By Yasuhiro Kobayashi / Yomiuri Shimbun Staff Writer
NTT Inc. is pushing back its timeline to achieve a medium-term financial target by three years.
The target, which was set in the company's medium-term management strategy, was originally set for fiscal 2027 but has now been shifted to fiscal 2030.
While the company's data center business is performing well, driven by demand for artificial intelligence, NTT Docomo Inc.'s performance continues to struggle due to concerns over declining communication quality.
NTT President and CEO Akira Shimada announced the revision at a press conference on Friday. He explained that Docomo's performance deteriorated due to increased promotional expenses aimed at recovering its domestic market share. He also emphasized that the company would "offset this through increased profits from its corporate business and smart life business (including financial services)."
While commenting, "I believe we have, for the time being, hit the bottom (of the decline in performance)," he also acknowledged that "we've already fallen behind (schedule) by at least two years."
The following is excerpted from the press conference.
Akira Shimada: It has become difficult to achieve our current target of 4 trillion yen in EBITDA (earnings before interest, taxes, depreciation, and amortization) by fiscal 2027. We aim to hit the target by fiscal 2030 by significantly boosting profits, centered on AI, a promising area for further business expansion.
Question: Can we assume that Docomo was a contributing factor (in the target being missed)?
Shimada: Docomo has been investing in strengthening its customer base and improving its communication quality, as well as working on other measures, and all of that has led to a decline in profits. We plan to offset this by increasing profits in our corporate business and smart life business. I believe we have, for the time being, hit the bottom. We want to make a turnaround from here, but we've already fallen behind by at least two years.
Recently, AI has been rapidly gaining traction. For the previous fiscal year, we had set a target of roughly 150 billion yen in AI-related revenue, but the final figure ended up being around 180 billion yen. We need to shift to a business strategy centered on AI.
Question: How do you view the impact of rising costs?
Shimada: In terms of risk, the impact of the Middle East (situation) is certainly significant. Energy costs are one factor, but labor and non-personnel expenses are naturally rising as well. Our current medium-term strategy doesn't factor in price increases or cost pass-through. We need to figure out how to have our customers bear these costs while considering the timing, among various other factors.
Question: What is the revenue-boosting effect of "IOWN" (Innovative Optical and Wireless Network), your next-generation optical communication technology?
Shimada: There are various estimates regarding the size of the market for optical devices, but it's currently said to be around 1 trillion yen. First and foremost, we intend to firmly secure an appropriate share of that market. Since it's a market that's only beginning to take shape, we plan to focus our efforts there.
Question: What is the scale of your investment under the medium-term management strategy?
Shimada: We plan to invest 12 trillion yen from 2026 to 2030. For key areas such as AI implementation and building new systems, we estimate that about 2 trillion yen will need to be invested. For our global operations, including data centers, we aim to invest roughly 3.5 trillion yen. As for the consumer sector, we are targeting an investment of about 500 billion yen.
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This article is from The Yomiuri Shimbun. Neither Dow Jones Newswires, MarketWatch, Barron's nor The Wall Street Journal were involved in the creation of this content.
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May 11, 2026 21:27 ET (01:27 GMT)
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