NTT to make ‘billions’ of savings by consolidating NTT East/West critical systems; corporate services to underpin falling sales

22 Jan 2018

Nippon Telegraph & Telephone Corp says it expects its regional landline phone service provider NTT East will boost enhanced services for corporate customers to help the company sustain its operating profit at levels similar to its fiscal 2017/18 guidance, despite an anticipated drop in revenue. Nikkei writes that the subsidiary forecasts a marginal increase in operating profit to JPY190 billion (USD1.71 billion) for the year ending 31 March 2018, on revenues that are expected to dip 2% to JPY1.64 trillion. The paper notes that NTT East’s sales have been soft since the company, which serves greater Tokyo and other parts of eastern Japan, switched from direct marketing of its flagship FLETs Hikari fibre-optic broadband connections to wholesale in 2015. More positively, NTT East has ramped up its marketing of Wi-Fi network setups, security solutions and maintenance and support services to corporate users, attracting new customers and helping to ensure profit levels, which its president Masayuki Yamamura says should keep operating profit in the JPY190 billion range. Further, the NTT Group is hoping to save ‘tens of billions of yen’ in operating costs over ten years from its planned consolidation of NTT East’s critical systems with those of sister company NTT West next fiscal year. Sales are forecast to continuing declining for the near term. But if services for corporate customers show steady growth, revenue will ‘start rising in less than four or five years,’ Yamamura is quoted as saying.

Japan, NTT (NTT East & NTT West)