawada (former Representative Memberof the Board, President) serving as chairperson to oversee the proceedings of each committee.

1. Policies with respect to the appointment and dismissal of Members of the Board and executive officers of the whole group, and the nomination ofcandidates
2. Matters related to the appointment and dismissal of Members of the Board
3. Matters related to the selection and dismissal of representative Members of the Board of major group companies
4. Selection and dismissal of representative Members of the Board and other named roles of Members of the Board
5. Selection and dismissal of the Chairman
6. The order of Members of the Board to assume the responsibilities of the President of the Company in the event that anything occurs to the President
7. Determination of the allocation of responsibilities for Members of the Board and assignment of employee duties
8. Appointment and dismissal of executive officers and assignment of duties
9. In addition to the foregoing matters, other nomination-related matters regarding Members of the Board, executive officers and others, for which thecommittee receives requests for deliberation from the Board of Directors
Nomination-related matters regarding Members of the Board, executive officers and others, for which the committee receives requests for deliberationfrom the Board of Directors
1. Policies for determining compensation of Members of the Board and executive officers, and composition and levels of compensation
2. In addition to the foregoing matters, other compensation-related matters regarding Members of the Board and executive officers, for which thecommittee receives requests for deliberation from the Board of Directors

Performance-linked compensation: Approx 50%

3

:

:

Bonus

Monthly salary(medium- to long-term
performance-linked
compensation)(short-term performancelinked compensation)(base compensation)2
Stock compensation

Amounts above certain amounts of base salaries and bonuses are used for stock purchases through the Board Members Shareholding Association●Bonus Performance Indicators
Performance Indicators*

Evaluation weight

Evaluation method

Fiscal year ended March 31, 2021

Fiscal year ended March 31, 2022

35%

Year-on-year improvement

¥248

¥329

Evaluation weight

Evaluation method

Target of Fiscal year ended March 31, 2022

Result of Fiscal year ended March 31, 2022

EPS
Performance Indicators*

Operating profit

35%¥1.73 trillion¥1.7686 trillion

ROIC

9%

7.4%

7.5%

Capex to Sales

6%

13.5%

13.1%

Overseas sales

6%

Achievement of targets

19,000 (Millions of dollars)

18,878 (Millions of dollars)

Overseas operating profit margin

6%

6.0%

6.3%

*In addition to the above, the degree of achievement for number of B2B2X projects is also evaluated.

SpecificallyDelegated Items

1. Ratios, calculation methods and amounts of compensation for each individual Member of the Board and executive officers
2. Other matters that are specifically delegated by the Board of Directors regarding the determination of compensation-related decisions of Membersof the Board and executive officers

Board Member Compensation
Board Member Compensation Determination Policy andProcess
Regarding the composition and level of compensation for Membersof the Board of NTT under the Determination Policy, in order to secure
objectivity and transparency, NTT established the Compensation
Committee, comprising five Members of the Board, including three
Independent Outside Members of the Board. Moreover, decisions on
the ratios and calculation methods for compensation for Membersof the Board, and amounts of compensation for individual Members,
are delegated from the Board of Directors to the Compensation
Committee. The reason for delegating these authorities to theCompensation Committee is that such committee is composed of two
Representative Members of the Board and three Outside Membersof the Board, and we believe that it is able to make the appropriate

74

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

In light of the new NTT Group Sustainability Charter being established on November 10, 2021, we plan to make changes to theperformance indicators for bonuses in fiscal year 2022 and beyond, which includes adding three new sustainability indicators withthe goal of achieving the three themes of a sustainable society.
Positionjudgements from an outside perspective while also taking a bird’s-eyeview of the Company’s overall performance.
Compensation of individual Members of the Board (excluding
outside Members of the Board) consists of a monthly salary (basesalary) and a bonus (compensation related to performance overthe short term), NTT stock purchase through Board Members
Shareholding Association and stock compensation (compensation
related to performance over the medium to long term). The
composition ratio of compensation in a case where standard businessresults are achieved is roughly as follows: Fixed compensation: Shortterm performance-linked compensation: Medium- to long-term
performance-linked compensation = 50%: 30%: 20%.

Financial indicators

Sustainability indicators

Performance Indicators

Evaluation weight

Evaluation method

EPS (earnings per share)

35%

Year-on-year improvement

Operating profit

35%

Overseas operating profit margin

10%

ROIC

5%

Greenhouse gas emissions

5%

B2B2X earnings

5%

Ratio of women newly promoted to management positions

5%

Achievement of targets

ANNUAL REPORT 2022

75

Message from our CEO

Value Creation Story

Growth Strategy

NTT Group
Sustainability

Data Section

NTT Group Sustainability

Stakeholder Engagement
NTT Group provides products and services to diverse stakeholders around the world, and its value chain continues
to expand globally and grow in complexity. Along with these changes, our stakeholders’ needs and expectations arealso becoming increasingly diverse, and we must accurately understand and reflect them in our business activities
through stakeholder engagement.

Customers (Corporations/Individuals)

Business Partners

All customers, both corporate and individual, who use services provided by NTT Group

Business partners who offer their cooperation in various ways as NTT Group provides its services

Why We Engage

NTT Group’s Approach

As we strive to be chosen as “Your
Value Partner”, each individual
employee will strive for an even higher
awareness of sustainability to provide
safe, secure services that are highin quality and convenient from thecustomer’s standpoint.

 stablish customer information
E
service points

NTT Group endeavors to enhancecustomer satisfaction and become“ Yo u r Va l u e P a r t n e r ” f o r o u r
customers by understanding theirneeds and standpoints in order toprovide higher quality services andproducts.

We will seek to work together tocreate and implement services that
address a variety of social issues.

▲▲

Utilize website and social media

 isclose procurement policies
Dand guidelines
Conduct supplier surveys
Provide briefings for suppliers

Why We Engage
By procuring products with due
consideration to the environmentand human rights, and by forging
partnerships based on fairness, wewill fulfill our social responsibilities as
a company and achieve sustainablegrowth alongside our business
partners.

Shareholders and Investors

ICT Companies and Industry Associations

Individual and institutional investors including the shareholders and creditors of NTT Group

Other ICT companies and people in industry associations who are striving to develop Japan’s information and telecommunications

Why We Engage

NTT Group’s Approach

Methods of Engagement (examples)

Why We Engage

We will return profits to shareholders
while maintaining a sound financial
standing and enhancing ourcorporate value. We will alsoendeavor to disclose information
related to the Group in a timely,
appropriate, and fair manner.

 eneral Meeting of Shareholders,G
earnings reports
E xplanatory presentation for
individual investors
E xplanatory presentation for
institutional investors
Annual reports, etc.

We disclose information necessary
for the shareholders and investors
to make investment decisions andreceive appropriate evaluations fromthem through communication withthem, and refer to their opinions in
the Group’s management.

We will engage in discussions on
the direction and initiatives for the
information and telecommunicationsindustry, not only in Japan but froma global perspective, and seek
to address diverse social issues
together.

 articipation in industry
P
associations and related initiatives

We will invigorate the entire
industry and contribute to society
by promoting development andprogress in information andtelecommunications.

▲

Methods of Engagement (examples)▲

NTT Group’s Approach▲▲

Participation in conferences▲▲

Employees (Employees, Their Families, and Retired Employees)

Central Government and Administrative Agencies

Employees who work at NTT Group and retired employees who support NTT Group’s sustainability ideals

Central and local governments and administrative agencies that make policy decisions on information and telecommunications,employment and the economy, the environment, and other issues

Why We Engage

NTT Group’s Approach

Methods of Engagement (examples)

Why We Engage

We will pursue various employee
initiatives to create safe and healthy
workplaces in which everyone canrealize their full potential and be
rewarded in their work and daily lives.
We will also value communication
with retired employees.

 onduct employee satisfaction
C
surveys
Regular interviews
D ialogue between labor andmanagement
Establih corporate ethics helplines
Hold sustainability conferences

We create safe and healthy
workplaces for our employees andsupport their daily lives so that eachindividual employee can realize theirfull potential and carry out their workwith a strong awareness of CSR.

We will fulfill our responsibility as an
information and telecommunications
company by adhering to thepolicies of the central government,
administrative agencies, and local
governments.

Response to laws and regulations

We will respond to and comply withcentral and local government andadministrative agency policies tocarry out business activities in an
appropriate manner, and contributeto resolving social issues facedby the Japanese people and local
governments.

▲▲

▲ ▲ ▲

Methods of Engagement (examples)▲

NTT Group’s Approach

Policy proposals▲▲

 articipation in joint projects
P
between the government andprivate sector

Local Communities

NGOs, NPOs, and Experts

People in local communities who are connected to us through the core businesses of NTT Group companies

NGOs, NPOs, and experts who are positioned within NTT Group’s domain of activities including sustainability

Why We Engage

NTT Group’s Approach

Methods of Engagement (examples)

Why We Engage

We will advance alongside local
communities by implementingsocial contributions and disastercountermeasures through our ICT
business.

Support and collaboration throughsocial contribution activities

We seek to contribute to the further
development of a flourishing andvibrant community and to understandand identify the issues faced by local
communities in order to implement
various contributions through our ITC
business.

We will contribute to creating asustainable society by sharing theexpert knowledge and experienceof NGOs, NPOs, and experts, andb y inco r p o r ating them into thetelecommunications industry.

 articipation and collaborationPwith study groups and activitiesof each organization

NTT Group provides services that
extend beyond telecommunications
to broader domains, and gaining thespecialized perspectives of NGOs,
NPOs, and experts allows the Group
to appropriately and effectively
develop business activities.

▲▲

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

Dialogue▲ ▲Negotiations with local residents
on construction work, systemdevelopment, and other activities▲

Methods of Engagement (examples)▲

NTT Group’s Approach

Support through donations andsponsorships

76

Set up inquiry forms▲ ▲ onduct customer satisfaction
C
surveys

Methods of Engagement (examples)▲ ▲Methods of Engagement (examples)▲

NTT Group’s Approach

Collaborative projects

ANNUAL REPORT 2022

77

Message from our CEO

Value Creation Story

NTT Group
Sustainability

Growth Strategy

Data Section

Financial Data Summary
Unit: Billions of yen

U.S. GAAPFY2012FY2013

FY2014FY2015FY2016

Unit: Billions of yen

IFRS

FY2017

Profit and loss (For the year)

FY2017FY2018FY2019FY2021

FY2020

Profit and loss (For the year)

Operating revenues

10,700.7

10,925.2

11,095.3

11,541.0

11,391.0

11,799.6

Operating revenues

11,782.1

11,879.8

11,899.4

11,944.0

12,156.4

Operating expenses

9,498.8

9,711.5

10,010.8

10,192.8

9,851.2

10,156.7

Operating expenses

10,141.1

10,186.0

10,337.3

10,272.6

10,387.9

Operating profit

1,202.0

1,213.7

1,084.6

1,348.1

1,539.8

1,642.8

Operating profit

1,641.1

1,693.8

1,562.2

1,671.4

1,768.6

(4.3)

80.5

(17.9)(18.9)(12.0)

112.8(53.2)(11.9)(3.3)(19.0)

7.2

1,197.6

1,294.2

1,066.6

1,329.3

1,527.8

1,755.6

474.0

486.5

397.3

354.8

468.4

541.9

Profit before tax
Income taxes

Other income
Income before income taxes and equity in earnings (losses) of affiliated companies
Income tax expense

Finance Income and Costs
Share of Profit (Loss) of Entities Accounted for Using Equity Method

5.0(10.1)

11.3

0.2

19.7

1,740.5

1,671.9

1,570.1

1,652.6

1,795.5

533.8

533.2

458.8

524.7

539.5

1,206.7

1,138.7

1,111.3

1,127.9

1,256.0

Equity in earnings (losses) of affiliated companies(16.1)(50.8)

5.9

5.8

(0.0)

5.6

Net income

707.6

756.9

675.2

980.2

1,059.4

1,219.3

Less— Net income attributable to non-controlling interests

185.7

171.4

157.1

242.5

259.2

309.6

Less— Non-controlling interests

308.8

284.1

256.0

211.7

74.9

Net income attributable to NTT

521.9

585.5

518.1

737.7

800.1

909.7

Profit attributable to NTT

897.9

854.6

855.3

916.2

1,181.1

Property, plant and equipment

9,776.7

9,839.7

9,801.5

9,551.9

9,719.0

9,821.1

Property, plant and equipment

8,812.2

9,012.9

9,087.5

9,282.3

9,326.9

Balance sheet (At year-end)

ProfitBalance sheet (At year-end)

Total assets

19,549.1

20,284.9

20,702.4

21,035.9

21,250.3

21,675.8

Total assets

21,541.4

22,295.1

23,014.1

22,965.5

23,862.2

Current liabilities

3,499.4

3,676.8

3,721.7

3,741.1

4,131.4

4,239.0

Current liabilities

4,622.4

5,228.1

6,607.6

7,426.2

6,258.6

Total long-term liabilities

5,527.7

5,657.4

5,902.7

6,009.6

5,560.4

5,354.3

Non-current liabilities

5,353.4

5,262.3

4,943.9

7,336.3

8,585.5

Capital stock (common stock plus additional paid-in capital)

3,765.6

3,765.0

3,784.7

3,817.5

3,800.0

3,791.6

Capital stock (common stock plus additional paid-in capital)

3,334.5

3,279.2

3,190.6

938.0

938.0

Total NTT shareholders’ equity

8,231.4

8,511.4

8,681.9

8,833.8

9,052.5

9,486.0

Total NTT shareholders’ equity

9,050.4

9,264.9

9,061.1

7,562.7

8,282.5

Non-controlling interests

2,290.6

2,413.5

2,368.0

2,406.3

2,455.3

2,546.6

Non-controlling interests

2,515.3

2,539.9

2,401.5

640.3

735.7

Total equity

10,522.0

10,924.8

11,049.8

11,240.1

11,507.8

12,032.6

Total equity

11,565.7

11,804.8

11,462.6

8,203.0

9,018.1

Net cash provided by operating activities

2,453.7

2,727.9

2,391.8

2,711.8

2,917.4

2,637.5

Net cash provided by operating activities

2,541.3

2,406.2

2,995.2

3,009.1

3,010.3

Cash flows from investing activities(1,776.3)(2,106.8)(1,868.6)(1,759.8)(2,089.3)(1,841.8)

Cash flows from investing activities(1,746.2)(1,774.1)(1,852.7)(1,424.5)(1,699.2)

Cash flows from financing activities(745.2)(622.4)(678.0)(707.6)(981.5)(931.7)

Cash flows from financing activities(968.3)(584.3)(1,041.3)(1,689.5)(1,438.1)

4,036.0

4,200.0

4,406.7

4,163.3

4,088.2

3,854.8

3,971.6

4,262.7

4,699.9

7,624.3

7,364.3

49.0

49.3

50.8

47.1

45.2

40.6

43.9

46.0

51.9

100.8

88.9

Capital investment (For the year) (1)1,970.0

1,892.8

1,817.5

1,687.2

1,700.0

1,674.8

Capital investment (For the year)

1,697.9

1,697.0

1,806.6

1,728.3

1,687.6

Depreciation and amortization

1,899.2

1,880.3

1,828.0

1,766.3

1,462.2

1,339.4

Depreciation and amortization (For the year) (1)1,346.9

1,333.6

1,465.3

1,507.2

1,561.2

269.2

249.3

233.8

213.4

211.6

213.9

208.6

211.3

224.9

232.6

248.0

3,244.2

3,204.2

3,063.4

3,277.9

3,183.3

3,215.8

3,237.1

3,241.4

2,968.6

3,111.6

3,247.1

EBITDA margin (%) (1)

30.3

29.3

27.6

28.4

27.9

27.3

EBITDA margin (%) (1)

27.5

27.3

24.9

26.1

26.7

Free cash flows

677.4

621.1

523.2

952.1

828.0

795.8

Free cash flows

795.1

632.0

1,142.5

1,584.5

1,311.1

Cash flows (For the year)

Cash flows (For the year)

Other financial data, performance indicators, etc.
Interest-bearing liabilities
D/E ratio (%)

Research and development expenses (For the year)
EBITDA (1)Other financial data, performance indicators, etc.
Interest-bearing liabilities
D/E ratio (%)

Research and development expenses (For the year)
EBITDA (1)Employees (Thousands) (At year-end) (3)

227

240

242

241

275

283

283

308

319

325

334

(2)

4,847,523,076

4,599,032,856

4,374,720,036

4,211,565,656

4,093,356,288

3,991,825,514

Weighted average number of shares outstanding (4) (5)3,991,825,514

3,882,137,457

3,699,278,775

3,691,993,269

3,586,788,697

Cash dividends, applicable to earnings for the year (2)

40

42.5

45

55

60

75

Cash dividends, applicable to earnings for the year (4)

75

90

95

105

115

Dividend payout ratio (%)

37.2

33.4

38.0

31.4

30.7

32.9

Dividend payout ratio (%)

33.3

40.9

41.1

42.3

34.9

ROE (%)

6.5

7.0

6.0

8.4

8.9

9.8

ROE (%)

10.2

9.3

9.3

11.0

14.9

107.67127.31118.43175.17

195.47227.89329.29

Employees (Thousands) (At year-end)
Weighted average number of shares outstanding

Medium-term financial targets
EPS (Yen) (2)Capex to sales (%)

18.4

17.3

16.4

14.6

14.9

14.2

(1)
• Capital investment: On an accrual basis for the acquisition of property, plant and equipment• From the fiscal year ended March 31, 2017, the method for calculating EBITDA has been revised.
EBITDA = Operating income + Depreciation and amortization + Loss on sales of property, plant and equipment + Impairment loss
EBITDA margin = (Operating income + Depreciation and amortization + Loss on sales and disposal of property, plant and equipment + Impairment loss) / Operating revenues × 100• Beginning on April 1, 2020, NTT Group has excluded all depreciation expenses related to right-of-use assets from EBITDA and depreciation, as a component of EBITDA. As a result of
the change described above, EBITDA and depreciation, as a component of EBITDA, for FY2019 have been retroactively revised to be reduced by ¥10.9 billion.
(2) Adjusted for the 2-for-1 stock split with an effective date of July 1, 2015.

78

NIPPON TELEGRAPH AND TELEPHONE CORPORATIONEPS (Yen) (4)224.93220.13231.21

248.15

Overseas operating profit margin (%) (6)

3.1

3.2

2.4

3.0

6.3

Cost reductions (7)̶(220.0)(500.0)(670.0)(840.0)

ROIC (%)

7.4

7.4

6.6

7.2

7.5

Capex to sales (%) (Domestic network business (8))

13.7

13.9

13.8

13.6

13.1

(3) Past figures have been retroactively revised as a result of expanding the scope of the personnel counted at certain overseas subsidiaries.
(4) EPS amounts reflect the two-for-one stock split with an effective date of January 1, 2020 as approved by the Board of Directors on November 5, 2019.
(5) Shares of the Company held by the officer compensation BIP trust are included in the treasury stock deducted when calculating the weighted average number of shares outstanding.
(6) Includes results from the global holding company (NTT, Inc.) and its subsidiaries and affiliates. Operating Profit excludes temporary expenses, such as M&A-related depreciation costs ofintangible fixed assets.
(7) Cumulative reductions from FY2017.
(8) Excludes NTT Communications’ data centers and certain other assets.

ANNUAL REPORT 2022

79

Message from our CEO

Value Creation Story

NTT Group
Sustainability

Growth Strategy

Data Section

Financial Data Summary

Business Segment Data
Operating revenues

Capital Investment(Billions of yen)(Billions of yen)

2,000

15,00012,0005,880.9
4,461.2

4,383.4

4,527.1

4,584.6

4,762.3

4,840.8

4,651.3

4,725.2

3,572.3

3,505.5

3,407.9

3,308.2

3,231.6

3,152.3

3,079.9

3,207.4

5,984.0

5,870.2

1,500

703.1

661.8

595.2

597.1

577.0

593.7

572.8

569.1

722.8

666.2

622.1

583.4

549.6

541.0

522.5

527.4

734.3

698.6

713.0

527.4

501.1

495.0

327.9

347.2

387.0

9,000
1,000

3,207.4

6,000

2,242.2
1,809.9

1,998.6

2,250.9

2,278.7

2,205.8

2,065.6

2,045.2
1,511.0

1,328.502013

1,616.8

1,272.2
2014

Business Segments After Change FY2020
onwardBusiness Segments Prior to Change
Through FY2020

2,163.6

2,266.8

2,318.7

3,367.1

3,870.0

3,615.2

1,718.7

1,294.5
2015

279.3

500

2,129.3

3,000

1,343.9

3,220.0

3,207.6

1,282.3
2016

1,214.6
2017[IFRS]

1,240.3
2018[IFRS]

1,601.7
2019[IFRS]■ Integrated ICT Business ■ Regional Communications Business■ Other (Real Estate, Energy and Others)

1,467.1
2020[IFRS]

1,335.4
2020[IFRS]

1,510.0

1,396.0
2021[IFRS]

2022E (Fiscal year)[IFRS]■ Global Solutions Business■ Mobile Communications Business ■Regional Communications Business■ Long Distance and International Communications Business ■ Data Communications Business

168.4

198.1

147.7

140.9

150.7

0
2013

150.6
2014

Business Segments After Change FY2020
onwardBusiness Segments Prior to Change
Through FY2020■ Other Businesses

227.6

244.9

134.0

158.1

108.3
2015

116.6
2016

235.0

244.3

194.8

179.2

193.8

141.5
2017
[IFRS]

138.7
2018[IFRS]

238.2
2019[IFRS]■ Integrated ICT Business ■ Regional Communications Business■ Other (Real Estate, Energy and Others)

259.0

169.5

203.3
2020
[IFRS]

138.7
2020[IFRS]

155.0

140.7
2021
[IFRS]

2022E (Fiscal year)[IFRS]■ Global Solutions Business■ Mobile Communications Business ■Regional Communications Business■ Long Distance and International Communications Business ■ Data Communications Business■ Other Businesses

Operating profit
・Revenues from segment operations include intersegment transactions.
・Beginning with the fourth quarter of FY2021, NTT Group's segments were changed from the previous five segments Mobile Communications, Regional Communications,(Billions of yen)

2,000Long-distance and International Communications, Data Communications, and Other Businesses to the four segments of Integrated ICT, Regional Communications, Global
Solutions, and Other (Real Estate, Energy and Others). As a result of this change, the FY2020 figures have been reclassified based on the new segments.

1,500

987.0

1,013.6

854.7

913.2

1,060.0

1,072.5

1,084.0

351.6

360.7

388.3

420.2

420.2

440.0

442.0

90.6

100.1

103.6

146.2

123.2

147.7

130.9

139.2
64.8

210.5

244.0

1,000

817.2

788.4

951.6

265.0

359.5

96.7
112.7
74.0

40.8
107.9
77.3

635.8

500

0
2013

127.2

168.9

127.5
67.9
56.1

113.6
86.4
67.5
2014

Business Segments After Change FY2020
onwardBusiness Segments Prior to Change
Through FY2020

80

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

2015

2016

98.7
2017
[IFRS]

85.6
2018[IFRS]

90.9
2019[IFRS]■ Integrated ICT Business ■ Regional Communications Business■ Other (Real Estate, Energy and Others)

2020[IFRS]

147.3
56.4
2020
[IFRS]

74.0

72.5
2021
[IFRS]

2022E (Fiscal year)[IFRS]■ Global Solutions Business■ Mobile Communications Business ■Regional Communications Business■ Long Distance and International Communications Business ■ Data Communications Business■ Other Businesses

ANNUAL REPORT 2022

81

Message from our CEO

Value Creation Story

Growth Strategy

NTT Group
Sustainability

Data Section

Financial Data Summary
Unit: Billions of yen

Consolidated Data (IFRS)

Years Ended March 31
FY2020Business Segments (IFRS)FY2020

FY2021NTT Consolidated Financial Results
Operating revenues

Unit: Billions of yen

Years Ended March 31
FY2021

Integrated ICT Business Segment
11,944.0

12,156.4

Fixed voice-related service

934.7

916.1

Fixed voice-related service

187.4

176.0

Mobile voice-related service

1,126.8

1,102.5

Mobile voice-related service

1,132.8

1,109.9

IP/packet communications service

3,477.5

3,444.8

IP/packet communications service

674.1

694.7

System integration services

3,829.8

Other

Sales of telecommunications equipment

Operating expenses

Operating revenues

5,880.9

5,870.2

2,372.1

2,304.3

Sales of telecommunications equipment

605.2

629.0

3,988.7

System integration services

486.0

525.2

1,901.0

2,009.6

Other

1,097.4

1,125.7

4,820.9

4,797.6

10,272.6

10,387.9

Personnel expenses

2,461.4

2,566.1

Personnel expenses

Expenses for purchase of goods and services and other expenses

5,875.3

5,839.4

Expenses for purchase of goods and services and other expenses

Depreciation and amortization

1,507.2

1,561.2

Depreciation and amortization

25.7

38.1

Impairment losses

0.4

1.7

2.7

0.2

Expenses on disposal of fixed assets

67.9

52.6

Impairment losses
Goodwill
Other
Expenses on disposal of fixed assets
Taxes and dues

Operating expenses

23.0

37.8

156.9

132.1

Operating profit

Taxes and dues
Regional Communications Business

246.1

251.0

Operating profit

1,671.4

1,768.6

Profit before taxes

1,652.6

1,795.5

Fixed voice-related service

916.2

1,181.1

IP/packet communications service

Profit attributable to NTT
NTT Consolidated Financial Position
Total assets
Current assets

22,965.5

23,862.2

Operating revenues

1,598.6

2,787.2

2,767.6

Operating expenses

17,639.1

18,145.6

9,282.3

9,326.9

22,965.5

Personnel expenses

675.4

657.4

1,447.4

1,457.6

Depreciation and amortization

422.9

421.3

Impairment losses

14.1

14.5

23,862.2

Expenses on disposal of fixed assets

88.3

78.2

14,762.4

14,844.1

Taxes and dues

139.3

138.5

7,426.2

6,258.6

Operating profit

420.2

440.0

2,356.7

2,500.3

Global Solutions Business Segment
Operating revenues

3,367.1

3,615.2

3,364.2

3,592.9

7,336.3

8,585.5(incl.) Long-term liabilities

4,455.7

5,717.5

System integration services(incl.) Defined benefit liabilities

1,731.6

1,561.0

Other

8,203.0

9,018.1

Interest-Bearing Liabilities (Consolidated)
7,624.3

7,364.3

Capital Investment
Capital investment

932.0

1,544.1

389.9

Expenses for purchase of goods and services and other expenses

Interest-bearing liabilities

3,207.6

950.3

350.8

3,605.0

Total equity

3,207.4

Other

3,534.6

Non-current liabilities

62.7
1,072.5

67.7(incl.) Trade and other receivables(incl.) Trade and other payables

60.8
1,060.0

219.3

834.6

Current liabilities

779.9

69.5

5,716.6

Liabilities

750.6

292.7

935.7

Liabilities and Equity

3,430.0

System integration services
5,326.4(incl.) Property, plant and equipment

470.7

3,478.5

Sales of telecommunications equipment(incl.) Cash and cash equivalents
Non-current assets

462.8

3.0

22.3

3,219.8

3,404.7

Personnel expenses

1,150.5

1,263.7

Expenses for purchase of goods and services and other expenses

1,742.5

1,791.5

296.9

309.1

Impairment losses

9.7

19.4

Expenses on disposal of fixed assets

6.5

5.5

Taxes and dues

13.6

15.5

147.3

210.5

1,335.4

1,396.0

Operating expenses

Depreciation and amortization

1,728.3

1,687.6

Integrated ICT Business Segment

734.3

698.6

Operating profit

Regional Communications Business

527.4

501.1

Others (Real Estate, Energy and Others)

Global Solutions Business Segment

327.9

347.2

Operating revenues

Others (Real Estate, Energy and Others)

138.7

140.7

System integration services
Other(Ref.) Capital investment by group*1*2

Operating expenses

46.8

40.5

1,288.7

1,355.4

1,279.0

1,323.5

Former NTT DOCOMO Group (excluding former NTT Communications/NTT Comware Group)

569.1

548.1

Personnel expenses

245.5

248.8

NTT Communications Group

97.8

101.9

Expenses for purchase of goods and services and other expenses

889.0

914.1

NTT East Group

268.7

251.6

Depreciation and amortization

106.1

118.9

NTT West Group

258.6

249.5

Impairment losses

2.5

2.5

NTT DATA Consolidated (Before Global Business Integration)

169.5

176.7

Expenses on disposal of fixed assets

3.5

4.9

NTT Ltd. Group

155.5

169.7

Taxes and dues

32.5

34.3

NTT Urban Solutions Group

92.1

78.8

56.4

72.5

Operating profit*1 The results for the former NTT DOCOMO Group prior to the consolidation of NTT Communications and NTT Comware as subsidiaries (implemented on January 1, 2022)
are provided as a reference.
*2 Figures reflect NTT DATA consolidated figures on a conventional basis, excluding the impact of the global business integration scheduled to be implemented in October 2022.

82

NIPPON TELEGRAPH AND TELEPHONE CORPORATIONANNUAL REPORT 2022

83

Message from our CEO

Value Creation Story

Growth Strategy

NTT Group
Sustainability

Data Section

Financial Data Summary
Unit: Billions of yen

Group Summary (IFRS)FY2020

Telecommunications services
Mobile communications services
Fixed-line communications service and other telecommunications services
Equipment sales
System integration services
Other
Operating expenses
Personnel expenses
Expenses for purchase of goods and services and other expenses
Depreciation and amortization

FY2021NTT East Group *1
5,880.9

5,870.2

1,726.1

1,718.0

3,707.5

3,605.8

Fixed voice-related service

500.7

493.8

2,752.5

2,658.3

955.0

947.5

IP/packet communications service

884.8

912.8

605.2

629.0

Sales of telecommunications equipment

27.9

27.0

System integration services

144.6

111.9

Other

168.0

172.4

486.0

525.2

1,082.2

1,110.2

4,820.9

4,797.6

462.8

470.7

2,933.3

2,875.3

Operating revenues

Operating expenses

1,462.1

1,439.0

Personnel expenses

353.3

344.0

Expenses for purchase of goods and services and other expenses

755.2

744.4

Depreciation and amortization

225.0

221.7

Impairment losses

13.6

13.9
40.4

750.6

779.9

0.4

1.7

Communication network charges

606.0

617.4

Expenses on disposal of fixed assets

39.9

Expenses on disposal of fixed assets

67.9

52.6

Taxes and dues

75.0

74.6

Operating profit

1,060.0

1,072.5

Operating profit

264.0

279.0

Profit before taxes

1,072.6

1,082.4

749.6

752.1

Profit before taxes

263.3

281.5

Profit attributable to NTT

180.4

196.4

Impairment losses

Profit attributable to NTTFormer NTT DOCOMO Group (excluding NTT Communications/NTT Comware Group) *1*2
Operating revenues
Telecommunications services
Mobile communications services
Optical-fiber broadband service and other telecommunications services
Equipment sales

4,725.2

4,713.8

3,127.9

3,046.6

2,741.2

2,645.6

386.7
575.7

Other

1,505.9

1,513.5

456.4

444.2

401.0

IP/packet communications service

660.3

687.4

618.0

Sales of telecommunications equipment

42.0

41.2

System integration services

149.7

109.2

1,021.6

1,049.2
3,785.9

290.9

296.3

2,397.9

2,350.1

606.1

622.1

0.2

0.2

Communication network charges

458.6

473.3

Expenses on disposal of fixed assets

58.2

43.9

Personnel expenses
Expenses for purchase of goods and services and other expenses
Depreciation and amortization
Impairment losses

NTT West Group*2

Fixed voice-related service

3,812.0

Operating expenses

Operating profit

913.2

927.9

Profit before taxes

915.6

930.9

Profit attributable to NTT

629.0

648.0

NTT Communications Group *2

Operating revenues

Other
Operating expenses

197.5

231.5

1,350.1

1,352.7

Personnel expenses

322.1

313.7

Expenses for purchase of goods and services and other expenses

716.8

736.8

Depreciation and amortization

198.2

199.9

Impairment losses

0.5

0.6

Expenses on disposal of fixed assets

48.3

37.8

64.2

64.0

Operating profit

Taxes and dues

155.8

160.9

Profit before taxes

154.4

158.3

105.2

110.5

1,070.4

1,047.6

Profit attributable to NTT

Cloud computing platforms

102.8

104.7

NTT DATA Consolidated

Data networks

391.1

392.2

Net sales

2,318.7

2,551.9

Voice communications

221.8

203.6

Public and Social Infrastructure

540.5

582.4

Applications & content

74.1

76.3

Financial

607.6

633.1

Solution services

255.1

246.8

Other

25.4

Enterprise and Solutions

590.9

652.9

24.0

933.1

912.5

North America

429.4

475.7

Personnel expenses

126.6

126.4

EMEA and LATAM

454.2

550.9

Expenses for purchase of goods and services and other expenses

671.5

648.3

Eliminations or Corporate(303.9)(343.0)Depreciation and amortization

115.7

120.1

Cost of sales

1,734.1

1,875.9

̶̶

Gross profit

584.6

676.0

Operating revenues*3

Operating expenses

Impairment losses
Expenses on disposal of fixed assets

9.0

7.5

Selling, general and administrative expenses

445.4

463.4

Taxes and dues

10.3

10.1

Operating profit

139.2

212.6

Operating profit

137.3

135.1

Profit before taxes

130.5

215.8

Profit before taxes

148.7

145.0

Profit attributable to NTT DATA

76.8

143.0

Profit attributable to NTT

115.7

100.5

*1 The scope of aggregation for each of the figures presented for NTT East Group is internal management figures after eliminating internal transactions between NTT East and its
subsidiaries. Such figures are not audited and are provided for reference only.
*2 The scope of aggregation for each of the figures presented for NTT West Group is internal management figures after eliminating internal transactions between NTT West and its
subsidiaries. Such figures are not audited and are provided for reference only.

*1 The results for the former NTT DOCOMO Group prior to the consolidation of NTT Communications and NTT Comware as subsidiaries (implemented on January 1, 2022) are provided as a reference.
*2 The scope of aggregation for each of the figures presented for the former NTT DOCOMO Group and NTT Communications Group is internal management figures after eliminating internal transactions between the former
NTT DOCOMO Group and NTT Communications and their subsidiaries. Such figures are not audited and are provided for reference only.
*3 The following are the main services included in each line item: - Cloud computing platforms: “Data center services” and “Private cloud services (Enterprise cloud, etc.)” - Data networks: “Closed network services (Arcstar
Universal One, etc.)” and “Open network services (OCN, etc.)” - Voice communications: “Telephone services” and “VoIP services (050 plus, etc.)” - Applications & content: “Application services (Mail services, etc.)” Solution services: “System integration services”

84

Fiscal YearFY2020

FY2021

NTT DOCOMO Group (including NTT Communications/NTT Comware Group)
Operating revenues

Unit: Billions of yen

Fiscal YearNIPPON TELEGRAPH AND TELEPHONE CORPORATIONANNUAL REPORT 2022

85

Message from our CEO

Value Creation Story

Growth Strategy

NTT Group
Sustainability

Data Section

Financial Data Summary
Unit: Billions of yen

Unit: Billions of yen

Fiscal YearFY2020Fiscal YearFY2020

FY2021

FY2021NTT Urban Solutions Group *1

NTT Ltd. Group *1
1,054.7

Operating revenues

447.7

446.5

387.4

456.2

Operating expenses

410.3

407.6

Data centers

127.9

173.9

Managed services

120.7

147.9

Networks

59.3

54.3

Other (cloud communications, etc.)

79.5

80.1

Expenses on disposal of fixed assets

671.5

598.5

Taxes and dues

Operating revenues

1,058.8

High value-added services

Other (sales of telecommunications equipment, etc.)

Personnel expenses

88.5

89.1

Expenses for purchase of goods and services and other expenses

266.8

259.4

Depreciation and amortization

39.7

41.2

̶

2.0

Impairment losses

̶
15.3

̶
15.9
46.6

1,049.6

1,048.3

Operating profit

45.1

Personnel expenses

265.1

289.2

Profit before taxes

40.4

41.5

Expenses for purchase of goods and services and other expenses

694.8

650.9

Profit attributable to NTT T Urban Development

26.2

26.0

Depreciation and amortization

87.4

93.5

Impairment losses

0.7

10.7

Operating revenues

143.9

141.5

Expenses on disposal of fixed assets

0.5

1.8

Operating expenses

122.0

116.0

Taxes and dues

1.1

2.3

Operating expenses

NTT Urban Development Consolidated

Personnel expenses

12.0

7.5

Expenses for purchase of goods and services and other expenses

70.4

65.1

26.5

27.7

̶

2.0

Operating profit

9.2

6.3

Depreciation and amortization

Profit before taxes

(2.4)

(4.6)

Impairment losses

4.9

Expenses on disposal of fixed assets

Profit attributable to NTT T Urban Development(13.6)*1 The scope of aggregation for each of the figures presented for NTT Ltd. Group is internal management figures after eliminating internal transactions between NTT Ltd. and its
subsidiaries. Such figures are not audited and are provided for reference only.

Operational Data

Taxes and dues

̶
13.1

̶
13.7
31.2

Operating profit

27.4

Profit before taxes

22.6

26.3

Profit attributable to NTT T Urban Development

14.1

16.5

*1 The scope of aggregation for each of the figures presented for NTT Urban Solutions Group is internal management figures after eliminating internal transactions among NTT Urban
Solutions and its subsidiaries. Such figures are not audited and are provided for reference only.

End of FY2012

End of FY2013

End of FY2014

End of FY2015

End of FY2016

End of FY2017

End of FY2018

End of FY2019

End of FY2020

̶
11,566

̶
21,965

̶
30,744

̶
38,679̶
44,544

̶
50,097

̶
55,87214

3,091

11,530LTE (Xi)

61,66464,21061,396FOMA (3G)

49,97041,14035,85132,28530,33626,273

22,581

18,64815,331

11,826

FLET’S Hikari

17,30018,05018,716

19,25920,053

20,53321,07821,65822,56423,266

Hikari Denwa

15,16916,256

17,10817,37417,75918,032

18,24418,503

18,692

18,782

Telephone subscriber lines

25,042

23,00021,286

19,943

18,797

17,53816,363

15,144

14,102

13,123

INS-Net

3,724

3,366

3,058

2,776

2,539

2,331

2,138

1,942

1,767

1,604

FLET’S ADSL

1,848

1,483

1,219

1,053

919

780

602

483

381

286

FLET’S ISDN

127

109

95

85

77

70

62

54

47

40

11,611

11,466

11,586

11,411

11,231

11,057

10,945

11,517

11,43011,360Hikari TV

2,453

2,823

3,014

3,052

3,023

3,016

3,001

2,983

2,947

2,952

FLET’S TV Transmission Services *1

1,003

1,161

1,345

1,432

1,521

1,615

1,716

1,828

1,916

1,995

End of FY2021

Mobile Communications Services Subscriptions (Thousands of subscriptions)
5G

Fixed-Line Broadband Services Subscriptions (Thousands of subscriptions) *1

Telephone Subscriber Lines + INS-Net (in thousands) *2

FLET’S ADSL / FLET’S ISDN (in thousands)

NTT Group Major ISPs (Thousands of subscriptions) *3
Hikari TV / FLET’S TV Transmission Services (Thousands of subscriptions)

FY2012FY2013

FY2014FY2015FY2016FY2017FY2018FY2019FY2020

FY2021

Mobile Aggregate ARPU (Yen) *4*5*6
New

Mobile ARPU (5G + LTE (Xi) + FOMA)

4,150

Hikari ARPU
Mobile ARPU (5G + LTE (Xi) + FOMA)

590
̶

̶

̶

̶
50

̶
190

̶
340

4,360

4,230

4,280

4,210

440

510

570

600

̶

̶

̶

Old Voice ARPU

̶
1,760

̶
1,490

̶
1,280

1,210

1,250

1,370

Packet ARPU

2,720

2,880

2,820

2,910

2,990

2,970

Smart ARPU

420

̶

̶

̶

̶

̶

docomo Hikari ARPU

̶

̶

̶

̶

̶

̶

̶

̶

̶

ARPU of FLET’S Hikari (Yen) *4
NTT East

5,860

5,660

5,490

5,510

5,250

5,080

4,910

4,790

4,690

4,570

NTT West

5,880

5,830

5,680

5,470

5,280

5,100

4,930

4,820

4,740

4,620

*1 The number of subscriptions for FLET’S Hikari, Hikari Denwa, and FLET’S TV transmission services includes wholesale services provided to service providers by NTT East and NTT West.
*2 The number of telephone subscriber lines is the total of individual lines and central station lines (including the Subscriber Telephone Lite Plan). “INS-Net” includes INS-Net 64 and INS-Net 1500. In terms of the numberof channels, transmission rate, and line use rate (base rate), INS-Net 1500 is in all cases approximately 10 times greater than INS-Net 64. For this reason, one INS-Net 1500 subscription is calculated as ten INS-Net 64
subscriptions (including subscriptions to the INS-Net 64 Lite Plan).
*3 “NTT Group Major ISPs” includes WAKWAK and InfoSphere, in addition to OCN and Plala.

86

NIPPON TELEGRAPH AND TELEPHONE CORPORATION*4 Please see page 88 for the ARPU calculation method and other details.
*5 The ARPU calculation method was changed in the fiscal year ended March 31, 2016. Accompanying this change, the new method has been applied retroactively to the ARPU figures for the fiscal year ended March 31,
2014, and the fiscal year ended March 31, 2015. A subsequent change to the ARPU calculation method was instituted in the fiscal year ended March 31, 2019, that entailed the integration of Voice ARPU and Packet
ARPU.
*6 Starting in FY2021, Mobile ARPU has included OCN Mobile-related revenues and subscriptions.

ANNUAL REPORT 2022

87

Message from our CEO■■ Reference Materials
ARPU (Average monthly Revenue Per Unit):
Average monthly revenue per subscriber(user)
Average monthly revenue per unit, or ARPU, is used tomeasure average monthly operating revenues on a persubscriber (user) basis. In the case of NTT Group’s regional
communications business, ARPU is calculated by dividing
revenue items included in the operating revenues of NTT
Group’s Regional Communications Business Segment (i.e.,
fixed-line (telephone subscriber lines plus INS-Net subscriberlines) and FLET’S Hikari) by the number of Active Subscribers
to the relevant services. In the case of the integrated ICT
business, ARPU is calculated by dividing communications
services revenue items included in operating revenues fromNTT Group’s Integrated ICT Business Segment, such as
revenues from 5G mobile phone services, LTE (Xi) mobile
phone services, FOMA mobile phone services and docomo
Hikari services (with certain exceptions), by the number ofActive users to the relevant services. The calculation of thesefigures excludes revenues that are not representative ofmonthly average usage, such as telecommunications
equipment sales, activation fees and universal service charges.
NTT believes that its ARPU figures calculated in this way
provide useful information regarding the monthly average
usage of its subscribers. The revenue items included in the
numerators of NTT Group’s ARPU figures are based on its
financial results comprising its IFRS results of operations.

Method of calculating ARPU
■ NTT East and NTT WestNTT separately computes the following two categories of
ARPU for the fixed-line business conducted by each of NTT
East and NTT West, using the following measures:• Aggregate Fixed-line ARPU (Telephone Subscriber Lines+ INS-Net Subscriber Lines): Calculated based onrevenues from monthly charges and call charges for
Telephone Subscriber Lines and INS-Net SubscriberLines, which are included in operating revenues from
Voice Transmission Services (excluding IP Services), andrevenues from FLET’S ADSL and FLET’S ISDN, which areincluded in operating revenues from IP Services.
• FLET’S Hikari ARPU: Calculated based on revenues from
FLET’S Hikari (including FLET’S Hikari optional services),
which are included in operating revenues from IP Services
and Supplementary Business, revenues from monthly

88

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

charges, call charges and device connection charges for
Hikari Denwa, which are included in operating revenues
from IP Services, and revenues from “FLET’S Hikari”
optional services, which are included in Supplementary
Business revenues.
(1) FLET’S Hikari includes FLET’S Hikari Cross, B FLET’S(service of which ended at the end of January 2021),
FLET’S Hikari Next, FLET’S Hikari Light, FLET’S HikariLightplus and FLET’S Hikari WiFi Access provided by
NTT East, FLET’S Hikari Cross, FLET’S Hikari Next,
FLET'S Hikari Mytown Next, FLET’S Hikari Light and
FLET’S Hikari WiFi Access provided by NTT West, andthe “Hikari Collaboration Model” wholesale provision ofservices provided by NTT East and NTT West to service
providers. FLET’S Hikari optional services include
wholesale services provided to service providers by NTT
East and NTT West.
(2) Revenues from interconnection charges are excluded
from the calculation of Aggregate Fixed-line ARPU
(Telephone Subscriber Lines + INS-Net Subscriber Lines)
and FLET’S Hikari ARPU.
(3) For purposes of calculating Aggregate Fixed-line ARPU
(Telephone Subscriber Lines + INS-Net Subscriber Lines),
the number of subscribers is that for fixed-line services(telephone subscriber lines or INS Net subscriber lines).
(4) In terms of number of channels, transmission rate, andline use rate (base rate), INS-Net 1500 is in all casesroughly ten times greater than INS-Net 64. For thisreason, one INS-Net 1500 subscription is calculated as
ten INS-Net 64 subscriptions.
(5) For purposes of calculating FLET’S Hikari ARPU, thenumber of subscribers is determined based on thenumber of FLET’S Hikari subscribers (including FLET’S
Hikari Cross, B FLET’S (service of which ended at theend of January 2021), FLET’S Hikari Next, FLET’S HikariLight, FLET’S Hikari Lightplus and FLET’S Hikari WiFi
Access provided by NTT East, FLET’S Hikari Cross,
FLET’S Hikari Next, FLET’S Hikari Mytown Next, FLET’S
Hikari Light and FLET’S Hikari WiFi Access provided by
NTT West), and “Hikari Collaboration Model” wholesale
services provided by NTT East and NTT West to service
providers.
(6) Number of Active Subscribers used in the ARPU
calculation of NTT East and NTT West is as below:
FY Results: Sum of number of Active Subscribers foreach month in the applicable period Active Subscribers =(number of subscribers at end of previous month +number of subscribers at end of current month)/2

Value Creation Story

Growth Strategy

NTT Group
Sustainability

Data Section■ NTT DOCOMO
NTT computes ARPU for NTT DOCOMO as follows:• Aggregate ARPU = Mobile ARPU + “Hikari” ARPU.
(1) • Mobile ARPU: Mobile ARPU-related revenues (basic
monthly charges, voice communication charges andpacket communication charges) / Number of activeusers• “Hikari” ARPU: “Hikari” ARPU-related revenues (basic
monthly charges and voice communication
charges) / Number of Active Users(2) Number of Active Users used in the ARPU calculation of
NTT DOCOMO is as below.
Sum of number of Active Users for each month during
the applicable period Active Users = (number of users at
end of previous month + number of users at end ofcurrent month)/2.
(3) The number of “users” used to calculate ARPU isbasically total number of subscriptions, excluding thesubscriptions listed below:
Number of active users = subscriptions
a. Subscriptions of communication module
services, “Phone Number Storage,” “Mail
Address Storage,” “docomo BusinessTr a n s c e i v e r ” a n d w h o l e s a l etelecommunications services andinterconnecting telecommunications
facilities that are provided to MVNOs;
andb. Data Plan subscriptions in the casewhere the customer contracting for such
subscription in his/her name also has asubscription for 5G, Xi or FOMA services
in his/her name.
Revenues from communication module services,“Phone Number Storage,” “Mail Address Storage,”“docomo Business Transceiver,” and wholesaletelecommunications services and interconnecting
telecommunications facilities that are provided to
MVNOs, and the impact of “d POINTs”-related
revenues, among others, are not included in NTT
DOCOMO’s ARPU calculation.

ANNUAL REPORT 2022

89

Message from our CEO

Consolidated Statement of Financial Position

Value Creation Story

Growth Strategy

NTT Group
Sustainability

Data Section

Consolidated Statement of Profit or Loss
Unit: Millions of yen

Unit: Millions of yen

End of FY2020

End of FY2021

FY2020

FY2021(As of March 31, 2021)(As of March 31, 2022)(Fiscal year ended
March 31, 2021)(Fiscal year ended
March 31, 2022)

ASSETS
Operating revenues

Current assets
Cash and cash equivalents

935,727

834,564

Trade and other receivables

3,534,555

3,604,959

Other financial assets

41,73288,441Inventories

315,437

408,362

Other current assets

498,106

574,9225,325,557

5,511,248

Assets held for sale

Subtotal

816

205,344

Total current assets

5,326,373

5,716,592

Non-current assets
Property, plant and equipment
Right-of-use assets

9,282,286

9,326,888

11,943,966

12,156,447

Personnel expenses

2,461,410

2,566,127

Expenses for purchase of goods and services and other expenses

5,875,302

5,839,441

Depreciation and amortization

1,507,153

1,561,183

156,869

132,073

Operating expenses

Expenses on disposal of fixed assets
Impairment losses
Goodwill

2,702

228

Other

22,99737,824

Taxes and dues
Total operating expenses

246,142

250,978

10,272,575

10,387,854

639,627

694,612Goodwill

1,056,187

1,213,009

Operating profit

1,671,391

1,768,593

Intangible assets

1,765,858

1,951,824

Finance income

31,78563,471

Investment property

1,182,713

1,236,490

411,033

429,806

Finance costs

50,83056,2501,515,922

1,426,157

Investments accounted for using the equity method
Other financial assets

Share of Profit (Loss) of Entities Accounted for Using Equity Method

Deferred tax assets

993,858

970,432

Profit before tax

Other non-current assets

791,635

896,431

Income taxes

Total non-current assets

17,639,119

18,145,649

22,965,492

23,862,241

Total assets
LIABILITIES AND EQUITY

229

19,711

1,652,575

1,795,525

524,719539,531

1,127,856

1,255,994

Profit attributable to NTT

916,181

1,181,083

Profit attributable to Non-controlling interests

211,675

74,911

248.15329.29ProfitCurrent liabilities
Short-term borrowings

3,168,613

1,646,806

Earnings per share attributable to NTT

Trade and other payables

2,356,705

2,500,341

Basic earnings per share (yen)193,915

189,495

Lease liabilities
Other financial liabilities

28,33429,566

Accrued payroll

509,416

544,455

Income taxes payable

115,965

210,964

Other current liabilities

1,053,196

1,129,851

7,426,144

6,251,478

18

7,161

7,426,162

6,258,639

Subtotal
Liabilities directly associated with assets held for sale
Total current liabilities

4,455,724

5,717,465

Lease liabilities

553,836

655,729

Other financial liabilities

137,620

135,686

Defined benefit liabilities

1,731,645

1,561,049

Deferred tax liabilities

81,420137,474

Other non-current liabilities

376,042

378,067

Total non-current liabilities

7,336,287

8,585,470

14,762,449

14,844,109

Liabilities
EquityNTT shareholders’ equity
Common stock

937,950

937,950

Retained earnings

7,068,008

7,293,915

Treasury stock(704,793)(226,459)

Other components of equity

261,542

277,050

Total NTT shareholders’ equity

7,562,707

8,282,456

Non-controlling interests

90

640,336735,676

Total equity

8,203,043

9,018,132

Total liabilities and equity

22,965,492

23,862,241

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

Unit: Millions of yen

ProfitFY2020

FY2021(Fiscal year ended
March 31, 2021)(Fiscal year ended
March 31, 2022)

1,127,856

1,255,994

241,404(25,482)

Other comprehensive income (net of taxes)

Non-current liabilities
Long-term borrowings

Consolidated Statement of Comprehensive Income

Items that will not be reclassified to profit or loss
C hange in the fair value of financial assets measured at fair value through othercomprehensive income
Share of other comprehensive income of entities accounted for using the equity method

(922)

(2)

Remeasurements of the defined benefit plans

121,455

131,032

Total of items that will not be reclassified to profit or loss

361,937

105,548

Cash flow hedges(2,012)(50,748)

Hedges cost

(16,555)

14,434Foreign currency translation adjustments

81,356167,688

Items that may be reclassified subsequently to profit or loss

Share of other comprehensive income of entities accounted for using the equity method

7,029

(835)

Total of items that may be reclassified to profit or loss

69,818130,539

Total other comprehensive income (net of taxes)
Total comprehensive income
Comprehensive income attributable to NTT
Comprehensive income attributable to non-controlling interests

431,755

236,087

1,559,611

1,492,081

1,275,214

1,373,364

284,397

118,717

ANNUAL REPORT 2022

91

Message from our CEO

Consolidated Statement of Changes in Equity

Value Creation Story

Growth Strategy

NTT Group
Sustainability

Data Section

Consolidated Statement of Cash Flows
Unit: Millions of yen

Fiscal year ended March 31, 2021
Unit: Millions of yen
NTT shareholders’ equity
Commonstock
As of March 31, 2020

937,950

Additional
paid-in
capitalRetainedearnings

Treasurystock

2,252,672

6,499,942(653,369)

Other
componentsof equity
23,908

Noncontrollinginterests

Total
9,061,103

2,401,524

Total equity
11,462,627

Profit－－916,181－－

916,181

211,675

1,127,856

Other comprehensive income

－

－

－

－

359,033

359,033

72,722431,755

Total comprehensive income－－

916,181－359,033

1,275,214

284,397

1,559,611

Dividends of surplus－－(358,470)－－(358,470)(152,543)(511,013)

Transfer to retained earnings－

109,983

11,416－(121,399)－－－

Purchase and disposal of treasury stock

－

1,290

－

(51,424)－(50,134)－(50,134)

Changes in ownership interest in subsidiaries
without loss of control－(2,366,079)

－

－

－

(2,366,079)(1,891,495)(4,257,574)

Share-based compensation transactions

－

3,043

－

－

－

3,043

－

3,043

Put options granted to non-controllinginterests－(2,364)－－－(2,364)(2,124)(4,488)Transactions with owners and other transactions

－

1,455

(1,061)

－

－

394

577

971

－

(2,252,672)(348,115)(51,424)(121,399)(2,773,610)(2,045,585)(4,819,195)

937,950－

7,068,008(704,793)

261,542

7,562,707

640,336

8,203,043

OtherTotal transactions with owners and othertransactions
As of March 31, 2021

FY2021(Fiscal year ended
March 31, 2022)

Net cash provided by operating activities
Profit1,127,856

1,255,994

Depreciation and amortization

1,507,153

1,561,183

Impairment losses
Share of loss (profit) of entities accounted for using the equity method

Comprehensive income

FY2020(Fiscal year ended
March 31, 2021)

25,69938,052(229)(19,711)

Losses on retirement of property, plant and equipment and intangible assets

79,87360,936

Gain on sales of property, plant and equipment and intangible assets(12,308)(30,208)

Income taxes

524,719539,531

Decrease (increase) in trade and other receivables

24,097828

Decrease (increase) in inventories(64,263)(86,559)

Decrease (increase) in other current assets(48,086)(10,421)

Increase (decrease) in trade and other payables / accrued payroll

270,146

137,551

Increase (decrease) in other current liabilities

50,69037,198

Increase (decrease) in defined benefit liabilities(17,727)(15,936)

Increase (decrease) in other non-current liabilities

39,408

5,304

Other

(2,413)(61,066)

3,504,615

3,412,676

70,63679,703

SubtotalInterest and dividends received
Interest paid

(41,856)(47,858)

Income taxes paid

(524,331)(434,264)

3,009,064

3,010,257(1,795,430)(1,758,045)

266

38,110(375,161)(125,838)

Proceeds from sale or redemption of investments

41,974

187,198

Proceeds from loss of control of subsidiaries

57,127

15,936

Acquisition of subsidiaries, net of cash acquired(30,755)(121,747)

Net increase (decrease) loan receivable

672,683

26,343

Net cash provided by operating activities
Cash flows from investing activities
Purchase of property, plant and equipment, intangible assets, and investment property
Proceeds from government grants

Fiscal year ended March 31, 2022
Unit: Millions of yen
NTT shareholders’ equity
Additional
paid-in
capitalCommonstock
As of March 31, 2021

937,950

Retainedearnings－

Other
componentsof equity

Treasurystock

7,068,008(704,793)

261,542

Noncontrollinginterests

Total
7,562,707

640,336

Total equity
8,203,043

Other

Comprehensive income
Profit－－1,181,083－－

1,181,083

74,911

1,255,994

Other comprehensive income

－

－

－

－

192,281

192,281

43,806

236,087

Total comprehensive income－－

1,181,083－

192,281

1,373,364

118,717

1,492,081

Transactions with owners and other transactions
Dividends of surplus－－(396,963)－－(396,963)(17,580)(414,543)

Transfer to retained earnings

－

4,370

172,403－(176,773)－－－

Purchase and disposal of treasury stock

－

8

－

(253,581)－(253,573)－(253,573)

Cancellation of treasury stock－(1,299)(730,616)

731,915

－

－

－

－

Changes in ownership interest in subsidiaries
without loss of control－(1,754)－－－(1,754)(4,729)(6,483)

Share-based compensation transactions

－

235

－

－

－

235

48

283

P ut options granted to non-controllinginterests

－

(943)

－

－

－

(943)

(595)

(1,538)

Other

－

(617)

－

－

－

(617)

(521)

(1,138)－－(955,176)

478,334(176,773)(653,615)(23,377)(676,992)

Total transactions with owners and othertransactions
As of March 31, 2022

92

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

Purchase of investments

937,950－

4,764

38,891(1,424,532)(1,699,152)

Net increase (decrease) in short-term borrowings

1,165,623(1,860,107)

Proceeds from increases in long-term borrowings

2,674,593

1,716,162

Repayments of long-term borrowings(524,880)(401,905)

Cash flows from investing activities
Cash flows from financing activities

Repayment of lease liabilities(195,783)(208,232)(4,249,407)(16,791)

Dividends paid

(358,470)(396,963)

Dividends paid to non-controlling interests(152,275)(17,485)

Purchase of treasury stock(250,244)(253,685)

Proceeds from sale of treasury stock

200,026

58

1,269

818

(1,689,548)(1,438,130)

7,169

25,862

Payments for acquisition of interests in subsidiaries from non-controlling interests

Other
Cash flows from financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year

7,293,915(226,459)

277,050

8,282,456

735,676

9,018,132

Cash and cash equivalents at the end of the year

(97,847)(101,163)

1,033,574

935,727

935,727

834,564

ANNUAL REPORT 2022

93

Message from our CEO

Value Creation Story

Growth Strategy

NTT Group
Sustainability

Data Section

Management’s Analysis of Financial Condition, Results ofOperations and Cash Flows■■ Results of Operations
Operating revenues
NTT Group’s operating revenues are divided into six service
categories, comprising fixed voice related services, mobile
voice related services, IP/packet communications services,
sales of telecommunications equipment, system integrationand other.
Operating revenues in the fiscal year ended March 31, 2022
increased 1.8% from the previous fiscal year to ¥12,156.4
billion. This increase was due to such factors as an increase insystem integration revenues as a result of capturing significant
demand for digitalization both domestically and overseas andan increase in other business revenues as a result of the
expansion of the smart life area in the Integrated ICT Business
Operating revenues for each service category for the fiscal
year ended March 31, 2022 are summarized as follows:■Fixed Voice Related Services
NTT Group’s fixed voice related services include a portion of
the services it provides in the regional communications
business segment and Integrated ICT Business Segment, suchas telephone subscriber lines, INS-Net, conventional leased
circuits and high speed digital.
Fixed voice related revenues for the fiscal year ended March
31, 2022 decreased 2.0% from the previous fiscal year to¥916.1 billion, accounting for 7.5% of total operating revenues.
This decrease was due to a continued decline in the number ofsubscriptions for telephone subscriber lines and INS-Net
caused by the increased popularization of mobile phones andIP telephones, and an increase in free or low-priced
communications services offered by providers of over-the-top
content.
■Mobile Voice Related Services
Mobile voice related services include a portion of theservices NTT Group provides in the Integrated ICT Business
Segment, such as 5G, LTE (Xi) and other services.
Mobile voice related revenues for the fiscal year ended
March 31, 2022 decreased 2.2% from the previous fiscal yearto ¥1,102.5 billion, accounting for 9.1% of total operating
revenues. This decrease was primarily due to the effects ofwholesale voice service price reductions.
■IP/Packet Communications Services
NTT Group’s IP/packet communications services include ap o r t i o n o f t h e s e r v i c e s i t p ro v i d e s i n t h e R e g i o n a lCommunications Business Segment, such as FLET’S Hikari,
and a portion of the services it provides in the Integrated ICT
Business Segment, such as Arcstar Universal One, IP-VPN,
OCN, and 5G, LTE (Xi) and other packet communications
services.
In the fiscal year ended March 31, 2022, revenues from IP/
packet communications services decreased 0.9% from theprevious fiscal year to ¥3,444.8 billion, accounting for 28.3% of
total operating revenues. This decrease was due to a decrease
in revenues due to the enhancement of customer returns
through the introduction of ahamo and other billing plans,
despite an increase in revenues due to a net increase in fiber
optic lines.

94

NIPPON TELEGRAPH AND TELEPHONE CORPORATION■Sales of Telecommunications Equipment
This category includes a portion of the services NTT Group
provides in the Integrated ICT Business Segment and theRegional Communications Business Segment.
In the fiscal year ended March 31, 2022, revenues fromtelecommunications equipment sales increased 3.1% from theprevious fiscal year to ¥694.7 billion, accounting for 5.7% of
total operating revenues. This increase was mainly due to anincrease in the number of equipment units sold in the
Integrated ICT Business Segment as a result of the number ofcustomers at DOCOMO shops recovering from the decreasethat had occurred in the previous fiscal year due to the spreadof the COVID-19 and other factors.
■System Integration
NTT Group’s system integration services include a portion of
the services it provides in the Global Solutions Business
Segment, the Integrated ICT Business Segment and theRegional Communications Business Segment.
In the fiscal year ended March 31, 2022, revenues fromsystem integration increased 4.1% from the previous fiscal yearto ¥3,988.7 billion, accounting for 32.8% of total operating
revenues. This increase was mainly due to factors such
capturing increased demand for digitalization both domesticallyand abroad in the Global Solutions Business Segment.
■Other Operating Revenues
Other services principally comprise building maintenance,
real estate rentals, sales of electricity and the Smart Life area in
the Integrated ICT Business Segment.
In the fiscal year ended March 31, 2022, revenues fromother services increased 5.7% from the previous fiscal year to¥2,009.6 billion, accounting for 16.5% of total operating
revenues. This increase was due to an increase in revenues asa result of the expansion of the smart life area in the Integrated
ICT Business Segment and an increase in revenues in the
Regional Communications Business Segment as a result of anincrease in revenues from subsidiaries, including the contact
center business, among other factors.

Operating expenses
Operating expenses in the fiscal year ended March 31, 2022
increased 1.1% from the previous fiscal year to ¥10,387.9
billion. The reasons for the increase are discussed below.
■Personnel Expenses
Personnel expenses in the fiscal year ended March 31,
2022 increased 4.3% from the previous fiscal year to ¥2,566.1
billion. This increase was mainly due to the increase inpersonnel expenses as a result of the expansion of businesses
in the Global Solutions Business Segment.
■Expenses
In the fiscal year ended March 31, 2022, expenses forpurchase of goods and services and other expenses
decreased 0.6% from the previous fiscal year to ¥5,839.4
billion. This decrease was mainly due to a decrease in salesrelated costs in the Integrated ICT Business Segment, partially
offset by an increase in revenue-linked costs in the Regional

Communications Business Segment and the Global Solutions
Business Segment.
■Depreciation and Amortization Expenses
Depreciation and amortization expenses in the fiscal year
ended March 31, 2022 increased 3.6% from the previous fiscal
year to ¥1,561.2 billion. This increase was mainly due to anincrease in 5G-related equipment in the Integrated ICT
Business Segment.

Operating Profit
As a result of the foregoing, operating profit for the fiscal
year ended March 31, 2022 increased 5.8% from the previous
fiscal year to ¥1,768.6 billion.

Finance Income and Costs
Finance income and costs for the fiscal year ended March
31, 2022 was ¥7.2 billion compared to ¥(19.0) billion for theprevious fiscal year.

Share of Profit (Loss) of Entities Accounted
for Using Equity Method
Share of profit (loss) of entities accounted for using theequity method for the fiscal year ended March 31, 2022 was¥19.7 billion compared to ¥0.2 billion for the previous fiscal
year.

Profit before tax
As a result of the foregoing, profit before taxes for the fiscal
year ended March 31, 2022 increased 8.7% from the previous
fiscal year to ¥1,795.5 billion.

Income taxes
In the fiscal year ended March 31, 2022, income taxes
increased 2.8% from the previous fiscal year to ¥539.5 billion.
Effective tax rates for the fiscal year ended March 31, 2021
and for the fiscal year ended March 31, 2022 were 31.75%
and 30.05%, respectively.

Profit attributable to NTT
As a result, profit for the fiscal year ended March 31, 2022
increased 11.4% from the previous fiscal year to ¥1,256.0
billion. Profit attributable to NTT (excluding the profit
attributable to non-controlling interests) for the fiscal year
ended March 31, 2022 increased 28.9% from the previous
fiscal year to ¥1,181.1 billion.

■■ Financial Position and Cash Flows
Cash FlowsAt NTT Group, the stable cash flows generated by its
business cover the expenditures necessary for recurringinvestment activities, such as capital investments, and provide
the main source of funds for shareholder returns (dividends
and share buy-backs) and repayments of borrowings.

■Operating Cash Flows
Cash flows provided by operating activities during the fiscal
year ended March 31, 2022 amounted to ¥3,010.3 billion. Thiswas mainly due to “adjusted profit after non-cash items” (profit
plus non-cash items such as depreciation and amortizationand losses on retirement of property, plant and equipment andintangible assets) reaching ¥2,896.5 billion.
Further, this was an increase of ¥1.2 billion from ¥3,009.1
billion in the fiscal year ended March 31, 2021. This increase
was due to, in comparison to the prior fiscal year, “adjusted
profit after non-cash items” increasing by ¥156.1 billion while
cash outflows increased by ¥154.9 billion, primarily due tochanges in assets and liabilities resulting from operating
activities, including decreases in operating debt.
■Investment Cash Flows
Cash flows used in investment activities during the fiscal
year ended March 31, 2022 amounted to ¥1,699.2 billion.
Cash flows used in investing activities were primarily used inpurchase of property, plant and equipment, intangible assets
and investment property, which amounted to payments of¥1,758.0 billion for the fiscal year of ended March 31, 2022.
This was an increase in payments of ¥274.6 billion from
¥1,424.5 billion in the fiscal year ended March 31, 2021. This
increase was due to, among other factors, a decrease of¥646.3 billion in proceeds from collections of loan receivables
and an increase of ¥145.2 billion in proceeds from sale ofinvestments, despite a decrease of ¥158.3 billion in payments
for investments.
The decrease in purchase of property, plant and equipment,
intangibles assets and investment property for the fiscal year
ended March 31, 2022 resulted from, among other factors, adecrease due to streamlining existing investments, mainly in
the Integrated ICT Business Segment and Regional
Communications Business Segment, despite an increase in 5G
investments and data center investments. For the fiscal year
ended March 31, 2022, capital investments amounted to¥1,687.6 billion on an accrual basis, of which ¥698.6 billion
was invested in the Integrated ICT Business Segment and¥501.1 billion was invested in the Regional Communications
Business Segment.
■ Financing Cash Flows
Cash flows used in financing activities during the fiscal year
ended March 31, 2022 amounted to ¥1,438.1 billion.
Among financing activities for the fiscal year ended March
31, 2022, expenditures for shareholder returns amounted to¥668.1 billion. This was due to the payment of ¥414.4 billion in
dividends and expenditures of ¥253.7 billion in purchase oftreasury stock.
Further, net outflows for borrowings were ¥545.9 billion. Thisconsisted of ¥1,860.1 billion in repayments of short-termborrowings, ¥1,716.2 billion in proceeds from an increase inlong-term borrowings and ¥401.9 billion in repayments of longterm borrowings.
Issuances of green bonds during the fiscal year ended
March 31, 2022 amounting to ¥492.0 billion contributed to theincrease in long-term borrowings. The proceeds from thegreen bonds were allocated to projects that contribute to theresolution of environmental issues (5G-related investments,
FTTH-related investments, research and development forachieving IOWN, and renewable energy).
Furthermore, cash flows from finance activities represented
ANNUAL REPORT 2022

95

Message from our CEO

Management’s Analysis of Financial Condition, Results of Operations and Cash Flows

Value Creation Story

Financial Position

Data Section

Location

Consolidated Subsidiaries

Common stock

Voting rights
ratio

Unit: Millions ofyen%

Main line(s) of business

Integrated ICT BusinessChiyoda Ward,Tokyo

949,680

100.00

Provision of mobile communications services and smart life area services

Chiyoda Ward,Tokyo

230,979

100.00

Provision of inter-prefectural communications services, international communications
services, and internet-related services

NTT COMWARE CORPORATION*3

Minato Ward, Tokyo

20,000100.00Development, production, operation, and maintenance of information communications
systems and software

NTT Plala Inc.

Toshima Ward,Tokyo

12,321100.00

Provision of internet connection and video distribution services

NTT DOCOMO, INC.*1 *2 *3 *4
NTT Communications Corporation*1 *2 *3

Regional Communications Business

Assets as of the fiscal year ended March 31, 2022 increasedby ¥896.7 billion from the fiscal year ended March 31, 2021 to¥23,862.2 billion, due to an increase in goodwill and intangible
fixed assets resulting from new investments, among otherfactors.
Liabilities as of the fiscal year ended March 31, 2022
increased by ¥81.7 billion from the fiscal year ended March 31,
2021 to ¥14,844.1 billion, due to, among other factors, anincrease in operating debt and other debt, as well as anincrease in income taxes payable, partially offset by a decrease
in interest-bearing debt. The balance of interest-bearing debt
was ¥7,364.3 billion, a decrease of ¥260.1 billion from
¥7,624.3 billion as of the fiscal year ended March 31, 2021.
Shareholders’ equity for the fiscal year ended March 31,
2022 increased by ¥719.7 billion from the fiscal year ended
March 31, 2021 to ¥8,282.5 billion, due to an increase in profit,
partially offset by decreases from dividend payments and sharebuy-backs. The ratio of interest-bearing debt to shareholders’equity was 88.9% (compared to 100.8% at the fiscal year
ended March 31, 2021). In addition, equity, the sum ofshareholders’ equity and non-controlling interests, increasedby ¥815.1 billion from the fiscal year ended March 31, 2021 to¥9,018.1 billion.

Nippon Telegraph and Telephone East
Corporation*1 *2 *3

Shinjuku Ward,Tokyo

335,000

100.00

Provision of intra-prefectural communications services in the eastern part of Japan

Nippon Telegraph and Telephone West
Corporation*1 *2 *3

Miyakojima Ward,
Osaka City

312,000

100.00

Provision of intra-prefectural communications services in the western part of Japan

NTT, Inc.*1

Chiyoda Ward,Tokyo

340,051

100.00Governance and strategy formulation, and promotion of measures in the global businessof NTT GroupNTT Ltd .*1 *2 *3

U.K.

USD8,271.57
million100.00

Provision of IT services and communications and internet-related services forcorporations

Dimension Data Holdings*1

U.K.

USD1,076.85
million100.00

Provision of IT system building and maintenance support for corporations

NTT Security Corporation

Chiyoda Ward,Tokyo

25,250100.00

Provision of professional security services

NTT America*1

U.S.A.

USD3,328.57
million100.00

Provision of ICT services in North America

NTT EUROPE

U.K.

■ Liquidity and Capital Resources
In addition to its cash and cash equivalents, NTT Group hasentered into agreements with its banks to provide for overdraft
accounts and committed financing lines to ensure that it
maintains the liquidity necessary for its business activities. Asof the fiscal year ended March 31, 2022, NTT Group had cash
and cash equivalents balance at the end of the fiscal year of¥834.6 billion, a decrease of ¥101.2 billion compared to thebalance of ¥935.7 billion as of the fiscal year ended March 31,
2021. Cash equivalents represent a temporary cash surplus
used to repay debts and make capital investments, among
other factors, and are used as working capital. Accordingly, thebalance of cash equivalents fluctuates each fiscal year
depending on particular financing and working capitalrequirements.
In addition, as of the fiscal year ended March 31, 2022, NTT
Group had undrawn credit line under commitment line
contracts with banks of ¥318.5 billion.

Global Solutions Business

GBP100100.00

Provision of ICT services in Europe

Luxembourg

EUR403.21
million100.00

Provision of data center-related services in Europe

France

EUR177.24
million100.00

Provision of teleconference, web conference, and video conference services

U.S.A.

USD424.29
million100.00

Provision of data center-related services in North America

U.S.A.

USD513.53
million100.00

Provision of network services

India

INR16,610.93
million100.00

Provision of data center-related services in India

NTT Global Data Centers EMEA UK

U.K.

GBP93.00
million100.00

Provision of data center-related services in the U.K.

NTT Managed Services Americas Intermediate
Holdings

U.S.A.

USD714.27
million100.00

Provision of managed services in North America

Transatel

FranceEUR5.86
million

80.70

Provision of mobile connectivity services for IoT

NTT Global Data Centers EMEANTT Cloud Communications International
Holdings
NTT Global Data Centers Americas
NTT Global Networks
NETMAGIC SOLUTIONSNTT Security AppSec Solutions

U.S.A.

Symmetry Holding
Spectrum Holdings

100.00

Provision of security services

100.00

Provision of managed services in North America

USD4,101.93
million100.00Management of subsidiaries of Dimension Data Holdings plc in Europe and North
America

U.S.A.

USD822.86
million100.00

Provision of ICT services in North America

Isle of Man

USD782.67
million100.00Management of subsidiaries of Dimension Data Holdings plc in Europe and North
America

BritishVirgin Islands

NTT America Holdings II*1
Dimension Data Commerce Centre
NTT DATA CORPORATION*1*1 *2 *3 *4 *5

NTT DATA*1
NTT DATA Services*1

NTT DATA Europe & Latam*1

NTT Data International*1

USD10
USD216.45
millionU.S.A.
*1

Koto Ward, Tokyo

142,520

54.22

Provision of data communications system services and network system services

U.S.A.

USD5,543.51
million100.00Consulting, system design, and development in North America

U.S.A.

USD2,114.29
million100.00Consulting, system design, and development in North America

Spain

EUR856.73
million100.00Consulting, system design, and development

U.S.A.

USD5,565.42
million100.00Management of subsidiaries of NTT DATA CORPORATION in North America

Other (Real Estate, Energy and Others)
NTT Urban Solutions, Inc*1 *3

Chiyoda Ward,Tokyo108,372

100.00

Contact point for urban solutions business, and integrated management of urban
solutions-related information

NTT URBAN DEVELOPMENT CORPORATION

Chiyoda Ward,Tokyo

48,760100.00Real estate acquisition, development, construction, leasing, and management

NTT FACILITIES, INC.

Minato Ward, Tokyo

12,400100.00Design, management, and maintenance of buildings, equipment, and electric power
facilities

NTT Anode Energy Corporation*3

Chiyoda Ward,
Tokyo

7,924

100.00Development of smart energy solutions and energy management system

Minato Ward, Tokyo

16,771100.00

Provision of billing and collection of charges for communications and other services, andcredit card transaction settlement services

Shinjuku Ward,
Tokyo

5,000

100.00NTT FINANCE CORPORATION*3 *5

NTT Advance Technology Corporation*1 *3(Note) 1. In the Main line(s) of business column, the name of the segment is provided.
2. Figures in parentheses in the Voting Rights Held column indicate the indirect ownership ratio and areincluded in the total. In addition, for overseas subsidiaries, additional paid-in capital (APIC) is included.
3. *1: Applies to specified subsidiaries.
4. *2: During the period under review, the company entered into an agreement concerning the continued
use of the results of basic research and development that we conducted, and it paid for thecomprehensive services that we provide in relation to this basic research and development.

96

NTT Group
Sustainability

Consolidated Subsidiaries (As of March 31, 2022)
Companya decrease in payments of ¥251.4 billion from ¥1,689.5 billion
in comparison to the fiscal year ended March 31, 2021. Thisdecrease was due to, among other factors, a decrease of¥4,232.6 billion in payments for acquisition of interests in
subsidiaries from non-controlling interests in comparison to theprior fiscal year, partially offset by a decrease of ¥3,861.2 billion
in proceeds in borrowings.

Growth Strategy

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

Technology transfer, technical consulting, and design and development of systems
5. *3: During the period under review, 21 of the companies subject to consolidated accounting enteredinto agreements with us concerning Group management that aimed to maximize each Group
company’s profits while respecting its autonomy and independence, as well as paid compensation
for comprehensive services provided to promote Group management.
6. *4: The ratio of net sales (excluding sales between consolidated subsidiaries) to consolidated net sales
exceeds 10/100.
7. *5: Annual securities reports are submitted.
8. There were 952 consolidated subsidiaries and 141 affiliates (accounted for using the equity method) in
FY2021.

ANNUAL REPORT 2022

97

Message from our CEO

Value Creation Story

NTT Group
Sustainability

Growth Strategy

Data Section

Career Summaries of Members of the Board and Audit &Supervisory Board Members (As of June 30, 2022)
Outside Member of the Board
Jun Sawada

Akira Shimada

Katsuhiko Kawazoe

Noriko Endo

Chairman of the Board

Representative Member of the Board President

Years Served as Member of the Board:
Shares Owned:

Representative Member of the Board
Senior Executive Vice President
In charge of technical strategy Chief Technology
Officer (CTO)
Chief Information Officer (CIO)
Chief Digital Officer (CDO)

Outside Member of the Board

Chief Executive Officer (CEO)841,500Brief Career Summary
April 1978: Joined Nippon Telegraph and Telephone Public Corporation
June 2008: Senior Vice President
Executive Manager of Corporate Strategy Planning Department
Member of the Board of NTT Communications Corporation
June 2011: Executive Vice President
Executive Manager of Corporate Strategy Planning Department
Member of the Board of NTT Communications Corporation
June 2012: Senior Executive Vice President
Executive Manager of Corporate Strategy Planning Department
Representative Member of the Board of NTT Communications
Corporation
June 2013: Senior Executive Vice President
Representative Member of the Board of NTT Communications
Corporation
June 2014: Senior Executive Vice President
Representative Member of the Board of the Company
June 2016: Director and President, Chief Executive Officer of NTT Security
Corporation
June 2018: President and Chief Executive Officer
Representative Member of the Board of the Company
August 2018: President and Chief Executive Officer
Representative Member of the Board of NTT, Inc.
June 2020: President and Chief Executive Officer
Representative Member of the Board of the Company
June 2022: Chairman and Representative Member of the Board of theCompany (present post)

Years Served as Member of the Board:
Shares Owned:

1026,808

Brief Career Summary
April 1981: Joined Nippon Telegraph and Telephone Public Corporation
June 2007: Vice President of Corporate Strategy Planning of the Company
July 2007: General Manager of the Accounts and Finance Department of
Nippon Telegraph and Telephone West Corporation
July 2009: General Manager of the General Affairs and Personnel Departmentof Nippon Telegraph and Telephone East Corporation
June 2011: Senior Vice President
General Manager of the General Affairs and Personnel Department
Member of the Board of Nippon Telegraph and Telephone East
Corporation
June 2012: Senior Vice President
Head of the General Affairs
Member of the Board of the Company
June 2012: Member of the Board of Nippon Telegraph and Telephone West
Corporation
June 2015: Executive Vice President
Head of General Affairs
Member of the Board of the Company
June 2018: Senior Executive Vice President
Representative Member of the Board of the Company
August 2018: Member of the Board of NTT, Inc.
October 2018: Senior Executive Vice President of NTT, Inc.
June 2020: Senior Executive Vice President
Representative Member of the Board of the Company
June 2022: President and Chief Executive Officer
Representative Member of the Board of the Company (present post)
June 2022: President and Chief Executive Officer
Representative Member of the Board of NTT, Inc. (present post)

Years Served as Member of the Board:
Shares Owned:

Takashi Hiroi

Akiko Kudo

Ken Sakamura

Representative Member of the Board
Senior Executive Vice President
In charge of business strategy
Chief Financial Officer (CFO)
Chief Compliance Officer (CCO)
Chief Human Resource Officer (CHRO)

Member of the Board
Senior Vice President

Outside Member of the Board

Years Served as Member of the Board:
Shares Owned:

Years Served as Member of the Board:
Shares Owned:
5
12,000Brief Career Summary
April 1986: Joined the Company
May 2005: Vice President of Medium-Term Corporate Business Strategyof the Company
June 2008: Vice President of Strategic Business Development of theCompany
July 2009: Vice President of Corporate Strategy Planning of the Company
June 2014: Head of Finance and Accounting of the Company
June 2015: Senior Vice President; Head of Finance and Accounting,Member of the Board of the Company
June 2020: Executive Vice President; General Manager of Accounts andFinance Department; Member of the Board of Directors of NTT
DOCOMO, INC.
December 2020: Senior Executive Vice President; Representative Member ofthe Board of Directors of NTT DOCOMO, INC.
June 2022: Representative Member of the Board, Senior Executive
Vice President of the Company (present post)

Yukako Uchinaga
Years Served as Member of the Board:
Shares Owned:

Brief Career Summary
April 1990: Joined the Company
June 2014: Head of Public Relations of Corporate Planning of
NTT Communications Corporation
July 2016: Director of Tokai Branch of West Japan Sales Division of
NTT Communications Corporation
June 2019: Senior Vice President, Head of Fifth Sales Division of
NTT Communications Corporation
April 2020: Deputy Senior Vice President of Fourth Business Solutions
Department of Business Solution Division of
NTT Communications Corporation
June 2020: Senior Vice President, Head of Public Relations,
Deputy Head of Business Strategy of the Company
June 2022: Senior Vice President, Executive Manager of the New Business
Promotion Department of the Company (present post)

Years Served as Member of the Board:
Shares Owned:

2
13,300Brief Career Summary
April 1987: Joined the Company
August 2003: Senior Research Engineer of the Cyberspace Laboratories of
the Cyber Communications Laboratory Group of the Company
October 2007: Senior Research Engineer of the Cyber Solutions Laboratories of
the Cyber Communications Laboratory Group of the Company
July 2008: Vice President of Research and Development Planningof the Company
July 2014: Head of the Service Innovation Laboratory Group of the Company,
Service Evolution Research Laboratory of the Company
July 2016: Head of the Service Innovation Laboratory Group of the Company
June 2018: Senior Vice President, head of Research and Development Planning,and Member of the Board of the Company
June 2020: Executive Vice President, Head of Research and Development
Planning of the Company
June 2022: Senior Executive Vice President, Representative Member ofthe Board of the Company (present post)

Years Served as Member of the Board:
Shares Owned:

3
1,700

Brief Career Summary
April 2000: Professor of the Interfaculty Initiative in Information Studies
and the Graduate School of Interdisciplinary Information
Studies of the University of Tokyo
January 2002: Director of YRP Ubiquitous Networking Laboratory (present
post)
April 2009: Director of Institute of Infrastructure Application of
Ubiquitous Computing of the Interfaculty Initiative inInformation Studies of the University of Tokyo
October 2014: President of Vitalizing Local Economy Organization by
Open Data & Big Data (present post)
April 2017: Professor and Dean of Faculty of Information Networking forInnovation and Design of Toyo University
Head of Collaboration Hub for University and Business of
Toyo University (present post)
June 2017: Emeritus Professor of the University of Tokyo (present post)
June 2019: Member of the Board of the Company (present post)
August 2019: President of Association for IoT Services Coordination (present
post)

Koichiro Watanabe

Outside Member of the Board－
0

Brief Career Summary
July 1971: Joined IBM Japan, Ltd.
April 2004: Director and Senior Executive Officer, IBM Japan, Ltd.
April 2007: Technical Advisor of IBM Japan, Ltd.
April 2007: Board Chair, Japan Women’s Innovative Network,a non-profit organization (present post)
April 2008: Representative Director, Chairman of the Board,
President & CEO of Berlitz Corporation
June 2008: Director, Sony Corporation
October 2009: Director and Executive Vice President, Benesse Holdings, Inc.
April 2013: Honorary Chairman, Berlitz Corporation
May 2013: Director, AEON, Co., Ltd.
June 2013: Director, HOYA CORPORATION(Chairperson of the Audit Committee)
September 2013: President and CEO, Globalization Research Institute, Inc.
(present post)
March 2014: Director, DIC Corporation
June 2018: Director, Teijin Limited
Member of the Advisory Board, Teijin Limited (present post)
June 2021: Director, SINTOKOGIO, LTD. (present post)
June 2022: Member of the Board of the Company (present post)

NIPPON TELEGRAPH AND TELEPHONE CORPORATION

－
2,900

Ryoji Chubachi

Outside Member of the Board

98

Outside Audit & Supervisory Board Member

Outside Member of the Board

Years Served as Member of the Board:－

Shares Owned:

0

Brief Career Summary
April 1977: Joined Sony Corporation
June 2005: President, Representative Corporate Executive Officer andMember of the Board of Sony Corporation
April 2009: Vice Chairman, Representative Corporate Executive Officer
and Member of the Board, Sony Corporation
April 2013: President of National Institute of Advanced Industrial Scienceand Technology (incorporated administrative agency;
currently the National Research and Development Agency)
June 2018: Director, JAPAN POST BANK Co., Ltd. (present post)
April 2020: Grand Emeritus Advisor of National Institute ofAdvanced Industrial Science and Technology (present post)
June 2022: Member of the Board of the Company (present post)

Years Served as Member of the Board:
Shares Owned:－
600

Brief Career Summary
June 1994: Joined DIAMOND Inc.
April 2004: Concurrently served as Director of Kyushu University andHead of Tokyo Office
March 2006: Deputy Editor-in-Chief of Diamond Weekly of DIAMOND Inc.
September 2013: Visiting Researcher at Policy Alternatives Research Instituteof the University of Tokyo
April 2015: Project Professor of Graduate School of Media andGovernance of Keio University
June 2016: Director, NTT DOCOMO, INC.
July 2018: Director of AIN HOLDINGS INC. (present post)
June 2019: Director of Hankyu Hanshin Holdings, Inc. (present post)
April 2020: Project Professor of Keio University Global Research Institute(present post)
March 2021: Director of Techpoint, Inc. (present post)
June 2021: Director of Japan Elevator Service Holdings Co., Ltd. (present
post)June 2022: Member of the Board of the Company (present post)

Brief Career Summary
April 1976: Joined The Dai-ichi Mutual Life Insurance Company
April 2010: Representative Director and President of
The Dai-ichi Mutual Life Insurance Company, Limited
October 2016: Representative Director and President of
The Dai-ichi Life Holdings, Inc.
October 2016: Representative Director and President of The Dai-ichi Life
Insurance Company, Limited (a new company that took overthe domestic life insurance business)
April 2017: Chairman of the Board and Representative Director of
The Dai-ichi Life Holdings, Inc.
April 2017: Chairman of the Board and Representative Director of
The Dai-ichi Life Insurance Company, Limited
March 2018: Member of the Board, Japan Tobacco Inc.
June 2020: Director, Chairman of the Board of Dai-ichi Life Holdings, Inc.
(present post)
June 2020: Director, Chairman of the Board of The Dai-ichi Life
Insurance Company, Limited (present post)
June 2022: Member of the Board of the Company (present post)

Kanae Takahashi

Audit & Supervisory Board Member

Audit & Supervisory Board Member

Years Served as Audit & Supervisory Board Member:
Shares Owned:－0Years Served as Audit & Supervisory Board Member:
Shares Owned:

2
6,500

Brief Career Summary
April 1984: Joined Nippon Telegraph and Telephone Public Corporation
April 2009: President and Representative Director of NTT DATA
Getronics Corporation (currently NTT DATA Luweave
Corporation)
June 2012: Head of General Affairs Department of NTT DATA Corporation
July 2013: Senior Vice President, Head of Second Financial Sector of
NTT DATA Corporation
June 2016: Director and Executive Vice President, Head of General
Affairs Department, concurrently serving as Head of Human
Resources Department of NTT DATA Corporation
July 2017: Director and Executive Vice President, Head of HR
Headquarters, concurrently serving as Head of General
Affairs Department of NTT DATA Corporation
June 2018: Representative Director and Senior Executive Vice President,
concurrently serving as Head of HR Headquarters of
NTT DATA Corporation
June 2020: Executive Advisor of NTT DATA Corporation
June 2020: CEO and President of NTT DATA INSTITUTE OFMANAGEMENT CONSULTING, Inc.
June 2022: Full-Time Audit & Supervisory Board Member of theCompany (present post)

Brief Career Summary
April 1987: Joined the Company
July 2013: Deputy Head of the Internal Control Office of the General
Affairs
Department of the Company
June 2014: Head of the Internal Control Office of the General Affairs
Department of the Company
June 2016: Executive Manager of the Kanagawa Division and Manager ofthe Kanagawa Branch of the Kanagawa Division
Member of the Board of Nippon Telegraph and Telephone
East Corporation
June 2016: Executive Manager of the Kanagawa Division and Manager ofthe Kanagawa Branch of the Kanagawa Division
Member of the Board of NTT EAST-MINAMI
KANTO CORPORATION
June 2019: Executive Vice President
Executive Manager of the Corporate Strategy Planning
Department and the NW Facilities Business Department
Member of the Board of NTT InfraNet Co., Ltd.
June 2020: Full Time Audit & Supervisory Board Member of the Company(present post)

Kensuke Koshiyama

Takashi Iida

Hideki Kanda

Audit & Supervisory Board Member

Outside Audit & Supervisory Board Member

Outside Audit & Supervisory Board Member

Years Served as Audit & Supervisory Board Member:
Shares Owned:－0Years Served as Audit & Supervisory Board Member:
Shares Owned:

8
7,700

Brief Career Summary
April 1984: Joined Board of Audit of Japan
December 2016: Senior ASG of Secretariat of Board of Audit of Japan
April 2017: Director-General of 2nd Bureau of Board of Audit of Japan
April 2018: Deputy Secretary-General of Board of Audit of Japan
December 2018: Secretary-General of Board of Audit of Japan
June 2022: Full-Time & Outside Audit & Supervisory Board Member of
the Company (present post)

Brief Career Summary
April 1974: Registered as attorney-at-law(Daini Tokyo Bar Association) (registration up-to-date)
Joined Mori Sogo Law Offices(currently Mori Hamada & Matsumoto)
April 1991: Deputy Chairman of the Daini Tokyo Bar Association
April 1997: Executive Governor of the Japan Federation of Bar
Associations
April 2006: Chairman of the Daini Tokyo Bar Association
April 2006: Vice President of the Japan Federation of Bar Associations
January 2012: Established Kowa Law Office (present post)
June 2012: Corporate Auditor (Part-Time) for Shimadzu Corporation
June 2013: Corporate Auditor of JAFCO Co., Ltd(currently JAFCO Group Co., Ltd.)
June 2013: Outside Director of Alps Electric Co., Ltd.
(currently ALPS ALPINE CO., LTD.) (present post)
June 2014: Outside Audit & Supervisory Board Member of the Company(present post)

Kaoru Kashima

Executive Officers

Outside Audit & Supervisory Board Member－0

Keiichiro Yanagi

Years Served as Audit & Supervisory Board Member:
Shares Owned:

30

Brief Career Summary
November 1981: Joined Showa Audit Corporation(currently Ernst & Young ShinNihon LLC)
April 1985: Registered as a certified public accountant (registration
up-to-date)June 1996: Partner of Showa Ota & Co.
(currently Ernst & Young ShinNihon LLC)
June 2002: Senior Partner of ShinNihon & Co.
(currently Ernst & Young ShinNihon LLC)
July 2006: In charge of personnel of HR Development Headquarters of
ShinNihon & Co.
September 2010: Managing Director of Ernst & Young ShinNihon LLC In chargeof Corporate Culture Promotion Office In charge of
Public Relations Office
July 2012: General Manager of Knowledge Headquarters Managing
Director of Ernst & Young ShinNihon LLC
July 2013: Representative Director of Ernst & Young Institute Co., Ltd.
June 2019: Outside Audit & Supervisory Board Member of the Company(present post)
June 2019: Director of Sumitomo Mitsui Trust Bank, Limited
March 2020: Audit & Supervisory Board Member of Kirin Holdings
Company, Limited (present post)
June 2021: Director of Sumitomo Mitsui Trust Holdings, Inc. (present
post)

Years Served as Audit & Supervisory Board Member:
Shares Owned:

Brief Career Summary
April 1977: Research Assistant of Faculty of Law of the University ofTokyo
April 1980: Lecturer of Faculty of Law of Gakushuin University
April 1982: Associate Professor of Faculty of Law of Gakushuin
University
April 1988: Associate Professor of Faculty of Law of the University ofTokyo
April 1991: Associate Professor of Graduate Schools for Law and Politics
of the University of Tokyo
May 1993: Professor of Graduate Schools for Law and Politics of
the University of Tokyo
April 2016: Professor of Professional School of Law (Law School) of
Gakushuin University (present post)
June 2016: Emeritus Professor of the University of Tokyo (present post)
June 2017: Director of Sumitomo Mitsui Trust Bank, Limited (present
post)June 2019: Outside Audit & Supervisory Board Member of the Company(present post)

Akira Shimada
Representative Member of the Board
President
CEO (Chief Executive Officer)

Shinichi Yokohama
Executive Vice President Head of Security and Trust
CISO (Chief Information Security Officer)

Katsuhiko Kawazoe
Representative Member of the Board
Senior Executive Vice President
In charge of technical strategy
Chief Technology Officer (CTO)
Chief Information Officer (CIO)
Chief Digital Officer (CDO)

Kazuhiko Nakayama
Senior Vice President Head of Finance and Accounting

Takashi Hiroi
Representative Member of the Board
Senior Executive Vice President
In charge of business strategy
Chief Financial Officer (CFO)
Chief Compliance Officer (CCO)
Chief Human Resource Officer (CHRO)

30

Hideaki Ozaki
Senior Vice President

Head of Global BusinessAkiko Kudo
Member of the Board Senior Vice President
Head of Strategic Business Development
Takashi Taniyama
Senior Vice President Head of Corporate Strategy Planning
Kei Ikeda
Senior Vice President

Head of Technology Planning

Tadao Yanase
Senior Executive Vice President
Head of Business Strategy
In charge of economic security
Chief Business Development Officer (CBDO)

Kyoko Yamamoto
Senior Vice President Head of General Affairs
Makiko Sekine
Senior Vice President

Head of Public Relations

Atsuko Oka
Executive Vice President
Head of Research and Development
Planning

Natsuko Fujiki
Senior Vice President

Head of Internal Audit

ANNUAL REPORT 2022

99

Stock Information (As of March 31, 2022)● Corporate Information
Company name	NIPPON TELEGRAPH AND
TELEPHONE CORPORATION
Date of establishment
April 1, 1985
Head office
Otemachi First Square, East Tower, 5-1,
Otemachi 1-Chome, Chiyoda-ku, Tokyo
100-8116, Japan
Common stock		¥937,950,000,000
Total number of shares authorized
to be issued by NTT
6,192,920,900 shares
Total number of shares issued
3,622,012,656 shares
Aggregate voting rights
35,379,553
Number of shareholders(including holders of fractional shares)
888,337●Stock Exchange on Which the Company Is Listed
Tokyo (Stock Code: 9432)●Investor Relations
NIPPON TELEGRAPH AND TELEPHONE CORPORATION,
Finance and Accounting Department, IR Officehttps://group.ntt/en/ir/contact/index.html●Shareholder Registry Administrator/Special Account Administrator
Sumitomo Mitsui Trust Bank, Limited
1-4-1 Marunouchi, Chiyoda-ku, Tokyo
Inquiries
Stock Transfer Agency
2-8-4 Izumi, Suginami-ku, Tokyo 168-0063
Toll free: 0120-584-400 (For NTT shareholders)0120-782-031 (Main number)●Depositary for NTT American Depositary Receipts (ADRs)
JPMorgan Chase Bank, N.A.
383 Madison Avenue, Floor 11
New York, NY10179, U.S.A.
Inquiries
JPMorgan Service Center
P.O. Box 64504
St. Paul, MN 55164-0504, U.S.A.
TEL: 1-800-990-1135（General）
1-651-453-2128（From outside the U.S.A.）●Principal Shareholders
Number ofshares held(Thousands)

Name
The Minister of FinanceRatio of the numberof shares held tothe total number ofshares issued (%)

1,260,901

35.59

The Master Trust Bank of Japan, Ltd. (Trust Account)

368,424

10.40

Custody Bank of Japan, Ltd. (Trust Account)

159,421

4.50

Toyota Motor Corporation

80,775

2.28

Moxley & Co. LLC

35,674

1.01

Nippon Life Insurance Company

27,2000.77

Barclays Securities Japan Ltd.

25,876

0.73

State Street Bank West Client – Treaty 505234

25,2780.71

JPMorgan Chase Bank 385632

24,7830.70

NTT Employee Share-Holding Association

24,7400.70(Note) 1. Number of shares held is rounded down to the nearest thousand shares.
2. NTT’s holdings of treasury stock (79,490,430 shares) are not included in
the above table.
3. Equity ownership percentages do not include treasury stock. Furthermore,treasury stock does not include 1,089,760 shares of the Company heldby the officer compensation BIP trust.

●Breakdown of Shares by Shareholder
The number of shares is rounded down to the nearest thousand. The figures in parentheses
represent the percentage of total shares owned for each category of shareholder.

584,423■ Individuals, etc.
 oreign Corporations,■F
etc.
800,403
 ational and Local■N
Governments
1,260,941
681,009■ Financial Institutions
 inancial Instruments■F
Business Operators
86,090129,653■ Other Corporations(16.50)(22.59)(35.60)(19.22)(2.43)(3.66)(Note) 1. Percentages are calculated based on the total number of shares issued
minus treasury stock. Treasury stock does not include the company's
shares that are held by the Board Incentive Plan (BIP) Trust.
2. The aforementioned other corporations include 57,000 shares in thename of Japan Securities Depository Center, Inc.

●Restrictions under the NTT Act
The NTT Act requires the government to own at least one-thirdof the total number of issued shares.* Pursuant to the NTT Act,the proportion of voting rights of foreign nationals and foreign
corporations is limited to less than one-third of the total voting
rights.
If the proportion of voting rights of foreign nationals and foreign
corporations should exceed one-third, pursuant to the NTT Act,NTT is prohibited from registering ownership of shareholders inexcess of such limit.
As of the end of March 2022, 8,003,745 of the voting rights
were owned by foreign nationals and foreign corporations.
*For the time being, pursuant to Article 13 of the NTT Act, any increase in thenumber of shares attributable to the issuance of new shares is not included in
calculating the total number of issued shares for the purposes of the NTT Act.

●NTT’s Share Price on the Tokyo Stock Exchange
4,000 (Yen)(Points) 4,000

3,000

3,000

2,000

2,000

1,000

1,000

0

0

(Thousands of shares)
4,000
3,000
2,000
1,000
0

2013

2014

NTT’s share price (upper left scale)

2015
TOPIX (right scale)

2016

2017

2018

2019

2020

2021

2022

NTT’s trading volume (lower left scale)Notes: 1. NTT’s share price and TOPIX index are the simple average closing prices on the last trading day every month.
2. NTT’s trading volume refers to the number of NTT shares traded every month.
3. NTT conducted a 100-for-1 stock split of its common stock, with an effective date of July 1, 2015, and a 2-for-1 stock split of its common stock, with an effective date of January 1,
2020. NTT share prices have been adjusted to reflect the impact of these stock splits.

100

NIPPON TELEGRAPH AND TELEPHONE CORPORATION