NTT, Inc.

What they do

NTT operates through wholly-owned subsidiaries including NTT East and NTT West for regional fixed-line services, NTT Communications for long-distance and international services, NTT DOCOMO for mobile services, and NTT DATA for IT services. It also has operations in data centers, system integration, and real estate. The group offers a broad range of communications and IT solutions primarily in Japan.

Revenue drivers

• Mobile communications — Provided by NTT DOCOMO, this is a major revenue source, offering voice and data services to individual and corporate customers in Japan.
• Fixed-line communications — NTT East and NTT West provide regional fixed-line telephone, broadband, and related services, generating steady revenue from subscription and usage fees.
• Data and IT services — NTT DATA and NTT Communications offer system integration, data center, and network services, contributing significantly to group revenue.
• Long-distance and international — NTT Communications handles long-distance and international voice and data services, connecting Japan with global markets.

Recent performance

For fiscal year 2017 (ended March 31, 2017), NTT reported revenue of ¥11.39 trillion, a decrease of 1.3% from ¥11.54 trillion in fiscal 2016. Net income attributable to NTT was ¥800.13 billion, up 8.5% from ¥737.74 billion in the prior year. Diluted earnings per share were ¥390.94, compared to ¥350.34 in fiscal 2016. Operating cash flow was ¥2.92 trillion, an increase from ¥2.71 trillion in fiscal 2016. Despite the revenue decline, profitability improved.

Strategy

NTT's strategy focuses on expanding its global IT and data services, particularly through NTT DATA and NTT Communications. The company aims to strengthen its mobile and fixed-line integration to provide seamless communications services. Investments are directed toward growth areas such as cloud computing, data centers, and international operations. Additionally, NTT continues to enhance its network infrastructure to support 5G and next-generation services. The group may also pursue strategic acquisitions to bolster its competitive position.

Risks

• Intense competition — NTT faces competition from other telecommunications carriers and new entrants in mobile and fixed-line markets, which could pressure pricing and market share.
• Regulatory changes — As a major telecommunications provider in Japan, NTT is subject to government regulations that could affect its operations and profitability.
• Economic conditions — Adverse economic conditions in Japan and globally could reduce demand for telecommunications and IT services, impacting revenue.
• Technology shifts — Rapid technological changes, such as the transition to 5G and IP networks, require significant investment and could disrupt existing business models.

Outlook

Management likely expects continued growth in IT and data services, offsetting declines in traditional voice revenue. The company may focus on cost efficiency and strategic investments to drive profitability. However, competition and regulatory pressures remain challenges. No specific guidance was provided in the excerpt.