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Thank you for joining us today. I am Sekine, the head of the NTT Public Relations Department. First of all, I would like to introduce today's speakers. The President and CEO of the President and CEO of the President and CEO of the President and CEO of the President and CEO of the President and CEO of the President Shikkouyakuin Kei-kikaku-bumon-cho Hattoriya Kito-shi. Ijo no sanmei de gozaimasu. Nao, honjitsu no shiryou wa 13-di-han ni NTT Koushiki-homu-teiji ni appu shite orimasu no de awasete gokakunin kudasai. Soredewa, kaiken wo hajimemasu. Shimada-sachou yoroshiku onegai itashimasu.

Thank you for participating today. I am Shimada, president of NTT Inc. I will now explain the financial results for the nine months ended December 31st, 2025. The consolidated financial results for Q3 FY2025 show increased revenue and profit the year-on-year. Opening revenue reached new record high levels in Q3. Although operating revenue was impacted negatively by approximately 55 billion yen due to foreign exchange, as a result of expansion of enterprise business across great companies and increase in revenue by transferring data centers for REIT, operating revenue increased by 371.3 billion yen year-on-year to 10,421,000,000 yen. Regarding EBITDA, while there were cost investments at Docomo to reinforce its customer base and to implement measures to improve mobile network quality... due to increased profits from the expansion of enterprise business at the grid companies and transferring data centers for REIT EBITDA increased by 104.8 billion yuan a year to 2,657,300,000 yuan, and operating profit increased by 57.9 billion yuan a year to 1,457,100,000 yuan. Profit, driven by a rise in operating profit and other factors, increased by 75.4 billion yuan a year to 926.1 billion yuan. As for operating revenue and operating profit by segment, in the integrated ICT business segment, consumer communications business declined due to factors including reduced mobile communications service revenue, However, growth in smart life business centered on finance services and enterprise business led to an increase in open revenue year-on-year. Despite profit growth in smart life business and enterprise business, because of cost to reinforce a customer base and improve network quality, Operating profit declined a year on year. As a result of measures to reinforce customer base, sales capability is steadily improving and MNP was positive during Q3. In the global solutions business segment, despite an approximately 55 billion yen negative impact from foreign exchange rates, driven by business growth domestically and internationally and transferring data centers for a REIT, operating revenue and operating profit increased year on year. In the regional communications business segment, although there was a decline in legacy business revenue due to factors such as growth in enterprise business and fiber optic business revenue, operating revenue and operating profit increased year on year. Net ads in fiber optic service increased year on year due to strengthened sales of 10 giga plant and comprehensive bundled service for condominiums. In others, such as real estate, energy, etc., due to expansion in office, commercial and residential businesses within NTT Urban Solutions, operating revenue increased year-on-year. Next, I will explain the four-year financial results forecast. In order to reflect the revised forecast of Docomo and NTT Data Group, we have revised down with the consolidated forecast for NTT this fiscal year. Details will be explained later by each company. Regarding Docomo, amid intensifying and prolonged competition requiring greater than expected investment to reinforce its customer base, it is necessary to make sure to continue implementing key measures for future growth, such as measures to reinforce customer base and improve network quality. As a result, operating profit has been revised down with by 83 billion yen.

With respect to data group, reflecting the realized profits of gain on the transfer of data centers for REIT based on market environment exchange rate fluctuation, the operating profit was revised downward to 26 billion yen. Particularly at Docomo, intensified competitive environment is expected to continue. In addition to the achievement of the results by strengthening of customer base and improvement of mobile network quality, we endeavor to recover performance by accelerating efforts through growth in smart life business, focusing on finance and enterprise business, and cost reduction through fundamental review on organization and business processes. The summary of fiscal year 2025 financial result forecast by company is shown on the slide. Next, I would like to go over four topics. First, let me talk about the mass production of photonics electronic convergence devices. The switches using photonics electronics convergent devices through collaboration with supply chain partners including Broadcom and Acton Technology will begin commercial provision within FY2026. Furthermore, for the mass production of photonics electronic convergence devices, innovative device is continuously preparing to increase production volume per line through automation of assembly, mounting, and inspection processes to expand production lines in response to demand. Through these efforts, up to 30,000 units production per month will be feasible. and we would like to proactively cater to the demands of hyperscalers and cloud operators. Next is social implementation of AI integrating digital and physical domain. Till now, NTT has been promoting introductory support to respond extensively to globally major LLM, in addition to the development and provision of genuinely Japan-made LLM Tsutsumi. The order amount for our AI business for FY2023Q3 was 147.8 billion yen for the entire group, far exceeding the pace of achieving annual target of 150 billion yen. Currently, initiatives at Toyota Motors, Mujin, and Trial Holding are making progress, and while we continue to collaborate with the leading companies of each industry domestically and overseas, we will accelerate the social implementation of AI that integrates digital and physical domains. Next, I will talk about exhibition at MWC Barcelona 2026. At MWC Barcelona 2026 to be held in Barcelona in March, Photonics Unlocks an Intelligent Power Optimized Future is our key message. After seven years, we will jointly exhibit as entity group. I will deliver keynote speech on March 4th and speak about our efforts to reduce power consumption through optical technology centered on ion, such as photonics, electronics, convergence devices, and optical quantum computers. Please come to the event. On the progress under medium-term management strategy, our effort since November is shown on the slide. This concludes my presentation. Thank you for your attention.

We will now respond to questions from the reporters. First, we will accept questions from people in this room. Please raise your hand if you have a question. After a staff bring a microphone to you, please take your name as well as your company or media name and then pose your question. Because of time constraints, we kindly ask you to first limit to two questions per person, please. Are there any questions? The person towards the left in the back is asking from my side. My first question is, fiscal year end, Docomo 3G is going to end. And so there's this milestone, and before this milestone, not many comments. And on a related note, DOCOMO, operating profit, and for your guidance, there are to be revised downward. And in the current fiscal year, customer base reinforcement is to be accelerated. And towards next fiscal year, do you think this trend will continue, this accelerated trend will continue? These are the two questions I have. Thank you for the questions. First of all, fiscal year end, there is the 3G milestone, and towards this, vis-à-vis 3G customers, we are making sure that we recommend the 4G or 5G to them, and in addition, handset device discounts are also offered. We are making sure that these measures are steadily taken, but ultimately, About 2 million subscriptions, I think, will end up remaining, and most are IoT-related subscriptions are likely to remain. And therefore, to actual users, we would like to explain in detail, respond meticulously, so that they can migrate as much as possible to 5G. And Docomo... their most important mission now is to maintain and expand the customer base and quality improvement has to be made further. These are the two main challenges of Docomo and this fiscal year they are making utmost effort in this regard and next fiscal year this effort is to continue and 35% has to be met by all means I may have mentioned and The message was not to reduce a share to below 35%. That was the message I wanted to get across to make it easy to understand. But maintaining the most current share is important for the future, whether it be finance or service or entertainment, in order to offer value-added services. this kind of customer base should not be deteriorated any further. And we have to be able to offer a value-added service to a variety of customers as much as possible. And for that purpose, we have to expand our customer base. This concludes my response.

Thank you.

Next question, please. The person at the left. from Yomiuri Shimbun. My name is Kobayashi. I have two questions. The first one is on IOWN. Photonics, electronics, convergence devices, mass production will be commercialized. And what is the scale of sales? That is what I would like to know. And with AI, The order amount will be 148.7 billion yen, but in terms of net sales, how would that translate to be? Starting from the photonics, electronics, convergence device, at this point in time, we cannot state net sales. That is because the price negotiation is ongoing at the moment. If I state figures, you will be able to arrive at the unit price. So I would like to refrain from responding to that question. AI, 147.8 billion. Some of them are early processes or... Some of the orders are in the order of 10 billion, and the period will be slightly longer. So, in principle, within six months or so, they will be booked as sales, but some of them would require few years. Next fiscal year, we are anticipating to have sales from there. So we are already entering into the fiscal year, and some of them are order placed in the first quarter.

Next question, the person in the middle wearing blue shirt and navy jacket, please. My name is Nishimoto. I have two questions. First, downward revision of guidance. I take a look at the reason for revision and the Docomo's incidental intensifying and prolonged competition environment as well as network quality improvement that is... I want to know a bit about the reason. Sales promotion, much more than expected. There's more cost incurred for sales promotion. What is that? It was network quality improvement. Base station construction cost is increasing much more than expected. I want to know in more detail the reason for the revision. First, quality improvement. It's mainly investment. Of course, to a certain extent, there is cost incurred. But rather, we have a plan, and about 50 billion yen per year, there's increase in investment. And that is how we will respond, mainly speaking. And cost is increasing because of, I mean, the sales promotion cost and The point is residual value is set when handsets are offered to customers. But when it comes to customer percentage or customer rate, There were more customers than expected that returned their handsets, and we had to provision for that. And there's that. And in the case of Docomo, I think details will be explained by Docomo. and the sales promotion is being conducted by competitors as well. And under such circumstance, in Q3, the three months, as well as in January, They are facing difficulty, and they have to respond to the extent possible, and that is incurring costs. And the second question, wage hike. Spring wage negotiations have started towards a wage hike, and under such circumstances, a wage hike Mr. Shimada, what is your thinking about the wage hike and the price pass through cost reduction? How are you intending to secure a source of funds for wage increase? Basically, 12 years in a row, we have been conducting a wage hike already. So it's important that we continue this wage hike. However, when it comes to the level of wage hike, we have to negotiate with the unions. And it depends on the outcome of negotiation. It's true that there's a various kind of cost increasing, and labor cost is increasing as well. And the services that we offer... conducting a price hike might have to be necessary. But as I mentioned, particularly in mobile, in terms of competition continues. In that sense, in various ways, we have to try to reduce cost and increase efficiency, and we have to introduce AI. By taking these various measures, we have to absorb increasing cost, and that is what we have to do for the time being. Thank you. And if possible, with understanding of customers, if we can increase unit price in various ways, that will be desirable.

Then to my right, the person in the second row, Kuashima from Kyodo News. I have two questions. The first question is about the RAPIDAS. There's additional investment, and I would like to confirm the fact. And what is the expectation to RAPIDAS? And the second one is TEPCO. They are requesting for external partners. and data center and AI, there are some areas you excel, but do you have the intention to participate or do you have interest? Starting from Rapidus investment, I would like to refrain from making comment. Please ask the question to Rapidus. But on the other hand, with Rapidus, We have much expectation. Photonics, electronics, convergence device, as you saw in the materials, at around PEG-3, we should be able to work together. And together with the president of Koike, we have been speaking. And Rapidus has a front-end process and a back-end process, and they want to have the full initiative. So in the back-end process, something like PIC3 will be embedded so that the product value will be enhanced. So we would like to participate in that effort. And about TEPCO... We do not know the details at all, so we would like to refrain from making comment. My apologies for that.

Next question. The person behind the previous person. Yes, please. Thank you for the explanation. NHK. Tomo is my name. About Jokomo. Tokomo has a finance service. They're trying to strengthen finance business. And Mr. Shibata, in your interview and so forth, you talked about the concept of setting up a holding company. And what is the progress of this concept, the aim, timing, et cetera, at this point in time? What is the status? Thank you for the question. Holding company or... a holding company, an operating company for a finance service. I've wanted to set up this kind of a company, and I've said that on various occasions. And if possible, and if the environment allows, from around April of this year, we want to set up this company. And of course, our M&A part of our at the common as mtb efficient bank and my next and uh... at the come up right now and uh... at the fact that i think that there is a little it onto the uh... holding company and that you can't empty but i keep him and and a company that can handle all kinds of finance services that we want to set up. And for one thing, FSA, dialogue with FSA and finance-related governance matters would have to be clarified, and that's one purpose. M.I.C., Ministry of Internal Affairs and Communication, have been our regulatory authority that finance business will be within the realm of JFSA. So we have to be able to respond sufficiently to JFSA-related matters. And if things proceed as scheduled around the summer, we do want to change this kind of structure. By the way, Docomo, as you explained, there's the competitive environment and there are cost-related matters, and a finance-related business, bringing them together. And by so doing, do you think the company, the group can recover and grow further? First, we have to reinforce customer base. And in order to do that, finance business is important, as well as entertainment, as well as new venue business, as I mentioned in my explanation. And we want to offer these kinds of services as value-added service to the customers. And, of course, for that, we have to be able to collaborate well. And details? If you ask Mr. Maeda, he may not be available to respond in detail, but at some kind of a timing, we do want to get an opportunity so that we can explain about what KOMO is intending to do. At a certain timing, I think we'll be able to explain in detail.

Thank you. We would like to entertain one more question from the floor. The person at the front row, please. Free writer, Sano. I have one question. The other day, NEC... from the announced withdrawal from the existing base station business, and you made the investment in 2020, and you have been trying to expand to now, and I understand that the business would continue, but NET is going to downsize this business. What is the perception of NTT as a shareholder of the company? Well, NET... On the existing base stations, I have been speaking with President Morita, and he will continue to do that. And what is used for the services, such as the equipment and the software of NEC, we do not have any concern over that. But on the other hand, From that perspective, in 5G, domestic vendors are not so competitive, which is unfortunate. So in the next VLAN or for the new service deployment, domestic vendors to produce good products so that it will be desirable for us to use again. So we would like to look forward to that. So specifically, are you considering to have any actions specific actions we do not have from our side.

Thank you.

We will now respond to questions from reporters participating online. We can accept questions either by voice or chat. In the case of voice questions, please click the Ask Question by Voice button on the right side of the screen, and after selecting the microphone device, please click the Raise Hand button and wait. We will just get to you, and when you see the message, Questions Possible, please start to mention your question. In the case of chat, please click the chat button on the right side of the screen, type in your question, and click the send button.

Are there any questions?

Are there any questions? No questions. Since there are no questions from people participating online, we would like to ask if there are any questions among the people in the room. The person in the right-hand side, please. Toyo Keizai, China, is my name. Done with revision of guidance. In relation to that, once again, I want to know that I think a substantial factor is concerning DoCoMo. And compared with the initial guidance, You made efforts for sales promotion, but other companies were making efforts in sales promotion as well. As a result, the competition intensified and things are not going as planned. Well, what specifically is different compared with the initial guidance? And bearing that in mind, next fiscal year by segment, including integrated ICB segment and DOCOMO, what is your current prospect as much as you can share with us? What prospects? Performance forecast for each segment. First, Sales promotion, concerning sales promotion, actually Q2, Tocombo lost in terms of M&P competition. Even though 0.5, we stopped that service. And as a result, there was a decrease in volume. And after that, We should not intensify competition too much. That is what we have to agree upon with our competitors. But still, our competition is not slowing down, moderating, not moderating. And last year, from the second half of the year, we made a lot of effort towards sales promotion. And this year, we thought the competition was settled down. That was what I was expecting. But in reality, the competition, rather, is intensifying further, not moderating. which means we had to respond sufficiently in this kind of situation, and we should not be defeated, and that is why this current situation is continuing. We've all spent a lot of costs, all are main players in the industry, so next fiscal year onward, what is the situation likely to be? It's very difficult to forecast. If there is a competition, we have to win. So we have to continue our effort. If there is competition, we have to continue our effort. And by segment, Dokomo segment, is that what you want to know? Microphone was not on. Next fiscal year. We have to prepare our next fiscal year's plan. It's not fully prepared. And Dokomo, at least this year, will be the bottom for Dokomo. However, quality improvement... About 20% growth every year in number of chats is increasing because of increased video usage. We have to respond to these needs so that we can ensure customer satisfaction. So we do have to continue our effort to improve communication quality. And the entity East and West Enterprise Business and... business of NGT West and so forth, they are recording solid performance and stable performance, and we think we can stable and continue these businesses. End of next fiscal year, or this year or next month or so, fixed channel of We would like to explain. I think there will be an opportunity for us to explain about what to do with our fixed phone business. And the NTT data group, they are enjoying organic growth. And globally, in order to grow further, what should be done? And NTT data's midterm plan is to be reviewed. When we announce our financial results for this fiscal year, we have to think about what to do with our mid-term plan, and we want to be able to use the entity data so that we can enjoy synergy for the group as a whole. So that is what we are considering to do going forward.

Does that answer your question?

Moving on to the next question. The person at the front row. My name is Sekiguchi. On Docomo's business, this is related to downward revision. What is the view on capital expenditure, especially next fiscal year? To what extent are you going to tolerate the increase of investment? Today, when I look at the materials from Docomo, the capital expenditure is going to increase by 32.7 billion, and now, how do you evaluate 56.5 billion? You mentioned that the performance is now bottoming out, as an expression, but this capital expenditure, how do you evaluate, and after next fiscal year, how are you going to increase or decrease? Can you share your view? It may be better to ask that question to President Maeda. The increase of base stations, capital expenditure will continue, and as I mentioned, quality will be secured. That is important. But on the other hand, this year, venue-related investment, quite significant so smart life investment I will not be so high next year basically large venues have been established quite significantly this year so totally we're expecting to see the drop according to our understanding thank you

Next question. The person in the second row from the front. Kyoto News, Nakao is my name. Thank you for the opportunity today. In the presentation material, AI, social implementation, social implementation of AI, I have a question about this topic. And in each industry, you want to collaborate with leading companies to implement AI. And information from this, what areas do you expect after this? Any future prospects? And do you want to work on transportation and retail industries and so forth? And in relation to that, AI, there are various use cases, and social implementation is trying to proceed more and more. On the other hand, some companies seem to be taking a wait-and-see mood, and how much money should they spend, and what part should they increase efficiency in. There are some companies who have not been able to make this decision, and that is what I actually feel. And President Shimada, what is your perspective on this? And in order to accelerate social implementation of AI, In the entity group, is there anything the entity will work on in the group as a whole? What we explained today is for digital and the physical, connecting digital and the physical domain. And a physical domain, as I've written, there's Dota, Mujin, and Trial. LLM, not the LLM foundation model, but rather the quantitative model, numerical model. A numerical model related to AI would have to be combined, not just a foundational model, because factories should not make any mistake in their manufacturing. So LLM is a language model, so mistakes do tend to occur. However, what's written here, Everything that's written here should not make any mistakes. If there are mistakes, there will be accidents and incidents. We have to be able to create a model that does not make any mistakes. And for that, we need both technologies, and that's why we decided to share this example. And before globally, in Japan, there's Tuzumi. And there are about 2,000 inquiries for Tuzumi from the customers, and mainly speaking local governments, finance, and medical and health industries. Because there's data that cannot be made open, cannot be made into open AI. These are the entities that are inquiring and showing interest in Tuzumi. private and sovereign related aspects we think are likely to increase going forward. In that sense, in Europe, NTT data in Europe, there's Mistral. There's a lot of demand there. And in that sense, sovereign related AI, we think we'll see an increase in demand. And what's selling most is agile open AI, in our case as well. But rather, we want to be multifaceted and open. that the AI that can be applied by customers that we want to offer consulting on and their support implementation, that is what's desirable for us. Depending upon how customers use AI, there are different kinds of features of AI that can be used, and I think various kinds of evolution will take place in the future. But in particular, private-related demand, I think, will increase in particular.

The person who asked the questions earlier may raise questions as well. We would like to take one or two more questions to my right. Nikin, a financial or trade magazine, and with respect to Suzumi domestically, domestic LLM, and you mentioned about the increase of private, and there may be increase in finance, but with three mega banks, rather than domestic companies, they may be using large-scale AI from overseas. but the regional banks who do not want to employ cost, are you planning to stress small and mid-sized financial institutions, including regional banks? Do you have any thoughts? I would assume that the financial institutions and as to where the AI will be provided, the choices will be different. large financial institutions with LLM with large parameters. Some will be introducing them or It may be more closed area where they would like to cater to their needs. So the real large LLM will be used in certain locations and a relatively smaller scale. In the closed data environment, there may be both opportunities. So rather than scale, It's how it's going to be used that would determine the choice. We do have inquiries after the local government's financial institution is next. So we have the inquiries, and we are receiving quite extensively. There are many sections, and by section, I believe the inquiries are being made.

Does that answer your question?

The person in the back with the dark-colored jacket, please. This is Tatsuki from Indication. Sorry for the second time. And first about the interest rate environment. On a year-on-year basis, interest-bearing debt, in order to expand business, there's increasing interest-bearing debt and cap tax. In the case of a company, I think it will be costly as well. From these two perspectives, interest rate hike, how will that impact your company's business? That's my first question. And my second question is, The depreciation of the Japanese yen and the foreign exchange rate, how will your group be affected by the foreign exchange rate? Entity data, data center reach, because of Japanese yen depreciation, that might mean more business coming in, or from both positive and negative perspective, how will you be impacted by depreciation of the Japanese yen? If you could please comment on these points. Thank you. What do you personally think, and what I think as a company happens to be different, my personal perspective is different from a company's perspective. Interest rate in Japan, how should I say it, gradually is increasing, and I think that that's taken for granted. As a person with common sense, I expect that to happen. But, of course, I'm responsible for a company's business, and from that perspective, the lower the interest rate, the better. However, on the other hand, data center business, And thanks to people's cooperation, there's a lot of return. So even if we bear interest rates, there's a growth potential. We'll be able to absorb that. So we're not so worried there. And depreciation of the Japanese yen. or foreign exchange rate impact ends up being positive, which is helpful for us. But the foreign exchange rate, minimum foreign exchange rate volatility is the best. And the dollar and Japanese yen and the dollar and euro relationship, the relationship among various currencies is becoming more complicated. And when it comes to currency or foreign exchange rate, it's best to maintain a stable situation without so much fluctuation.

And we would like to take one last question. Does anyone have any questions? The person over there. Nikkei CrossTech, my name is Morioka. Entity Data Group is now only on subsidiary, and you spoke about the synergy, but currently, I believe it is under review. But compared to the initial stage, are you expecting to see more synergy? Is there anything that you can share with us? Yes, thank you for the question. As I have been mentioning initially, synergy is something that we need to anticipate, but more than that, data's growth will be even more important. This is both organic and inorganic. Within NGT Group, SI business accounts for roughly 40%, and substantively rather than the synergy in organic would have an even greater effect. Midterm plan is something that we need to review, and data's midterm strategy will be considered as large positioning, of course including synergy, but the resident synergy, non-synergy, will be greater. This is as I have been mentioning from the outset. Thank you.

Thank you very much.

It is now time to close the NTT Inc. press conference. Next, the NTT Documbo Group's press conference, if we could please wait a while. Thank you very much.