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Nec presentation wireless backhaul

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NEC Europe Ltd
NEC Europe Ltd

1) NEC aims to strengthen its position in the global wireless broadband market and recover growth and profitability, with a target of 900 billion yen in sales and 9% operating margin by fiscal year 2012. 2) For LTE business, NEC will capitalize on its femtocell solution and expand into the TD-LTE market segment globally. 3) NEC's mobile backhaul strategy is to provide small cell solutions for high-speed LTE deployments in urban areas with high data traffic to improve speeds and spectrum usage.

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Wireless Broadband BusinessWireless Broadband Business Growth StrategyGrowth Strategy January 20, 2011 Shunichiro TEJIMA Associate SVP and Executive General Manager Network Platform Operations Unit NEC Corporation
? NEC Corporation 2011Page 2 To be a leading global company leveraging the power of innovation to realize an information society friendly to humans and the earth NEC Group Vision 2017
? NEC Corporation 2011Page 3 ? 1. Business Overview ? 2. Key Business Strategy 2.1 LTE Business Strategy 2.2 Mobile Backhaul Business Strategy ? 3. Toward Achieving V2012
? NEC Corporation 2011Page 4 Business Domain EnterpriseEnterprise Carrier/ISPCarrier/ISP Data CentersData Centers FTTHFTTH,, ADSLADSL etcetc Land Terminal Equipment Submarine Cable system Mobile (3G,LTE), Femtocell, WiMAX OSS/BSS HomeHome Services & ManagementServices & Management TransportTransport AccessAccess CoreCore NetworkNetwork MetroMetro NetworkNetwork Router/Router/ SwitchSwitchPASOLINKPASOLINK Mobile CoreMobile Core SIPSIP ServerServer IMSIMS SDPSDP Service Platform ? To provide products/systems/services which are necessary for transformation of carrier service as a business partner Mobile backhaul (MBH) WirelessWireless Base stationBase station
? NEC Corporation 2011Page 5 Wireless Broadband (WBB) Business ?Carrier Network Business Mid Term Strategy: Strengthen position in the global market and recover growth and profitability ?FY2012 Target: Sales: JPY900B, OP Margin: 9% Key Business Areas 1. Wireless Broadband Access 3. Submarine Cable System 2. Mobile Backhaul 4. Service & Management ?Carrier Network Business Mid Term Strategy: Strengthen position in the global market and recover growth and profitability ?FY2012 Target: Sales: JPY900B, OP Margin: 9% Key Business Areas 1. Wireless Broadband Access 3. Submarine Cable System 2. Mobile Backhaul 4. Service & Management Service & ManagementService & Management ¢Ü Service & Management¢Ü Service & Management OSS/BSSOSS/BSS Service PlatformService Platform C&C CloudC&C CloudC&C Cloud ServiceService IT/NW PlatformIT/NW Platform IT and NWIT and NW ConvergenceConvergence IT SystemIT System ServerServer XaaSXaaS ? ? ? TerminalTerminal Thin ClientThin Client Mobile Terminal £¨Smartphone / Data card £©Mobile Terminal £¨Smartphone / Data card £© ? ? Network InfrastructureNetwork Infrastructure ¢ÛSubmarine cable System¢ÛSubmarine cable System ¢ÙWireless Broadband Access¢Ù¢ÙWireless Broadband AccessWireless Broadband Access ¢ÚMobile Backhaul¢Ú¢ÚMobile BackhaulMobile Backhaul PASOLINKPASOLINK LTE/Femotocell/WiMAXLTE/Femotocell/WiMAX Wireless Broadband Business: Sales Target JPY 250B (FY2012)Wireless Broadband Business: Sales Target JPY 250B (FY2012) Terminal/Terminal/ SensorSensor
? NEC Corporation 2011Page 6 Wireless Broadband Access Business Environment ? Rapid increase of data traffic, including rich content, due to the increase of Smart Phones (e.g. iPhone) ? Increase in Wireless Broadband business opportunities ? Rapid increase of data traffic, including rich content, due to the increase of Smart Phones (e.g. iPhone) ? Increase in Wireless Broadband business opportunities Global Mobile Devices Market Trend Traffic increase from Smart Phones Ratio of traffic measured by AdMob NW £¨Feb. £²£°£°£¹ = 100£© source:AdMob,Inc Mobile Internet Devices ¡ù 100 200 Smart Phone High end Mobile Phone Feb. 2009 Feb. 2010 ¡ù iPod touch, Sony PSP, Nintendo DSi etc. 2009 2010 2011 2012 2013 2014 source:Ovum SmartSmart PhonePhone £±£±//£³£³++ (M units) 1,405 Mobile Phone (year) Provide High Speed Wireless Access/Provide High Speed Wireless Access/ High Quality Radio Access AreaHigh Quality Radio Access Area <LTE<LTE> ? Expansion of rich content services ? Improve usability £¨High-speed, Real time£© Enhanced capability and capacityEnhanced capability and capacity expansion of Mobile Backhaulexpansion of Mobile Backhaul <<iPASOLINKiPASOLINK>> ? Applicable to 3G/LTE £¨Transition to packet base NW£© ? Rapid increase in Mobile data traffic Rapid increase in rich content traffic Business Opportunities
? NEC Corporation 2011Page 7 What is LTE? ? High speed data communication service (10 times faster and 1 tenth less delay than HSDPA) ? Improve spectrum efficiency (3-4 times efficient than HSPA) ? Support high speed mobility (up to 350km/h) ? High speed data communication service (10 times faster and 1 tenth less delay than HSDPA) ? Improve spectrum efficiency (3-4 times efficient than HSPA) ? Support high speed mobility (up to 350km/h) SISO2x2 to 4x4 Antenna (MIMO) < 120km/h 14.4Mbps@5 MHz FDD 5 MHz < 100 ms QPSK/16QAM CDMA 3G (HSPA) ? Support high speed mobility ? Improved transmission speed ? Allow introduction of LTE using the existing spectrum ? Improved transfer speed ? Improved spectrum efficiency ? Improved transmission speed ? Improved transmission quality Points of Improvement QPSK/16QAM/64QAM Modulation Method 75Mbps@10MHz MIMO:2¡Á2 Transmission Speed (DL) < 350km/h Speed of mobility FDD 1.4, 3, 5, 10, 15, 20MHz Bandwidth < 10 msDelay Downlink: OFDMA Uplink: SC- FDMA Access Method LTE
? NEC Corporation 2011Page 8 New LTE Business Opportunities ? Shorter download time and quicker responses reduces user¡¯s stress ? Creation of variety of service/applications and increase ARPU for carrier ? Shorter download time and quicker responses reduces user¡¯s stress ? Creation of variety of service/applications and increase ARPU for carrier 5MB Music (MP3) 1 song 10MB News (MP3) 20 minutes 15MB Video Clip 3 minutes 20MB Video Podcast 5 minutes 70MB Music CD (MP3) 1 CD 0.5s 11s 16s 21s 75s 1.1s 1.6s 2.1s 7.5s5s Station Grounds LTE zone PositivePositive CycleCycle DownloadSpeed *Download conditions = LTE: 75Mbps @ 10MHz, MIMO 2x2 / HSDPA: 7.2Mbps @ 5MHz 12s 17s 22s 78s 5.2s HSDPA LTE S = Seconds
? NEC Corporation 2011Page 9 ? 1. Business Overview ? 2. Key Business Strategy 2.1 LTE Business Strategy 2.2 Mobile Backhaul Business Strategy ? 3. Toward Achieving V2012
? NEC Corporation 2011Page 10 2.1 LTE Business Strategy
? NEC Corporation 2011Page 11 Operator Trends on LTE Deployment Status of LTE deployment by operators ?180 operators in 70 countries are investing in LTE ?128 LTE network commitment in 52 countries ?At least 64 LTE networks are anticipated to be in commercial service by end of 2012 Status of LTE deployment by operators ?180 operators in 70 countries are investing in LTE ?128 LTE network commitment in 52 countries ?At least 64 LTE networks are anticipated to be in commercial service by end of 2012 ¨„Launch of Commercial LTE Networks ¨„Global Market Size of LTE Equipment 0 100 200 300 400 500 2009 2010 2011 2012 (Billions of yen) Source: NEC¡¯ estimates based on research firm data Source: List compiled by NEC based on press announcements and research firm data 2010 20122011 NTT DoCoMo, TeliaSonera, MTS, Ucell, Verizon, MetroPCS, Telenor, Tele2, CSL, Vodafone, EMT, Elisa, A1 Telekom (17 Companies) Telefonica, T-Mobile, China Mobile, Orange, AT&T, Zain, Yota, TMN, ¡­ KDDIKDDI, T-Mobile, CTC, ¡­ 210% CAGR 2009-2012 60 200 450 15
? NEC Corporation 2011Page 12 LTE Business Strategy ? Successfully complete projects for leading domestic carriers and expand globally ? Capitalize on the Femtocell footprint and Small Cell Solution which manifest high speed of LTE ? Expand LTE business by entering the TD-LTE market segment ? Successfully complete projects for leading domestic carriers and expand globally ? Capitalize on the Femtocell footprint and Small Cell Solution which manifest high speed of LTE ? Expand LTE business by entering the TD-LTE market segment KDDI SingTel Telefonica NTT DOCOMOFrance SFR Network Norway CommercialCommercial ServiceService Successful Trial Successful Trial Successful Field Trial Delivery of Wireless Base Stations, Core Network Systems, MBH switches Commercial ServiceCommercial Service Selected as base station vendor £Ì£Ô£Å Femtocell SBM First IMS based Femtocell solution CommercialCommercial ServiceService Denmark TDC Successful Trial Only projects publicly announced are indicated (as of December 2010) Femtocell Commercial & Trial Europe Africa / Mid. East Asia Americas 3 Co. 17 Co. 8 Co. 5 Co.
? NEC Corporation 2011Page 13 Target Market Segments for LTE Service Service Network Network Fixed BB NetworkNetwork Cloud ServiceCloud Service Mobile BB High-speed WiFi (Femtocell) Residential ? Mobile BB Service ? High-speed data services for 2G/3G/cdma networks ? 3G ¡ú LTE migration ? GSM ¡ú LTE migration ? cdma ¡ú LTE migration ? High-speed data services for emerging networks with LTE (TD-LTE) markets ? High-speed WiFi BB Service ? Wireless backhaul for public WiFi service access points ? Wireless access for mobile WiFi routers ? Fixed BB Service ? FBWA (Fixed Broadband Wireless Access) ? Broadband wireless access for SOHO Market Scale: JPY50 billion in 2012 Market Scale: JPY400 billion in 2012 ?Cultivate enhancement market segment for mobile Broadband service providers and market segment providing high-speed WiFi / fixed Broadband services
? NEC Corporation 2011Page 14 Strategy for Mobile BB Service Small Cell Solution ? Provide Small Cell Solutions that manifest high speed of LTE, in addition to macro cell deployment ? Applicable to zone deployment in urban areas / data dense regions ? Enter market with small, lightweight and easy to install base stations Small Cell Solution ? Provide Small Cell Solutions that manifest high speed of LTE, in addition to macro cell deployment ? Applicable to zone deployment in urban areas / data dense regions ? Enter market with small, lightweight and easy to install base stations Macro Cell deployment Small CellSmall Cell deploymentdeployment 500m¡«several km in radius Less than 200 meter radius (Urban, data density area) (1)Improve data speed Total throughput is independent of the cell size. Less number of devices in the cell means higher throughput for each device. (2)Improve spectrum usage More repetitive use of the spectrum
? NEC Corporation 2011Page 15 TD-LTE Market Strategy ? TD-LTE Market Expansion ? TD-LTE is strategically promoted by Chinese government ? In India, winner of BWA spectrum in 2010 proactive to deploy TD-LTE ? TD-LTE adoption planned by Clearwire (USA), Yota (Russia), FarEasTone (Taiwan), etc. £ª33% of 18 companies surveyed by GSA plans to deploy TD-LTE Chinese MarketChinese Market ? Joint LTE product development by business collaboration with WRI Capitalize on NEC¡¯s LTE development assets in combination with WRI¡¯s TD-LTE technologies to optimize development (Develop TD-LTE base stations with common FD/TD LTE platform) ?Leverage WRI¡¯s sales channels Enter Chinese market utilizing WRI¡¯s sales channel and 3G footprint Other Oversea MarketOther Oversea Market ?Cultivate PASOLINK market footprint with products developed in China following the success in Chinese TD-LTE market
? NEC Corporation 2011Page 16 Summary of press release (for Reference) ? Cooperation with WRI on development, manufacturing, sales and field support ? Collaborative target: LTE base stations, maintenance and operation systems, and Self Organizing Network (SON) ? These systems support both the TD-LTE and FD-LTE for Chinese market. Commercialization is planned for the second half of 2011. ? Entry into China¡¯s TD and FD-LTE market by leveraging WRI¡¯s sales channel and 3G footprint . ? Leverage the TD-LTE success in the Chinese market to expand globally ? NEC and WRI Collaborate on LTE Infrastructure Business? NEC and WRI Collaborate on LTE Infrastructure Business WRI operates under China¡¯s State-owned Assets Supervision and Administration Commission (SASAC) as one of the top manufacturer in China¡¯s communications Infrastructure field. Wuhan Fiberhome Mobile Communications Inc. is a joint venture between NEC and WRI established in 2005 that will market jointly developed products, mostly in the Chinese market, while NEC will mainly target other global markets.
? NEC Corporation 2011Page 17 Strategy on High-speed WiFi / Fixed BB Services ?Propose high-speed WiFi BB service / fixed BB service that utilize LTE to fixed-line operators and expand business (capitalize on the existing business footprint) ?Propose high-speed WiFi BB service / fixed BB service that utilize LTE to fixed-line operators and expand business (capitalize on the existing business footprint) ? Fixed BB Service LTELTE Smart PhoneSmart Phone WiWi--FiFi PCPC HomeHome GWGW Fixed TelephoneFixed TelephoneIPTVIPTV STBSTB PCPC eNBeNB Last one-mile by wireless fiber (LTE) LTE-WiFi Router (Pocket terminal) TabTabllet (PAD)et (PAD) WiWi--FiFi iPASOLINKiPASOLINK MBH Carrier Network £×£é£Æ£é Area £È£ï£í£å ? High-speed WiFi BB Service
? NEC Corporation 2011Page 18 Commercial LTE Systems CX2800/210 CX2800/220 CX2800/230 £Í£Í£Å £Ð?£Ç£× £Ó?£Ç£× BBUBBURRHRRH All in one eNodeBAll in one eNodeB (BBU+RRH)(BBU+RRH) LTE Base Station Equipment (eNB) Ethernet Transmission Equipment (ERP-SW) Core Network Equipment (EPC)
? NEC Corporation 2011Page 19 2.2 Mobile Backhaul Business Strategy
? NEC Corporation 2011Page 20 Aggregation CoreMetroAccess ?Mobile backhaul is an access network for mobile communications systems that transmits data traffic from mobile terminals to mobile core networks by inter-connecting several base stations scattered in wide area 2G 3G 2G 3G BSC/RNC £Å£Ð£Ã LTE 2G 3G LTE Wired TDM Wired Ethernet Wireless TDM Wireless Ethernet Transmission mode Mobile BackhaulMobile Backhaul The Status and Role of Mobile Backhaul
? NEC Corporation 2011Page 21 ?Moving towards next generation mobile backhaul aiming to reduce OPEX and CAPEX while coping with rapid increase in mobile data traffic. ? Demand for TDM based legacy transport such as SONET / SDH decreases ? Demand increase for hybrid TDM & packet based transport such as ether-net Trend of Mobile Services 2008 2010 2015 3G (IP) / HSPA / LTE3G (IP) / HSPA / LTE Packet-based Mobile Services Circuit-based Mobile Services 2G,2G, 3G3G (ATM) / HSDPA(ATM) / HSDPA TrafficVolume(Mbps) ¨„Traffic increase with wireless access system evolution Global Market Size for Mobile Backhaul Equipment Trends to Improve Mobile Backhaul Network 0 10 2009 2010 2011 2012 2013 2014 Others SONET/SDH and WDM Microwave TDM Microwave Ethernet & Dual TDM/Ethernet Ethernet cell site gateways Ethernet cell site routers Packet / TDM hybrid equipmentPacket / TDM hybrid equipment ¨„Packet based network migration (B$) Source£ºInfonetics , Mobile Backhaul Equipment and Services 10% CAGR 2010-2013
? NEC Corporation 2011Page 22 ? Supports rapid growth of mobile data traffic ? Smooth migration from existing networks to next generation networks ? Power saving / space saving ? New management system to reduce operating costs Further expand NEC¡¯s business opportunity by introducing iPASOLINK series which meets market requirements Mobile Backhaul Requirements (Needs of Operators)
? NEC Corporation 2011Page 23 Access Aggregation Metro Core Wired TDM Wired Ethernet Wireless TDM Wireless Ethernet Existing PASOLINK application area 3G 2G 3G 2G BSC/RNC aGW LTE Expandapplication area ?Converge NEC¡¯s wireless / optical / IP and OSS technologies ?A mobile backhaul solution that uniformly and economically handle the migration from 2G ?3G ?3.9G (LTE) ?The coordination of integrated NMS with OSS enables the provision of E2E / multilayer pass management and provide high reliability and scalability Meeting Next Generation Mobile Backhaul Requirements iPASOLINK 200 iPASOLINK 400 iPASOLINK application area
? NEC Corporation 2011Page 24 ¨„All-in-One Model in 1U (44mm in height) Launch ofLaunch of iPASOLINKiPASOLINK 400400 ? Up to 4-way branch configuration in 1U ? Universal slot enables flexible expansion (transport interface and/or functionality) ? Internal high capacity packet switch ? Compact design, high reliability iPASOLINK 200 ? 2-way branch (repeater function) ? Internal high capacity packet switch ? Compact design, high reliability iPASOLINK 400
? NEC Corporation 2011Page 25 EuropeEurope AsiaAsia Central / S. AmericaCentral / S. America Italy Poland Hungary Moldova Montenegro Typical Usage of iPASOLINK 200 by Customers ¨„Communication line between mobile network base stations ? Deployment of new 3G (HSPA / HSPA+) and LTE networks ? Replacement of existing equipments (capacity expansion of existing access backhaul Turkey India Sri Lanka Bangladesh Malaysia Brazil Guatemala ?Since its commercial release on September 1, 2010 orders for 23,000 units in 18 countries has been received Orders for the iPASOLINK 200 Serbia Germany Thailand AfricaAfrica
? NEC Corporation 2011Page 26 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 ÀÛ·e Overseas Ver. PASOLINK50 PASOLINK V3 PASOLINK-S PASOLINK+ PASOLINK NEO (Standard) PASOLINK MxPASOLINK V4 Overseas Ver. PASOLINK (joint dev. with overseas operators) PASOLINK V2 2007.2 PASOLINK High Performance (HP) 1.1.55 mil.mil. (year)(year) PASOLINK NEO/c 100 thou.100 thou. 2002.10 Shipment growth to mobileShipment growth to mobile operator.operator. total shipment ratio to mobile operator.total shipment ratio to mobile operator. 20002000 20092009 40%40% ?? 80%+80%+ iPASOLINK200iPASOLINK200/400/400 Major Shipment Milestone: ?1.5 million shipments: achieved in26 year (1984¡«2010) ?1.0 million shipments: achieved in 24 year (2008.9) ?1.0¡ú1.5 million: achieved in 1 year 11 months (2010.8) 1.0 mil.1.0 mil. 500 thou.500 thou. 2008.9 2010.8 NewNew SeriesSeries TotalTotal 1.1.5252 mil.mil.AsiaAsia OceanaOceana Mid.EastMid.East AfricaAfrica N./S.N./S. AmericaAmerica EuropeEurope Countries: 145 (as of Dec. 2010) Total PASOLINK Shipments (Over 1.5 Million)
? NEC Corporation 2011Page 27 ? 1. Business Overview ? 2. Key Business Strategy 2.1 LTE Business Strategy 2.2 Mobile Backhaul Business Strategy ? 3. Toward Achieving V2012
? NEC Corporation 2011Page 28 Toward Achieving V2012 (Billions of yen) FY2009 CAGR +13%£¨09¡ú12£© FY2012 (planned) 900.0 Overseas Japan Overseas Japan 627.4 Sales ?Sales of 900 billion yen in FY2012 (9% operating profit margin) Key Business Existing Business Key Business Existing Business 40%28%Overseas Sales Ratio 50%34%Key Business Ratio 9%5%Operating Income Margin FY2012FY2009 Sales ¡ù forecast as of July 8, 2010 WBB Business 100 billion yen WBB Business 250 billion yen
? NEC Corporation 2011Page 29 £Á£Ò£Ð£Õ£º Average Revenue Per User £Â£Â£º Broadband £Â£Â£Õ£º Base Band Unit £Â£Ä£Å£º Base station Digital processing Equipment £Â£Ò£Å£º Base station Radio processing Equipment £Â£Ó£Ã£º Base Station Controller £Â£Ó£Ó£º Business Support Systems/Billing Support Systems £Â£×£Á£º Broadband Wireless Access £Ã£Á£Ç£Ò£º Compound Annual Growth Rate £å£Î£Â£º evolutional Node B £Å£²£Å£º End to End £Å£Ð£Ã£º Evolved Packet Core £Å£Ò£Ð-£Ó£×£º Ethernet Ring Protection Switch £Æ£Â£×£Á£º Fixed Broadband Wireless Access £Æ£Ä£Ä£º Frequency Division Duplex £Ç£×£º Gateway £Ç£Ó£Í£º Global System for Mobile communications £È£Ó£Ä£Ð£Á£º High Speed Downlink Packet Access £È£Ó£Ð£Á£º High Speed Packet Access £É£Í£Ó£º IP Multimedia Subsystem £Ì£Ò£Å£º Low power Radio processing Equipment £Ì£Ô£Å£º Long Term Evolution £Í£Â£È£º Mobile Backhaul £Í£É£Í£Ï£º Multiple Input Multiple Output Abbreviations £Í£Í£Å£º Mobility Management Entity £Î£Í£Ó£º Network Management System £Î£×£º Network £Ï£Ó£Ó£º Operational Support Systems £Ð£²£Ð£º Peer to Peer £Ð£Æ£º Platform £Ð-£Ç£×£º PDN Gateway £Ò£Î£Ã£º Radio Network Controller £Ò£Ò£Å£º Optical Remote Radio processing Equipment £Ò£Ò£È£º Remote Radio Head £Ó£Ä£È£º Synchronous Digital Hierarchy £Ó-£Ç£×£º Serving Gateway £Ó£Ï£È£Ï£º Small Office / Home Office £Ó£Ï£Î£º Self Organizing Network £Ó£Ï£Î£Å£Ô£º Synchronous Optical Network £Ó£Ô£Â£º Set Top Box £Ô£Ä£Ä£º Time Division Duplex £Ô£Ä£Í£º Time Division Multiplexing £×£Â£Â£º Wireless Broadband £×£Ä£Í£º Wavelength Division Multiplexing £×£é£Æ£é£º Wireless Fidelity £×£é£Í£Á£Ø£º Worldwide Interoperability for Microwave Access £×£Ò£É£º Wuhan Research Institute of Post and Telecommunications £Ø£á£á£Ó£º X as a Service
Nec presentation wireless backhaul
CAUTIONARY STATEMENTS: This material contains forward-looking statements pertaining to strategies, financial targets, technology, products and services, and business performance of NEC Corporation and its consolidated subsidiaries (collectively "NEC"). Written forward-looking statements may appear in other documents that NEC files with stock exchanges or regulatory authorities, such as the Director of the Kanto Finance Bureau, and in reports to shareholders and other communications. NEC is relying on certain safe- harbors for forward-looking statements in making these disclosures. Some of the forward-looking statements can be identified by the use of forward-looking words such as "believes," "expects," "may," "will," "should," "seeks," "intends," "plans," "estimates," "targets," "aims," or "anticipates," or the negative of those words, or other comparable words or phrases. You can also identify forward-looking statements by discussions of strategy, beliefs, plans, targets, or intentions. Forward-looking statements necessarily depend on currently available assumptions, data, or methods that may be incorrect or imprecise and NEC may not be able to realize the results expected by them. You should not place undue reliance on forward-looking statements, which reflect NEC¡¯s analysis and expectations only. Forward-looking statements are not guarantees of future performance and involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking statements. Among the factors that could cause actual results to differ materially from such statements include (i) global economic conditions and general economic conditions in NEC¡¯s markets, (ii) fluctuating demand for, and competitive pricing pressure on, NEC¡¯s products and services, (iii) NEC¡¯s ability to continue to win acceptance of NEC¡¯s products and services in highly competitive markets, (iv) NEC¡¯s ability to expand into foreign markets, such as China, (v) regulatory change and uncertainty and potential legal liability relating to NEC¡¯s business and operations, (vi) NEC¡¯s ability to restructure, or otherwise adjust, its operations to reflect changing market conditions, (vii) movement of currency exchange rates, particularly the rate between the yen and the U.S. dollar, (viii) the impact of unfavorable conditions or developments, including share price declines, in the equity markets which may result in losses from devaluation of listed securities held by NEC, and (iv) impact of any regulatory action or legal proceeding against NEC. Any forward-looking statements speak only as of the date on which they are made. New risks and uncertainties come up from time to time, and it is impossible for NEC to predict these events or how they may affect NEC. NEC does not undertake any obligation to update or revise any of the forward-looking statements, whether as a result of new information, future events, or otherwise. The management targets included in this material are not projections, and do not represent management¡¯s current estimates of future performance. Rather, they represent targets that management will strive to achieve through the successful implementation of NEC¡¯s business strategies. Finally, NEC cautions you that the statements made in this material are not an offer of securities for sale. Securities may not be offered or sold in any jurisdiction in which required registration is absent or an exemption from registration under the applicable securities laws is not granted.

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Nec presentation wireless backhaul

  • 1. Wireless Broadband BusinessWireless Broadband Business Growth StrategyGrowth Strategy January 20, 2011 Shunichiro TEJIMA Associate SVP and Executive General Manager Network Platform Operations Unit NEC Corporation
  • 2. ? NEC Corporation 2011Page 2 To be a leading global company leveraging the power of innovation to realize an information society friendly to humans and the earth NEC Group Vision 2017
  • 3. ? NEC Corporation 2011Page 3 ? 1. Business Overview ? 2. Key Business Strategy 2.1 LTE Business Strategy 2.2 Mobile Backhaul Business Strategy ? 3. Toward Achieving V2012
  • 4. ? NEC Corporation 2011Page 4 Business Domain EnterpriseEnterprise Carrier/ISPCarrier/ISP Data CentersData Centers FTTHFTTH,, ADSLADSL etcetc Land Terminal Equipment Submarine Cable system Mobile (3G,LTE), Femtocell, WiMAX OSS/BSS HomeHome Services & ManagementServices & Management TransportTransport AccessAccess CoreCore NetworkNetwork MetroMetro NetworkNetwork Router/Router/ SwitchSwitchPASOLINKPASOLINK Mobile CoreMobile Core SIPSIP ServerServer IMSIMS SDPSDP Service Platform ? To provide products/systems/services which are necessary for transformation of carrier service as a business partner Mobile backhaul (MBH) WirelessWireless Base stationBase station
  • 5. ? NEC Corporation 2011Page 5 Wireless Broadband (WBB) Business ?Carrier Network Business Mid Term Strategy: Strengthen position in the global market and recover growth and profitability ?FY2012 Target: Sales: JPY900B, OP Margin: 9% Key Business Areas 1. Wireless Broadband Access 3. Submarine Cable System 2. Mobile Backhaul 4. Service & Management ?Carrier Network Business Mid Term Strategy: Strengthen position in the global market and recover growth and profitability ?FY2012 Target: Sales: JPY900B, OP Margin: 9% Key Business Areas 1. Wireless Broadband Access 3. Submarine Cable System 2. Mobile Backhaul 4. Service & Management Service & ManagementService & Management ¢Ü Service & Management¢Ü Service & Management OSS/BSSOSS/BSS Service PlatformService Platform C&C CloudC&C CloudC&C Cloud ServiceService IT/NW PlatformIT/NW Platform IT and NWIT and NW ConvergenceConvergence IT SystemIT System ServerServer XaaSXaaS ? ? ? TerminalTerminal Thin ClientThin Client Mobile Terminal £¨Smartphone / Data card £©Mobile Terminal £¨Smartphone / Data card £© ? ? Network InfrastructureNetwork Infrastructure ¢ÛSubmarine cable System¢ÛSubmarine cable System ¢ÙWireless Broadband Access¢Ù¢ÙWireless Broadband AccessWireless Broadband Access ¢ÚMobile Backhaul¢Ú¢ÚMobile BackhaulMobile Backhaul PASOLINKPASOLINK LTE/Femotocell/WiMAXLTE/Femotocell/WiMAX Wireless Broadband Business: Sales Target JPY 250B (FY2012)Wireless Broadband Business: Sales Target JPY 250B (FY2012) Terminal/Terminal/ SensorSensor
  • 6. ? NEC Corporation 2011Page 6 Wireless Broadband Access Business Environment ? Rapid increase of data traffic, including rich content, due to the increase of Smart Phones (e.g. iPhone) ? Increase in Wireless Broadband business opportunities ? Rapid increase of data traffic, including rich content, due to the increase of Smart Phones (e.g. iPhone) ? Increase in Wireless Broadband business opportunities Global Mobile Devices Market Trend Traffic increase from Smart Phones Ratio of traffic measured by AdMob NW £¨Feb. £²£°£°£¹ = 100£© source:AdMob,Inc Mobile Internet Devices ¡ù 100 200 Smart Phone High end Mobile Phone Feb. 2009 Feb. 2010 ¡ù iPod touch, Sony PSP, Nintendo DSi etc. 2009 2010 2011 2012 2013 2014 source:Ovum SmartSmart PhonePhone £±£±//£³£³++ (M units) 1,405 Mobile Phone (year) Provide High Speed Wireless Access/Provide High Speed Wireless Access/ High Quality Radio Access AreaHigh Quality Radio Access Area <LTE<LTE> ? Expansion of rich content services ? Improve usability £¨High-speed, Real time£© Enhanced capability and capacityEnhanced capability and capacity expansion of Mobile Backhaulexpansion of Mobile Backhaul <<iPASOLINKiPASOLINK>> ? Applicable to 3G/LTE £¨Transition to packet base NW£© ? Rapid increase in Mobile data traffic Rapid increase in rich content traffic Business Opportunities
  • 7. ? NEC Corporation 2011Page 7 What is LTE? ? High speed data communication service (10 times faster and 1 tenth less delay than HSDPA) ? Improve spectrum efficiency (3-4 times efficient than HSPA) ? Support high speed mobility (up to 350km/h) ? High speed data communication service (10 times faster and 1 tenth less delay than HSDPA) ? Improve spectrum efficiency (3-4 times efficient than HSPA) ? Support high speed mobility (up to 350km/h) SISO2x2 to 4x4 Antenna (MIMO) < 120km/h 14.4Mbps@5 MHz FDD 5 MHz < 100 ms QPSK/16QAM CDMA 3G (HSPA) ? Support high speed mobility ? Improved transmission speed ? Allow introduction of LTE using the existing spectrum ? Improved transfer speed ? Improved spectrum efficiency ? Improved transmission speed ? Improved transmission quality Points of Improvement QPSK/16QAM/64QAM Modulation Method 75Mbps@10MHz MIMO:2¡Á2 Transmission Speed (DL) < 350km/h Speed of mobility FDD 1.4, 3, 5, 10, 15, 20MHz Bandwidth < 10 msDelay Downlink: OFDMA Uplink: SC- FDMA Access Method LTE
  • 8. ? NEC Corporation 2011Page 8 New LTE Business Opportunities ? Shorter download time and quicker responses reduces user¡¯s stress ? Creation of variety of service/applications and increase ARPU for carrier ? Shorter download time and quicker responses reduces user¡¯s stress ? Creation of variety of service/applications and increase ARPU for carrier 5MB Music (MP3) 1 song 10MB News (MP3) 20 minutes 15MB Video Clip 3 minutes 20MB Video Podcast 5 minutes 70MB Music CD (MP3) 1 CD 0.5s 11s 16s 21s 75s 1.1s 1.6s 2.1s 7.5s5s Station Grounds LTE zone PositivePositive CycleCycle DownloadSpeed *Download conditions = LTE: 75Mbps @ 10MHz, MIMO 2x2 / HSDPA: 7.2Mbps @ 5MHz 12s 17s 22s 78s 5.2s HSDPA LTE S = Seconds
  • 9. ? NEC Corporation 2011Page 9 ? 1. Business Overview ? 2. Key Business Strategy 2.1 LTE Business Strategy 2.2 Mobile Backhaul Business Strategy ? 3. Toward Achieving V2012
  • 10. ? NEC Corporation 2011Page 10 2.1 LTE Business Strategy
  • 11. ? NEC Corporation 2011Page 11 Operator Trends on LTE Deployment Status of LTE deployment by operators ?180 operators in 70 countries are investing in LTE ?128 LTE network commitment in 52 countries ?At least 64 LTE networks are anticipated to be in commercial service by end of 2012 Status of LTE deployment by operators ?180 operators in 70 countries are investing in LTE ?128 LTE network commitment in 52 countries ?At least 64 LTE networks are anticipated to be in commercial service by end of 2012 ¨„Launch of Commercial LTE Networks ¨„Global Market Size of LTE Equipment 0 100 200 300 400 500 2009 2010 2011 2012 (Billions of yen) Source: NEC¡¯ estimates based on research firm data Source: List compiled by NEC based on press announcements and research firm data 2010 20122011 NTT DoCoMo, TeliaSonera, MTS, Ucell, Verizon, MetroPCS, Telenor, Tele2, CSL, Vodafone, EMT, Elisa, A1 Telekom (17 Companies) Telefonica, T-Mobile, China Mobile, Orange, AT&T, Zain, Yota, TMN, ¡­ KDDIKDDI, T-Mobile, CTC, ¡­ 210% CAGR 2009-2012 60 200 450 15
  • 12. ? NEC Corporation 2011Page 12 LTE Business Strategy ? Successfully complete projects for leading domestic carriers and expand globally ? Capitalize on the Femtocell footprint and Small Cell Solution which manifest high speed of LTE ? Expand LTE business by entering the TD-LTE market segment ? Successfully complete projects for leading domestic carriers and expand globally ? Capitalize on the Femtocell footprint and Small Cell Solution which manifest high speed of LTE ? Expand LTE business by entering the TD-LTE market segment KDDI SingTel Telefonica NTT DOCOMOFrance SFR Network Norway CommercialCommercial ServiceService Successful Trial Successful Trial Successful Field Trial Delivery of Wireless Base Stations, Core Network Systems, MBH switches Commercial ServiceCommercial Service Selected as base station vendor £Ì£Ô£Å Femtocell SBM First IMS based Femtocell solution CommercialCommercial ServiceService Denmark TDC Successful Trial Only projects publicly announced are indicated (as of December 2010) Femtocell Commercial & Trial Europe Africa / Mid. East Asia Americas 3 Co. 17 Co. 8 Co. 5 Co.
  • 13. ? NEC Corporation 2011Page 13 Target Market Segments for LTE Service Service Network Network Fixed BB NetworkNetwork Cloud ServiceCloud Service Mobile BB High-speed WiFi (Femtocell) Residential ? Mobile BB Service ? High-speed data services for 2G/3G/cdma networks ? 3G ¡ú LTE migration ? GSM ¡ú LTE migration ? cdma ¡ú LTE migration ? High-speed data services for emerging networks with LTE (TD-LTE) markets ? High-speed WiFi BB Service ? Wireless backhaul for public WiFi service access points ? Wireless access for mobile WiFi routers ? Fixed BB Service ? FBWA (Fixed Broadband Wireless Access) ? Broadband wireless access for SOHO Market Scale: JPY50 billion in 2012 Market Scale: JPY400 billion in 2012 ?Cultivate enhancement market segment for mobile Broadband service providers and market segment providing high-speed WiFi / fixed Broadband services
  • 14. ? NEC Corporation 2011Page 14 Strategy for Mobile BB Service Small Cell Solution ? Provide Small Cell Solutions that manifest high speed of LTE, in addition to macro cell deployment ? Applicable to zone deployment in urban areas / data dense regions ? Enter market with small, lightweight and easy to install base stations Small Cell Solution ? Provide Small Cell Solutions that manifest high speed of LTE, in addition to macro cell deployment ? Applicable to zone deployment in urban areas / data dense regions ? Enter market with small, lightweight and easy to install base stations Macro Cell deployment Small CellSmall Cell deploymentdeployment 500m¡«several km in radius Less than 200 meter radius (Urban, data density area) (1)Improve data speed Total throughput is independent of the cell size. Less number of devices in the cell means higher throughput for each device. (2)Improve spectrum usage More repetitive use of the spectrum
  • 15. ? NEC Corporation 2011Page 15 TD-LTE Market Strategy ? TD-LTE Market Expansion ? TD-LTE is strategically promoted by Chinese government ? In India, winner of BWA spectrum in 2010 proactive to deploy TD-LTE ? TD-LTE adoption planned by Clearwire (USA), Yota (Russia), FarEasTone (Taiwan), etc. £ª33% of 18 companies surveyed by GSA plans to deploy TD-LTE Chinese MarketChinese Market ? Joint LTE product development by business collaboration with WRI Capitalize on NEC¡¯s LTE development assets in combination with WRI¡¯s TD-LTE technologies to optimize development (Develop TD-LTE base stations with common FD/TD LTE platform) ?Leverage WRI¡¯s sales channels Enter Chinese market utilizing WRI¡¯s sales channel and 3G footprint Other Oversea MarketOther Oversea Market ?Cultivate PASOLINK market footprint with products developed in China following the success in Chinese TD-LTE market
  • 16. ? NEC Corporation 2011Page 16 Summary of press release (for Reference) ? Cooperation with WRI on development, manufacturing, sales and field support ? Collaborative target: LTE base stations, maintenance and operation systems, and Self Organizing Network (SON) ? These systems support both the TD-LTE and FD-LTE for Chinese market. Commercialization is planned for the second half of 2011. ? Entry into China¡¯s TD and FD-LTE market by leveraging WRI¡¯s sales channel and 3G footprint . ? Leverage the TD-LTE success in the Chinese market to expand globally ? NEC and WRI Collaborate on LTE Infrastructure Business? NEC and WRI Collaborate on LTE Infrastructure Business WRI operates under China¡¯s State-owned Assets Supervision and Administration Commission (SASAC) as one of the top manufacturer in China¡¯s communications Infrastructure field. Wuhan Fiberhome Mobile Communications Inc. is a joint venture between NEC and WRI established in 2005 that will market jointly developed products, mostly in the Chinese market, while NEC will mainly target other global markets.
  • 17. ? NEC Corporation 2011Page 17 Strategy on High-speed WiFi / Fixed BB Services ?Propose high-speed WiFi BB service / fixed BB service that utilize LTE to fixed-line operators and expand business (capitalize on the existing business footprint) ?Propose high-speed WiFi BB service / fixed BB service that utilize LTE to fixed-line operators and expand business (capitalize on the existing business footprint) ? Fixed BB Service LTELTE Smart PhoneSmart Phone WiWi--FiFi PCPC HomeHome GWGW Fixed TelephoneFixed TelephoneIPTVIPTV STBSTB PCPC eNBeNB Last one-mile by wireless fiber (LTE) LTE-WiFi Router (Pocket terminal) TabTabllet (PAD)et (PAD) WiWi--FiFi iPASOLINKiPASOLINK MBH Carrier Network £×£é£Æ£é Area £È£ï£í£å ? High-speed WiFi BB Service
  • 18. ? NEC Corporation 2011Page 18 Commercial LTE Systems CX2800/210 CX2800/220 CX2800/230 £Í£Í£Å £Ð?£Ç£× £Ó?£Ç£× BBUBBURRHRRH All in one eNodeBAll in one eNodeB (BBU+RRH)(BBU+RRH) LTE Base Station Equipment (eNB) Ethernet Transmission Equipment (ERP-SW) Core Network Equipment (EPC)
  • 19. ? NEC Corporation 2011Page 19 2.2 Mobile Backhaul Business Strategy
  • 20. ? NEC Corporation 2011Page 20 Aggregation CoreMetroAccess ?Mobile backhaul is an access network for mobile communications systems that transmits data traffic from mobile terminals to mobile core networks by inter-connecting several base stations scattered in wide area 2G 3G 2G 3G BSC/RNC £Å£Ð£Ã LTE 2G 3G LTE Wired TDM Wired Ethernet Wireless TDM Wireless Ethernet Transmission mode Mobile BackhaulMobile Backhaul The Status and Role of Mobile Backhaul
  • 21. ? NEC Corporation 2011Page 21 ?Moving towards next generation mobile backhaul aiming to reduce OPEX and CAPEX while coping with rapid increase in mobile data traffic. ? Demand for TDM based legacy transport such as SONET / SDH decreases ? Demand increase for hybrid TDM & packet based transport such as ether-net Trend of Mobile Services 2008 2010 2015 3G (IP) / HSPA / LTE3G (IP) / HSPA / LTE Packet-based Mobile Services Circuit-based Mobile Services 2G,2G, 3G3G (ATM) / HSDPA(ATM) / HSDPA TrafficVolume(Mbps) ¨„Traffic increase with wireless access system evolution Global Market Size for Mobile Backhaul Equipment Trends to Improve Mobile Backhaul Network 0 10 2009 2010 2011 2012 2013 2014 Others SONET/SDH and WDM Microwave TDM Microwave Ethernet & Dual TDM/Ethernet Ethernet cell site gateways Ethernet cell site routers Packet / TDM hybrid equipmentPacket / TDM hybrid equipment ¨„Packet based network migration (B$) Source£ºInfonetics , Mobile Backhaul Equipment and Services 10% CAGR 2010-2013
  • 22. ? NEC Corporation 2011Page 22 ? Supports rapid growth of mobile data traffic ? Smooth migration from existing networks to next generation networks ? Power saving / space saving ? New management system to reduce operating costs Further expand NEC¡¯s business opportunity by introducing iPASOLINK series which meets market requirements Mobile Backhaul Requirements (Needs of Operators)
  • 23. ? NEC Corporation 2011Page 23 Access Aggregation Metro Core Wired TDM Wired Ethernet Wireless TDM Wireless Ethernet Existing PASOLINK application area 3G 2G 3G 2G BSC/RNC aGW LTE Expandapplication area ?Converge NEC¡¯s wireless / optical / IP and OSS technologies ?A mobile backhaul solution that uniformly and economically handle the migration from 2G ?3G ?3.9G (LTE) ?The coordination of integrated NMS with OSS enables the provision of E2E / multilayer pass management and provide high reliability and scalability Meeting Next Generation Mobile Backhaul Requirements iPASOLINK 200 iPASOLINK 400 iPASOLINK application area
  • 24. ? NEC Corporation 2011Page 24 ¨„All-in-One Model in 1U (44mm in height) Launch ofLaunch of iPASOLINKiPASOLINK 400400 ? Up to 4-way branch configuration in 1U ? Universal slot enables flexible expansion (transport interface and/or functionality) ? Internal high capacity packet switch ? Compact design, high reliability iPASOLINK 200 ? 2-way branch (repeater function) ? Internal high capacity packet switch ? Compact design, high reliability iPASOLINK 400
  • 25. ? NEC Corporation 2011Page 25 EuropeEurope AsiaAsia Central / S. AmericaCentral / S. America Italy Poland Hungary Moldova Montenegro Typical Usage of iPASOLINK 200 by Customers ¨„Communication line between mobile network base stations ? Deployment of new 3G (HSPA / HSPA+) and LTE networks ? Replacement of existing equipments (capacity expansion of existing access backhaul Turkey India Sri Lanka Bangladesh Malaysia Brazil Guatemala ?Since its commercial release on September 1, 2010 orders for 23,000 units in 18 countries has been received Orders for the iPASOLINK 200 Serbia Germany Thailand AfricaAfrica
  • 26. ? NEC Corporation 2011Page 26 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 ÀÛ·e Overseas Ver. PASOLINK50 PASOLINK V3 PASOLINK-S PASOLINK+ PASOLINK NEO (Standard) PASOLINK MxPASOLINK V4 Overseas Ver. PASOLINK (joint dev. with overseas operators) PASOLINK V2 2007.2 PASOLINK High Performance (HP) 1.1.55 mil.mil. (year)(year) PASOLINK NEO/c 100 thou.100 thou. 2002.10 Shipment growth to mobileShipment growth to mobile operator.operator. total shipment ratio to mobile operator.total shipment ratio to mobile operator. 20002000 20092009 40%40% ?? 80%+80%+ iPASOLINK200iPASOLINK200/400/400 Major Shipment Milestone: ?1.5 million shipments: achieved in26 year (1984¡«2010) ?1.0 million shipments: achieved in 24 year (2008.9) ?1.0¡ú1.5 million: achieved in 1 year 11 months (2010.8) 1.0 mil.1.0 mil. 500 thou.500 thou. 2008.9 2010.8 NewNew SeriesSeries TotalTotal 1.1.5252 mil.mil.AsiaAsia OceanaOceana Mid.EastMid.East AfricaAfrica N./S.N./S. AmericaAmerica EuropeEurope Countries: 145 (as of Dec. 2010) Total PASOLINK Shipments (Over 1.5 Million)
  • 27. ? NEC Corporation 2011Page 27 ? 1. Business Overview ? 2. Key Business Strategy 2.1 LTE Business Strategy 2.2 Mobile Backhaul Business Strategy ? 3. Toward Achieving V2012
  • 28. ? NEC Corporation 2011Page 28 Toward Achieving V2012 (Billions of yen) FY2009 CAGR +13%£¨09¡ú12£© FY2012 (planned) 900.0 Overseas Japan Overseas Japan 627.4 Sales ?Sales of 900 billion yen in FY2012 (9% operating profit margin) Key Business Existing Business Key Business Existing Business 40%28%Overseas Sales Ratio 50%34%Key Business Ratio 9%5%Operating Income Margin FY2012FY2009 Sales ¡ù forecast as of July 8, 2010 WBB Business 100 billion yen WBB Business 250 billion yen
  • 29. ? NEC Corporation 2011Page 29 £Á£Ò£Ð£Õ£º Average Revenue Per User £Â£Â£º Broadband £Â£Â£Õ£º Base Band Unit £Â£Ä£Å£º Base station Digital processing Equipment £Â£Ò£Å£º Base station Radio processing Equipment £Â£Ó£Ã£º Base Station Controller £Â£Ó£Ó£º Business Support Systems/Billing Support Systems £Â£×£Á£º Broadband Wireless Access £Ã£Á£Ç£Ò£º Compound Annual Growth Rate £å£Î£Â£º evolutional Node B £Å£²£Å£º End to End £Å£Ð£Ã£º Evolved Packet Core £Å£Ò£Ð-£Ó£×£º Ethernet Ring Protection Switch £Æ£Â£×£Á£º Fixed Broadband Wireless Access £Æ£Ä£Ä£º Frequency Division Duplex £Ç£×£º Gateway £Ç£Ó£Í£º Global System for Mobile communications £È£Ó£Ä£Ð£Á£º High Speed Downlink Packet Access £È£Ó£Ð£Á£º High Speed Packet Access £É£Í£Ó£º IP Multimedia Subsystem £Ì£Ò£Å£º Low power Radio processing Equipment £Ì£Ô£Å£º Long Term Evolution £Í£Â£È£º Mobile Backhaul £Í£É£Í£Ï£º Multiple Input Multiple Output Abbreviations £Í£Í£Å£º Mobility Management Entity £Î£Í£Ó£º Network Management System £Î£×£º Network £Ï£Ó£Ó£º Operational Support Systems £Ð£²£Ð£º Peer to Peer £Ð£Æ£º Platform £Ð-£Ç£×£º PDN Gateway £Ò£Î£Ã£º Radio Network Controller £Ò£Ò£Å£º Optical Remote Radio processing Equipment £Ò£Ò£È£º Remote Radio Head £Ó£Ä£È£º Synchronous Digital Hierarchy £Ó-£Ç£×£º Serving Gateway £Ó£Ï£È£Ï£º Small Office / Home Office £Ó£Ï£Î£º Self Organizing Network £Ó£Ï£Î£Å£Ô£º Synchronous Optical Network £Ó£Ô£Â£º Set Top Box £Ô£Ä£Ä£º Time Division Duplex £Ô£Ä£Í£º Time Division Multiplexing £×£Â£Â£º Wireless Broadband £×£Ä£Í£º Wavelength Division Multiplexing £×£é£Æ£é£º Wireless Fidelity £×£é£Í£Á£Ø£º Worldwide Interoperability for Microwave Access £×£Ò£É£º Wuhan Research Institute of Post and Telecommunications £Ø£á£á£Ó£º X as a Service
  • 31. CAUTIONARY STATEMENTS: This material contains forward-looking statements pertaining to strategies, financial targets, technology, products and services, and business performance of NEC Corporation and its consolidated subsidiaries (collectively "NEC"). Written forward-looking statements may appear in other documents that NEC files with stock exchanges or regulatory authorities, such as the Director of the Kanto Finance Bureau, and in reports to shareholders and other communications. NEC is relying on certain safe- harbors for forward-looking statements in making these disclosures. Some of the forward-looking statements can be identified by the use of forward-looking words such as "believes," "expects," "may," "will," "should," "seeks," "intends," "plans," "estimates," "targets," "aims," or "anticipates," or the negative of those words, or other comparable words or phrases. You can also identify forward-looking statements by discussions of strategy, beliefs, plans, targets, or intentions. Forward-looking statements necessarily depend on currently available assumptions, data, or methods that may be incorrect or imprecise and NEC may not be able to realize the results expected by them. You should not place undue reliance on forward-looking statements, which reflect NEC¡¯s analysis and expectations only. Forward-looking statements are not guarantees of future performance and involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking statements. Among the factors that could cause actual results to differ materially from such statements include (i) global economic conditions and general economic conditions in NEC¡¯s markets, (ii) fluctuating demand for, and competitive pricing pressure on, NEC¡¯s products and services, (iii) NEC¡¯s ability to continue to win acceptance of NEC¡¯s products and services in highly competitive markets, (iv) NEC¡¯s ability to expand into foreign markets, such as China, (v) regulatory change and uncertainty and potential legal liability relating to NEC¡¯s business and operations, (vi) NEC¡¯s ability to restructure, or otherwise adjust, its operations to reflect changing market conditions, (vii) movement of currency exchange rates, particularly the rate between the yen and the U.S. dollar, (viii) the impact of unfavorable conditions or developments, including share price declines, in the equity markets which may result in losses from devaluation of listed securities held by NEC, and (iv) impact of any regulatory action or legal proceeding against NEC. Any forward-looking statements speak only as of the date on which they are made. New risks and uncertainties come up from time to time, and it is impossible for NEC to predict these events or how they may affect NEC. NEC does not undertake any obligation to update or revise any of the forward-looking statements, whether as a result of new information, future events, or otherwise. The management targets included in this material are not projections, and do not represent management¡¯s current estimates of future performance. Rather, they represent targets that management will strive to achieve through the successful implementation of NEC¡¯s business strategies. Finally, NEC cautions you that the statements made in this material are not an offer of securities for sale. Securities may not be offered or sold in any jurisdiction in which required registration is absent or an exemption from registration under the applicable securities laws is not granted.