Establishment of KDD Network Systems Co., Ltd.
1996-014                                                    July 11, 1996

KDD will establish on July 29 KDD Network Systems Co., Ltd. (KDD-NS), a 100% owned subsidiary that will perform general network engineering services.

KDD-NS will maximize the telecommunication technology and know-how nurtured by KDD to provide primarily corporate customers with a wide range of telecommunication technology-related services. These services include the general contracting of telecommunication network construction, the design, operation, and maintenance of intracorporate information systems, the design and installation of power air-conditioning systems along with the installation of telecommunication facilities, and the design, development, and manufacture of telecommunication facilities including software.

KDD-NS will assume KDD's functions including the design and development of telecommunication facilities, operation and maintenance of information systems, and operation and maintenance of power air-conditioning systems. By splitting off these functions as an independent organization, KDD anticipates that the subsidiary will achieve better efficiency under its own profit and loss responsibility.

KDD-NS plans to begin business in August, primarily at Tokyo, Osaka, and Oyama offices. The company expects to generate some 7 billion in revenues the first year.

KDD has successfully improved business efficiency and increased external revenues by splitting off other operations. For example, KDD Submarine Cable Systems Co., Ltd. was founded to assume the construction of and technology development for optical submarine cable systems.

By establishing KDD-NS, KDD will split off its forte, the construction and operation of telecommunication networks, to further improve its efficiency and more flexibly and better meet customers' various needs in the construction of telecommunication networks.

(Reference)

KDD-NS Company Profile

1.Name:KDD Network Systems Co., Ltd.
2.Main office:2-3-2 Nishishinjuku, Shinjuku-ku, Tokyo (in KDD Building)
3.Capital:490 million yen
4.Stockholder:KDD (100% owner)
5.Number of employees:Approximately 130 in the beginning
6.Offices:Tokyo (in Shinjuku KDD Building),
Osaka (in KDD Osaka Building), and
Oyama (in KDD Oyama International Telecommunication Center)
7.Operations:
EContracting, consulting, and engineering concerning the construction of telecommunication networks.
EDesign and development of telecommunication facilities, etc.
EOperation and maintenance of information systems and development of information applications.
EAssuming of the following operations from KDD
| Design and construction of telecommunication facilities
(including software).
|Development, operation, and maintenance of intracorporate information system applications.
|Design, construction, operation, and maintenance of power air-conditioning facilities.
|Legal protection, maintenance, and management of intellectual properties.