Business Operation Plan for Fiscal Year Ending March 31, 2010

Business Operation Plan for Fiscal Year Ending March 31, 2010

Business Operation Plan for Fiscal Year Ending March 31, 2010 February 27, 2009 Nippon Telegraph and Telephone East Corporation (“NTT East”) 1. Revenue and Expenses Plan (Unit: billions of yen) Item FY 3/10 FY 3/09 Change Operating Revenues 1,930 1,960 (30) Voice Transmission* (excluding IP-Related services) 820 910 (90) IP-Related* 660 575 85 Leased Circuits* (excluding IP- Related services) 160 171 (11) Operating Expenses 1,890 1,920 (30) Personnel* 114 115 (1) Non-Personnel* 1,245 1,280 (35) Depreciation, Amortization and Other* 531 525 6 Operating Income 40 40 0 Non-Operating Revenues 20 30 (10) Recurring Profits 60 70 (10) *Major items Note: Figures for FY 3/09 have changed since the results for the six months ended September 30, 2008 were announced. The figures announced for that period were 900 billion yen for voice transmission services (excluding IP-Related services) and 590 billion yen for IP-Related revenues. 1 2. Trends in Operating Income and Changes in Earnings Structure (Unit: Billions of yen) FY 3/07 FY 3/08 FY 3/09 Forecasts FY 3/10 Plan 59.9 Operating Income (14.9) 44.9 Operating Revenues 40.0 40.0 2,061.3 (4.9) ±0.0 (58.6) 2,002.7 (42.7) IP 1,960.0 (30.0) 1,930.0 359.4 +103.2 [17.4%] IP 462.6 Voice transmissions+IP +112.4 [23.1%] IP 1,518.5 IP (23.8) 575.0 +85.0 Voice transmissions +IP [29.3%] 660.0 1,494.6 [34.2%] (9.5) Voice transmissions +IP 1,485.0 (5.0) Voice transmissions +IP 1,480.0 Voice Transmissions 1,159.0 (127.0) Voice Transmissions 1,031.9 (121.9) Voice Transmissions 910.0 Voice Transmissions (90.0) 820.0 Other Other Other 542.8 Other 508.0 475.0 450.0 Note: Numbers in brackets indicate composition ratios of operating revenues 2 3. Capital Investment Plan (Unit: Billions of yen) Item FY 3/10 FY 3/09 Change Expansion and Improvement of Services 431 430 1 Voice Transmission* 160 150 10 Data Transmission* 70 65 5 Leased Circuits* 200 214 (14) Telegraph* 1 1 0 Research and Development Facilities 3 4 (1) Common Facilities and Others 26 26 0 Total 460 460 0 Optical Access Network* Approx. 180 Approx. 180 0 *Major items Note: Figures for FY 3/09 have changed since the second quarter results were announced. The figures announced at that time are: Expansion and Improvement of Services: 425 billion yen; Data Transmission: 60 billion yen; and Total Capital Investment: 455 billion yen. 3 4. Development of NGN (FLET’S Hikari Next) 100% 100% FLET’S Hikari Area Coverage Ratio* 91% (end of FY03/09) EntireEntire BB FLET’SFLET’S areaarea 73% CompletionCompletion expectedexpected oneone yearyear earlierearlier thanthan initiallyinitially plannedplanned VirtuallyVirtually entireentire TokyoTokyo metropolitmetropolitanan areaarea andand otherother majormajor citiescities 63% 50% PrefecturalPrefectural capitalscapitals NGN’s FLET’S Hikari NGN coverage ratio 35% 2323 wardswards ofof TokyoTokyo andand government-designatedgovernment-designated citiescities inin TokyoTokyo metmetropolitanropolitan areaarea ApplicationApplication startsstarts 0% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q FY03/08FY03/08 FY03/09FY03/09 FY03/10FY03/10 FY03/11FY03/11 No. of fixed-line phone lines in FLET’S Hikari service areas *FLET’S Hikari area coverage ratio= No. of fixed-line phone lines 4 5. Principal Services Plan (Unit: 10,000 contracts/subscriptions) Item FY 3/10 FY 3/09 Subscriptions FLET’S Hikari 776 636 Net increase 140 140 Subscriptions Telephone Subscriptions + ISDN 1,920 2,100 Net increase (180) (190) Telephone Subscriptions* Subscriptions 1,653 1,801 Net increase (148) (156) *Major items Note 1: Figures for ISDN subscriber lines consist of INS-Net 64 and INS-Net 1500 subscriptions. In terms of number of channels, transmission rate and line use rate (base rate), INS-Net 1500 is in all cases roughly ten times greater than INS-Net 64. For this reason, one INS-Net 1500 subscription is calculated as ten INS-Net 64 subscriptions. Note 2: Figures for FY 3/09 have changed since the results for the six months ended September 30, 2008 were announced. The figures announced at that time were: FLET’S Hikari: 6.56 million contracts, the new plan shows a net increase of 1.6 million; telephone subscriptions + ISDN: 20.7 million subscribers, the new plan shows a net decrease of 2.2 million; and telephone subscriptions: 17.77 million subscribers, the new plan shows a net decrease of 1.8 million. 5 (Reference) Collaboration between Cable Television Yamagata and NTT East ◆Service area ◆Image of offered services Yuza-machi Mamurogawa-machi Sakata-shi Cable Television Yamagata Kaneyama-machi Sakegawa-mura Mikawa-machi Mogami-machi Customer’s Shonai-machi Shinjo-shi home Tozawa-mura Multichannel Funagata-machi broadcasting Obanazawa-shi • Terrestrial Tsuruoka-shi Okura-mura Oishida-machi digital NTT East Can watch Cable Television Murayama-shi broadcasting Yamagata’s multichannel • BS digital broadcasting Nishikawa-machi Sagae-shi Tendo-shi broadcasting Kahoku-cho Oe-machi Tendou-shi • Communication Nakayama-machi satellites Optical Yamanobe-machi Tu Asahi-machi Network termin • Self-produced fiber ne Yamagata-shi [TV] Shirataka-machi shows r Nagai-shi Kaminoyama-shi Nanyo-shi Oguni-machi Internet a Kawanishi-machiTakahata-machi t i [High-speed Internet] on uni CATV Yamagata’s Iide-machi current service area* t Service area with Yonezawa-shi collaboration Coaxial cable [Hikari Denwa] *Includes a part of Yamanobe- LAN machi, but does not include parts of Yamagata-shi and Tendou-shi Phone line ・Service area Kaminoyama-shi Sagae-shi, Kahoku-cho, Nakayama- cho, Yamabe-cho (approximately 33,000 households, excluding certain areas) ・Scheduled period of service FY03/10 second quarter 6 (Reference) A New Series of Telecommunication Terminals ~Convenient and comfortable living with FLET’S Hikari~ “Hikari Link” Series Other companies’ products compatible with NTT Network Excellent Hikari home camera (Kururimo) Product Lineup For a Secure Health care and Safe Life Emergency earthquake report terminal ・Standby information Cabling reception terminals Solutions ・Next-generation family PCs ・Video communication Family PC Game terminals consoles ・Stronger cooperation between AV device and Entertainment BB router other appliance manufactures Video receivers PLC Robust Maintenance TV phone terminals Support Communication High-quality IP phones ・Enhancing customer inquiry support ・Supporting the products of First new product! other companies Hikari Photo Frame ・Photos sent by e-mail or from a digital camera are displayed on an 8- inch LED backlit screen. ・Retail price: 29,800 yen (with tax, 31,290 yen) ・Launch: March 2, 2009 (scheduled) 7 The forward-looking statements and projected figures concerning the future performance of NTT East contained or referred to herein are based on a series of assumptions, projections, estimates, judgments and beliefs of the management of NTT East in light of information currently available to it regarding NTT East, the economy and telecommunications industry in Japan and overseas, and other factors. These projections and estimates may be affected by the future business operations of NTT East, the state of the economy in Japan and abroad, possible fluctuations in the securities markets, the pricing of services, the effects of competition, the performance of new products, services and new businesses, changes to laws and regulations affecting the telecommunications industry in Japan and elsewhere, other changes in circumstances that could cause actual results to differ materially from the forecasts contained or referred to herein, as well as other risks included in NTT’s most recent Annual Report on Form 20-F and other filings and submissions with the United States Securities and Exchange Commission. 8.

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