Future Business Strategy by Market
November 30, 2004

Kaoru Noda
Director, General Manager of Corporate Planning Department

— Contents —1. Business Trends by Market• • • • • • • • • • • • • • • • • • • • •3

2. COMSYS Group Core Competencies• • • • • • • • • • • • • • • • • • • • •5

3. Business Strategy(1) NTT Business• • • • • • • • • • • • • • • • • • • • •6(2) NCC Business• • • • • • • • • • • • • • • • • • • • •7(3) Government Business• • • • • • • • • • • • • • • • • • • • •8(4) Electrical Facility Business• • • • • • • • • • • • • • • • • • • • •9(5) IT Solutions Business• • • • • • • • • • • • • • • • • • • • •10

4. Management Targets by Business (End-FY2007)• • • • • • • • • • • • • • • • • • • • •11Exhibit 1. COMSYS Group Technical Staff• • • • • • • • • • • • • • • • • • • • •12Reference: Main Medium-Term Management Indicators• • • • • • • • • • • • • • • • • • • • •142

1. Business Trends by Market (1/2)
COMSYS Group main customers
Business category
Current

NTT Information
Communications Engineering

Comprehensive engineering services

NTT business

NTT(HD), NTT EAST, NTT WEST, NTT-C—DoCoMo business

NTT DoCoMo Group—

NCC business

KDDI, Vodafone, POWEREDCOM, DDI-P, TEPCO

NEC business

NEC Corporation

Government business

Ministry of Land, Infrastructure and Transport, Japan Highway Public Corporation,
Ministry of Internal Affairs and Communications, Urban Renaissance Agency, Japan
Defense Agency, National Police Agency relaited, Civil Aviation Bureau

PFI, mid-size local governments, Japan Post,
Fire and Disaster Management Agency, Civil Aviation Bureau

Electrical facility business

Metropolitan Expressway Public Corporation, Nihon University,Kurimoto Construction Industry, Ltd.

General companies, private universities

General private-sector demand business

Sumisho Electronics Co., Ltd, Mitsui Fudosan Co., Ltd., LAWSON, INC., Mori
Building Co., Ltd., NTT InfraNet

Mid-size general companies, SOHONTT EAST, NTT WEST, NTT-C, Meiji Yasuda Life Insurance Company,Recruit Co., Ltd., NISSHO ELECTRONICS CORPORATION, NTT-ME, NTT Neomeit

Mid-size general companies, SOHONEC Corporation, NTT DATA, NTT COMWARE, Sharp Corporation,
Nihon Dengyo Kosaku Co., Ltd., ODK Co., Ltd.

Mid-size general companies, mid-size general contractors, SOHOIBM Japan, Ltd., ORIX Corporation, NTT-PC, NEC Corporation

Security companies, mid-size general companies

Telecommunications
EngineeringNI
IT Solutions

IT solutions business SI
MaintenanceSocial Systems

Target expansion through FY2007

Softbank, new mobile phone carriers,
regional electric power companies—General civil engineering business

Ministry of Land, Infrastructure and Transport, Shimizu Corporation,
Maeda Road Construction Co., Ltd., Matsumoto Construction Industry, Ltd.

Construction business

Maeda Corporation, Yamada Corporation, DAIHO CORPORATIONSECOM, PFI

Eco business

National and local government, electric power companies, electric power sellers

Public service corporations, general companies

3—Business Trends by Market (2/2)
Target market size (¥100 million)
Business category
Current

NTT Information
Communications Engineering

FY2007 (Estimate)

NTT business

9,580

DoCoMo business

8,550

9,900
Under examination

Comprehensive engineering services

NCC business

870

1,000

NEC business

1,500

1,400

Government business

4,900

5,200

Electrical facility business

6,300

6,400

General private-sector demand business

3,000

4,000

NI

4,500

8,000

IT solutions business SI

3,800

5,100

Maintenance500800General civil engineering business

1,700

1,800

Construction business

3,000

2,500

700

1,000

Telecommunications
Engineering

IT Solutions

Social Systems

Eco business
Note 1: Target market size represents the customers and industries of COMSYS Group business activities.
Note 2: Capital expenditures for NTT business and DoCoMo business.

42. COMSYS Group Core Competencies(1) Offer experience and reliability in network infrastructure construction(2) Offer experience in production of software for information systems(3) Offer internal corporate systems construction and administration experience(4) Provide IT solutions from an advanced
and diverse group of technical personnel (Exhibit 1)(One-stop solutions provider from consulting to design,development, construction, and maintenance)(5) Provide maintenance services from facilities nationwide(Monitoring, administration, call center, and on-site maintenance)53. Business Strategy(1) NTT Business[Target market size]HD
NTT-C 190
1,390

HD
NTT-C 200
1,200

Total
9,580
NTT WEST

Total
9,900

NTT EAST
4,100

Modest growth
NTT WEST
4,200

3,900

FY2004 (Forecast)(Unit: ¥100 million)

NTT EAST
4,300

FY2007 (COMSYS estimate)

Strategy(1) Establish construction organization to deliver 30 million optical lines to customers by 2010

(2) Reduce optical access costs by 30% through on-site reform and improvement(3) Enter next-generation network construction(Train IP engineers in partnership with the NTT Group— target increase from current 20 engineers to 100 engineers in end-FY2007)(4) Enter facility management, maintenance, and in-home business(5) Develop construction methods to ensure safety and improve quality6(2) NCC Business[Target market size]

Solutions
20Mobile
400

Total
870

Solutions100
Fixed-line
450

GrowthTotal
1,000Mobile(Unit: ¥100 million)

Fixed-line
450

450

FY2004 (Forecast)

FY2007 (Estimate)

Strategy(1) Maintain top industry position by concentrating COMSYS Group businesses(2) Prevent information leaks between NTT, DoCoMo businesses
and NCC business under COMSYS Holdings (New SANWA ELEC)(3) Full-scale entry into solutions business and maintenance services

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(3) Government Business[Target market size](Unit: ¥100 million)
Local government
1,000IT deployment

Local government
OtherOther
Civil engineering
750
IT deployment
700760(included in regional
Civil engineering
and urban revitalization)
650
IT environment
Total(included in regional Total(900)IT environment
700 and disaster
Modest growthand urban revitalization) 4,900
and disaster
5,200
prevention(1,000)prevention
2,800
2,740
Regional and urban revitalization
Regional and urban revitalization

FY2004 (Forecast)

FY2007 (Estimate)

Strategy(1) Aim to lead in deploying IT systems (including CATV) at local government(2) Step up efforts in laying power lines underground and civil engineering maintenance(3) Actively participate in PFI businesses

8(4) Electrical Facility Business[Target market size](Unit: ¥100 million)
Government

Government
1,000

1,000

Total
6,300

Flat

General private-sector demand
5,300

Total
6,400

General private-sector demand
5,400

FY2004 (Forecast)

FY2007 (Estimate)

Strategy(1) Aim to be a leader in electrical infrastructure construction
by concentrating COMSYS Group businesses (New SANWA ELEC)(2) Integrate sales for electrical infrastructure construction and information and communications construction
under COMSYS Holdings (Collaboration between Nippon COMSYS and New SANWA ELEC)(3) Actively pursue partner strategy (M&A, alliances, and joint ventures)

9(5) IT Solutions Business[Target market size]

Maintenance
800

Maintenance
500

SI
3,800

Total
8,800

NI
4,500

Significant growth

FY2004 (Forecast)

SI
5,100

Total
13,900(Unit: ¥100 million)

NI
8,000

FY2007 (Estimate)

Strategy(1) Provide one-stop solutions from consulting to design, development (inspection), construction, and maintenance(Target solutions sales weighting of 20% at end-FY2007)(2) Provide round-the-clock monitoring and administration and nationwide on-site maintenance services(3) Develop COMSYS brand (COMSIP IP telephone, security, in-home services, etc.)(4) Conduct direct sales to small and medium-sized firms and partner with NTT’s corporate sales division for large firms(5) Actively form alliances with vendors and other providers
104. Management Targets by Business (End-FY2007)
Business category

NTT Information
Communications Engineering

Net sales

Explanatory notes

NTT business
Under examination

DoCoMo businessComprehensive engineering services

UpOver 30%

NCC business
NEC business

Up15%-30%

Telecommunications
Engineering

Operating incomeGovernment business

Up0%-15%

Electrical facility business
General private-sector demand business

FlatNIIT Solutions

Down
5%

IT solutions business SIMaintenance

Down
5%-10%

General civil engineering businessSocial Systems

Construction business

Down
Over 10%

Eco business*Arrows indicate estimated increases or decreases between FY2004 and FY2007.

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Exhibit 1

COMSYS Group Technical Staff
Qualifications Name

2005/3 (Estimate)

Certified engineers

Certified engineers

Supervisory engineers

Supervisory engineers (Telecommunications, etc.)

Electrical730

2,560

2,870337390

1,337

1,460

Chief telecommunications engineers

476

550

First-class cable television broadcast engineers

108

150

1,131

1,200

First-class terrestrial wireless engineers

65

80

First-class special terrestrial wireless technicians

508

550

First-class civil engineering construction management engineers

357

380

First-class plumping construction management engineers

1320

First-class paving construction management engineers

1020

Land surveyors

92

100

First-class architects

1020

First-class architectural construction management engineers

2840

System analysts

110

Fundamental information technology engineers

380

440

Software development engineers

103

140

Technical engineers (network)

1730

Technical engineers (database)

110

Security administrators

1030

Senior system administrators

210

First-class electrical construction management engineers
Electricians

Telecommunications

Installation technicians
Wireless
National qualifications

Civil engineering

Construction

Information processing

2008/3 (Plan)

12

2005/3(Estimate)

Qualifications NameCCIE (included in Cisco)
Cisco
Vendor qualification

MCSE (included in Microsoft)
Microsoft
PLATINUM/GOLD (included in Oracle)
OracleRHCE (included in Linux)
Linux13

2008/3(Plan)

1070

1,048

1,600

1020788

1,000

2950

104160530

109360Reference: Main Medium-Term Management Indicators—Explanation at FY3/04 Results Briefing (May 27, 2004)(Unit: ¥100 million)(1) Net Sales(2) Recurring Profit(3) Net Income

2,900
2,741

2,761

2,800
140
120
1046770

2005/3(Plan)

2006/3(Plan)

80
47
28

2003/3(Actual)

2004/3(Actual)2005/3(Plan)

2006/3(Plan)

2003/3(Actual)(4) ROA

2004/3(Actual)2005/3(Plan)

2006/3(Plan)(5) ROE

2003/3(Actual)

2004/3(Actual)(6) Interest-Bearing Debt
180

6.6%

5.5%

5.8%

5.7%

114

4.9%

3.9%

*3.8%
60

2.3%

2003/3(Actual)

2004/3(Actual)2005/3(Plan)

2006/3(Plan)

2003/3(Actual)

2004/3(Actual)

2005/3(Plan)

2006/3(Plan)

2003/3(Actual)

2004/3(Actual)2005/3(Plan)

50

2006/3(Plan)* Plans in FY3/05

Note: FY3/03 and FY3/04 figures are simple three-company totals for comparison purposes.

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