[Company analysis] Nippon Telegraph and Telephone Corporation (日本電信電話)

「Nippon Telegraph and Telephone Corporation (日本電信電話)」maintains the telephone network in Japan by inheriting the business of「Nippon Telegraph and Telephone Public Corporation(日本電信電話公社)」which was a state-owned company. Their english abbreviation is "NTT". In addition, they have a position to lead the「NTT Group」, which is engaged in various businesses centering on information and communication and mobile phones. The number of consolidated employees is approximately 303,350.

 

1. Company Profile

2. Summary and Features

3. Major Business

4. Financial Information

 

 

 

1. Company Profile

 

※Unit is JPY million, as of 2019

Company name	Nippon Telegraph and Telephone Corporation
Company name (Japanese)	日本電信電話
Date of establishment	Monday, April 1, 1985
Headquarters location	〒100-8116 東京都千代田区大手町一丁目5番1号 大手町ファーストスクエア イーストタワー
Capital	938,000
Consolidated sales	11,879,842
Consolidated operating profit	1,693,833
Consolidated total assets	22,295,146
Consolidated capital	11,804,790
Capital adequacy ratio	52.9%
Consolidated number of employees	303,350

 

 

 

2. Summary and Features

 
「NTT」originally started as a state-owned enterprise. The telephone service business in Japan was started in the 1890s. At that time, there was a mechanism in which a telephone exchange person could manually connect a telephone by using the telephone exchanger, until automatic exchanges was introduced in Japan in 1926. In order to expand telephone services, the state-owned company「Nippon Telegraph and Telephone Public Corporation」was established from the viewpoints of "Publicness", "Technical integrity", "Natural independence" and "Business independence" in 1952.

 

And this「NTT」became privatized in 1985. Current「NTT」that inherits the business of「Nippon Telegraph and Telephone Public Corporation」, still continue to maintain telephone network in Japan. However, in order to optimize organization size and expand its business area, they decided to separate each business into a subsidiary. For example,「NTT Docomo」is in charge of the mobile phone services, and「NTT Data Corporation」is in charge of data communication and system construction services. Like this,「NTT」plays the role of supervising the「NTT Group」.

 

However, one unique feature of「NTT」is that they does not only carry out overall management as a holding company, but also has its own R & D department. Especially, 「NTT Laboratory(NTT 研究所)」is considered as Japan's largest engineers group both in scale and technology. This organisation conducts not only commercial business related research but also contributing greatly to OSS and academics.

 

Actually,「NTT Group」has a very strong image as a “telephone station”. But at present, the benefit of telephone services is not so high. On the other hand, the Internet-related business and information system construction business account for most of the benefits of the NTT Group. Among them, about 70% of operating income is dependent on the mobile phone business.

 

 

 

3. Major Business

 

■ Regional communication business
Through「NTT East」and「NTT West」, they carry out local communications business, including wired telephones. This is the second largest sales scale in the「NTT Group」business. However, the number of fixed line contracts is currently continuing to decline.

■ Long-distance / international communication business
「NTT」conducts this business through「NTT Communications」and「Dimension Deta Holdings」.「NTT Communications」mainly provide cloud platforms and ICT solutions for corporate customers. On the other hand,「Dimension Deta Holdings」is a company that NTT acquired in 2010, and it is said that it has strengths in technical fields such as networks, data centers, and security.

■ Data communication business
They provide system integration and network system construction services related to social infrastructure as well as general commercial and industrial fields.

■ Other business
Through「NTT Urban Development」, they also carry out engineering-related projects such as the design and implementation of real estate rental buildings. In case of system development business, they conducts through「NTT Comware」 and financial business through「NTT Finance」.

 

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated sales		11,391,016	11,799,587	11,879,842
Consolidated operating profit		1,539,789	1,642,843	1,693,833
Consolidated total assets		21,250,325	21,675,770	22,295,146
Consolidated net assets		11,507,756	12,032,551	11,804,790
Breakdown of sales	Regional communication business	2,736,664	2,581,751	4,774,711
	Long-distance・International communication business	2,040,209	2,124,443	2,463,941
	Mobile communication business	4,535,829	4,709,448	2,162,563
	Data communication business	1,609,163	1,926,272	2,037,782
	Others	469,151	457,673	440,845