• As it publishes its full fiscal year results, NTT Group announces a couple of significant changes to its portfolio
• It is to take full control of global business services division NTT Data to speed up strategic and investment decisions 
• Giant mobile subsidiary NTT Docomo has a management refresh and rebrands its enterprise unit 

Giant Japanese telco NTT Group has revamped key parts of its portfolio in order to foster further growth and boost profit margins in its domestic and overseas markets, but the move is going to be costly. 

The main change, strategically and financially, regards the ownership status of NTT Data, the global IT, digital and communications services company that is currently majority owned by NTT Group but which has its own stock market listing. NTT Group is to acquire the shares it doesn’t own and make NTT Data a wholly owned subsidiary that doesn’t have external investors, a move that will cost the company about 2.37tn yen ($16bn). 

By completely owning the operation, NTT Group believes it can speed up investment and strategic decision-making because it won’t have to gain approval from other shareholders. It also believes it will allow it to foster stronger ties between NTT Data and other parts of the NTT empire, particularly NTT Communications (more on that unit in a moment) – and that’s important because NTT Data has long been viewed by the Japanese giant as its main growth engine. 

The moves, according to NTT, will help it to “enhance its growth investments” and subsequently strengthen its presence in markets such as North America, expand its AI services portfolio, advance its “digital engineering” and pump more funds into datacentre facilities. It will also enable NTT to more easily make strategic infrastructure decisions, such as the deployment of innovative optical and wireless network (IOWN) technologies, which have long been developed and advocated by NTT, in datacentres and other infrastructure. You can find out more about the rationale in this document. 

Docomo overhaul

At NTT Docomo, Japan’s largest telco with more than 91 million customers (of which 37.3 million are 5G customers), NTT has refreshed its management team and is rebranding its enterprise services unit, currently called NTT Communications, to become NTT Docomo Business.   

As part of its overall broad refresh, NTT Group is changing its official “corporate identity” to NTT Inc. and will use the “dynamic loop” logo currently used by parts of its empire (as shown below) across the full portfolio. 

As a result, NTT Docomo Business will adopt the following logo:

News of the changes came as NTT Group reported a 2.5% year-on-year increase in full fiscal year revenues to 13.7tn yen ($92.6bn) for the 12 months that ended 31 March, but a 5.2% decline in earnings before interest, taxes, depreciation and amortisation (EBITDA) to 3.24tn yen ($21.9bn) and a 14.2% dip in operating profits to 1.65tn yen ($11.1bn). 

As a result of these changes, NTT Group believes it will be able to grow its revenues again during the current financial year to almost 14.2tn yen ($96bn) and reverse the trend in its margins by increasing its full year EBITDA and operating profits. For the full forecast, see this document.  

- Ray Le Maistre, Editorial Director, TelecomTV