KDD to Make Organizational Changes

Details of the changes are as follows:

1. Organizational changes

KDD expects to face a series of changes in the business environment, including further competition in international telecommunications, launching of full-fledged domestic telephone service, and abolition of the KDD Law. To promptly and appropriately cope with these changes, and also boost marketing ability and further streamline operations, KDD will restructure parts of the main office organization.

(1) Marketing & Sales Headquarters

Service Development Department and Global Multimedia Business Department will be transferred to Marketing & Sales Headquarters so that Marketing & Sales Headquarters can plan and develop services fine-tuned to market trends and give a boost to marketing activities, in anticipation of the government's transition from the rate approval system to rate notification system. Office of Visual Communications, which combines the marketing and engineering units pertaining to such video services as TV transmission, will be created in Business Communications Department I. To aggressively promote SI business, Business Communications Development Department will be expanded to create Network Solutions Department. The telephone operations unit will be split off and combined with KDD Telemarketing Inc.

(2) Network Headquarters

Engineering Department, which will manage all technical operations related to networks in general, will be created in Network Headquarters to better manage the costs incurred in the construction and operation of network facilities. The network operation and maintenance operation will be separated into another company and, as a result, Network Engineering & Administration Department will be abolished. To streamline radio-related operations and enable a concerted effort in new businesses, Mobile Communications Business Department and Transmission Systems Engineering Department, among other units, will be integrated to create Wireless Business Department. IMT-2000 Business Development Office, set up last March, will be placed under this new department.

2. Operations split off into new companies

(1) Establishment of KDD Telecom Network Co., Ltd.

KDD will split off Network Service Center, earth stations, and cable landing stations etc. from Network Headquarters to form KDD Telecom Network Co., Ltd. KDD anticipates the new company will help further improve the productivity of operation and maintenance and generate outside revenues from the operation and maintenance of networks. Besides providing KDD with network operation and maintenance services, the new company will utilize its pool of know-how and resources to provide other companies with telecommunications facility operation and maintenance service and consulting service to increase greater revenues from external sources.

(2) Establishment of KDD Sales Co., Ltd.

KDD will establish KDD Sales Central Tokyo Co., Ltd., KDD Sales South Tokyo Co., Ltd., KDD Sales West Tokyo Co., Ltd., and KDD Sales Osaka Co., Ltd. KDD feels that these companies are essential to its full-fledged entry into the domestic telephone market. The purpose of these companies is to reinforce the ability to cultivate new customers, particularly the consumer segment, and to generate revenues from outside by selling KDD group's and other companies' products and services.

As a result of the changes to the organization and the establishment of new companies as described above, Administrative Headquarters, Corporate Headquarters, and Business Development Headquarters will be abolished.

[Reference]

Name of Company	KDD Telecom Network Co.,Ltd.	KDD Sales Central Tokyo Co., Ltd.	KDD Sales South Tokyo Co., Ltd.	KDD Sales West Tokyo Co., Ltd.	KDD Sales Osaka Co., Ltd.
Main Office	Shinjuku-ku, Tokyo	Chiyoda-ku, Tokyo	Meguro-ku, Tokyo	Shinjuku-ku, Tokyo	Chuo-ku, Tokyo
President	Nobuo Nezu	Akitsugu Kuwayama	Sadao Ogiwara	Nobuhiko Oka	Seiji Furuya
Capital	490M yen	490M yen	490M yen	490M yen	490M yen
Investor	KDD 100%	KDD 100%	KDD 100%	KDD 100%	KDD 100%
Date of Incorporated	June 1, 1998	June 1, 1998	June 1, 1998	June 1, 1998	June 1, 1998