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We will now start the briefing session of NTT financial results for the six months ended September 30th, 2021. Thank you very much for participating today despite your busy schedules. I am from the IR office and I will be today's facilitator. It is nice to speak to you today. I would like to introduce today's attending members. Mr. Sawada, representative member of the board, president. Mr. Shimada, representative member of the board, senior executive vice president. Mr. Nakayama, executive officer, senior vice president, head of finance and accounting. Mr. Taniyama, executive officer, senior vice president, head of corporate strategy planning. Today's sessions Voice audio will be streamed live on the internet. This will also be distributed on demand basis on a later date, so we kindly seek your understanding. After this session, NTT Docomo will hold its briefing session regarding their results, so please attend this session also. Today's presentation materials are posted on our website under the title Presentation Materials. On the first page of the presentation materials, points to be considered are stated, so we kindly ask you to please read through them. After this, Mr. Sawada, our president, will explain the outline of the results and others, followed by opening the floor for your questions. Mr. Sawada, the floor is yours.

Thank you very much for joining us today. My name is Samada, the President and CEO. I will give you the highlights of the consolidated results for the first half of the year. Please turn to page four of the material. This shows you the consolidated results status. We saw year-on-year both operating revenue and operating income increase in profits at the new record high level. That is the situation as for operating revenue. due to increased identity data, operating revenue increased by 176.3 billion yen. Operating income, there was decline due to impact of review of the accounting system in the previous year at Docomo, but due to increased revenue at various up-goals, such as entity data, as well as their cost reduction efforts, operating income increased by 700 million yen, up to 1 trillion 9.3 billion yen. And for profit, this increased by 134.3 billion yen, and so an increase year-on-year. So both operating revenue and operating profits exceeded our expectation as for overseas sales increased year-on-year due to increased system integration. So we saw both increase in operating income and operating profit and operating revenue. Now page five talks about the Percentage of change in revenues and profit on a quarterly basis of the last couple of years. The blue shows 2018. We maintain increase in both increase in revenue and income. Green on the bottom, this shows increase in revenue by profit decline. This is for 2019. This is due to the reduction in billing plan at Okomo. 2020 shows the impact of COVID-19. We're able to make recovery from that. and we were able to refer to increase in both revenue and income during the year. As for 2010-21, this is indicated in red. In the second quarter, we saw an increase in profit. So we're now back on track toward increase in both operating income and operating plan. So we are very much in line with their initial expectation. So therefore, as for the recent situation is concerned, as far as the first half is concerned, we actually exceeded our initial business plan. Turning now to page six, this shows you the contributing factors by segment. Top shows operating revenue, bottom shows operating profit, or income rather. So as far as the downward trend is concerned, this is in Docomo, but as for other segments, the correction is not Docomo and long distance and international communication, but other sectors shows with increase in operating revenue and operating income as for mobile, As for sales, revenues are increasing. So we now see upward trend in operating revenue in the mobile communications segment. As far as the property is concerned, there was 27 billion yen impact from the review of the point plan. So there was also increase in factory-related investment and also increase in R&D. So as a result, on a year-on-year basis, This went down. However, there was $35 billion in decline in the first quarter. It's only $5 billion in the second quarter, so things are improving. As far as regional communication segment is concerned, focused on fiber, we see increasing service revenues. So, again, increasing revenue and income due to cost reduction. As for long-distance international segment, at NTT Limited, there was increase in structural transformation costs. So, there is a semiconductor shortage impact. This has had impact on declining chances on equipment sales as well as maintenance service revenue. So that is why they are experiencing declining both operating revenue and operating income. As for data, I think they have already announced their plans last year, just yesterday. Five topics. I'll be very brief in highlighting the topics. First relates to establishment of a sensibility charter. For the first time, we are setting a sensibility charter on a global basis. We have created, so this is a broad concept that includes SDGs, ESGs, and CSVs. This is a certain norm. And we have set our principle as self as we. As we have already announced, we have already announced the environment energy vision as well as new management style transformation policy. On top of these policies, we've also announced our human rights policy as well in conjunction with the aforementioned vision. Let's skip page nine. And go on to page 10. Here we talk about our thinking behind the policy of self-as-we. There are three topics. Ensuring the coexistence of nature and humanity, improving prosperity for all people and cultures, and maximizing well-being for all. Please turn to page 11.

We have set 30 activities for them, especially three, if I would like to point it out. Carbon neutral, and in the center where it says our culture is promoting the B2B2F and under the human right. promoting recruitment training and education for diverse human resources and women's investment in the workplace. And these indicators will be reflected in the executive's compensation. Page 12 is explaining about the basic way of thinking regarding the human rights policy. Page 13, the second topic, the Japan rugby is going to be changed to Japan Rebellion as their title partnership. We will be supporting them as the sponsors. And on page 14, this is the third topic, is showing the initiatives to create a remote world. There are three points, NTT East, same telework system, NTT West, the El Gana business chat, NTT Business Solutions, El Gana business chat, and Minor Pocket Service, which have a combined identification verification and my number card from NTT data. And on page 15, we're showing the progress regarding the medium-term management strategy initiative. It's in detail, so if you can look at the red letters, The ION, the Avatar robot, has been implemented, and to have the remote control, it's moving under 20 megabytes. So it's 1 20th of the regular delay is what we were able to realize through this. And using that method, we wanted to apply it to the eSports, which is a networking, and we are working on it. A MINISEC order, we wanted to control the latency, and we have developed that technology, and was of the case for ION. There's a possibility that we'll be able to come out with this technology to be applied, and globally, NPDT E-mail. Including the Latin America, we have established a new company, and we would like to promote migration. And as for strengthening of our new businesses, together with MUFG Bank and Osaka Gas Companies, and others, a total of eight companies, we created a renewable energy fund in September. At the very bottom, enhancement of our corporate value, we have issued NTT group green bonds. And today, it was resolved, and the board of directors are meeting at Tokyo Stock Exchange New Market Classification. We will be selecting a prime market and also comply and commit both the items in the revised Corporate Governance Code. And lastly, it's about the cancellation of the Treasury stock. It is going to be 7.15% of the outstanding shares prior to cancellation. And we will cancel 200 and 79 million shares. That is all from me. Thank you so much. Now I would like to take questions.

With regard to your questions, we are taking questions only those who have registered in advance and those who are connected to the Poland conference system as we speak. We would like to invite the operator to explain how we're going to accept your questions from now on. We will be starting the Q&A session If you have any questions, please push zero followed by one. If you wish to cancel and withdraw your question, please push zero followed by two. From Dower Securities, Mr. Ando, at the floor is yours. Please ask your question. Hello, can you hear me? Yes, we hear you, Mr. Ando. Please go ahead. Thank you very much. I would like to ask two questions. The first relates to overseas. Well, NTT data has announced very good performance, I have heard. But what about other parts of your global business? What is the situation, if you give us a wrap-up review of the overall global business situation? What about dimension data? What about the former dimension data? What about added value services? What about the impact of COVID-19? What about the impact of shortage of semiconductor? several perspectives that one could take so if you could please give your assessment of your global business i would appreciate it that's my first question okay thank you for your question let me talk about entity group global business entity data group and entity limited these are the two contributors to our global business that's right entity data group as you're aware they're doing very well overseas as well so that indicates for example the impact of cover 19 is really felt more or less by Entity Limited. And also the shortage of semiconductor is also being felt by Entity Limited. So the portfolio for Entity Limited and the service lineup of Entity Limited, for example, relates to sales, so for the common sales and offer maintenance services and also offering, for example, offering network related services and offering simplified system integration services or offering algorithms, video, conference system that injured very strong cells last year, but this year, in reaction to that, the cells have been lowered this year. So, therefore, anti-limited value-added services are increasing, but because of semiconductors and COVID-19, they are faced with significant negative elements. So, that being the case, they're now in the negative territory. The impact is now in the negative territory as far as anti-limited is concerned. I would like to invite, yes, I would like to have numbers. Okay, then the numbers, as far as the limited for revenue, negative 12.4 billion yen. As for added value service, as we just further mentioned, they're doing very well. So for equity negative, yes, there is there, but that's 26.2 billion, the same back we see. Now, as for the communications ourselves and also maintenance, here, the COVID-19, 20 billion in impact, and also supply chain impact in relation to about 20 billion. That's very much 39 billion in negative is what we're experiencing. So at the end of the day, added value is in the positive territory, but I'm afraid the negative in the maintenance sales and sales is exceeding in terms of the negative impact. Okay, we answered your question. Okay, what about What about the achieving overseas margin target for the management strategy for the global service? Okay, well, as we explained the numbers, NTD Limited is going to face very difficult situation this fiscal year. But having said that, they are now further carrying on additional streamlining that will, and they have that plan to pursue even added streamlining. So therefore, for the analysts, you're saying that we should be completing a structural transformation. I know that that is your expectation. But there's some things that we have to carry out in conjunction. So to rephrase the situation, NTD Data is doing very well. NTD Limited is experiencing various efforts. And we want to maintain the target for the overseas margin without any change. So that's what we want to do by combining the efforts of these two companies. Okay, thank you. Let me now turn to my second question. It's about the six-line business. In particular, NTD East and West, are they doing very well? Also, as far as revenues are concerned, they're enjoying growth year on year. So, what are the factors that are contributing to the very strong performance at NTD Southwest? If you could explain, please. Thank you. Okay, well, to give you the overall picture, yes, there is the impact of COVID-19, but IP packet service revenue increased. So, that's one thing. And also, as far as profit is concerned, Well, the accounting system, when it comes to air conditioning, useful life treatment has changed. So that has had very slight positive impact as well. And also cost reduction. This is an ongoing program. And also at NGT East, they've also disposed of several buildings. And also orders related to Olympic Games have also expanded. Mr. Taniyama, if there are any numbers that you can share, please go ahead. Okay, let me give you the numbers. Taniyama here. As for East and West, 30 billion increase in operating revenue on both sides. Now, both East and West has increased service revenue, 60 billion impact from increase in service revenue. And as for other positive factors in the case of entities, Olympic, Paralympic, has a positive contribution, system integration in particular. So for NDT West, call center, such as Marketing Act and Solmare, there's a positive increase as a result of call center business. So that has also had positive impact. Operating preference situation, Mr. Sawada has already explained, I believe. Okay, thank you very much.

Thank you very much. We would like to take the next question. Next. It's from Mitsubishi UFJ Morgan Stanley Securities. Mr. Tanaka, please go ahead with your question. This is Tanaka speaking. Thank you very much. Can you hear me? Yes, we can hear you. Thank you. I have two questions that I would like to ask one by one. First of all, for NTT Limited, this time in the first half, the structural reform spending amount and the effect or the outcome of that. What are the numbers for that? This is Taniyama speaking. In the first half, the structural reform expense is $11 billion, and the impact from that is $5 billion. However, $11 billion, this is an $8 billion increase compared to the previous year. Understood. So in that sense, annually, it's $28 billion. So it means that in the second half, you'll be using more. of the expenses. So how is it going to progress in the third quarter and fourth quarter? For the first half, as I have mentioned, we spent $11 billion, and it's behind the schedule. However, we have prepared to use the set $28 billion throughout the year. And for the positive impact from that, we are seeking $18 billion. Thank you very much. And regarding NTT Limited, I would like to ask additional detailed questions. Due to the shortage of semiconductors, the communications equipment, such as routers, the sales of that are being stagnating. I do understand that. But the maintenance of revenue is, I think, what you have mentioned. What does that mean? Can you elaborate more? Well, originally, Dimension Data, their business was to resale the Cisco routers or HP's equipment. And then after that, they were receiving the maintenance business. So it's a sales and maintenance business that they were conducting. And there's a shortage of semiconductors. So there's actually no product. So they cannot actually provide a maintenance for those products. meaning that the component for maintenance is lacking? No, there's something, well, we cannot sell the product itself that uses semiconductors, so we cannot sell the maintenance that was sold with the products. Okay, understood. Second question is the cancellation of the treasury shares is what you have announced, and I believe that there will be some overhang that will be generated as a result of that. Therefore, I believe that you have already had a thorough discussion with the government, and can we have an expectation for the next fiscal year? And in addition to responding to the overhang, are you thinking of doing something within the open market? Can you share your thoughts regarding that or comment on that, please? This is Hashimoto speaking. First of all, regarding the overhang, if you do your calculation, It's about 300 billion yen. If the government makes the decision, that size will be about 300 billion yen, and they'll be able to sell 300 billion yen worth of the overhang. And at that time, as usually, we are purchasing it outside the open market, but we are making it in a way that the general public can also participate. Therefore, if such a situation arises, we will need to think of something. Regarding the share buyback, we would like to consider looking at the overall picture. Okay, thank you very much. That is all for my questions. This is Nakayama from the Finance and Accounting. I think you have asked about the timing, and regarding that, It will all depend on how the government will record their budget. Therefore, at what time, what is it going to be like is something that we will have to wait after the government will make their plans and decisions. We will be responding to that accordingly. Thank you very much.

Thank you very much. Next question, please. Next question is from UMJ Securities, Mr. Kinoshita, UMJ Securities. Thank you. Kinoshita here. Can you hear me? Yes, we hear you, Kinoshita-san. Please go ahead. Thank you. I would like to ask two questions as well. They might be somewhat similar in nature, but I will ask them lumped together. So this time around, you talked about the progress. You mentioned that you were exceeding your plan. but you did not change your full-year guidance despite the strong performance. Why is it that you did not revise your full-year guidance to anticipate toward the second half on short-term deeds or to expect additional costs that will have to be incurred during the second half? Is that the reason why you have not changed your full-year guidance? That's my first question. My second question, when we take a look at the overall trend, entity data seems to be doing very well and they're probably offsetting the negative of entity limited. So, for the full year, from an outsider's point of view, I think you have a safety net that you can work with. Now, as for Docomo, you have not changed the full year guidance of increase in operating profit for Docomo. So, why not leverage that? Why not spend money? Why not allow Docomo to acquire additional customers? What is the thought of entity holding? Does entity holding want Docomo to acquire new customers actively? Or do you want Docomo to hang on to the four-year guidance of increase in operating profit? That's my second question. Okay, thank you for your questions. Well, when we took a look at the most recent performance, be it data, Docomo, or east and west, yes, they're all doing very well, but as you're aware, Energy cost has been increasing, so various enterprise customers are affected by the increase in energy prices. For entity data, they have very large-scale customers, and these customers are planning DX. So I would imagine that an upward trend. And as for overseas and global, this includes entity data. The COVID-19 situation is not as well as here in Japan, especially the situation in Europe is not all that positive. So as we head towards winter, what will happen? That is the second element we ought to bear in mind. Third is the impact of semiconductors. This is very deep-rooted. Now, in principle, the effect is primarily seen at Entity Limited, but will that have impact on enterprise customers right here in the east and west and docomo? We are not still clear on that, so we have to watch and monitor the situation for some time before we can make any upward revision in our four-year guidance. That is the backdrop. So having said all this, yes, things are very well. Are we going after acquiring new customers? In principle, Docomo will maintain or should maintain its plan of increase in operating income on a four-year basis. That is our thought as a holding company. We're greedy. We want them to protect their base, but also go after new customers as well. I guess that is the situation. Thank you. Thank you very much.

We'd like to take the next question. Next, SMBC NICCO Securities, Mr. Kikuchi. Please go ahead with your question. This is Kikuchi speaking. What was discussed before regarding the overhang, it is this timing, so probably the direction is that it is going to incorporate in next fiscal year's budget. On the other hand, your company's cash flow, you have made NTT Tokomo a wholly owned subsidiary, and after that, it seems that the cash flow way of usage throughout the year is very close to the limit. And if you allocate ¥300 billion for the share buyback, you have the framework of ¥200 billion to ¥300 billion of a share buyback. I believe that you are going to continue that plan, with that including the overhang of the government side. Also, I just wanted to confirm that, and as for the dividend, this fiscal year, it's a 5 yen increase in dividend. And compared to the past track record, it seems that the degree of the increase is small, but you have a strong performance, and you're able to bring in 100% of Tokomo's profit. So you have an increase in profit, and next fiscal year, the number of shares will be Outstanding, if you count on flow of the treasury shares, there will be less number of shares out in the market. If that is so, I thought that maybe you can increase the dividend more slightly. So the share buyback and the dividend, regarding this backdrop, can you elaborate more? Thank you very much. Basically, every time, as I have been mentioning, continuous increase in dividend is our basic policy for dividends. So when there's a momentum of the increasing profit trend, of course, we would like to consider that. That's the way of thinking regarding dividends. And as for share buyback, after wholly owning NPT Tokomo, and on the other hand, in line as the plan, generating cash at the same time, we are repaying our interest-bearing debt and conduct share buyback. It's something that we have been conducting. So the efficiency of the cash usage, the real estate data center or credit receivables, We would like to thoroughly control that, and we also would like to improve efficiency of working capital are the efforts that we have been conducting. Therefore, we don't think it in like one framework, but we would like to further expand the share buyback. Several years ago, we conducted share buyback both from the government overhang and the open market. And of course, we want to reflect that to the total return ratio. And so we would like to see what the total return ratio will be, so I cannot comment in detail. But it's not that because there's no government overhang that we're not doing anything, so please understand that point. Thank you very much. My second question is related to the previous Q&A, and it's regarding NTD Limited. How long are you going to conduct structural reform? I think everybody's thinking that. So next fiscal year, next fiscal year, what is going to happen? To begin with, as the business structure itself, is it difficult? Is it becoming more difficult? And structural reform, is that going to disappear next year? And once that is completed as a company, it might end up being a smaller size company is what I think. So next year and next, next year's NTP limit is outlook. If possible, Can you show it in numbers? For example, next year you would like to increase it by $20 billion or such. If there are some specific numbers, can you share that with us? Thank you very much for your question. So in that sense, we don't have any specific numbers yet. However, in the medium-term plan, of course, we have created the numbers that exist. So in that sense, several $10 billion level achievement is the commitment that we have. And if I may comment regarding the structural reform initiatives, the true feeling is that not just for NTT Limited, but NTT data's outsourcing model in the future is going to come within the scope of the structural reform initiatives, meaning that NTT Limited is doing that in a faster speed because the market is moving in a faster speed. But the conventional IT cloud infrastructures within the new cloud and new IT system, the migration is happening in a very high speed. Different from Japan, unless we replace the people, we'll not be able to respond to the new solutions that come out. So the structural reform continuing means that the change in the market is a very rapid And we are responding to that change accordingly, is how I would like you to understand that. And us ourselves, we would like to continue that within NTT Limited and NTT Data, respectively. And at this point, it is true that we don't have any specific number allocated yet. Thank you very much. That is all.

Thank you very much. We'd like to go on to the next question, please. Next question is from Nomada Securities, Mr. Masano. Mr. Masano, please go ahead with your question. Thank you. I would like to ask about Docomo and entity communications. 100 billion yen synergy in the first phase. What is the current situation? I would like to ask about these points, if I may, in the course of my question. In the first half, both entity communications, domestic business and Docomo, saw increase in revenue but decline in profit, but through structural reform you want to generate profitability. I think that is the place you are in. But the industry overall, corporate enterprise network demand is very strong and solution business is expanding. So therefore, profit should be increasing against such backdrop. So what are you doing in the face of the industry trends? Maybe entity communications could do more against the backdrop of the current industry environment. And also, in January, understand that NTD Communications will become a subsidiary firm, and by the second quarter, you'll have functional separation. That is what you have announced. So, you mentioned Trans-Tibetan Indian over the two-year period. If that is the case, in what form will the Trans-Tibetan Indian Synergy be generated? I know it might be difficult for you to forecast the two years in time, but if you could just give us an image of how this synergy will be realized. Thank you. Yes, in terms of the integration between Docomo and intensive communications, especially the enterprise business, well, Docomo has been focused on mobile. So the enterprise business will be pursued primarily by intensive communications. Two trends. First, this software introduction will be progressing. especially as a network service. But demand is increasing, but the overall volume is coming down. And second relates to mobile. So we have to combine these two factors. So up until now, indeed, anti-communications was actually behind the rest of the pack in this area. So therefore, it's important that they work on this. So that is one trend that we need to work on. And the other is cloud. So cloud is... Microsoft Teams and 03506, these services are very popular. But again, the volume, the per unit value is not that large. But there is demand for this type of service. So therefore, we have to add voice service on top of that and also add security on top of that. We are trying to partner with Microsoft on a global basis in this market. segment. So if we can combine mobile in this packet, then this will be very strong. As far as synergy is concerned, about two weeks ago, when we explained the management strategy, I think we touched upon the same topic. I think this is more heavily skewed toward the second half of the program. $100 billion in 2023, $200 billion in 2025. I would say that The synergy will probably begin from the second half of fiscal year 2022. So this year, synergy is not going to be felt that much this year. Next year, it will be more concentrated toward the second half of the year. So we want to make sure that we employ various policies to generate synergies, but the synergy will be more heavily skewed toward the second half of the overall program. I hope I have answered your question. I see, then. If Docomo had enterprise segment, and if combining that with entity communications, how do you see the business environment for the enterprise business if you combine these two teams? Well, if you add the two, it will come to 1.6 trillion yen. But if you exclude that, well, KDDI, I believe, their size is over 1 trillion, and I think SoftBank is about 700 billion. So as far as the business environment is concerned, before we can talk about business environment, we really have to make effort. And the sentiment is not very bad because the demand for remote services is very strong. These services, there's strong demand by having said all this. But the per unit value is not all that large. That is the situation, I believe, as far as this market segment is concerned. I see. Okay. If I could follow up. Half of the synergy has to come through sales, right? But what type of sales are you looking for in the form of synergy? Well, first of all, we want to pursue cross-selling opportunities. So Docomo's customers and NTD Communications customers, if you combine the two, there would be overlaps, but there would be customers that will be owned independently by these two companies. So first of all, the overall subject or the overall target customers will be expanding as a result of combining the two teams. And also, this might help entity communications even more. But the solutions offered by entity communications, we can add mobile components on top of that. So that's the second element. And the third element, the value might not be all that large, but to fix mobile conversion services that are offered by other competition, this cannot be offered by Docomo. So that's the third strand. So that being the case, As far as the products and offerings are concerned, we're able to enrich that. So the customer, expanding customer base and enriching our offerings. And lastly, in the case of SMEs, both companies, again, are lagging behind. So if we could offer DX and mobile-based services to SMEs, if we could approach that, then this would actually lead to opportunity. So that's the third element. So this is an area where we were not able to have inroads at Batona, and we want to change that. Okay, thank you very much. That is all from my side. Thank you.

Thank you very much. We would like to take the next question. The next question is from Credit Suisse Securities. Mr. Eguchi, please go ahead with your question. Thank you very much for this opportunity. This is Eguchi from Credit Suisse Securities. This is related to a follow-up question regarding NTT Limited. The outsourcing model, you said it is struggling. So the competitive environment such as AWS or with the Indian-affiliated companies, the competition is becoming severe. Can you share with us your views, the future views on this? Thank you very much. The outsourcing model may start to struggle. That is for NTT data. As the AI technology evolves further, instead of having outsourcing offshore, there will be more patterns where that will be done through AI. So the outsourcing that will increase the value added is the shift we need to make. So in that sense, the personnel or the solution lineup that we need to have is going to change. Therefore, the outsourcing model will also become within the scope of structural reform. It's more data than limited. Okay, understood. So the global delivery model, I think, is what you're going to review based on this. So in India, if my memory is correct, you have about over 10,000 of engineers. so the effective utilization of those personnels is something that you need to think for the future, too. Is that the correct understanding? Yes. It's not that we are going to immediately do so, but in the long term, we believe it's going to change that way. So, Mr. Sawada, in the long term, the global business, I believe, is going to become one of your main pillars. However, in the last several years, it seems that you're implementing initiatives behind the the actual situation, and you're actually reactive than proactive. So I thought that maybe the changes are going to be more difficult to make, but I do have a specific timing of where you will catch up. What I want you to understand is that in 2010, we have acquired dimension data, and in the United States, we have acquired teens. It was over 10 several years ago. At that time, Only $100 billion or $200 billion was the revenue or sales of overseas, and that is close to $2 trillion. So within 10 several years, we have doubled the business. How are we going to expand the revenue of the overseas business is what we have been putting our efforts in. But what we are serving right now is to increase the profitability of the overseas business, and we have made the focus of shifting over to the profit several years ago. So in that sense, the structural reforms are strengthening the governance and various management being involved more, and we have close to about 600 companies overseas alone, but each brand was separately operating, and within the last several years, we are integrating and consolidating these brands So we are doing all this at the same time. So it seems that the structural reforms are being reactive, but if we don't do that, we cannot move on to the next step. The technology that we can take the lead, we need to actually pioneer or cultivate that market to grasp that. So in that sense, We are lacking the capability there. However, we are putting our efforts in now so that you can expect more from what we're doing now. Thank you very much.

Thank you. Next question, please. Next question from Goldman Sachs Securities. Mr. Tamaka, please go ahead with your question. Thank you. Tanaka with Goldman Sachs. I hope you can hear me. Yes, we hear you, sir. Please go ahead. Thank you very much. I have one broad question. It's about NTD Limited. Well, I'd like to confirm the short-term demand situation. The margin has slowed down, I believe. Maybe, I thought it was just a further present by the previous year, but the network, it seems, you want to expand, I'm sure. That's what you mentioned in the first quarter about strengthening your network. So network, but not even network is slowing down. So yes, there's the impact of semiconductor. Is it just due to one-off factors such as semiconductor? Is this organic? Can you talk about your outlook for the demand situation? How do you see the demand situation for MTC Limited, especially for their added value services? How do you see the situation? Thank you for your question. First, as far as revenue is concerned, yes, it does seem as though it's not growing. That is due to the external environments that are semiconductor and COVID-19. We also changed the accounting about the reporting of their revenue. So telecom maintenance services, only part of that is reflected. So the revenue side, we don't have a structure where it can enjoy exponential growth like we adjoined in the past. As for network service revenue, Last year, the growth of Arcadine was very strong last year, but that part, there was a very large contract, and that element is no longer there for this fiscal year. Now, for Arcadine, the web conference and video conference technology sales, this is also subject to transformation. So, new SDN is in the picture, and also intra-enterprise network, that's offered by NTD Global Network Services. This is recognized as number one by Gartner. We are globally number one in this area. So its value is not that large, but we can enjoy steady growth as far as the ANA is concerned. So overall, we're still an upward trend. We're going to make efforts to further expand this. I would like to invite my colleagues to offer any additional comments. Mr. Taniyama, comment, yes. data center and managed services, there's a value added services. But as you pointed out, this is cloud communication, the network part. We're seeing some slight problems right now, but we're trying to increase the pipeline. So therefore, for the first half, yes, although we were not able to see concrete results, but we want to make recovery toward the second half. We're working on that. As for cloud communication, as was mentioned, We'll be carrying a structural transformation, so we believe that in the second half, we'll be able to see recovery and improvement from that point onwards. Thank you. That is all from my side. Okay, if I could ask a follow-up question. So this is a temporary factor, and things look challenging because of the temporary factor, but the demand situation itself is not problematic. You're saying that you see growth potential for value added services. Is that how you see the situation? Yes, that is how we see the situation. but this is a competitive market, so we have to expand the market. We have to expand the pipeline against this competitive landscape. That is what we're working on. Okay, thank you. I'd like to ask about NTC data. Any cross-selling or collaboration with NTC data? Is there progress on this front? If you could share that, I would appreciate it. Well, with regard to Microsoft-related services, we're discussing working together. And also with regard to SAP, NTT, we want to work, we're discussing working with NTT data when it comes to SAP. And also when it comes to Telefonica and carrier, telecom carrier related to system integration. This is now being done by NTT data. This relates not so much for NTT Limited, but using Docomo's tech technology, maybe there's room for partnership and collaboration. So these are discussions which we're engaged in right now. But in principle, we want to work through cross selling and also NTT DataStack solutions, we should add product on top of that. When it comes to data centers, yes, they're doing a lot of good sales, so we want to enhance this area as well. Okay, thank you very much.

Thank you very much. We'd like to take the next question now. Citigroup Securities, Mr. Trudeau, please go ahead with your question. Thank you very much for this opportunity to ask a question. Sorry, my question is in the last part of the question, so I may ask you about detailed numbers. The first is regarding NTT Limited. I'm looking at the supplementary materials, full year NTT Limited numbers, so I have one question there. Mr. Sawada, at the beginning you said that we need to step one step deeper into the structural reform. And you mean that the restructuring structural reform expense is going to increase to 28 billion yen? And for the upper – for sales, there's – for the others, there are the telecommunications equipment. In the first half, it is showing a decline, but it seems that in the second half, it's going to recover. The overall forecast you have not changed, so you have not changed these numbers over here either. So at this point, moving forward, how would these numbers look like is what I would like to know. Thank you very much. Regarding the structure reform question, we are going to be making the plan from now onwards. So in that sense, it is going to increase. So therefore, the bottom part, there will be the pressure on the profit or the final profit. We will see that pressure. But of course, we would like to see the positive effect of the structure reforms immediately. So we are going to plan that number. And regarding the full year figures, Tania Masson, can you share? As for the full year, the original plan, the COVID-19 impact was up to the first half. And for the second half, the impact of COVID-19 is going to show the recovery was the base or assumption of the plan. Therefore, there's more weight on the second half in terms of performance. And as mentioned before, however, the COVID-19 The impact remains more in Europe and also the semiconductor supply chain. Probably it's not going to be resolved within this fiscal year. Therefore, we need to keep a close eye on those situations. However, on the other hand, what we have conducted in the first half, which is the structural reforms, that positive effect is going to start to show in more specific terms and also in numbers in the second half. Therefore, the operating income is where we would like to start That is all. Thank you. Sorry, my second question is regarding numbers also. This is regarding share buyback. You have a wholly owned entity, Docomo, and from there you said that you will conduct a 250 billion yen share buyback every year. And then you said that you may have the share buyback from the government as an overhang. And when we think about the amount of overhang, it will be equivalent to 300 billion yen. So in that sense, our next fiscal year's assured buyback, how should we look at it? Is it going to be the most bullish calculation will be $550 billion? That's possible, but as a reality, realistically speaking, it seems that it's not going to be so. And maybe this is a question of asking you to read between the lines, but I would like you to once again explain this part. First of all, I will answer that question first. I think it's better to read between the lines I think even in the past, we didn't have this 550 billion yen of a share buyback. So simply adding it, I don't think that's the correct way. Nakayama-san, Mr. Nakayama, do you have any comments? Well, first of all, the free cash flow is about 1 trillion yen on hand and 400 billion for dividends and the remaining 600 billion. How are we going to use that is what we think every year. And when we think by fiscal year, individual fiscal years, how much of the allocation is going to be for what. We're looking at the balance. But as Mr. Sawada explained previously, selling the assets, and we are working on becoming asset-light. Therefore, of course, we don't know how to respond or what the government is going to decide this time. So we only can make decisions depending on what the situation will become is the only answer I can provide with you. In the past, responding to the government, and there were some issues, and it was not a 200 or 300 billion yen level of a share buyback, but there was a year that we conducted about a 500 billion yen level of a share buyback. However, We need to take a look at the bigger overall picture and make the decision. So prior to doing so, we're not going to be able to share the specifics with you. Okay, understood. Thank you very much.

Thank you. Next question, please. Next question from U.S. Securities. Mr. Takahashi, please go ahead with your question. Mr. Takahashi, please. Thank you, Takashi from UBS. I just have one question. It relates to the billing policy at entity Docomo. Mr. Soweto, what are your thoughts about Docomo's billing policy? In particular, there was an announcement about economy and VNO, but I think Docomo itself, they are saying customer first. And also, they have a large user base that is more suitable for this type of billing plan. So do you believe that this policy alone would be sufficient for you to compete with your competition? Personally, I doubt whether or not your billing plan would be sufficient to compete with the others. So Mr. Sawada, what are your thoughts? Thank you very much for your question. Well, first of all, it's not so much of a straightforward reduction of billings, right? It's about adding value. It's all about convincing the customers, providing service package that will be convincing to the customers. That is important thing. So what we're, our concern is this, is of course the billing question has to be considered. There was an interruption. But what about customer service? Response to our customers. We have to constantly brush up our response to our customers. And having done all that, and then it is important that we constantly scrutinize the prevailing situation. So Mr. Takahashi, you asked your question about Docomo. If we believe that there is need for new services beyond a certain threshold, then we hope that they will put out such a service as soon as possible. Or if they believe that they should add value for the time being, then they should do so bearing in mind the prevailing situation. If they want, and I think efforts to expand their partner MVNOs is also important. So I think we have to take a look at the overall picture, but be sure to take various policies, consider various policies. That is my position. So just because they seem to be losing, should they come up with newer, cheaper 0M model? No, that is not my position whatsoever, as far as Stockholm is concerned. I see. If we look back, if we look back over the past, And I've been looking over the past situation, but initially they took away the attitude, but at the end of the day, Docomo was forced to reduce their pricing. That was a frequent occurring situation for Docomo in the past. So when you consider the past trend, yes, you have to consider the profit. So I'm sure the holding company is forced to make a very difficult position because he wants to safeguard profitability. But over the long-term perspective, maybe there's a need to take proactive measures beforehand. Any thoughts? Well, from the standpoint of marketing, as you pointed out, what type of service is required for each of those companies? I think we should have multiple diversified offerings for different segments. The issue is the lead time. You have to reduce the lead time after you make the decision and launch your product. So it's not just about your pricing policy. Even if you leave the market, they'll be catching up. So you have to take countermeasures. So you have to work based on the moving target. That is what you should work on. That is my wish for Docomo. Also, if I could add further, with regard to the handsets, we want something that goes beyond smartphones as soon as possible. And also when it comes to services, they should be more converged services involving health and medicine. We're getting to these areas. So these services should include all these essential sectors and offer added value to our customers. So once you have that, then I believe that you'll be able to expand your customer base more strongly. You'll be able to improve your output and hope that can be realized through marketing. That is my wish for Docomo. Thank you. Very clear. Thank you very much for that.

Thank you very much. We would like to take the next question. Q Research and Consulting. Mr. Soejima, please go ahead with your question. I think you're on mute. Mr. Soejima, it seems that we cannot hear you. Oh, this is Soejima speaking. Can you hear me now? Yes, we can hear you now. Thank you. In the United States, there was an infrastructure bill that has passed, and about a 30 trillion yen level of investments will be made into the market with what is reported. So towards an old infrastructure, the country is committed to replace that, to improve their competitiveness as a country is what is going to happen moving forward, to be of some impact on your business or your company through that. Backing up the telecommunications environment, if the United States government is going to spend money there or not, think it's difficult to think that they will be spending that. However, IT or digital transformation, in order to move that forward, if the government is going to allocate budget for that, then NTT Data America, it will be a positive impact for them. On the other hand, the semiconductors manufacturing plant, including the supply chain, Bringing it back to the United States, that trend is becoming stronger. And for us, we only manufacture a small volume of semiconductors, but in the future, through ION with Intel and Broadcom that are partners, if we collaborate with our partners, that will suffice is what we think. But directly to IT or telecommunications, I don't think there is going to be any positive direct impact. Thank you very much. Do you think that there's going to be some impact for Japan moving forward? So as a country, Japan, the supply chain is almost disappearing from our country. Therefore, from the economic security, especially semiconductors or the other essential medical-related products, supply chain, I think there's going to be movement to bring it back to Japan. So the infrastructures in the United States, if they're going to move towards the infrastructure development using that close to 30 trillion yen budget, if we are just going to watch it without doing anything, we are going to fall behind. But even though the United States or Japan needs to put an effort to keep the supply chain existing within the country. Okay, thank you very much. Thank you very much.

We have – I believe these are all the questions we have received. We want to confirm whether or not there are any additional questions from anyone else. Any other questions? If any questions, please push the zero followed by one. It seems that there are no additional questions. With this, we'd like to complete the presentation of financial results by NTT Holding Company. Thank you for joining us. We would now like to continue with the press conference with the session by NTT Docomo. Please remain connected. We will now continue with the session involving NTT Docomo. Thank you for joining us today. Thank you very much.