Message from the CEO

Dear shareholders and investors,

First of all, I wish to express my heartfelt sympathy to our shareholders and all others who were affected by the recent Great East Japan Earthquake.

Under the banner of our "Change and Challenge" action plan, we have moved ahead with our customer-focused reform initiatives, undertaking various measures aimed for growth, including, among other things, facilitating the widespread adoption of smartphones, introducing our next-generation mobile communication service, Xi (pronounced "crossy"), and expanding subscriber's packet usage. As a result of these endeavors, we were able to secure, in despite of a decrease in operating revenues, an increase in operating income for the fiscal year ended March 31, 2011, and received the No. 1 customer satisfaction ranking in the sectors of consumer, enterprise and data communications service offerings. In the aftermath of the Great East Japan Earthquake, we devoted our full strengths to supporting victims of the disaster and to restoring our communication services in the affected areas as quickly as possible. As a result, our services were almost completely restored by late April 2011.

In the fiscal year ending March 31, 2012, we will devote ourselves to further advancing our customer-focused reform initiatives, with the aim of maintaining the No. 1 ranking in customer satisfaction. We will boldly tackle the challenge of implementing various measures for the expansion of packet ARPU, increased adoption of smartphones, deployment of new services which take advantage of the "high-speed", "large-capacity" and "low-latency" transmission capabilities of the Xi network, and the creation of new businesses. Learning from our experience in the Great East Japan Earthquake, we will also strive to offer enhanced "safety and security" to our customers by implementing new disaster preparedness measures that will allow us to secure communication services and respond swiftly in the stricken areas in the event of a large-scale disaster. Through these endeavors, we aim to create a safe and secure society where everyone can find affluence and comfort, and to become a company that contributes to the sustainable development of such a society.

As always, I ask for your continued goodwill and support.

May 2011

Ryuji Yamada
President and Chief Executive Officer