.00 US$2,400 ： ) 00 (on or before Oct. 31) FAX +81-3-5371-6966 ） ） in 2006 ~ FTTH, A Driver to bring NGN New Market Report in English!! ：（ 81-3-5371-6937 Special Price for Advanced Order (Regular Price after October 31, 2006: US$2,750. Please fill in the enclosed “FAX Order Form” and fax us at number below. Orders by telephone or e-mail are also welcome. We will confirm our acknowledgement of your order(s) shortly by phone or e-mail. FAX: 81-3-5371-6966 PHONE (Contacts) Koichi Seto ([email protected]) / Sachiya Inagaki ([email protected]) Electronics and optics division Phone +81-3-5371-6937 (direct URL: http://www.yanoresearch.com Yano Research Institute Ltd. Nakano-sakaue Central Bldg. 2-46-2 Honcho, Nakano-ku 164-8620 JAPAN Fiber-Optic Market

～ Price ¥63,000 ¥300,000 US$1,950.00 US$1,500.00 (TAX not included) July, 2006 June, 2006 Issued in August, 2005 January, 2006 Yano Researach Institute Ltd. Features of the Report Title Prospects 2005 (PV Power Systems) 2005 Laser Market in Japan 2006 Market Share in Japan 2006 New Energy Systems Market Other Market Report in English, Offered by In 2005, the number of FTTH service subscribers increased much more sharply than ever before due partly FTTH Market in Japan and Its Future ～ to aggressive sales promotion offerred by NTT that is targeting achieve three hundred thousand cumulative subscribers by the year of 2010. The total number FTTH service in Japan has reached five millions and forty five thousands as of the end March, 2006 net increase FTTH subscribers per month has surpassed that of ADSL, the most popular form broadband internet accesess service in Japan at the time of March, 2006. Major factors that have made FTTH service more popular in these days include popularization of optical fiber IP phone as well many different types sales campaigns provided by communication carriers and IPS (Internet Service Providers) lowered monthly fees. The basic fees of the optical fiber IP phone is attractive enough for customers to switch from conventional analog telephone due to the "0ABJ" number porability service. It is truely remarkable that more than 60-70% of new subscribers to the FTTH internet access service concurrently subscribe IP phone services. In conjunction with the expansion of FTTH service market, demand transmission devices for access network has started to show upward trend and the optical communication related market as a whole apparently becoming more active after the downturn that market had experienced until a few years ago. Transmission capacity has increased due to enrichment and more frequent use of video contents 10Gbps interface is coming to be a standard on the fiber optic backbone. In addition, demand of CWDM and WDM systems has gradually increased for the purpose of enhancing transmission capacity while achieving efficiency in use of fiber optic cables. In this market report, you can overview trends of FTTH service in Japan. Also, status and the FTTH related services provided by major communication carriers, as well systems and devices they use, are introduced. Finally, profiles, major products and business strategeis of device suppliers as well as their views on current and future market are provided. This report is useful in grasping trends of optical fiber communication systems and device market being focused on the access and metro area networks, we are strongly believe this report will help you build your marketing strategeis and product development strategies for the future in association with FTTH related market in Japan.

-Sample Pages- Fiber-Optic Telecommunication Market in Japan 2006

Figure 8: Market size transition of PON systems ~ FTTH, A Driver to Bring NGN ~ (Million yen) 70,000 600% 1. NEC Corporation

Amount ～Expanding PON system sales with a lineup meeting 60,000 500% Year-on-year ratio general and individual standards～ 47,400SAMPLE 50,000 400% Table of Contents (Tentative) 40,000 1. Corporate information 300% Company NEC Corporation President Akinobu Kanasugi Name 30,000 21,500 200% Address 5-7-1 Shiba, Minato-ku, Tokyo, Japan Chapter1: Spread of FTTH services Chapter4: The optical access transmission system 20,000 17,300 Phone 03-3454-1111 URL http://www.nec.co.jp 12,250 SAMPLE 1. Status of subscription to the FTTH services market No. of 100% Capital 337.8 billion yen 23,168 10,000 employees 2. Factors that help improve popularity of FTTH 1. PON system market * Capital and no. of employees: as of March 31, 2005 0% 2-1. Improved overall recognition concerning FTTH assisted 1-1. Market summary 0 2001 2002 2003 2004 by positive advertisement and public relations 1-2. Changes in the size of the domestic market 2. Current state of optical fiber communications market 2-2. Providing campaigns that make installation fee free 1-3. Major vendors' market share as well as provide reduction in subscription charges 1-4. Trends of major vendors • 100 M Ethernet-PON

In response to growth in optical fiber transmissions in recent years, NEC has released 2-3. Recognition of discounted prices for "Optical Fiber 1-5. Future outlook for the PON system market 2. Co., Ltd. Figure 9: Market share of PONits ATM-PON-basedsystems by manufacturer Ethernet-PON. This (2002) system uses the B-PON system to assign + Optical IP Tlephone" 2. Media Converter Market wavelengths between the OLT and ONU (PON section) and the ATM-PON system to ～Working to further expand sales in the GE-PON market ～ 3. Historical transition of the number of FTTH subscribers 2-1. Market summary control the ATM 150 Mbps bandwidth for up/down multiplexed transmissions. A

10BASE-T/100BASE-TX Ether interface is provided for the ONU user interface and 4. Future outlook for the number of subscribers 2-2. Changes in the size of the domestic market SAMPLE OLT upstream network interface. While the products differ in numerous specific ways, Fujikura, 1.6% Mobile, 16.3% 2-3. Major vendors' market share 1. Corporate information representing a mixtureOthers, of multiple 3.3% standards, sales continue to expand, thanks to Company Oki Electric Industry Co., Ltd. President Katsumasa Shinozuka expectations of future demand stemming from standardized interfaces. Chapter2: Trends of capital investment in optical 2-4. Trends of major vendors Name Oki, 1.6% SAMPLE Address Shin-Toranomon Building 1-7-12 Toranomon, Minato-ku, Tokyo, Japan transmission systems 2-5. Future outlook for the optical media converter market Phone 03-3501-3111 URL http://www.oki.com/jp/ 1. The Overall Trend No. of Capital 67,877 million yen 5,389 , 8.6% employees 1-1. Changes in amount of capital investment in optical Chapter 5: Profiles and status of telecommunication * Capital and no. of employees: as of March 31, 2005 transmission systems carries and major vendors (Telecommunication Carriers) 2. Current state of the optical fiber communications market , 68.6% Chapter3: The optical fiber-based transmission system 1. Nippon Telegraph and Telephone East Corporation • Expanding sales of its own-standard GE-PON system ahead of the competition Oki Electric is focusing its efforts on expanding sales of the GE-PON system already market for "core" and "metro" sides 2. Nippon Telegraph and Telephone West Corporation Figure 15: Optical media converters: Historical transition and forecast of market size introduced to market. In the field of PON systems, it is already developing and selling 1. The SONET/SDH system market 3. Energia Communications, Inc. STM-PON and ATM-PON systems (which incorporate improvements to its PON system (Million yen) technology) to NTT. This accumulated expertise was channeled to GE-PON system 10,000 1-1. Market summary 4. K-Opticom Corporation research from 2001, with a GE-PON system brought to market and launched in June 8,400 8,550 1-2. Changes in the size of the domestic market 5. KDDI Corporation 2003. The product was built to Oki Electric's own standards, and the launch of a 8,000 GE-PON system ahead of other manufacturers increased demand, particularly among 7,100 1-3. Major vendors' market share 6. Kyushu Telecommunication Network Co., Inc. power generation communications carriers. Compliance with the IEEE802.3ah 8. UTStarcom Japan K.K. standard was subsequently achieved, and the company is currently in waiting to meet 6,000 1-4. Trends of major vendors 7. STNet Inc. ～ ～ the demands of major communications carriers. Entering the GE-PON market from ADSL 4,010 1-5. Future outlook for the market of SONET/SDH systems 8. Chubu Co., Inc. 3,660 3,610 4,000 3,070 2. The WDM system market 9. UCOM Corporation (former U's Communication 2-1. Domestic market summary Corporation) Figure 3: Transition of domestic communication carriers' investment2,000 in optical fibers 1. Corporate information （％） Company 2-2. Changes in the size of the domestic market (System and Dvice Manufacturers) (Million yen) UTStarcom Japan K.K. President Michio Nakanishi 40.0% Name 1,000,000 SAMPLE0 2-3. Major vendors' market share 1. Corporation Address Shiba-Koen Tower 2-11-1 Shiba-Koen Minato-ku, Tokyo, Japan Investment in optical fibers 2001 2002 2003 2004 2005 2006 2007 2-4. Trends of major vendors 2. Fujitsu Limited Ratio to total investment 820,000 Phone 03-6430-8600 URL http://www.utstar.co.jp/ 800,000 No. of 30.0% Capital 200 million yen 120 2-5. Future outlook for the WDM system market 3. NEC Corporation employees 680,000 * Capital and no. of employees: as of April 30, 2005 Table 14: Optical media converters: Historical transition and forecast of market size 3. CWDM system market 4. Hitachi, Ltd. (Million yen) 600,000 540,000 560,000 3-1. Market summary 5. Sumitomo Electric Industries, Ltd. FY 2001 2002 2003 2004 2005 2006 2007 20.0% Amount440,000 3,660 8,4002. Current state 8,550 of optical 7,100fiber communications 4,010 market 3,610 3,070 3-2. Changes in the size of the domestic market 6. The Co., Ltd. 390,000 400,000 3-3. Major vendors' market share 7. Oki Electric Industry Co., Ltd. • Starting to expand sales of FTTH products following on from ADSL UTStarcom Japan is a communications equipment manufacturer established in 3-4. Trends of major vendors 8. Fujikura Ltd. 10.0% January 2002 as a 100% owned subsidiary of UTStarcom Inc. in the USA. Its range of 200,000 3-5. Future outlook for the CWDM system market 9. Cisco Systems, Inc. systems targets four main business areas. Outside Japan, the company provides PAS 10. Corrigent Systems (PHS) products in China. In Japan, the company has supplied ADSL equipment to

0 0.0% SoftBank BB and expanded into the optical fiber sector with the entry into the FTTH 1999 2000 2001 2002 2003 2004 business by the SoftBank Group in FY 2004. According to previously published details, UTStarcom Japan already supplies the SoftBank Group with GE-PON systems and SONET system optical transmission equipment. * The above contents of the report is tentative and subject to chage.

*These tables and charts are only for reference and do not represent exact contents of the actual report.