Inadequate and inappropriate management of e-money, credit functions or points by companies with which we make alliances or collaborate.


	•	~~Illegal use of information,~~ ~~e-money,~~ ~~credit functions and points by third parties due to a loss or theft of handsets;~~

	•	~~Illegal access to and use of user records and balances accumulated on handsets by third-parties; and~~

	•	~~Inadequate and inappropriate management ofe-money,~~ ~~credit functions or points by companies with which we make alliances or collaborate.~~

Social problems that could be caused by misuse or misunderstanding of our products and services may adversely affect our credibility or corporate image.

We may face an increase in cancellations of ~~existing~~ subscriber contracts and difficulty in acquiring new subscriptions due to decreased credibility of our products and services and damaged corporate image caused by inappropriate use of our products and services by ~~unscrupulous~~ subscribers.

~~One~~

For example, isthere are cases of unsolicited bulk~~e-mail~~ e-mails sent through oure-mail services, including i-mode mail, SMS and ~~SMS.~~sp-mode mail. Despite our extensive efforts to address this issue caused by unsolicited bulke-mails including notifying our subscribers via various brochures, providing unsolicited bulke-mail filtering functions with our handsets and pursuing actions against companies which distribute large amounts of such unsolicited bulke-mails, the problem has not yet been rooted out. If our subscribers receive a large amount of unsolicitede-mail, it may cause a decrease in customer satisfaction and may damage our corporate image, leading to a reduction in the number of i-mode or sp-mode subscriptions.

Mobile phones have been used in crimes such as ~~the “it’s me” fraud, whereby callers request an emergency bank remittance pretending to be a relative.~~billing fraud. To combat these misuses of our services, we have introduced various measures such as ~~more strict~~stricter identification confirmation at points of purchase and ended new contracts for pre-paid mobile phones as of March 31, 2005 because pre-paid mobile phones are easier to use in criminal activities. However, in the event criminal usage increases, mobile phones may be regarded as a problem and lead to an increase in cancellation of contracts.

In addition, ~~there was an issue occurred~~problems arose from the fact that subscribers were charged fees for packet communication at higher levels than they were aware of as a result of using mobile phones without fully recognizing the increased volume and frequencies to use packet communication, as our handsets and services became more sophisticated. Also, there are issues concerning manners for phone usage in public places such as in trains and aircraft and the occurrence of car accidents caused by the use of mobile phones while driving. Further, there are a variety of issues concerning the possession of mobile phones by children in elementary and junior high schools, and discussions concerning whether our access restriction service to harmful web sites (“Filtering service”), which applies ~~basically~~generally to subscribers under 20 years of age as the enforcement of the Act on Establishment of Enhanced Environment for Youth’s Safe and Secure Internet Use, is sufficient and accurate. These issues may similarly damage our corporate image.

We believe that we have properly addressed the social issues involving mobile phones. However, it is uncertain whether we will be able to continue addressing those issues appropriately in the future as well and if we fail to do so, we may experience an increase in cancellation of existing subscriber contracts or fail to acquire new subscribers as expected, and this may affect our financial condition and results of operations.

Inadequate handling of confidential business information including personal information by our corporate group, contractors and others, may adversely affect our credibility or corporate image.

We possess information on numerous subscribers in the telecommunications, credit, and other businesses, and to appropriately and promptly address the Law Concerning the Protection of Personal Information, we have put in place comprehensive company-wide security management such as thorough management of confidential information including personal information, employee education, supervision of subcontractors and by strengthening technological security.

However, in the event an information leak occurs despite these security measures, our credibility and corporate image may be significantly damaged and we may experience an increase in cancellation of subscriber contracts, an increase in indemnity costs and slower increase in additional subscriptions, and our financial condition and results of operations may be adversely affected.

Owners of intellectual property rights that are essential for our business execution may not grant us the right to license or otherwise use such intellectual property rights on acceptable terms or at all, which may limit our ability to offer certain technologies, products and/or services, and we may also be held liable for damage compensation if we infringe the intellectual property rights of others.

For us to carry out our business, it is necessary to obtain licenses and other rights to use the intellectual property rights of third parties. Currently, we are obtaining licenses from the holders of the rights concerned by concluding license agreements. We will obtain the licenses from the holders of the rights concerned if others have the rights to ~~those~~ intellectual property ~~rights~~ necessary for us to operate our business in the future. However, if we cannot come to an agreement with the holders of the rights concerned or a mutual agreement concerning the granted rights cannot be maintained afterwards, there is a possibility that we will not be able to provide our specific technologies, products or services. Also, if we receive claims of violation of intellectual property rights from others, we may be forced to expend considerable time and cost in reaching a resolution, and if such claims are recognized, we may be liable to pay damages for infringement of the rights concerned, which may adversely affect our financial condition and results of operations.

~~Natural~~Events and incidents caused by natural disasters, social infrastructure paralysis such as power shortages, proliferation of harmful substances, terror or other destructive acts, the malfunctioning of equipment or software bugs, deliberate incidents induced by computer viruses, cyber attacks, hacking, unauthorized access and other problems could cause ~~failures~~failure in ~~the~~our networks, distribution ~~channel~~channels and/or other factors ~~required~~necessary for the provision of service, disrupting our ability to offer services to our subscribers, and may adversely affect our credibility and/or corporate ~~image.~~image, or lead to a reduction of revenues and/or increase of costs.

We have built a nationwide network including base stations, antennas, switching centers and transmission lines and provide mobile communication service using this network. In order to operate our network systems in a safe and stable manner, we have various measures in place, such as ~~multiple~~duplicative systems. However, despite these measures, our system could fail for various reasons, including malfunctioning of system hardware, natural disasters such as earthquakes, tsunamis, typhoons and floods, paralysis of social infrastructure such as power shortages and interruption of public transportation networks, terrorism, and similar ~~phenomena and~~ events and ~~shortages in personnel~~incidents, and the inability to sufficiently operate and maintain network ~~equipments~~facilities due to, for example, the proliferation of harmful substances or the spread of ~~a highly contagious and dangerous disease.~~an epidemic. These system failures can require an extended time for repair and, as a result, may lead to decreased revenues and ~~increased repair costs,~~significant cost burdens, and our financial condition and results of operations may be adversely affected.

There have been instances in which tens of millions of computers worldwide were infected by viruses through the Internet. Similar incidents could occur on our ~~mobile communication network.~~networks. If such a virus entered our network or handsets through such means as hacking, unauthorized access, or otherwise, our system could fail and our mobile phones become unusable. In such an instance, the credibility of our network and customer satisfaction could decrease significantly. Although we have enhanced ~~our~~ security measures including systems to block unauthorized access and remote downloading for mobile phones, in order to provide for unexpected events, such precautions may not make our system fully prepared for every ~~event.~~contingency. Moreover, our network could be affected by software bugs, incorrect equipment settings and human errors ~~which~~that are not the result of malfeasance but also cause system failures or breakdowns.

In addition, aevents or incidents caused by natural ~~disaster or the~~disasters, social infrastructure paralysis, proliferation of harmful substances, spread of ~~a highly contagious and dangerous disease~~an epidemic or any other event could force ~~the temporary closure of~~our offices or critical business partners including sales ~~outlets.~~agencies to suffer constraints on business operations or to temporarily close their offices or stores. In such a case, we would lose the opportunity to sell or provide goods and services and ~~we might~~also may not be able to respond appropriately to subscription applications and requests from subscribers, ~~including~~such as after-sales service ~~and this might damage our corporate image and credibility and lower customer satisfaction.~~

~~In the event~~requests.

If we are unable to properly respond to any such events, our credibility or corporate image may ~~be reduced,~~decrease, and we may experience a decrease in revenues as well as significant ~~repair costs, which~~cost burdens, and if the market growth slows

or the market shrinks due to any such event, ARPU may decrease below our forecast, or we may not be able to gain new subscriptions or maintain the existing number of subscriptions at the level we expect. All of these factors may affect our financial condition and results of operations.

The Great East Japan Earthquake that struck on March 11, 2011, caused interference with business activities of both our group and our business partners: for instance, our group suffered physical damage to networks and service interruption due to power outages, and our business partners, including sales agencies, were forced to temporarily close their stores. Should any further unforeseeable incident, including the disruption of social infrastructure due to aftershocks and diminished power supply, the proliferation of harmful substances and other impacts of damaged nuclear power plants, economic downturn, or market contraction, occur in the future in relation to the Great East Japan Earthquake, we may face increased costs required for network recovery and other such spending, or shrinking profits, and our group or our business partners may be subject to constraints in conducting business operations. All of these factors may affect our financial condition and results of operations.

Concerns about adverse health effects arising from wireless ~~telecommunication health~~telecommunications risks may spread and consequently adversely affect our financial condition and results of operations.

~~Media~~

Reports by the World Health Organization (WHO), other organizations and ~~other reports~~various media have suggested that electric wave emissions from wireless handsets and other wireless ~~equipment~~telecommunications devices may ~~adversely affect the health of mobile phone users and others by causing cancer and vision loss and interfering~~interfere with various electronic medical devices including hearing aids and pacemakers or may adversely affect the health of their users and ~~also may present increased health risks for users who are children. While these reports have not been conclusive, and although the findings in such reports are disputed, the~~others by causing cancer or vision loss. The actual or perceived risk of wireless telecommunication devices to the

health of users could adversely affect our corporate image, financial condition and results of operations through increased cancellation by existing subscribers, reduced subscriber growth, reduced usage per subscriber and introduction of new regulations, restrictions, or litigation. The perceived risk of wireless telecommunications devices may have been elevated by certain wireless carriers and handset manufactures affixing labels to their handsets showing levels of electric wave emissions or warnings about possible health risks. Research and studies are ongoing and we are actively attempting to confirm the safety of wireless telecommunication, but there can be no assurance that further research and studies will demonstrate that there is no interrelation between electric wave emissions and health problems.

Furthermore, although the electric wave emissions of our cellular handsets and base stations comply with the electromagnetic safety guidelines of Japan, including guidelines regarding the specific absorption rate of electric waves, and the International Commission on Non-Ionizing Radiation Protection, the guidelines of which are regarded as an international safety standard, the Electromagnetic Compatibility Conference Japan has confirmed that some electronic medical devices are affected by the electromagnetic interference from cellular phones as well as other portable radio transmitters. As a result, Japan has adopted a policy to restrict the use of cellular services inside medical facilities. We are working to ensure that our subscribers are aware of these restrictions when using cellular phones. There is a possibility that modifications to regulations, new regulations or restrictions could limit our ability to expand our market or our subscription base or otherwise adversely affect us.

Our parent company, NIPPON TELEGRAPH AND TELEPHONE CORPORATION (NTT), could exercise influence that may not be in the interests of our other shareholders.

As of March 31, ~~2010,~~2011, NTT owned ~~66.43%~~66.65% of our outstanding voting shares. While being subject to the conditions for fair competition established by the Ministry of Posts and Telecommunications (“MPT,” currently the Ministry of Internal Affairs and Communications, or “MIC”) in April 1992, NTT retains the right to control our management as a majority shareholder, including the right to appoint directors. Currently, although we conduct our day-to-day operations independently of NTT and its other subsidiaries, certain important matters are discussed with, or reported to, NTT. As such, NTT could take actions that are in its best interests ~~which~~but may not be in the interests of our other shareholders.

Risks Relating to the Shares and the ADSs

Future sales of our shares by NTT or by us may adversely affect the trading price of our shares and ADSs.

As of March 31, ~~2010,~~2011, NTT owned ~~66.43%~~66.65% of our outstanding voting shares. Under Japanese law, NTT, like any other shareholder, generally is able to dispose of our shares freely on the Tokyo Stock Exchange or otherwise. Additionally, our board of directors is authorized to issue ~~144,340,000~~144,480,000 additional shares generally without any shareholder approval. The sale or issuance or the potential for sale or issuance of such shares could have an adverse impact on the market price of our shares.

There are restrictions on your ability to withdraw shares from the depositary receipt facility.

Each ADS represents the right to receive 1/100th of a share of common stock. Therefore, pursuant to the terms of the deposit agreement with our depositary, The Bank of New York Mellon, in order to withdraw any shares, a holder of ADSs must surrender for cancellation and withdrawal of shares, ADRs evidencing 100 ADSs or any integral multiple thereof. Each ADR will bear a legend to that effect. As a result, holders of ADSs will be unable to withdraw fractions of shares from the depositary or receive any cash settlement in lieu of withdrawal of fractions of shares. In addition, although the ADSs themselves may be transferred in any lots pursuant to the deposit agreement, the ability to trade the underlying shares may be limited.

Holders of ADRs have fewer rights than shareholders and have to act through the depositary to exercise those rights.

Holders of ADRs do not have the same rights as shareholders and accordingly cannot exercise rights of shareholders against us. The Bank of New York Mellon, as depositary, through its custodian agent, is the registered shareholder of the deposited shares underlying the ADSs, and therefore only it can exercise the rights of shareholders in connection with the deposited shares. In certain cases, we may not ask The Bank of New York

Mellon to ask holders of ADSs for instructions as to how they wish their shares voted. Even if we ask The Bank of New York Mellon to ask holders of ADSs for such instructions, it may not be possible for The Bank of New York Mellon to obtain these instructions from ADS holders in time for The Bank of New York Mellon to vote in accordance with such instructions. The Bank of New York Mellon is only obliged to try, as far as practical, and subject to Japanese law and our Articles of Incorporation, to vote or have its agents vote the deposited shares as holders of ADSs instruct. In your capacity as an ADS holder, you will not be able to bring a derivative action, examine the accounting books and records of the Company, or exercise appraisal rights.

U.S. investors may have difficulty in serving process or enforcing a judgment against us or our directors, executive officers or corporate auditors.

We are a limited liability, joint stock corporation incorporated under the laws of Japan. Most of our directors, executive officers and corporate auditors reside in Japan. All or substantially all of our assets and the assets of these persons are located in Japan and elsewhere outside the United States. It may not be possible, therefore, for U.S. investors to effect service of process within the United States upon us or these persons or to enforce against us or these persons judgments obtained in U.S. Courts predicated upon the civil liability provisions of the Federal securities laws of the United States. There is doubt as to the enforceability in Japan, in original actions or in actions for enforcement of judgment of U.S. courts, of liabilities predicated solely upon the federal securities laws of the United States.

Rights of shareholders under Japanese law may be different from rights of shareholders in jurisdictions within the United States.

Our Articles of Incorporation, Regulations of the Board of Directors and the Corporation Law of Japan (Kaishaho) govern our corporate affairs. Legal principles relating to such matters as the validity of corporate procedures, directors’ and officers’ fiduciary duties and liabilities, and shareholders’ rights under Japanese law

may be different from those that would apply to a company incorporated in a jurisdiction within the United States. You may have more difficulty in asserting your rights as a shareholder than you would as a shareholder of a corporation organized in a jurisdiction within the United States.

Our shareholders of record on a record date may not receive the dividend they ~~anticipate~~anticipate.

The customary dividend payout practice and relevant regulatory regime of publicly listed companies in Japan may differ from that followed in foreign markets. Our dividend payout practice is no exception. While we may announce forecasts of year-end and interim dividends prior to the record date, these forecasts are not legally binding. The actual payment of year-end dividends requires a resolution of our shareholders. If the shareholders adopt such a resolution, the year-end dividend payment is made to shareholders as of the applicable record date, which is currently specified as March 31 by our Articles of Incorporation. However, such a resolution of our shareholders is usually made at an ordinary general meeting of shareholders held in June. The payment of interim dividends requires a resolution of our board of directors. If the board adopts such a resolution, the dividend payment is made to shareholders as of the applicable record date, which is currently specified as September 30 by our Articles of Incorporation. However, the board usually does not adopt a resolution with respect to an interim dividend until ~~after~~ September 30.

Shareholders of record as of an applicable record date may sell shares after the record date in anticipation of receiving a certain dividend payment based on the previously announced forecasts. However, since these forecasts are not legally binding and resolutions to pay dividends are usually not adopted until after the record date, our shareholders of record on record dates for year-end or interim dividends may not receive the dividend they anticipate.

Item 4. Information on the Company

A.
~~Item 4.~~	*~~Information on the Company~~*


A.	History and Development of the Company

We are a joint stock corporation under the Corporation Law of Japan. We were incorporated and registered ~~under the Japanese Law~~ in August 1991 under the name of NTT Mobile Communications Planning Co., Ltd., and, in April 1992, we were renamed NTT Mobile Communications Network, Inc. We changed our name to NTT DoCoMo, Inc. on April 1, 2000 (NTT DOCOMO,

INC. since June 2010). Our corporate head office is at Sanno Park Tower,11-1, Nagata-cho 2-chome, Chiyoda-ku, Tokyo100-6150, Japan. Our telephone number is81-3-5156-1111. We have no agent in the United States in connection with this annual report.

Our parent company is NIPPON TELEGRAPH AND TELEPHONE CORPORATION (“NTT”), the holding company of NTT group. NTT group ~~constitutes~~is one of the world’s leading telecommunications operators. We were incorporated as a subsidiary of NTT in August 1991 and took over NTT’s wireless telecommunication operations in July 1992. In July 1993, in accordance with the agreement between NTT and the Ministry of Posts and Telecommunications, we transferred wireless telecommunication operations (other than those in theKanto-Koshinetsuregion which remained with us) to our eight regional subsidiaries. However, the other eight regional subsidiaries were merged into our company as the surviving company in July 2008.

The following list shows our corporate organization and includes our subsidiaries and affiliates as of March 31, ~~2010.~~

2011.


Name	Percentage Voting Interest
*Service Subsidiaries^: 26**
DOCOMO Business Net Inc.		100%
	~~Percentage~~
~~Name~~	~~voting interest~~

*~~Service Subsidiaries; 26~~** DOCOMO Engineering Chugoku Inc.		100%
DOCOMO ~~Business Net~~Engineering Hokkaido Inc.		~~100~~100%	%
DOCOMO Engineering ~~Chugoku~~Hokuriku Inc.		~~100~~100%	%
DOCOMO Engineering ~~Hokkaido~~ Inc.		~~100~~100%	%
DOCOMO Engineering ~~Hokuriku~~Kansai Inc.		~~100~~100%	%
DOCOMO Engineering Kyushu Inc.		~~100~~100%	%
DOCOMO Engineering ~~Kansai~~Shikoku Inc.		~~100~~100%	%
DOCOMO Engineering ~~Kyushu~~Tohoku Inc.		~~100~~100%	%
DOCOMO Engineering ~~Shikoku~~Tokai Inc.		~~100~~100%	%
DOCOMO ~~Engineering Tohoku~~I Kyushu Inc.		~~100~~100%	%
DOCOMO ~~Engineering Tokai~~Mobile Inc.		~~100~~100%	%
~~DOCOMO I Kyushu Inc.~~		~~100~~	%
~~DOCOMO Mobile Inc.~~		~~100~~	%
~~DOCOMO Mobile Tokai Inc.~~		~~100~~	%
DOCOMO Mobile Media Kansai Inc.		~~100~~100%	%
DOCOMO ~~Service Chugoku~~Mobile Tokai Inc.		~~100~~100%	%
DOCOMO Service ~~Hokkaido~~Chugoku Inc.		~~100~~100%	%
DOCOMO Service ~~Hokuriku~~Hokkaido Inc.		~~100~~100%	%
DOCOMO Service Hokuriku Inc.		~~100~~100%	%
DOCOMO Service ~~Kansai~~ Inc.		~~100~~100%	%
DOCOMO Service ~~Kyushu~~Kansai Inc.		~~100~~100%	%
DOCOMO Service ~~Shikoku~~Kyushu Inc.		~~100~~100%	%
DOCOMO Service ~~Tohoku~~Shikoku Inc.		~~100~~100%	%
DOCOMO Service ~~Tokai~~Tohoku Inc.		~~100~~100%	%
DOCOMO ~~Support~~Service Tokai Inc.		~~100~~100%	%
DOCOMO ~~Systems,~~Support Inc.		~~100~~100%	%
DOCOMO ~~Technology,~~Systems, Inc.		~~100~~100%	%
~~Other Subsidiaries; 99~~ DOCOMO Technology, Inc.		100%
Other Subsidiaries: 101
DOCOMO.COM, INC.		~~100~~100%	%
DOCOMO Communications Laboratories Europe GmbH		~~100~~100%	%
DOCOMO Communications Laboratories USA, Inc.		~~100~~100%	%
DOCOMO interTouch Pte. Ltd.		~~100~~100%	%

DOCOMO PACIFIC, INC.		100%
	~~Percentage~~
~~Name~~	~~voting interest~~

~~DOCOMO PACIFIC, INC.~~ D2 Communications Inc.		~~100~~51.0%	%
~~D2 Communications Inc.~~ net mobile AG		~~51.0~~81.5%	%
~~net mobile AG~~		~~81.5~~	%
NIPPON DATA COM Co., Ltd.		~~66.2~~66.2%	%
NTT DOCOMO USA, Inc.		~~100~~100%	%
OAK LAWN MARKETING, INC.		~~51.0~~51.0%	%
~~and other subsidiaries~~
~~Affiliates; 25~~ PacketVideo Corporation		100%
and other subsidiaries
Affiliates: 27
Avex Broadcasting & Communications Inc.		~~30.0~~30.0%	%
~~Axiata (Bangladesh) Limited~~ FeliCa Networks, Inc.		~~30.0~~38.0%	%
Hutchison Telephone Company Ltd.		~~24.1~~24.1%	%
~~FeliCa Networks, Inc.~~		~~38.0~~	%
Nippon Telecommunications Network Co., Ltd.		~~37.4~~37.4%	%
NTT Resonant Inc.		~~33.3~~33.3%	%
Philippine Long Distance Telephone Company		~~14.3~~14.3%	%
Sumitomo Mitsui Card Company, Limited.		~~34.0~~34.0%	%
~~Tower Records Japan Inc.~~ Robi Axiata Limited		~~42.1~~30.0%	%
~~Tata Teleservices Limited~~ Tower Records Japan Inc.		~~26.5~~42.1%	%
Tata Teleservices Limited		26.3%
ZENRIN DataCom CO., LTD.		~~20.6~~20.6%	%
and other affiliates

These service subsidiaries provide operational services such as engineering and support services to NTT DOCOMO, INC.

For a discussion of recent and current capital expenditures, please see “Capital Expenditures” in Item 5.B. We have had no recent significant divestitures or any significant divestitures currently being made.

B.
B.	Business Overview


1.	~~Overview~~

1. Business Overview

We are a world-leading mobile ~~telecommunication services provider belonging to NTT group whose parent company is NIPPON TELEGRAPH AND TELEPHONE CORPORATION (“NTT”).~~operator in Japan. The total number of subscriptions to our cellular services ~~(FOMA~~(LTE, W-CDMA and ~~mova)~~PDC) was approximately ~~56.08~~58.01 million and our domestic market share was ~~50.0%~~48.5% as of March 31, ~~2010.~~

As2011.

We belong to the ~~Japanese~~NTT group under our parent company, NIPPON TELEGRAPH AND TELEPHONE CORPORATION (“NTT”). We, our 127 subsidiaries, and our 27 affiliates operate as the NTT DOCOMO group.

Our business segments are classified into two segments: the mobile ~~communication market has continued to mature in line with~~phone business and miscellaneous businesses. Operating revenues from the ~~rise in penetration rate, we~~mobile phone business include those from wireless services for mobile phones and those from equipment sales, which combined accounted for almost our entire operating revenues for the fiscal year ended March 31, 2011. Major examples of operating revenues sources from our miscellaneous businesses are ~~shifting from a strategy that emphasizes~~ the ~~acquisition of new subscribers to one that prioritizes~~credit business, sales by our ~~relationship with existing~~subsidiaries such as home shopping, system integration business for corporate customers and ~~are working to raise the brand loyalty~~public wireless LAN services.

We operate our business mainly in Japan, and do not generally experience significant seasonality.

Breakdown of ~~those customers and to secure a base for stable income. In addition, with the diversification of the sense of values and sophistication of the needs~~Operating Revenues


	Millions of yen
	Year ended March 31,
	2009		2010		2011
Mobile phone business		4,381,254		4,167,704		4,090,659
Miscellaneous businesses		66,726		116,700		133,614

For more details of our ~~customers,~~business segment information, please see “Operating and Financial Review and Prospects” in ~~April 2008~~Item 5.

•

Business Strategy

Since we ~~unveiled~~announced our new ~~corporate brand and the “New DOCOMO Commitments,” which sets forth four commitments for reforming our company.~~

~~New DOCOMO Commitments~~


	•	~~We will revamp our brand and strengthen our ties with our customers~~

	•	~~We will actively seek out the voices and opinions of our customers so that we can continue to exceed their expectations~~

	•	~~We will continue to drive innovations so that we can earn the respect and admiration of people worldwide~~


	•	~~We will become an organization whose energetic staff is capable of overcoming all challenges in pursuit of our corporate vision~~

~~Going forward, we will continue to work to offer high-quality, value-added mobile services and technologies to each customer.~~

~~Under our new~~medium-term action plan, ~~established in October 2008,~~ “DOCOMO’s Change and Challenge to Achieve New ~~Growth,”~~Growth” in October 2008, we have been carrying out actions to improve customer satisfaction, an endeavor that earned us the No. 1 ranking in the consumer satisfaction study conducted by J.D. Power Asia Pacific for the fiscal year ended March 31, 2011.

To promote further growth, we have been directing our efforts to a broader use of data communications through the promotion of ~~music~~subscriptions to packet flat-rate services, the promotion of migration to smartphones, acquisition of second subscriptions through tablet PCs and other data communications devices, the popularization of video services ~~directed~~and a smooth introduction of LTE services.

Furthermore, we are working towards ~~expanded subscribers’ usage of packet communications;~~ the personalization of services and functions to match customers’ lifestyles and needs; the provision of social support services directed towards sustainable growth of society, such as environment and ecology, and ~~safe~~safety and security; and the provision of convenient and easy-to-use services tailored to customer needs through the convergence between mobile phones and a variety of life tools, and other services that take advantage of mobile phone characteristics. ~~We provide handsets that are compatible with this extensive range of services and contents, and we provide a handset lineup tailored to diversifying customer values and lifestyles.~~

We are ~~putting efforts~~aiming to evolve into ~~improving the quality~~a “provider of comprehensive services centered on mobility,” which we set in our new corporate vision, “Pursuing Smart Innovation: HEART” (announced in July 2010) and are working to achieve growth through, among other things, exploring new areas of business.

•
Operating Data

Cellular Subscribers

The number of our subscriptions including Xi (LTE), FOMA (W-CDMA), and mova (PDC) services has increased by approximately 1.93 million in the most recent fiscal year to approximately 58.01 million as of March 31, 2011, which represents a market share of 48.5%, a 1.5 point decrease from March 31, 2010. Our cellular subscriber growth has been attributable primarily to (i) our consistently low churn rate as a result of our efforts to improve customer satisfaction, (ii) an attractive lineup of terminals that we offer, including smartphones, (iii) our high-quality networks, the foremost example being our LTE network that delivers faster communications, (iv) our efforts to ensure that customers can use the services we provide comfortably and stably. In addition to quality improvements of FOMA network, we made efforts in expanding FOMA coverage areas, and in December 2008 achieved 100% population coverage of high-speed FOMA. We are also making efforts so that customers can utilizestimulate demand for a ~~maximum download speed of 7.2 Mbps*, to enjoy a rich variety of content~~second device, such as ~~music~~data communications, (v) our competitive rates, and ~~video.~~

~~We conduct cutting-edge research~~(vi) the introduction of new services, including docomo Market and ~~development both in and outside~~an electronic book reader. Further, we successfully maintained our churn rate at the low level of Japan in fields such as network, wireless and multimedia. The DOCOMO R&D Center, established in Yokosuka Research Park to assist us in our research and development of advanced technology, is striving to further expand mobile communication services and is engaging0.47 % in the ~~development~~fiscal year ended March 2011.

The number of ~~LTE,~~cellular subscriptions for the fiscal years ended March 31, 2009, 2010 and 2011 are as ~~well as in fundamental research for 4G.~~

follows:


	Thousands
	Year ended March 31,
	2009			2010			2011
Cellular subscriptions⁽¹⁾		54,601			56,082			58,010
Xi (LTE) subscriptions		—			—			26
FOMA (W-CDMA) subscriptions⁽¹⁾		49,040			53,203			56,746
mova (PDC) subscriptions⁽¹⁾		5,560			2,879			1,239
i-mode subscriptions		48,474			48,992			48,141
sp-mode subscriptions		—			—			2,095
Estimated market share of total subscriptions		50.8	%		50.0	%		48.5	%
Subscription growth rate		2.3	%		2.7	%		3.4	%
Average monthly churn rate⁽¹^{) (}²⁾		0.50	%		0.46	%		0.47	%


* (1)	The ~~maximum downlink data~~number of cellular subscriptions includes FOMA, mova, and communication module services subscriptions.

(2)

In general, the term “churn rate” is defined as the percentage of customers who disconnect their service relative to the total subscription base. Our measurement of churn rates includes voluntary terminations in connection with handset upgrades or changes. The average monthly churn rate for each fiscal year is calculated by adding the number of ~~7.2 Mbps represents~~cellular subscriber contract terminations in each month of that fiscal year and dividing that number by sum of the ~~maximum data rate based on technical standards, and is not the actual data rate achievable.~~active cellular subscriptions^* from April to March.


2. *	~~Wireless Communication Services~~active cellular subscriptions = (number of subscriptions at the end of previous month + number of subscriptions at the end of current month) / 2

MOU and ARPU

We ~~offer wireless voice~~track subscriber usage of our cellular services (Xi, FOMA, and ~~data~~mova services) with two measures, minutes of use (“MOU”) and average monthly revenue per unit (“ARPU”). MOU measures the average monthly communication time per subscription. ARPU measures the average monthly operating revenues attributable to designated services on ~~networks that are accessible~~a per subscription basis. ARPU is calculated by ~~the entire population~~dividing various revenue items included in ~~Japan. We offer a variety of services to support~~operating revenues from our ~~subscribers’ needs for~~ wireless ~~voice and data communications. In addition to the cellular voice services, we are increasingly focusing on mobile multimedia~~ services, such as ~~i-mode. Further, we~~monthly charges, voice communication charges and packet communication charges from designated services which are ~~aiming~~incurred consistently each month, by the number of active subscriptions to ~~enhance~~ the ~~personalization~~relevant services. Accordingly, the calculation of ~~services, our social support services and convergence services leveraging unique mobile properties~~ARPU excludes revenues that are not representative of monthly average usage such as ~~real-time immediacy, personal authentication,~~activation fees. We believe that our ARPU figures provide useful information to analyze the average usage per subscription and ~~location capabilities.~~

~~For~~the impacts of changes in our billing arrangements. Additional discussions of MOU and ARPU are included in Item 5.A. of this annual report.

MOU decreased slightly to 134 minutes per month for the year ended March 31, 2011 from 136 minutes in the prior fiscal year. Billable MOU decreased to 114 minutes in the year ended March 31, 2011 from 118 minutes in the prior fiscal year, which was due to increased calls using free communication allowance caused by the penetration of the Family Discount plan.

Aggregate ARPU, which was ¥5,350 in the year ended March 31, 2010, fell by ¥280 to ¥5,070 for the year ended March 31, 2011. Aggregate ARPU continues to decline moderately because of rate reductions and changes in usage patterns. During the period from the beginning of the year ended March 31, 2010 to the end of the year ended March 31, 2011, voice ARPU declined while packet ARPU increased slightly. The reasons for the decline in voice ARPU include rate reductions (expansion of basic charge discounts as a result of expansion of Family Discounts, the introduction of a handset purchase method “Value Course” and the expansion of “Long-Term Subscriber Discount”) and changes in customer usage patterns (declining MOU and optimization of rate plans). Meanwhile, usage of data communication services, contributed by smartphones and data communications devices, is increasing, and packet ARPU is increasing steadily.

MOU and ARPU


	Year ended March 31,
	2009		2010		2011
MOU (minutes)		137		136		134

Billable MOU (minutes)		124		118		114

Aggregate ARPU	¥	5,710	¥	5,350	¥	5,070
Voice ARPU		3,330		2,900		2,530
Packet ARPU		2,380		2,450		2,540


Aggregate ARPU:		Voice ARPU + Packet ARPU
Voice ARPU:		Voice ARPU Related Revenues (basic monthly usage charges, voice communication charges) / number of active subscriptions
Packet ARPU:		Packet ARPU Related Revenues (basic monthly usage charges, packet communication charges) / number of active subscriptions
No. of active subscriptions used in ARPU/MOU calculations is as follows:
		FY Results: Sum of number of active subscriptions* for each month from April to March
* Active subscriptions for each month = (number of subscriptions at the end of previous month + number of subscriptions at the end of current month) / 2

2. Networks

We currently provide our ~~cellular~~ services ~~including associated equipment sales,~~mainly on LTE, W-CDMA, and PDC networks.

•

LTE

On December 24, 2010, we launched a new service called Xi (“Crossy”), which applies LTE (Long Term Evolution) technology, on our 3.9G network for use with data communications devices. Featuring high speed, high capacity and low latency, LTE also excels in frequency use efficiency and delivers a faster and more comfortable mobile environment. As we are expanding its service area while overlapping it with the W-CDMA network, customers are able to use the W-CDMA network outside the LTE area. In this way we are able to provide area coverage which does not compromise our ~~core business, accounted for approximately 97.3% of our consolidated operating revenues.~~ customers’ convenience.

•

W-CDMA

We offer FOMA services based on W-CDMA technology on our 3G ~~network, with voice and high-speed~~network. We thus deliver data communications and an international roaming service that are faster than those in the traditional PDC network.

After working on expanding population coverage of the FOMA high speed areas, we achieved 100% coverage in December 2008. To further strengthen our network quality, we are making proactive efforts to enhance our network quality and communication speed based on requests from customers and network quality surveys.

•
PDC

Our mova services based on PDC technology on our 2G network, currently offered nationwide, is expected to terminate in March 2012. We are actively moving ahead on the migration of our customers from our PDC network to our W-CDMA network.

•

Spectrum Use Status

3.9G/3G networks:

The Japanese government has allocated a total bandwidth of 335MHz as radio frequencies available for use for 3.9G/3G networks (including frequencies that are planned to be used in the future). Of this, we use three frequency bands—2GHz, 800MHz and 1.7GHz—to operate our networks.

We use 20MHz x2 (for uplink and downlink) in the 2GHz band across Japan for use for our 3G network. In the 800MHz band, which is in the process of reallocation, we currently use up to 10MHz x2 in regions where interference with existing systems can be avoided. Further, in the 1.7GHz spectrum, we use 20MHz x2 in the Kanto, Kansai, and Tokai areas. Of the 20MHz x2 allocated in the 2GHz band, we also use 5MHz x2 (10MHz x2 in some indoor locations) in the Kanto, Kansai and Tokai areas for use in the 3.9G network.

2G:

The Japanese government has currently allocated 21MHz x2 (uplink and downlink) for the use of our 2G Network. We are ~~compatible~~using 8MHz x2 in the 800MHz band for 2G network.

We are moving ahead with utilizing common antennas and transmission lines for our LTE, W-CDMA and PDC networks in our efforts to reduce network costs. Furthermore, in order to establish and maintain our high-quality network economically and efficiently, we purchase high-quality network equipment at low cost from suppliers inside and outside Japan in accordance with our procurement policies, which emphasize openness and fairness.

3. Services

•

Voice Services

In our FOMA (W-CDMA) and mova (PDC) services, we offer voice services and a range of value-added service options such as a voice mail service. Most subscribers subscribe on a postpaid basis.

•

Data Communication Services

Data Communication Services for Smartphones

In our FOMA (W-CDMA) services, we offer a series of data services, such as sp-mode and “docomo Market” for smartphones.

ISP for smartphones: sp-mode

sp-mode is the Internet service provider (“ISP”) for our smartphones. In addition to Internet connection, our smartphone users can use various services, such as ~~videophone~~a mail service using a mail address with the same domain name as i-mode, “@docomo.ne.jp”. Also, services including a content fee settlement service for purchasing applications on Android Market^TM and ~~video~~docomo Market, a phonebook backup service, a “Disaster Message Board” service and, as a fee-based option, a public wireless LAN service are also available.

Portal for smartphones: docomo Market (smartphones)

“docomo Market” is a portal site for introducing content ~~downloading. We also offer mova services on our 2G network, compatible with voice~~ and ~~data communications.~~

~~In order to improve convenience for our subscribers and to expand usage and increase profits, we are providing various additional services and features.~~

~~Cellular Services~~

~~• Cellular (FOMA) Services~~

~~FOMA services are our third generation, or 3G, wireless voice and data communication services. FOMA services use advanced technology which allows us to offer faster and higher quality services~~applications to our ~~customers. As of March 31, 2010, subscriptions have become approximately 53.2 million. Moving toward~~smartphone users. In addition to recommended applications, users can obtain popular content such as news, video, electronic books and games, as well as DOCOMO’s original content. In the ~~scheduled termination date of mova services in March 2012,~~electronic book store, we ~~will promote further migration of~~offer an e-book service provided by 2Dfacto, our ~~mova subscribers to FOMA services.~~

joint venture with the Dai Nippon Printing Group.

Data Communication Services for Feature Phones

~~Our basic strategy is to expand~~In our FOMA ~~services. We believe that our FOMA~~(W-CDMA) and mova (PDC) services, are well-suited for both individual users and business users because of FOMA’s advanced features, including clear voice quality, high data communication speed, video communication capabilities, and diversified billing plans for packet communication.

In December 2008, we achieved 100% population coverage nationwide in the FOMA high-speed area with maximum downlink transmission speed of 7.2Mbps. We will continue to enhance the FOMA high-speed areas, and build coverage areas that meet our customers’ expectations.


*	~~The maximum downlink data rate of 7.2 Mbps represents the maximum data rate based on technical standards, and is not the actual data rate achievable.~~

~~• Cellular (mova) Services~~

Our 2G mova services are still offered on our nationwide 800 MHz digital network. However, given that mova subscriptions have been steadily decreasing, we have decided to discontinue mova services on March 31, 2012 and concentrate on our popular 3G service, FOMA. We ceased accepting new mova subscriptions on November 30, 2008. Further, we terminated our cellular services using the 1.5 GHz radio band (City Phone services) on June 30, 2008.

~~• Revenues and Tariffs for Cellular Services~~

Our cellular revenues are generated primarily from basic monthly plan charges, usage charges for outgoing calls (in Japan the caller is usually charged), revenues from incoming calls and charges for optional value-added services and features. We set our own rates in accordance with the Telecommunications Business Act and government guidelines, which currently allow mobile network operators to set their own tariffs without government approval.

Over the past few years, as the competition for acquiring subscribers has increased, tariff rates have been significantly reduced. Currently, our cellular subscribers pay (i) an activation fee of ¥3,150 (including tax), (ii) a fixed monthly plan charge based upon the “plan” chosen, (iii) usage or per call charges which vary according to duration and the particular plan chosen and (iv) additional monthly service fees for miscellaneous value-added services, etc.

~~One of our basic strategies has been to focus on offering subscribers simple and easy-to-understand rate plans and discount services tailored to their usage patterns. As a result,~~ we offer a ~~variety~~series of different monthly plans targeted at different segments of the market. These plans include basic usage plans for ordinary usage and heavy usage plans. In addition, almost all plans include a certain amount of free minutes per month for fixed rates. The amount of free minutes can be applied to FOMA and mova subscribers with the “Two-Month CarryOver” service, which allows automatic carryovers of up to two months, and can be credited against telephone calls, packet communication, video phone (FOMA), SMS (FOMA), short mail (mova), and international communications. Additionally, we offer various discountdata services, including ~~discounts~~i-mode services and “docomo Market” for ~~families and heavy-volume user discounts. The amount of free minutes will not change even after~~feature phones.

ISP for feature phones: i-mode service

i-mode is the ~~discounts are applied to monthly charges.~~

In November 2007, in conjunction with the introduction of the new handset purchase method “Value Course,” we began offering the new “Value Plan,” which applies to subscribers who have chosen the “Value Course.” In exchange for payment of initial handset costs, a subscriber will be eligible to select the less expensive “Value Plan” under which basic monthly charges (prior to application of other discounts) will be ¥1,680 lower (including tax) with the exception of certain plans than standard plans. In March 2010, the number of subscribers of the “Value Plan” exceeded 30 million.

We offer a “Family Discount” service, which is available for families with two to 10 subscriptions. In August 2007, we began offering “Fami-wari MAX 50,” which offers subscribers who commit to a two-year contract of a “Family Discount” service of an immediate 50% discount to basic monthly charges, regardless of period of continuous usage. In addition, in April 2008, for FOMA subscribers who have contracted for the “Fami-wari MAX 50” service, domestic call among members of the same “Family Discount” group, which had been subject to a 30% discount, became free of charge for 24 hours a day.

In August 2007, we also launched “Hitoridemo Discount 50,” a discount service for subscribers who do not use the “Family Discount” but have a single subscription. With this service, subscribers committing to a two-year contract will immediately receive a 50% discount on basic monthly charges.

~~In June 2007,~~ISP for our corporate customers, we began offering the “Office Discount” service. Corporate customers which have between two and 10 subscriptions under the same corporate name are eligible for a 25% discount on basic monthly charges and a 30% discount on intra-group communication charges. In September 2007, for subscribers contracting under a corporate name who commit to a two-year subscription, we began offering a new discount service called “Office-wari MAX50,” which offers an immediate 50% discount on basic monthly charges. In June 2008, we expanded discounts for corporate customers subscribing to FOMA services with the “Office Discount” and “Office-wari MAX 50” services. Under the expanded discounts, domestic calls among “Office Discount” group employees are free (formerly discounted by 30%) for 24 hours a day.

We believe that our various and comprehensive plans, prices and discounts have helped us remain competitive in retaining existing subscribers and attracting new subscribers. Going forward, we will continue to provide simple and comprehensive fee structures for customers.

•feature phones. Directly through their handsets, i-mode ~~Services~~

i-mode services are our wireless Internet access services based on a data transmission system that organizes data into bundles called packets prior to transmission. Our i-mode handsets allow subscribers tousers can send and receive ~~data~~e-mail, use the “iMenu” portal through ~~our i-mode server to and from the Internet in addition to providing them with the full range of cellular voice services. i-mode is an optional service available to mova and FOMA subscribers~~ which ~~allows users to send and receivee-mail,~~ ~~access online services such as banking services and airline and ticket reservations,~~they can access an array of information from ~~i-mode servers and~~content providers, execute and settle ~~retail~~various commercial transactions ~~directly through~~in an environment in which a certain level of security is ensured, and pay content fees together with their ~~handsets. Almost all cellular handsets which we currently sell are i-mode compatible, thus allowing our customers to choose whether or not to subscribe to i-mode service.~~

mobile phone bills.

As of March 31, ~~2010,~~2011, the number of i-mode subscriptions reached ~~48.99~~48.14 million and the number of i-mode portal menu sites had reached ~~20,765~~23,580 (FOMA only).

~~Services on i-mode~~

~~Typical services that may be accessed through an i-mode handset include:~~


	•	~~e-mail;~~

	•	~~games and other entertainment;~~

	•	~~music distribution/video clips/e-books;~~

	•	~~social network services;~~

	•	~~online shopping (CDs, books, tickets, others)/auctions;~~

	•	~~news, weather and sports information;~~

	•	~~mobile banking;~~

	•	~~other financial services, such as “DCMX,” “iD” and other credit card services and information and online stock quotes and trading;~~

	•	~~maps and travel information;~~

	•	~~community guides, living information, safety and healthcare information; and~~

	•	~~telephone directories.~~

~~For FOMA subscribers with i-mode services, we offer “i-channel”, a~~

i-channel:

A service that automatically ~~delivers and~~ displays the latest information such as news, weather, entertainment, sports, horoscopes, and more. The number of subscribers ~~to this service~~ reached ~~16.82~~16.23 million in March ~~2010.~~

2011.

i-concier:

A service that supports users’ daily lives according to their lifestyle. An auto-GPS function delivers information useful for daily life in accordance with the time and user’s location. The number of subscribers ~~to the “i-concier” service, which was launched in November 2008 and which enables cellular handsets to act as a concierge by assisting customers in their daily lives,~~ reached ~~4.2~~approximately 6.22 million at the end of March ~~2010. In November 2009,~~2011.

Portal for feature phones: iMenu

“iMenu” is a portal that appears first when a phone connects to i-mode. To make i-mode more user-friendly, we are working on making improvements in the ~~“i-concier” service became compatible with~~view ability of the ~~“Auto-GPS” handset function, which regularly measures a subscriber’s position~~“iMenu” page, refining the search engine and enhancing general usability.

Typical services that may be accessed through iMenu include:

games and other entertainment;

music distribution/video clips/e-books;

social network services;

online shopping (CDs, books, tickets, others)/auctions;

news, weather and sports information;

mobile banking;

other financial services, such as “DCMX,” “iD” and other credit card services and information and ~~provides it~~online stock quotes and trading;

maps and travel information;

community guides, living information, safety and healthcare information; and

telephone directories.

Content market for feature phones: docomo Market (i-mode)

There are three stores in “docomo Market (i-mode)”: Application, Music and Book Stores. The Application Store not only offers high-quality content provided by businesses, but also allows individual content developers to us and service providers automatically, enabling the provision of information linked to the subscriber’s location. In this and other ways “i-concier” service has become more convenient for subscribers.

~~We have been working on enhancing video services with the aim to further expand the mobile video~~offer their content ~~market. We formed the joint venture Avex Broadcasting & Communications Inc. with Avex Entertainment Inc. in April 2009, and launched the video service “BeeTV” in May 2009.~~

~~Improvement of i-mode convenience~~

~~We are directing efforts towards facilitating the visualization of menu pages~~ as well, ~~as enhancing~~making the Store’s product lineup extensive and ~~improving the usability of search services in order to provide even greater convenience~~unique.

Data Communication Services for ~~i-mode customers.~~

PCs and Other Devices

In ~~May 2009, we launched “My Link,” an online bookmark function~~our Xi (LTE), FOMA (W-CDMA) and “My News,” a web-based RSS reader that displays updated information of certain iMenu sites according to subscribers’ requests. In March 2010, “My Menu” and “My Box” of iMenu services were merged into “My Page,” where personalized information of subscribers could be accumulated. These advances in personalization of services offer subscribers greater convenience in use.

~~We plan to further personalize~~mova (PDC) services and ~~features to match the lifestyles and needs~~public wireless LAN service, we offer a series of ~~individual customers and to continue adding new and attractive i-mode services in the future.~~

~~We are proactively engaging in the creation of a secure and comfortable environment where customers can use i-mode services.~~

With respect to access restriction services (filtering services)*, from November 2009, we began offering “Web Restricted Menu” primarily to subscribers of “Web Restrictions” targeted for young elementary school children, which replaces the standard iMenu and offers only a minimal number of links, such as the “Disaster Message Board” and “My Page.” In addition, we decided to enhance the functions of “Access Restriction Customize” from April 1, 2010, by providing a “Time Settings” function that allows children’s use of their phones to be restricted by~~one-hour~~ units. Moreover, in response to the implementation of the Law to Promote a Healthful Internet Environment for Youth, on April 1, 2009, we are actively promoting new subscribers for i-mode services to use this access restriction services when they sign up.


*	Services that restrict access to harmful sites, including “Kids i-mode Filters” which allows access only to i-mode menu sites, other than “gravure picture” sites and community sites, and “i-mode Filters” which allows access to public sites other than the sites such as dating sites, illegal sites and community sites.

~~• i-mode Revenues and Fees~~

i-mode users are charged according to the volume of data they transmit, not for the length of airtime or the distance over which the data are transmitted. Our billing plans for i-mode services include a usage-based plan with no upper limit on charges and flat rate plans that offer unlimited access to i-mode services with a certain upper limit.

The use of i-mode incurs a monthly fee of ¥315 (including tax), in addition to the standard monthly charges of voice services for FOMA and mova. Besides communication charges, subscribers are required to pay information charges to content providers when they subscribe certain i-mode sites. We bill subscribers on behalf of content providers for content provider fees together with communication charges, and we charge content providers for a commission of our billing and collection services.

In order for customers to use the services without worrying about the monthly charges, and to provide new value and expand the usage of i-mode, since June 2004 we have been providing a packet flat-rate service called “Pake-hodai,” which offers unlimited access to i-mode Internet service and i-mode mail for a flat monthly charge of ¥4,095 (including tax), for users of our FOMA i-mode service.

In October 2008, to expand subscribers’ usage of packet communications, we introduced the new “Pake-hodai double,” a two-tiered flat-rate services that feature variable monthly fees based on usage volume. “Pake-hodai double” is an unlimited domestic i-mode communication service with fees starting at ¥1,029 per month (including tax). While the monthly fee varies according to usage volume, the maximum fee is ¥4,410 (including tax). With the introduction of these flat-rate services, we stopped accepting new subscriptions for the “Pake-hodai” services in December 2008. Also, in August 2009, we reduced the minimum monthly fee to ¥390 (including tax) so that customers who rarely use packet communications will be able to use “Pake-hodai double.” Moreover, in December 2009, we launched “Mail Tsukai-hodai”, whereby users, by subscribing to a special payment plan “Type Simple (value)” and “Pake-hodai simple” and paying i-mode usage charges, can send i-mode~~e-mails~~ ~~in Japan free of charge regardless of the destinatione-mail~~ ~~address or whether photos, videos, or other files are attached.~~

~~• Data Communication Services~~

~~We are also making efforts in~~ data communication services for ~~PCs. Because of the increased~~PCs and other devices. Considering that they lead to a broader market representing demand for second ~~subscription from PC data cards, in~~device purchases, we are working on the enrichment of our product lineup and sales promotion. In addition to ~~our lineup of~~USB-type and card-type ~~and USB-type terminals, we are enhancing our lineup of PCs with built-in modules with the cooperation of PC manufacturers.~~

~~• Fees for Data Communication Services~~

We introduced two flat-rate plans, “Flat-rate Data Plan 64K” and “Flat-rate Data Plan HIGH-SPEED” in October 2007, so that our subscribers could use in mobile data communication without worrying about over communication charges. “Flat-rate Data Plan HIGH-SPEED” offers at monthly charges starting at ¥4,200 (including tax) and going up to ¥10,500 (including tax), unlimited domestic mobile data communication. “Flat-rate Data Plan HIGH-SPEED” is capable of data communication at a speed of up to 7.2Mbps for downlink, and provides a better environment for mobile data communication.

~~In addition, in March 2008, we began applying a new handset purchase method “Value Course” to exclusive~~ devices for FOMA data communication, and offering a new rate plan “Value Plan” for use with the “Value Course.” Under this purchase method, when a subscriber purchases a FOMA N2502 HIGH-SPEED, exclusive FOMA data communication handset, or later model, that subscriber is eligible to select the “Value Plan,” under which basic monthly charges (prior to application of other discounts) is ¥735 lower (including tax) than in standard data plans. In September 2008, for subscribers of “Flat-rate Data Plan HIGH-SPEED” and “Flat-rate Data Plan HIGH-SPEED with Value Course,” we launched the “Flat-rate Data Discount” service which allows subscribers who commit to a two-year contract to receive a discount of up to ¥3,780 on basic monthly charges, with a maximum monthly charge of ¥5,985 when the “Value Plan” is applicable. Further, starting in July 2009, we offer a new plan called “Flat-rate Data Plan Standard” and a discount service “Flat-rate Data Standard Discount.” When the “Value Plan” is applied, subscribers are able to use this plan at monthly charges, starting at ¥1,000 (including tax). With such plans and services, we believe we have achieved a customer-friendly rate structures for mobile data communications, as well as ~~rates for our cellular phone services~~PCs with a built-in communication module, we sold mobile Wi-Fi routers and ~~i-mode services.~~

~~• Fees~~book readers in the ~~case of using combination of i-mode Services and Data Communication Services~~fiscal year ended March 31, 2011.

ISP for data communications: mopera

~~From June 2010,~~

We reduced the maximum monthly charge for packet communications, which includes the usage in Wi-Fi access-point mode*, with a PC or other device, under “Pake-hodai double” and “Pake-hodai simple” flat-rate dataalso offer an ISP service ~~to ¥10,395 (including tax), down from ¥13,650 (including tax).~~


*	~~A capability to allow mobile phones to be used as mobile Wi-Fi routers.~~

~~• Smartphone Services~~

We are aware that the smartphone market is expected to expand moving forward. To widen the user base, we implemented easy-to-use payment plans and enhanced the terminal lineup. In April 2010, we launched the “DOCOMO Market” portal site for smartphones that showcases appealing content and applications, to enable even novice users to use smartphones with more convenience and ease.

~~• Fees for Smartphone Services~~

~~In April 2007, we launched “Biz-hodai,~~called “mopera U,” which ~~enables smartphone users~~provides an Internet connection for data communication services in our Xi (LTE) and FOMA (W-CDMA) services as well as our public wireless LAN service. In addition to ~~use packet communications at a flat rate. In October 2008, we launched “Biz-hodai double,” a new packet flat-rate service in which the monthly flat fee changes according~~providing easy access to the ~~usage amount to enable customers to use the service without worrying about the charges. “Biz-hodai double,” starting at ¥490 (including tax)~~Internet by connecting a ~~month, is a flat-rate packet service for smartphones offering unlimited non-i-mode packet~~docomo data communications ~~in Japan (excluding communications using PCs) with a monthly upper limit of ¥5,985 (including tax). In August 2009, we lowered the minimum flat-rate monthly charge to ¥390 (including tax).~~

~~In April 2010, we merged “Biz-hodai double” with “Pake-hodai double.” Accordingly, flat-rate packet services that differed depending on the handsets used now have a simpler~~device and ~~easier-to-understand fee structure, and customers using both i-mode compatible mobile phones and smartphones can use them without worrying about the charges.~~

~~• ISP Services~~

~~We offer the “mopera U” Internet connection service for data cards and smartphones. With~~PC, the “mopera U” service ~~users can easily access the~~offers an Internet ~~by connecting their FOMA handsets to their PCs, with one subscription covering everything~~connection and mail service, from mobile ~~phones~~ to broadband, under a single contract.

Public wireless LAN service

We offer a public wireless LAN service for high speed, high capacity Internet access at the maximum speed of 54 Mbps. It is available with the mopera U or sp-mode service and ~~enabling use~~also for customers without a mobile phone contract with us by subscribing to it at docomo Shops. As of ~~Internet~~March 31, 2011, we have approximately 6,800 access points and are expanding service areas in line with our customers’ needs.

~~e-mail.~~Mobile communication module service

Digital photo delivery service for digital photo frames:

We sell a digital photo frame embedded with our Ubiquitous Module, the “Otayori Photo Panel,” and offer the “Otayori Photo Service,” which enables users, by simply mailing a photo, to display it on the digital photo frame.

Driver navigation service:

In November ~~2009,~~2010, we ~~lowered~~began offering a service called “docomo Drive Net,” which supplies drivers with real time information, such as information on tourist facilities and vacant parking spaces based on the ~~rates~~latest map information and the location of the car, by using a communication module built into a Portable Navigation Device (PND).

Communication module services for ~~subscribers~~corporate customers:

For corporate customers, we offer a series of mobile communication module services, such as a vehicle management system using a built-in module, a wireless credit card settlement system and a telemetering system to ~~flat-rate data plans, to ¥525 (including tax) a month.~~

~~Our subscribers can choose a “DOCOMO Public Wireless LAN” service that provides high-speed large-capacity communication at speeds of up to 54Mbps as an option under~~enable automatic stock checks between vending machines and the ~~“mopera U” service. With respect to area development, as~~center. As of the end of March ~~2010,~~2011, the number of ~~access points increased to~~FOMA Ubiquitous service subscribers is approximately 6,660, and we will continue to develop areas to meet the needs of customers. Subscribers to the “DOCOMO Public Wireless LAN” service can easily browse streaming videos and transfer FTP files in the coverage areas such as in airports, train stations, and cafes.

~~• Module Services~~

As part of our endeavor to promote mobile multimedia services, we have provided the module services since July 2004 to address the increase in machine communication services. Embedded modules will lead to a broad range of uses such as automobile fleet management, wireless credit card settlement systems, and telemetric systems enabling automatic inventory checks between vending machines and service centers. These modules contribute to our strategy of broadening the scope of mobile communication. FOMA ubiquitous modules are used mainly in machine communications. We offer a ubiquitous plan for low-rate services for users with low-traffic needs.

In July 2009, we launched a digital photo frame (“OTAYORI PHOTO PANEL”), which uses a FOMA ubiquitous module. At the same time, we launched the “Otayori Photo services,” which allows users, just by sending an~~e-mail~~ ~~with a photo attached from a mobile phone or PC, to display the photo in a OTAYORI PHOTO PANEL even from a remote location.~~

As of March 31, 2010, there were approximately 1.08 million subscriptions to the FOMA ubiquitous services and approximately 0.52 million subscriptions to DoPa services. In order to focus management resources on FOMA services (our 3G communication services), we ceased accepting new subscriptions for DoPa single packet services for 2G communication services in September 2008. We have determined to terminate DoPa services in March 2012.

~~• MyArea Services~~

In November 2009, we launched the “MyArea” service that, with the installation of compact femtocell base transceiver stations in homes and the building of dedicated home use FOMA area, provides stable and high-speed packet communication, and the “Imasuka” function. The “MyArea” service is ¥980 (including tax) a month. The “Imasuka” function sends notifications to a selected email address when entrance into or exit from a subscriber’s personal FOMA area is detected.

1.36 million.

•

Other Services

• International Calling Service and International Roaming Service

“WORLD CALL,” our international calling service, is a service that allows customers to make international phone calls to ~~240~~241 countries and regions (as of March 31, ~~2010)~~2011) from their mobile phones. As of March 31, ~~2010,~~2011, FOMA subscribers were able to make international videophone calls via our 3G network to 3G subscribers in 5053 countries and regions.

With “WORLD WING,” our international roaming service, customers are able to use the DOCOMO mobile phones that they use in Japan, with the same phone numbers and i-mode mail addresses, in the service areas of overseas mobile network operators with which we have partnerships. Most of the handsets we currently offer are 3G + GSM compatible or 3G compatible, enabling customers to use their phones overseas. As of March 31, 2011, “WORLD WING” users are able to make and receive ~~phone~~voice calls with the same FOMA phone numbers in ~~207~~213 countries and regions, and use FOMA handsets as well as Xi-compatible handsets to access ~~i-mode~~ packet ~~communication~~communications in ~~156~~177 countries and ~~regions as of March 31, 2010.~~

regions.

In April 2006, we formed an alliance with mobile network operators in the Asia-Pacific region ~~with a total~~to boost business cooperation in the areas of six mobile network operators, including Far EasTone Telecommunications Co Ltd. (operating region: Taiwan), Hutchison Telecommunications (Hong Kong) Limited (operating region: Hong Kong and Macao), KT Corporation (operating region: South Korea), PT Indosat Tbk (operating region: Indonesia), and StarHub Ltd. (operating region: Singapore), to enhance each member’s competitiveness in international roaming and corporate ~~mobile~~customer services. In December 2006, Smart Communications, Inc. (operating region: the Philippines) joined the alliance, and it was officially named the Conexus Mobile Alliance (“Conexus”). In addition, with Bharat Sanchar Nigam Limited and Mahanagar Telephone Nigam Limited (operating region: India, both) joining the alliance in November 2007 and True Move Company Limited (operating region: Thailand) doing so in June 2008, and Vietnam Telecom Services Company (operating region: Vietnam) in November 2009, Conexus became oneConsisting of ~~the largest~~ mobile network ~~operator alliances in the Asia-Pacific region with approximately 260 million subscribers~~operators in 13 countries and regions ~~including Guam and~~serving approximately 310 million subscribers, this alliance, named the ~~Northern Mariana Islands.~~

“Conexus Mobile Alliance,” is currently one of the largest alliances of mobile network operators in the Asia-Pacific region.

• Services for Corporate Customers

We ~~consider the corporate market as a field in which we have substantial room for growth. We have achieved solid results~~are focusing on suggesting attractive solutions and ~~established strong reputation in the corporate market to date. We have been bolstering initiatives, by drawing on the strength that make up the foundation of~~expanding our ~~progress such as the diversity of our services, our robust security management structure and our reliable infrastructure.~~

We provide “Business mopera Access Series” services to corporate customers, to enable them to link to office information systems outside the workplace. “Business mopera Access Pro” provides extremely high-security access to corporate LANs from remote terminals such as notebook PCs and PDAs via closed networks. This service makes it possible under a contract for a single dedicated line to provide access to office information systems through wireless networks such as FOMA, mova, DoPa, i-mode and Wide Star (satellite packet communication only).

~~In August 2006, we launched the “Business mopera~~~~Anshin~~~~Manager” service which is a remote control service for mobile phones and expanded the Business mopera network lineup of~~B-to-B-to-C business, including offering network services for corporate ~~customers. We added~~customers that deliver high-security access to an internal system from outside the office, and developing an internal phone system to enable internal and external phone calls using an IP phone through an IP centrex device in our network without requiring a ~~browser use restriction function and simultaneous transmission function in January 2007, expanded~~private branch exchange, such as an IP-PBX, on the number of browser restricted URLs in September 2007, added subgroup settings and common manager settings in March 2008, and added remote initialization and remote customization functions in November 2008. In January 2009, we began the “Business mopera Command Direct” service so that mobile phones can be directly managed and restricted by customers.

~~In June 2007, as a~~ part of the ~~“OFFICEED” service menu, an internal communication service~~corporate customer. As a result, we earned the highest ranking for corporate customers, we launched the “OFFICEED-PBX Connection Service,” which achieves communication between FOMA handsets and internal telephone lines by connecting “OFFICEED” and the PBX, enabling FOMA handsets to serve as cordless internal telephones.

In April 2007, for the “Business mopera IP Centrex” service, which is a service for corporate customers that enables users to make internal or outbound IP telephony calls via IP Centrex devices on DOCOMO networks without the need for an in-house~~IP-PBX,~~ ~~we began providing new plans and expanded functions, including soft phone and fixed IP phone compatibility. In addition, in June 2008, we launched “IP Centrex One Number,” a Fixed~~

~~Mobile Convergence (“FMC”) service which enables users to make and receive calls with a single number (090 or 080) in both FOMA and Office areas (IP Centrex area).~~

~~We have been establishing structure that ensures contact with every customer, proposing of attractive solutions, and expanding B2B2C businesses. We achieved the No. 1 ranking~~two consecutive years in the ~~“J.D. Power Asia Pacific 2009~~“2010 Japan Business Mobile ~~Telephone/PHS~~Phone Service ~~Customer Satisfaction Index~~ Study^SMsm*”.

~~Disclaimer:~~ which was conducted by J.D. Power Asia ~~Pacific 2009 Japan Business Mobile Telephone/PHS Service Customer Satisfaction Index Study~~Pacific.

J.D. Power Asia Pacific 2009-2010 Japan Business Mobile Phone Service Studies^SM. 2010 Study based on a total of 3,222 responses from 2,345 companies with 100 or more employees (up to two responses from one company) about telecommunications firms who supply a mobile telephone / PHS service. http://www.jdpower.co.jp/

sm. Study based on a total of 3,309 responses from 2,632 companies with 100 or more employees (up to two responses from one company) about telecommunications firms who supply a mobile telephone/PHS service. (www.jdpower.co.jp)

• Satellite Mobile Communication Services

We provide satellite mobile communication services for communications in case of emergencies, in mountainous areas and aboard ships. The service area covers the entire territory of Japan and its surrounding waters for roughly up to 200 nautical miles from ~~the~~Japan’s coastline. ~~Currently the~~In April 2010, we launched “WideStar II,” a new satellite ~~mobile~~ communication ~~network uses two communication satellites, N-STARc and N-STARd.~~service. Satellite mobile ~~communication services~~phone service can be used for voice, fax and packet communication. We had approximately 39,500 subscriptions to the services as of March 31, 2010. The services can be used for high-speed packet communication (maximum 64 Kbps downlink and 4.8 Kbps uplink) and a variety of communication services are offered including Internet connectivity and telemetering.

~~In April 2010, we launched a new satellite communication service (WideStar II), as well as a portable satellite terminal, the 01. WideStar II is a new and faster satellite~~ transmission system, that enables an expanded range of usage for data transmission, including video image transmission, Internet and telemetry, by offering packet communication (maximum uplink 144 kbps, and maximum downlink 384 kbps) far faster than standard packet communication.

~~• PHS Services~~

Our PHS (Personal Handyphone System) services were wireless voice and data communication services similar to our cellular services but offered using different technology and a different network. However, with the subsequent popularity of inexpensive ADSL and optical fiber fixed-line flat rate data communication services, the introduction of packet flat-rate services using mobile phones, and the increasingly fast data transfer rates, the business environment changed rapidly, and on April 30, 2005, we stopped accepting new subscriptions to PHS services, and we terminated PHS services on January 7, 2008.

~~• Cellular Subscribers~~

The number of our subscriptions including FOMA and mova services has grown by approximately 1.48 million in the most recent fiscal year to approximately 56.08 million as of March 31, 2010, which represents a market share of 50.0%, a 0.8 point decrease from March 31, 2009. We believe that our cellular subscriber growth has been attributable primarily to (i) nationwide growth and popularity of cellular services, (ii) marketing from the customers’ perspectives, (iii) enhanced customer service, (iv) significant declines in tariffs and our competitive pricing, (v) our reputation for quality products and services and (vi) the introduction of new, value-added cellular services such as i-mode. As a result, the number of FOMA subscriptions increased and was approximately 53.2 million as March 31, 2010. Further, we successfully maintained our churn rate at the low level of 0.46% in the fiscal year ended March 2010.

Subscription growth for i-mode services in the four fiscal years ended March 31, 2010 was approximately 2.63 million. The DOCOMO cellular subscription numbers, including i-mode subscription numbers, for the fiscal years ended March 31, 2007, 2008, 2009 and 2010 are as follows:

Year ended March 31,
2007 2008 2009 2010
(in thousands)

Cellular subscriptions⁽¹⁾
52,621 53,388 54,601 56,082
FOMA subscriptions 35,529 43,949 49,040 53,203
mova subscriptions 17,092 9,438 5,560 2,879
i-mode subscriptions 47,574 47,993 48,474 48,992
FOMA subscriptions 34,052 41,213 44,853 47,330
mova subscriptions 13,522 6,780 3,621 1,661
DOCOMO estimated market share of total subscriptions 54.4 % 52.0 % 50.8 % 50.0 %
DOCOMO subscription growth rate 2.9 % 1.5 % 2.3 % 2.7 %
Average monthly churn rate⁽²⁾
0.78 % 0.80 % 0.50 % 0.46 %


~~(1)~~		~~The number of cellular subscriptions includes Communication Module Services subscriptions.~~

~~(2)~~		In general, the term “churn rate” is defined as the level of customers who disconnect their service relative to the total subscription base. Our measurement of churn rates includes voluntary terminations in connection with handset upgrades or changes. The average monthly churn rate for each fiscal year is calculated by adding the number of cellular subscriber contract terminations in each month of that fiscal year and dividing that number by sum of the active cellular subscriptions* from April to March.


*		~~active cellular subscriptions = (No. of subscriptions at the end of previous month + No. of subscriptions at the end of current month)/2~~

~~• Cellular Phone Service Usage~~

We track subscriber usage of our cellular services with two measures, MOU and average monthly revenue per unit (“ARPU”). MOU measures the average monthly amount of connection time per subscription basis. ARPU measures the average monthly operating revenues attributable to designated services on a per subscription basis. ARPU is calculated by dividing various revenue items included in operating revenues from our wireless services, such as monthly charges, voice communication charges and packet communication, ~~charges from designated services that are charged consistently each month, by~~and “WideStar II” enables high-speed packet communications at the ~~number~~maximum of active subscriptions to the relevant services. Accordingly, the calculation of ARPU excludes revenues that are not representative of monthly average usage such as activation fees. We believe that our ARPU figures provide useful information to analyze the trend of monthly average usage of our subscribers over time384 kbps downlink and ~~the impacts of changes in our billing arrangements. Additional discussions of MOU and ARPU are included in Item 5.A. of this annual report.~~

MOU (FOMA+mova) slightly decreased to 136 minutes per month for the year ended March 31, 2010 from 137 minutes in the prior fiscal year. Billable MOU (FOMA+mova) decreased to 118 minutes in the year ended March 31, 2010 from 124 minutes in the prior fiscal year, which is due to the increased calls in using free communication allowance caused by the penetration of the Family Discount plan.

~~The average monthly ARPU for one subscriber (FOMA + mova), which was ¥5,710 in the year ended March 31, 2009, fell by ¥360 to ¥5,350 for the year ended March 31, 2010.~~

Aggregate ARPU (FOMA + mova) continues to decline moderately because of rate reductions and changes in usage patterns. During the period from the beginning of the year ended March 31, 2009 to the end of the year ended March 31, 2010, voice ARPU declined while data ARPU increased slightly. The reasons for the decline in voice ARPU include rate reductions (expansion of basic charge discounts as a result of expansion of family discounts, the introduction of new handset purchase methods, and the expansion of “Long-Term Subscriber Discount”) and changes in customer usage patterns (declining MOU and optimization of rate plans). Meanwhile, usage of data services such as i-mode is increasing, and the data ARPU is increasing steadily.

~~The following tables set forth selected information concerning MOU and ARPU data for our cellular services in three categories, (FOMA + mova), (FOMA) and (mova):~~

~~MOU and APRU (FOMA + mova)~~

Year ended March 31,
2008 2009 2010

MOU (FOMA+mova) (minutes) 138 137 136

Billable MOU (FOMA+mova) (minutes) — 124 118

Aggregate ARPU (FOMA+mova) ¥ 6,360 ¥ 5,710 ¥ 5,350
Voice ARPU (FOMA+mova) 4,160 3,330 2,900
Packet ARPU (FOMA+mova) 2,200 2,380 2,450
i-mode ARPU (FOMA+mova) 2,170 2,340 2,380

~~Aggregate ARPU (FOMA+mova): Voice ARPU (FOMA+mova) + Packet ARPU (FOMA+mova)~~

~~Voice ARPU (FOMA+mova): Voice ARPU (FOMA+mova) Related Revenues (basic monthly usage charges, voice communication charges)/No. of active cellular phone subscriptions (FOMA+mova)~~

Packet ARPU (FOMA+mova): {Packet ARPU (FOMA) Related Revenues (basic monthly usage charges, packet communication charges) + i-mode ARPU (mova) Related Revenues (basic monthly usage charges, packet communication charges)}/No. of active cellular phone subscriptions (FOMA+mova)

~~i-mode ARPU (FOMA+mova)~~⁽²⁾~~: i-mode ARPU (FOMA+mova) Related Revenues (basic monthly usage charges, packet communication charges)/No. of active cellular phone subscriptions (FOMA+mova)~~

~~No. of active subscriptions used in ARPU/MOU calculations is as follows:~~

~~FY Results: Sum of No. of active subscriptions* for each month from April to March~~


	*	~~Active subscriptions for each month = (No. of subscriptions at the end of previous month + No. of subscriptions at the end of current month)/2~~

~~MOU and ARPU (FOMA)~~

Year ended March 31,
2008 2009 2010

MOU (FOMA) (minutes) 156 148 142

Aggregate ARPU (FOMA) ¥ 6,990 ¥ 6,010 ¥ 5,480
Voice ARPU (FOMA) 4,340 3,360 2,900
Packet ARPU (FOMA) 2,650 2,650 2,580
i-mode ARPU (FOMA) 2,610 2,590 2,500

~~Aggregate ARPU (FOMA): Voice ARPU (FOMA) + Packet ARPU (FOMA)~~

~~Voice ARPU (FOMA): Voice ARPU (FOMA) Related Revenues (basic monthly usage charges, voice communication charges)/No. of active cellular phone subscriptions (FOMA)~~

~~Packet ARPU (FOMA): Packet ARPU (FOMA) Related Revenues (basic monthly usage charges, packet communication charges)/No. of active cellular phone subscriptions (FOMA)~~

~~i-mode ARPU (FOMA)~~⁽²⁾~~: i-mode ARPU (FOMA) Related Revenues (basic monthly usage charges, packet communication charges)/No. of active cellular phone subscriptions (FOMA)~~

~~No. of active subscriptions used in ARPU/MOU calculations is as follows:~~

~~FY Results: Sum of No. of active subscriptions* for each month from April to March~~


	*	~~Active subscriptions for each month = (No. of subscriptions at the end of previous month + No. of subscriptions at the end of current month)/2~~

~~MOU and ARPU (mova)~~

Year ended March 31,
2008 2009 2010

MOU (mova) (minutes) 82 63 51

Aggregate ARPU (mova) ¥ 4,340 ¥ 3,750 ¥ 3,460
Voice ARPU (mova) 3,590 3,090 2,870
i-mode ARPU (mova) 750 660 590

~~Aggregate ARPU (mova): Voice ARPU (mova) + i-mode ARPU (mova)~~

~~Voice ARPU (mova): Voice ARPU (mova) Related Revenues (basic monthly usage charges, voice communication charges)/No. of active cellular phone subscriptions (mova)~~

~~i-mode ARPU (mova)~~⁽²⁾~~: i-mode ARPU (mova) Related Revenues (basic monthly usage charges, communication charges)/No. of active cellular phone subscriptions (mova)~~

~~No. of active subscriptions used in ARPU/MOU calculations is as follows:~~

~~FY Results: Sum of No. of active subscriptions* for each month from April to March~~


	*	~~Active subscriptions for each month = (No. of subscriptions at the end of previous month + No. of subscriptions at the end of current month)/2~~


~~(1)~~		~~Communication Module services subscriptions and the revenues thereof are included in neither the ARPU nor MOU calculations.~~

~~(2)~~		The denominator used in calculating i-mode ARPU (FOMA+mova, FOMA, mova) is the aggregate number of cellular subscriptions to each service (FOMA+mova, FOMA, mova, respectively), regardless of whether i-mode service is activated.

~~• Billing and Collection~~

We bill each of our subscribers on a monthly basis and subscribers may pay their bills by automatic withdrawal from a bank or other financial institution account, by credit card, or in person at any number of locations such as “docomo Shops” or convenience stores.144 kbps uplink. As of March 31, ~~2010, approximately 84%~~2011, the number of subscribers paid by financial institution account transfer or by credit card. In June 2008, we introduced a system, which allows applications for these payment methods to be registered online, to mass merchandisers and general distributors to increase convenience of customers. We also provide the~~“e-billing”~~ ~~service that sends the bills to customers using electronic media instead of paper invoices, which contributes~~ to the ~~environmental preservation.~~

As of March 31, 2010, the rate of collection for issued bills within 60 days from the payment due date was 99%. To limit the ratio of nonperforming receivables, we closely monitor subscribers with large outstanding amounts or in arrears, and if outstanding amounts exceed a certain level within a billing cycle, we send the subscribers frequent notices or take measures for earlier billing. Further, we suspend the services to subscribers who do not pay within 20 to 30 days after the initial due date and also cancel the contracts of customers who do not pay within 60 days.

~~Other Revenues~~

~~• Revenues at Subsidiaries~~

We are taking the initiative to create new businesses which we can create synergies with. As a part of this strategy, we invested in the home shopping services company OAK LAWN MARKETING (“OLM”) in April 2009.

OLM has broad knowledge and strong product procurement capabilities in home shopping businesses in the US market, product development and improvement know-how, video production know-how and marketing ability for generating a high response rate; whereas we have the mobilesatellite phone service ~~technology and know-how. Our~~

was approximately 40,000.

Credit Settlement Services

~~affiliation with OLM enables us to utilize the know-how and the spread and expansion ofe-commerce~~ ~~and home shopping businesses.~~

~~• Mobile Phone Protection & Delivery Service~~

~~To enable our subscribers to use our services comfortably, we are making efforts to further enhance and strengthen our after-sales services.~~

As part of these efforts, we now offer to docomo Premier Club members who use FOMA, the Mobile Phone Protection & Delivery Service. If a mobile handset is lost, stolen or damaged by water or otherwise becomes unusable, a replacement handset will be delivered directly to the customer. The Mobile Phone Protection & Delivery Service, which requires payment of ¥5,250 (including tax) each time the service is used in addition to the monthly fee of ¥315 (including tax), has been extremely popular with subscribers, who can use their mobile phones comfortably.

~~• Credit Business~~

Many of our mobile phones come equipped with the “~~Osaifu-Keitai~~”“Osaifu-Keitai” (Mobile Wallet) function, which uses cards with contactless IC chips.

~~The~~ We offer credit ~~brand “iD,” which enables users to make credit card payments using the~~ settlement services utilizing this function.

iD:

“~~Osaifu-Keitai~~~~” service,~~iD” is a settlement platform that enables a user, simply by holding the “~~Osaifu-Keitai~~”“Osaifu-Keitai” over a specialized terminal installed in stores (reader/writer), to make a speedy credit ~~settlement without the need for signing on a credit~~settlement. Credit card ~~slip. It can be used for both small and large purchases, and comes with a number of security features to prevent unauthorized use, so that it can be used with peace of mind and safety.~~

~~We are promoting the “iD” as a settlement platform to credit card~~ issuers ~~who~~ can offer card members credit settlement services combining conventional plastic cards and use of iD“iD” with the “~~Osaifu-Keitai~~.“Osaifu-Keitai.”

The number of subscribers exceeded 10 million in December 2008 and reached 14.2 million at the end of March 2010. The number of stores where “iD” can be used continues to increase steadily, as we give priority to the installment in shops that play an important role in customers’ day-to-day lives. As of the end of March ~~2010,~~2011, the number of subscribers reached 15.84 million and the number of the readers/writers reached ~~440,000~~510,000 units. ~~Going forward, we intend to continue providing an open “iD” platform to~~

DCMX:

“DCMX” is a credit ~~card issuers.~~

~~In February 2007, we agreed to establish a new company with McDonald’s Holdings Company (Japan), Ltd. (“McDonald’s”) to jointly promotee-marketing~~ ~~with a focus on “~~~~Osaifu-Keitai~~~~.” In conjunction with thistie-up,~~ we jointly formed a new company, The JV, Ltd., in July 2007 to plan and implement promotional activities targeting members of McDonald’s new membership club. This company, which merged McDonald’s and DOCOMO’s respective customer bases, brands, and business know-how in the restaurant andservice for mobile ~~phone businesses, provides customers with “Value,” “Convenience,” and “Fun,” by proposing new lifestyles to be achieved throughe-marketing~~ ~~focusing on the “~~~~Osaifu-Keitai.~~~~” As a result of these efforts, in August 2009, “iD” was introduced and installed at all McDonald’s shops throughout Japan.~~

~~With a goal of further increasing customer convenience, we have formed business alliances~~phones equipped with the ~~LAWSON and Family Mart convenience store chains. As part of this operational alliance, all stores~~“Osaifu-Keitai” function. This includes “DCMX mini,” ideal for use in ~~these chains have introduced~~small payment services that use “iD” mobile credit. We also reached agreement on having “iD” available at Seven-Eleven stores across Japan starting in July 2010. Now “iD” will be available in virtually all major convenience stores in Japan.

~~We aim to expand the range of locations in which the “~~~~Osaifu-Keitai~~needs, “DCMX,” ~~through the “iD” is used and bring up mobile phones as “~~~~Seikatsu Keitai~~~~,” that is, even more fully integrated into the daily lives of our subscribers.~~

~~DCMX~~

In April 2006, as the credit issuer using mobile credit “iD,” we launched “DCMX mini” and “DCMX” as services adequate for small purchases in order to further enhance the convenience providedenabling payments by ~~the “~~~~Osaifu-Keitai.~~” In April 2007, we further enhanced our menu of credit services tailored to customers’ spending styles, with the launch of “DCMX GOLD,” which allows for purchases in greater amounts and provides a higher level of customer benefits and rewards. In June 2007, in addition to the DCMX Visa ~~card that we have offered since the launch of the services, we started to issue the~~cards and DCMX ~~MasterCard, allowing customers, to choose a card from Visa~~Mastercards, and ~~MasterCard when they sign up for services.~~“DCMX Gold” cards, which come with attractive membership privileges. As of March 31, ~~2010,~~2011, the number of subscriptions ~~reached 11.26~~to our credit settlement service exceeded 12.32 million.

~~By enhancing these credit businesses, we aim to expand the credit market and acquire a portion of this market, leading to growth in our corporate value.~~

~~• System Integration for Corporate~~Services by Subsidiaries

We are ~~directing efforts towards~~striving to create new areas of business that will generate effective synergies with our operation. Examples include investments in subsidiaries, such as OAK LAWN MARKETING, INC. (a home shopping business), D2 Communications Inc. (a mobile advertisement business), DOCOMO interTouch Pte. Ltd. (a high speed Internet connection service for hotels) and net mobile AG (a mobile content distribution platform business). Another subsidiary of ours, mmbi, Inc., is currently preparing to launch a multimedia broadcasting business in 2012.

4. Tariffs

Our cellular services revenues are generated primarily from fixed basic monthly charges, usage charges for outgoing calls (in Japan the ~~SI business,~~caller is usually charged), revenues from incoming calls and charges for optional value-added services and features. We set our own rates in accordance with the Telecommunications Business Act and guidelines set by the Japanese government, which ~~offers corporate customers greater operational efficiency~~currently allow mobile network operators to set their own tariffs without approval.

Currently, monthly charges that our cellular subscribers pay consist mainly of (i) a fixed basic monthly charge based upon the “plan” chosen, (ii) packet communication charges, (iii) call charges which vary with airtime, billing plan, etc., (iv) a mobile ISP fee, and ~~expanded business opportunities. These solutions can be applied to~~(iv) other additional monthly service fees for miscellaneous value-added services.

•

Basic Monthly Charges

We offer a variety of ~~business scenarios,~~different basic monthly plans targeting different segments of the market. These plans include those tailored to common usage patterns and those for frequent users. In addition, almost all of our plans include a certain amount of free minutes in the applicable basic monthly rates. Free minutes are automatically carried over for up to two months, and can be credited against voice calls, packet communication, video calls (FOMA), SMS, and international communications.

In November 2007, in conjunction with the introduction of the “Value Course” handset purchase method, we began offering the new “Value Plan,” which applies to subscribers who have chosen the “Value Course.” In exchange for payment of initial handset costs, a subscriber will be eligible to select the less expensive “Value Plan” under which basic monthly charges*¹ (prior to application of other discounts) will be ¥1,680 to ¥ 1,823*² lower (including tax) than standard plans. In March 2011, the number of subscribers of the Value Plan exceeded 40 million.

*1	Charges before discounts

*2	Some plans not included

•

Discount Services

Family Discount Service

As a popular option among our discount services, we offer a family discount service which gives a discount to families, meaning those within third-degree kinship, who subscribe to at least two and up to 10 mobile phones.

Under our “Fami-wari MAX 50” service, subscribers who commit to a two-year contract receive, regardless of the period of continuous usage, an immediate 50% discount on basic monthly charges and, in addition, FOMA subscribers also benefit from free domestic calls among members of the same “Family Discount” group 24 hours a day and a 60% discount on charges for domestic video calls to family members.

Corporate Discount Service: Business Simple

“Business Simple” is a service which combines “Business Discount 50” and “Business Call Discount” services. “Business Discount 50” gives a 50% discount on basic mobile phone charges on the condition of a

two-year contract, and “Business Call Discount,” which is offered to corporate customers having a contract on 2 to 1,000 lines, allows employees in the same “Business Call Discount” group to call each other 24 hours a day for a flat rate or, as the case may be, free of charge and also gives a 10% to 30% discount on domestic calls to non-group numbers and packet communication charges.

•

Charges for Data Communication Services

Data communication services are billed according to the volume of data sent and received without regard to the airtime or transmission distances. Billing plans for our data communication services include both pay-as-you-go services with no maximum charges and flat-rate services. Our major flat-rate services are as follows:

Packet Flat-Rate Services for Smartphones

Pake-hodai FLAT:

As “Pake-hodai FLAT” gives unlimited data volume for smartphones in Japan at a flat monthly rate of ¥5,460 (including tax), it is a packet flat-rate service for customers whose smartphone use is constantly substantial every month.

Pake-hodai double 2:

“Pake-hodai double 2” is a two-tiered packet flat-rate service. Monthly charges start at ¥2,100 (including tax), and customers pay for data according to their usage up to ¥5,985 (including tax), past which domestic data communications using smartphones are unlimited.

Packet Flat-Rate Services for Feature Phones

Pake-hodai double:

“Pake-hodai double” is a two-tiered packet flat-rate service. Monthly charges start at ¥390 (including tax), and customers pay for data according to their usage up to ¥4,410 (including tax), past which domestic i-mode communications are unlimited.

Flat-Rate Services for PC and Other Devices

Most of our offerings are two-tiered flat-rate services and completely flat-rate services. In two-tiered flat-rate services, a certain amount of minimum charges apply and customers pay for data according to their usage but only up to a certain amount of maximum charges, at which point domestic data communications become unlimited. For our Xi service, we are currently running a campaign offering a ¥1,575 monthly discount that applies until April 30, 2012.


Type	FOMA(W-CDMA)			Xi(LTE)
Flat-rate data communication service	Flat-rate Data Standard Wari 2 Value	Flat-rate Data Plan Flat Value	Flat-rate Data Plan Standard Value	Xi Data Plan Ninen
Flat-rate	¥ 2,500*¹ (free minutes up to ¥2,500)	¥ 5,460*¹	¥ 1,000*¹ (free minutes up to ¥1,000)	¥ 1,000 (free minutes up to ¥1,000)
Maximum charge	¥ 5,985*¹ (Slope rate ¥0.0315/Packet)	¥ 5,460*¹	¥ 5,985*¹ (Slope rate ¥0.042/P)	¥ 6,510*² (¥0.315/KB)

*1	Above rates available with subscription to the “Flat-Rate Data Standard Discount” or “Flat-Rate Data Standard Discount 2.”

*2	Once use exceeds 5GB, ¥2,625 is additionally charged per 2GB. Promotional offer at flat-rate ¥4,935 per month until April 30, 2012 (no extra charge for use exceeding 5GB).

•
Mobile ISP Fees

ISP Fee for Smartphones

sp-mode:

There is a ¥315 monthly fee (including tax) required as monthly sp-mode service charges.

ISP Fee for Feature Phones

i-mode:

There is a ¥315 monthly fee (including tax) required as monthly i-mode service charges.

ISP Fee for PCs, Smartphones and Other Devices

mopera U:

We offer the “U Light Plan” for ¥315 per month (including tax) and the “U Standard Plan” for ¥525 per month (including tax). “U Standard Plan” allows customers to use mail in addition to Internet access services.

5. Products

We develop products compatible with our service offerings in cooperation with handset vendors, purchase the products from the vendors and then sell them to our sales agencies who sell these products to our subscribers. We have a diverse line of handsets and devices including ~~remote access~~smartphones, feature phones and data communication devices; in the fiscal year ended March 2011, we introduced 13 smartphone models, 39 feature phone models and 5 data communication device models, and sold approximately 19.06 million units.

•

Smartphones

In the fiscal year ended March 2011, in addition to global models, we introduced smartphones from Japanese vendors. This enriched our lineup and led to an ~~enterprise network~~expansion of smartphone sales, and, ~~security measures.~~

as a result, smartphone sales exceeded 2.50 million in the fiscal year ended March 2011.

We ~~are~~have proactively introduced highly popular global models into the Japanese market, such as the Xperia^TM and the GALAXY S. We have also ~~directing~~sold smartphones that come with functions familiar to our ~~efforts towards international solutions for corporate customers. We established DOCOMO China Co.~~customers using feature phones, including “Osaifu-Keitai” (Mobile Wallet), Ltd. (“DOCOMO China”) in Shanghai, China in June 2008 to perform marketing activities directed towards corporate customers in China. DOCOMO China provides mobile phone collaborative business solutions“One-Seg” (mobile TV), waterproof and ~~solutions relating to information distribution services for corporate customers~~infrared functions, as well as ~~support~~built-in, state-of-the-art added values, such as 3D liquid crystal displays and an imaging engine for ~~enhancing customer operating efficiency and business activities in China, the world’s largest mobile communication market.~~

~~• Social Platform Services~~better video viewing, thus suggesting whole new smartphone experiences.

In addition, ~~with a view towards sustainable social growth,~~ we ~~are developing businesses in fields that have a potential for strong synergy with mobile phones,~~released tablet-type devices, such as the ~~environment~~GALAXY Tab, that are handy to enjoy the Internet and ~~ecology, safety and security, and healthcare management, and are aiming to create value in new areas. At~~videos while on the ~~current time, however, none of these businesses is of a scale that would have a significant impact on revenues.~~


3.	~~Equipment Sales~~

~~We offer a wide~~go.

As smartphones broaden the range of ~~handsets~~use for customers with their extensive array of applications and other advantages, they are expected to have the effect of boosting packet ARPU as a result of customers switching from feature phones. With our ~~subscribers.~~

~~In the year ended March 31, 2010, equipment development~~full line of smartphones from many different makers that run on Android^TM OS and ~~sales accounted for 11.8% of consolidated operating revenue. We consider the development and sale of handsets~~Windows Mobile^® OS, we are working to ~~be critical for our service development and securing of market share.~~

~~Manufacturers of our handsets have met our strict quality standards. We also offer a one-year warranty period for all handsets and provide free repairs during this period, except for cases when~~encourage customers ~~are at fault. Further, software can be updated thorough our network,~~ to ~~enhance customer convenience and operational efficiency.~~

~~• Mobile Phone Handsets (FOMA)~~

We had previously offered a lineup that included the 90X series, which came equipped with the latest functions, the 70X series, which focused on key functions, and concept models, which featured unique characteristics. So that customers can choose accordingswitch to ~~their values and lifestyles, our handset lineup was renewed in~~smartphones.

•

Feature Phones

Since November 2008, ~~to the “docomo~~we have been offering a range of feature phones, with four series of terminals—”docomo STYLE series,” “docomo PRIME series,” “docomo SMART ~~series,”~~series” and “docomo PRO series”—as well as lines catered to seniors and children.

In our feature phone offerings in the ~~“Raku-Raku PHONE series.”~~

~~Further,~~fiscal year ended March 2011, we ~~had offered~~placed particular focus on diversity and launched terminals with built-in functions such as high performance cameras and projectors. On the ~~smartphone~~design front, we collaborated with brands such as ~~one of the handset lineups of “docomo PRO series.” However, given the rapid growth of the market, we created products that are acceptable to~~EMILIO PUCCI, popular with female consumers, and added a greater ~~range~~variety of ~~users~~colors. Also as a new endeavor, we launched the TOUCH WOOD™ mobile phone made from the surplus wood of trees culled during forest-thinning operations.

•

Data Communications Products

Data Cards

Because we can expect new demand for second devices with data cards, we have actively engaged in their sales promotion. Thus we have offered a wide array of data cards, including USB data cards and ~~have a separate brand category for “docomo smartphones”~~ExpressCard-type data cards. We also began selling data communication devices compatible with Xi, our LTE service, in ~~May~~December 2010.

Mobile Wi-Fi Routers

~~docomo STYLE series~~

~~Starting in November 2008, docomo STYLE series handsets were released, and in~~In the fiscal year ended March 31, 2010, 17 models were launched, including the “N-08A” and “SH-05A.” The series was developed under the concept of “distinctive mobile phones, designed like accessories and offered in a wide variety of fashionable designs and colors for individuals who want to project the latest ‘look’.”

~~docomo PRIME series~~

~~Beginning in November 2008, docomo PRIME series handsets were released, and in the year ended March 31, 2010, 11 models were launched, including the“P-07A”~~ and “N-06A.” The concept for the series is “full-feature mobile phones for the maximum enjoyment of video, games and other entertainment by people who love to explore the latest multimedia.” The series features a number of entertainment functions, including videos and games, and lets users fully enjoy the latest mobile entertainment.

~~docomo SMART series~~

~~Starting in January 2009, docomo SMART series handsets were released, and in the year ended March 31, 2010, four models were launched, including the “N-09A” and“P-09A.”~~ The series was developed under the concept of “sophisticated mobile phones for busy people who want to live productively and enhance the management of their professional and private lives.” The series is designed for those who want to successfully balance work and private life. The phones are equipped with useful business tools and feature elegant designs.

~~docomo PRO series~~

docomo PRO series handsets have been released since November 2008 and five models were launched in the year ended March 31, 2010, including the i-mode models “SH-07A” and “SH-03B,” and smartphone “HT-03A.” The series was developed under the concept of “the most advanced high-spec mobile phones for those who love cutting-edge digital tools and can’t get enough of the newest, hottest technology.” The series allows customers to use mobile phones comfortably as cutting-edge mobile phones with their own specifications by resemblance to personal computers in terms of operations.

~~Raku-Raku PHONE series~~

The series was developed under the concepts of “user-friendliness,” “easy to use,” “easy to see,” and “peace of mind.” In the year ended March 31, 2010, two models were launched, “Raku-Raku Basic II” and “Raku-Raku PHONE 6.”

~~docomo Smartphones~~

~~We have various lineups of Windows OS and Android OS compatible smartphones from a wide range of manufacturers. In April 2010, we launched the Xperia~~^tm ~~handset made by Sony Ericcson Mobile Communications. In July 2009, we also launched the “T-01A,” a stylish and thin Windows Mobile handset. In July 2009, we launched the Google~~^tm ~~“HT-03A,” the first mobile phone in Japan with the Android OS, and in February 2010, “SC-01B,” a Windows Mobile handset for businesses.~~

~~Kids’ PHONE~~

In December 2007, we released “Kids’ PHONE F801i,” with improved reassuring functions such as waterproof and loss-prevention functions. In February 2009, we started selling “Kids’ PHONE F-05A,” with initial settings that are limited to the functions of a security buzzer, calling and GPS but with enhanced functions available to give families peace of mind.

~~Concept Models~~

“FOMA D800iDS,” a two-screen handset equipped with a touch panel, was released in February 2007. In June 2008, we released “PRADA Phone by LG,” which was developed by the global brand Prada through collaboration with LG Electronics.

~~90X Series~~

~~In May 2007, the FOMA 904i series, which is compatible with “2in1,” “~~~~Chokkan~~~~Game” and “~~~~Uta~~~~Hodai,” was released. In November 2007, the FOMA 905i series went on sale as an“all-in-one~~ phone.” In June 2008, the FOMA 906i series, which is positioned as an all-around video phone, was released. The handset comes with such functions as “WORLD WING (3G+GSM)”; “FOMA high speed (HSDPA)”; “One-Seg”; “GPS”; “2in1”; “DCMX”; “iD”; “Full-wide VGA LCD,” and supports a variety of video services and contents.

~~70X Series~~

In January 2007, we released the FOMA 703i series, which pursue unique styles such as the world’s slimmest (as of January 16, 2007) handset and collaboration handsets. In July 2007, we released the FOMA 704i series, featuring not only “slim and compact,” but also “One-Seg,” “waterproof” and other functions. In January 2008,2011, we began selling ~~the FOMA 705i series, which is the result of~~ a new approach to design in addition to being slim. As part of this series, “PROSOLID µ (p705iCL)” — which comes installed with numerous business functions — was released in March 2008, and FOMA “SH705iII,” which features clear and audible calls and “One-Seg” and a 3.2 mega-pixel camera with clearly visible characters and screen, became available in April. In July 2008, we launched the FOMA 706i series, which was developed under the concept of individualism and slimness. It features not only a compact design but also functions supporting various customer needs and lifestyles, such as “Extreme Slim One-Seg Phone,” “Waterproof One-Seg,” “Wellness Phone” and “Friendly Phone for Everybody.” The performance of each of these handsets has been further improved.

~~SIMPURE Series~~

~~In June 2007, “SIMPURE L~~₂~~,” developed in collaboration with a designer, was released as the latest model in the “SIMPURE” series.~~

~~Data Communication Devices~~

In the year ended March 31, 2010, we launched the USB-type data communication device “L-05A,” and the ExpressCard-type data communication device “L-07A,” which are compatible with HSDPA 7.2Mbps and HSUPA 5.7Mbps and achieve a high-speed Internet connection with a simple~~set-up.~~

~~Mobile Wi-Fi Router~~

~~A new~~ mobile Wi-Fi ~~mini-router, co-developed by NTT Broadband Platform, Inc. and BUFFALO INC., has begun to be sold at a number of our outlets from June 2010.~~router. The mobile Wi-Fi router allows customers to connect devices with Wi-Fi ~~enabled devices,~~capabilities such as handheld gaming consoles and ~~tablet computers with wireless local area network (“WLAN”) capability, which only used to be used in WLAN coverage area, to connect~~tablets to the Internet anywhere on our W-CDMA network in addition to public wireless LAN coverage areas.

Digital Photo Frames

We offer a module-embedded digital photo frame, the “Otayori Photo Panel,” with communication functions whereby photos that subscribers have attached to e-mail or photos posted to the “Otayori Photo” site can be received by e-mail and displayed.

Book Reader

In January 2011, we launched a book reader called SH-07C. Compatible with our ~~FOMA network.~~

~~FOMA Modules~~

~~To further promote the spread and development~~e-book store, “2Dfacto,” customers can browse through a rich selection of electronic book content.

Modules

“FOMA Ubiquitous Modules for the built-in market to the machine communication field, we released in March 2007 “FOMA UM01-F,” which supports both FOMA packet communication and voice/packet communication separation control. In June 2009, we launched the FOMA Ubiquitous Module “FOMA UM02-KO,” improving functions and expanding the lineup of FOMA Ubiquitous Modules. Currently, the FOMA Ubiquitous ModulesModules” are used for managing taxi and bus operations, monitoring and controlling power and gas facility devices, distributing content to information posting systems, managing inventory for vending machines and payment using mobile handsets. ~~Further,~~

6. Sales and Marketing

Now that the Japanese mobile telecommunications market has entered a period of maturation, we have moved ahead with our business transformation programs from a customer-centric perspective in ~~order~~accordance with our “Change and Challenge” action plan, ensuring a thoroughly hands-on approach to ~~contribute~~serving customers and uniting the forces of the entire corporate group. We have constantly listened to the ~~expansion of the machine communications market and to the further spread and development of the telematics field, we launched~~

“FOMA TM01-SA,” a FOMA telematics module in April 2009. This product can be used for packet communications as well as voice and video phone communications, and is designed for durability, with high vibration-resistance and temperature-resistance properties. Our goal for FOMA Ubiquitous Modules is to provide optimal solutions based on a full understandingvoices of our ~~customers’ needs.~~

customers through various channels such as docomo Shops and call centers, and strived to respond to them in a steadfast manner. As a consequence, we were awarded the No. 1 ranking in the 2010 Japan Mobile Phone Service Study~~Digital Photo Frames~~^SM

, a consumer satisfaction study conducted by J.D. Power Asia Pacific*¹.

We ~~offer a digital photo frame (“OTAYORI PHOTO PANEL”) with communication functions whereby photos that subscribers have attached toe-mail~~ ~~or photos posted to~~also received the ~~Otayori Photo site can be received~~highest marks among the mobile operators for our enterprise offerings in the 2010 Japan Business Mobile Phone Service Study^SM by J.D. Power Asia Pacific for two consecutive years*~~e-mail~~² ~~and displayed.~~

~~We launched~~. In addition, we were awarded the ~~“PHOTO PANEL 01”~~highest ranking in ~~July 2009 and~~ the ~~“PHOTO PANEL 02” in December 2009.~~

Nikkei BP Consulting customer satisfaction survey of mobile data device users*³ for two consecutive years as well.

*1
4. J. D. Power Asia Pacific 2010 Japan Mobile Phone Service Study^SM. Study based on a total of 7,500 responses from mobile phone subscribers. http://www.jdpower.co.jp/
~~Marketing~~

~~• Sales Channels~~

*2	J.D. Power Asia Pacific 2009-2010 Japan Business Mobile Phone Service Studies^SM. 2010 Study based on a total of 3,222 responses from 2,345 companies with 100 or more employees (up to two responses from one company) about telecommunications firms who supply a mobile telephone / PHS service.

*3	Nikkei BP Consulting Mobile data devices customer satisfaction survey. Results were based on responses to a web-based customer satisfaction survey of 1,600 data device users, conducted between March 10 and March 15, 2010. http://consult.nikkeibp.co.jp/consult/release/mobile100525.html

•

Sales Channels

We sell our products and services through a vast sales of network covering the entire country. The shops, which deal with our products and services, are operated by various distributors, and as of March 31, ~~2010,~~2011, there were ~~2,390 “docomo Shops”~~2,393 docomo Shops nationwide, which are specialized stores for which we have approved the use of the DOCOMO logo and other trademarks and service marks belonging to us, as well as the use of store exteriors and displays that provide immediate ~~recognition as shops for DOCOMO.~~brand recognition. These ~~“docomo Shops”~~docomo Shops are mainly operated by third party distributors who have no equity relationship with DOCOMO. In addition to ~~“docomo~~docomo Shops,” there are general distributors that handle the products and services of multiple operators such as mass merchandisers of consumer electronics and other stores that also sell our products. As of March 31, ~~2010,~~2011, the number of such shops was approximately ~~5,600~~5,400 (excluding ~~“docomo Shops”)~~docomo Shops).

One of the major advantages of our large sales network is that it makes it easy for customers to subscribe to our services and purchase products, such as FOMA handsets. As the mobile communication market matures, it becomes more important to acquire and retain customers. To continue acquiring and retaining subscribers, we are engaged in the following sales and marketing strategies: (1) comprehensive brand enhancement from a customer-oriented perspective; (2) improvement of customer retention programs; (3) continuous expansion of service areas and improvement of network quality; (4) increase in traffic by promoting the use of services such as i-mode services; (5) improvement of the quality of our after-sales services; (6) provision of competitive tariffs; and (7) enhancement of handset lineups.

In order to enhance our business activities based on customer needs, we formed the Corporate Branding Division in August 2007 as an entity under the direct supervision of our president. Outside marketing experts were invited to participate in the Division, which directed its efforts towards brand marketing unbound by conventional values. In addition to seeking to further strengthen marketing functions, we also reviewed the role of the corporate brand in the light of the changing market environment. This led to the renewal of the DOCOMO brand and declaration of the “New DOCOMO Commitments,” for reforming our company in April 2008. Under these Commitments, we have thoroughly pursued our customer-based principles and provide each and every customer with the best service along with safety and security in order to transform ourselves to a corporation that exceeds expectations. The functions discussed above are succeeded by Strategic Marketing Department formed by structural reorganization in July 2008.

Moreover, we have employed a new brand statement and a new brand slogan, “Unlimited Potential, in Your Hand,” in an effort to enhance satisfaction of each and every customer and create deeper ties to bring customers continued enjoyment and satisfaction by using DOCOMO products and services. We also launched a new corporate brand logo and corporate color, “DOCOMO red,” which we have been using since July 2008.

•

Sales Methods

~~• Sales Methods~~Value Course

In November 2007, we started offering new handset purchase methods. Under these purchase methods, customers can choose the “Value Course” or the “Basic Course” based on their needs. The “Value Course” offers lower basic monthly charges than inthe conventional ~~model and~~model; instead, customers pay the initial handset purchase

costs on their own. The “Basic Course,” which is similar to the conventional model in that initial costs are reduced by our sales incentives to distributors, offers basic monthly charges unchanged from conventional basic monthly charges and lowers initial handset purchase costs, as we pay a portion of (give a discount on) handset purchases in exchange for two-year contracts. Nowadays most customers who purchase new handsets choose the “Value Course.”

Customers who purchased handsets with “Value Course” will receive lower basic monthly charges even after they finish the payment of handsets, so the longer customers use the same handsets, the more they can cut their spending. Under the “Value Course,” customers can choose from either 12- or24-month installments, in addition to a lump-sum payment.

~~In Japan, mobile handsets used~~

Monthly Support

We introduced the “Monthly Support” program in March 2011. Under this program, customers with new smartphones and tablets will be given certain levels of discounts, which will vary by model, on their monthly bills for up to ~~be sold with sales incentives to reduce initial costs and make them more affordable~~24 months. We believe this program will create a foundation for ~~customers, and this sales model contributed significantly to~~the spread of smartphones, as we are now capable of flexibly addressing the growth of the ~~mobile phone~~smartphone market. ~~However, as the market has matured, it was necessary to introduce a sales model suitable for the current situation to solve issues such as feelings of unfairness and the lack of transparency.~~

We feel strongly that the combined elements of our sales network, extensive advertising activities, strong branding power, network quality, competitive billing plans, and after-sales services will enable us to continue acquiring and retaining subscribers.

~~• Customer Support~~

•

Customer Support and Satisfaction

As Japan’s ~~mature~~ mobile communication market continues to mature, we have shifted from a strategy focusing on acquiring new subscriptions to one concentrating on the relationships with existing customers, and have strived to achieve high customer satisfaction. We consider customer support, including after-sales services, to be extremely critical in retaining subscribers and maintaining the high reputation and recognition of the DOCOMO brand. We provide ~~fruitful~~valuable services to our customers from the time a subscription is made or a handset is purchased at a ~~“docomo Shop”~~docomo Shop or at other sales channels, and such services are supported by our fully integrated

information system. In addition, our Internet site, accessible via mobile phones and personal computers, etc., allows customers to change their services, billing plans and addresses, as well as shop for mobile handsets and accessories 24 hours a day.

Our after-sales services are provided mainly through “docomo Shops”. All “docomo Shops” can deal with repairs. A toll-free number is available for inquiries on such matters as basic service contents and billing plans. In addition, we have a

~~24-hour~~Customer Loyalty Program ~~framework for responding to handset and network problems, including stolen or lost handsets.~~

To enhance the quality of after-sales services for existing subscribers, when our sales distributors provide certain after-sales services, including handset exchanges, billing plan changes, and diagnosis/repair work on products such as handsets, payments suitable for the services performed are paid to the distributors.

~~In July 2009, we began offering at all “docomo Shops” the “~~~~keitai tenken~~~~” service, acheck-up~~ ~~service for handsets designed to ensure that customers can use their mobile phones comfortably which have become an indispensible tool in their daily lives. With the “~~~~keitai tenken~~” service, to ensure that customers’ handsets are kept in the best possible condition, an expert staff checks for any problems in communication functions such as breakage and malfunction, and cleans the phones.

Further, in an effort to increase the number of users in customer segments where penetration rate is low, we have provided consultation for customers by holding seminars regularly to promote the understanding of how to use mobile phones.

As part of our efforts to provide enhanced customer services, we offer a ~~membership~~customer loyalty program called “docomo Premier Club.” This reward program consists of ~~the rewarding program,~~a point accumulation service, complimentary services and after-sales services; depending on their monthly mobile phone usage, subscribers earn points, which can be applied to purchasing handsets, or exchanged tofor travel tickets, restaurant vouchers, or others. Customers are classified into four stages based on their usage during the previous year and years of continuous subscription, and the point-earning percentage increases with each stage level. Alletc.

By joining this program, members ~~of the Club~~ are entitled to ~~the following services:~~ services such as:

free repair services for three years from handset ~~purchase;~~purchase (not applicable to damages resulting from customers’ negligence)

a discount on a battery pack or charger adapter with the ~~“Battery Pack~~~~Anshin~~~~Support,” which offers markdowns~~

~~on battery packs to customers who have used~~use of the same FOMA ~~handsets~~handset for at least one year ~~(the service was expanded in July 2009 to give customers an option to choose~~

a ~~charger adapter in addition to the conventional battery pack); the “Repair Fee~~~~Anshin~~~~Support,” which caps~~cap on repair charges for non-insured phones at ¥5,250 (including tax); (any repairs for which the ~~“Receive Anywhere Service~~request was received on or after April 1, 2011 are covered for ~~Repaired Mobile Phone,” which allows a repaired~~three years from purchase only)

In October 2010, we partially revised our “Premier Club” services to adjust to changes in the mobile phone ~~to be picked up~~usage patterns of customers, such as the increase in the length of the mobile phone replacement cycle. We announced the extension of the effective period of “docomo Points” and widened the scope of their application, and at ~~any desired~~the same time we implemented changes in the “docomo ~~Shop” or other location~~Point” award scale. We also made changes in ~~Japan free of charge, and~~ the “~~Keitai-Osagashi~~~~Service,” which confirms the approximate locations of phones free of charge. Moreover, FOMA customers may apply~~monthly fee for the “Mobile Phone Protection & Delivery ~~Service,” which for a monthly fee of ¥315 (including tax) and ¥5,250 (including tax) each time~~Service”, changes to charges when the protection service is used, ~~in case of water exposure, theft, loss or other trouble,~~ and ~~covers shipment of~~also announced a ~~replacement handset. Further, Club members are entitled to other complimentary services from hotels, shops, restaurants, and other sponsor companies. Customers~~revision in the ~~Premier Stage are also entitled to get free battery packs (since July 2009, we have been giving customers~~period of application of the ~~option to choose a charger adapter in addition to the conventional battery pack) to customers who have used the same FOMA handsets for more than one year.~~

“Repair Cost Support.” Following the introduction of new sales methods, ~~the~~our customers’ replacement purchase cycle has ~~been getting longer. Although the~~lengthened, and although we saw a rise in number of ~~handsets requiring~~ repair cases, after October 2010, this number has remained at levels near to the last fiscal year.

Other Support Services

Mobile Phone Protection & Delivery Service

We offer our Premier Club members with a Xi or FOMA subscription the “Mobile Phone Protection & Delivery Service,” under which customers, for a monthly fee and ~~its corresponding costs has been increasing, we expect~~service charges applicable each time the service is used, can have a replacement handset directly shipped with a single phone call in the event that ~~this will result in a retention effect as can be seen from our low churn rate.~~

their handset becomes no longer usable due to water exposure, theft, loss or other trouble.

48-hour Area Quality Surveys and Coverage Improvement

Further, to promptly respond to customer ~~opinions~~concerns regarding area quality, we offer a service under which, if a customer requests, we visit the customer’s home and perform area quality surveys, generally within 48 hours once our service staff contacts the customer making the request.

If an improvement in area coverage is possible immediately upon visiting the customer’s home, we swiftly take measures for improvement on the spot.

Overseas Support

We are also putting efforts into the support of customers overseas. In addition to our support desks in Honolulu, we expanded the number of overseas cities with support desks to 1314 in total, including London, New York, Paris, Singapore and Shanghai. These support desks offer free handset charging services and respond to inquiries regarding how to use and operate mobile handsets overseas.


5.	~~Investments and Affiliations~~

•7. Investments and Affiliations ~~in Japan~~

To expand our areas of business, we make investments in, enter into business alliances with and establish joint ventures with companies having resources and know-how that supplement our existing business. ~~The primary~~Primary fields ~~where~~in which we make such investments and affiliations are social support which includes financial settlements, broadcasting, content ~~social infrastructure~~ and the Internet, research and ~~development.~~

development and global fields.

•

Social Support

We engage in social support service offerings in various areas, including the environment and ecology, health and medical care, finance and settlement, and education. Currently, we are working aggressively to develop tie-ups with external partners in an attempt to secure new sources of profit by launching full-scale business endeavors.

In the ~~financial~~finance and settlement field, above all, we ~~undertake~~are undertaking business investment to expand the mobile e-commerce market, ~~for i-mode,~~ promote the spread of the “~~Osaifu-Keitai,~~”“Osaifu-Keitai” and promote the spread and expand of iD and DCMX services. In the broadcasting field, we have been investing in such targets as television stations to investigate new services and develop businesses through the convergence of telecommunications and broadcasting. In the content field, which includes video content, through investments in advertising companies and investments in and affiliations with companies that offer services to consumers, we are directing our efforts towards the expansion of ~~the mobile content market. In the social infrastructure field, we are undertaking investments~~“iD” and affiliations in fields with strong potential synergy with our business to contribute the sustainable development of society by providing mobile solutions. And with regards to the research and development field, we are making investments and affiliations to ensure a stable procurement of our products, competitive pricing and quality for our products, and market superiority through technical synergies with our business partners.

~~OAK LAWN MARKETING~~

In April 2009, we reached an agreement on a capital alliance with the home shopping company OAK LAWN MARKETING, INC. (“OLM”), and acquired 51% of the common shares of OLM for ¥31 billion. With a view towards revitalization of the~~e-commerce~~ market, we completed the transition of OLM’s three brands into official i-mode sites in September 2009, and in February 2010, OLM started to provide their contents using i-concierge service, which is the first introduction case for a home shopping company. The two companies plan to continue their

“DCMX” services.

efforts to expand the home shopping businesses that utilize our services including video contents and platforms. OLM’s revenue is recorded in Other Revenue in our consolidated results. Please see Other Revenue in Item 4B.

~~Sumitomo Mitsui Card~~

~~On April 27, 2005, we entered into an agreement with Sumitomo Mitsui Financial Group, Inc.,~~ Sumitomo Mitsui Card ~~Co., Ltd. (“Sumitomo Mitsui Card”) and Sumitomo Mitsui Banking Corporation (“SMBC”) to form a strategic business and capital alliance for the launch of a credit-payment service using our~~~~Osaifu-Keitai~~Company, Limited~~phones equipped with smart-card functions for cashless payments. As part of thetie-up,~~

In July 2005, we acquired 34% of the common stock of Sumitomo Mitsui Card Co., Ltd. (“Sumitomo Mitsui Card”), a major company in the credit card industry that was a pioneer as an issuer of Visa cards in Japan, for approximately ¥98.7 billion, including shares newly issued by Sumitomo Mitsui Card. Starting in December 2005, Sumitomo Mitsui Card began issuing the ~~Sumitomo~~“Sumitomo Mitsui Card for iD. ~~The current state~~”

•

Broadcasting

In the broadcasting field, we have been investing in such targets as television stations to investigate new services and develop businesses through the convergence of telecommunications and broadcasting.

mmbi, Inc. (formerly Multimedia Broadcasting, Inc.)

In order to offer a whole new broadcasting service combining the features of broadcasting and communications for use in mobile terminals, we set up Multimedia Broadcasting, Inc. On September 9, 2010, we obtained approval of our plan to establish a designated base station that will use frequencies between 207.5 MHz and 222 MHz. Additionally, Japan Mobilecasting, Inc. was set up as a subsidiary to operate a broadcasting service business for multimedia broadcasting in mobile terminals. On April 1, 2011, Multimedia Broadcasting, Inc. changed its name to mmbi, Inc. Following the licensing of the ~~credit~~company as a broadcasting operator, we are moving forward in preparations for service launch in the spring of 2012.

•

Content and Internet

In the content and Internet field, which includes video and e-books, through investments in advertising companies and investments in and affiliations with companies that offer services to consumers, we are directing our efforts towards the expansion of the mobile content and Internet market.

OAK LAWN MARKETING, INC.

In April 2009, with a view to vitalizing the mobile e-commerce market, we acquired 51% of the common shares of the home shopping company OAK LAWN MARKETING, INC. (“OLM”) for ¥31 billion. The two companies plan to continue their efforts to expand home shopping businesses that utilize our services and platforms, such as the “iMenu” portal and “docomo Market.”

•
Research and Development

In the research and development field, we make investments in and collaborate with companies that have technology essential for our products and services from the viewpoints of business ~~is discussed in Other Revenue — Credit Business in Item 4B.~~

cooperation for enhanced technology development, more stable corporate management of the target company through equity participation and protection of applied technology.

ACCESS CO., LTD.

In December 2005, we purchased an additional 6,356 newly allocated shares of ACCESS CO., LTD. (“ACCESS”), a developer of software for mobile phones, for approximately ¥15 billion, bringing our total stake in ACCESS to 11.6%. ACCESS’s browser is widely used in our 3G FOMA handsets and we aim to further strengthen our relationship through this investment to support the development of browser technology.

~~• International Investments and Affiliations~~

•

Global

We make investments inand/or enter into agreements with mobile service providers providing mobile phone related services with the long-term aim of securing growth and revenue opportunities and strengthening our global competitiveness.

In regards to investments in mobile service providers, in order to capture growth in overseas markets, we support the businesses of our investment partners and achieve financial returns in the form of dividends and equity gains, and at the same time, we aim to achieve synergies with ~~the~~our partners, including joint development of handsets, joint procurement and increased roaming revenues through introduction of W-CDMA technology.

In mobile phone-related business fields, as in our construction of an overseas platform business through our acquisition of net mobile AG, we are directing our efforts towards the provision of value-added services overseas, where synergy effects can be anticipated from our experience and know-how in the provision of sophisticated services in Japan.

Hutchison Telephone Company Limited/Hutchison 3G HK Holdings Limited

In December 1999, we acquired a 19% equity interest in Hutchison Telephone Company Limited (“HTCL”) in Hong Kong for approximately US$410 million (approximately ¥42 ~~billion at the date of investment)~~billion) as part of our business alliance with Hutchison Whampoa Limited (“HWL”) with respect to the development of their mobile Internet services and 3G businesses in Hong Kong. ~~In May 2001, we made an additional investment of US$30.44 million (approximately ¥3.7 billion at the date of investment) for a 6.4 point increase in our equity interest in HTCL.~~

In July 2001, we agreed with HWL to separate the 3G entity from HTCL, and acquired a 25.4% equity interest in Hutchison 3G HK Holdings Limited (“H3G HK”), for approximately HK$303,190 (approximately ¥5 ~~million at the date of investment).~~

~~In November 2002, NEC Corporation (“NEC”) acquired a 5% equity interest in both HTCL and H3G HK. As part of this transaction, our interest in both HTCL and H3G HK decreased from 25.4% to 24.1%~~million). We currently hold a 24.1% equity interest in both HTCL and H3G HK.

~~HTCL launched its mobile Internet services in May 2000.~~

Philippine Long Distance Telephone Company

In ~~addition, H3G HK acquired a 3G license in September 2001 and launched 3G services in~~ January ~~2004. H3G HK’s 3G license was transferred to HTCL in June 2005 and 3G services are provided by HTCL at present.~~

~~Far EasTone Telecommunications Co., Ltd.~~

In February 2001, we invested approximately NT$17.1 billion (approximately ¥61.3 billion at the date of investment) for a 20% equity stake in KG Telecommunications Co., Ltd. (“KG Telecom”). KG Telecom was a mobile network operator which operated in Taiwan. In July 2001, we purchased new shares of KG Telecom, thereby increasing our equity stake to 21.4%. The amount of our additional investment was NT$1.87 billion (approximately ¥6.7 billion at the date of investment).

In October 2003, KG Telecom became a wholly owned subsidiary of Far EasTone Telecommunications Co., Ltd. (“FET”), the third-ranked mobile network operator in Taiwan. We became an approximately 5.0% shareholder in FET, and received NT$2.5 billion (approximately ¥8.0 billion at the date of payment) in cash.

~~In March 2004, we signed a consulting agreement with FET. Under the agreement, we provided technical assistance including assistance for network field testing and coverage optimization~~2006, for the ~~introduction~~purpose of ~~FET’s W-CDMA 3G service. FET launched 3G services based on W-CDMA technology in July 2005.~~

~~KT Corporation~~

~~In December 2005,~~business support and technological tie-up, including enhancing our international roaming service, we entered into an agreement with Korean mobile network operator KT Freetel Co., Ltd. (“KTF”) on a comprehensive strategic alliance including equity participation, under which we invested approximately KRW 564.9 billion (approximately ¥65.1 billion at the date of investment) to acquire a 10% stake in KTF through a third-party allotment of new shares and purchase of KTF treasury stock.

Through the partnership, we provided technical support to KTF to deploy a nationwide W-CDMA network successfully. Also, we have been working on initiatives such as improving convenience for the travelers in both countries through the joint development and the provision of roaming services, developing new business by taking advantage of the technical and marketing expertise of the worlds leading providers of cellular services and examining cost-saving opportunities, such as the joint handset procurements. In July 2007, as part of the companies’ joint handset procurement project, an announcement was made of the joint procurement of HSDPA compatible USB type terminals. In October 2007, as part of the joint activities in the Business & Technology Cooperation Committee (“BTCC”) established by the two companies, the companies agreed to investment in KT-DOCOMO Mobile Investment Limited Partnership, a fund having KTBnetwork Co., Ltd. (“KTB”) as the asset manager, which invests in South Korean venture companies in the mobile and IT related fields. In conjunction with this alliance, we invested KRW 13.5 billion (approximately ¥1.7 billion at time of investment decision, a 45% equity stake) in the fund. In 2009, we achieved certain results through the activity in BTCC, including the launch of jointly planned handsets in South Korea and the provision of a jointly developed “Local Number Roaming” service.

In addition, in January 2009, in conjunction with the merger between KTF and the Korean fixed-line carrier KT Corporation (“KT”), for the purpose of a strategic alliance with KT, we agreed to exchange 40% of our stake for KT common shares, and the remaining 60% for exchangeable bonds issued by KT. In June 2009, we acquired the above shares and exchangeable bonds, and our equity stake became approximately 2.2%. In December 2009, we exchanged the exchangeable bonds for KT’s US ADRs, making our stake in KT roughly 5.5%.

~~Philippine Long Distance Telephone Company~~

~~In January 2006, we entered into an agreement with~~ three companies—NTT Communications Corporation (“NTT Com”), Philippine Long Distance Telephone Company (“PLDT”) and First Pacific Company Limited (“FPC”), which is PLDT’s largest ~~shareholder,~~ shareholder—on ~~a share acquisition and businesstie-up.~~ ~~Under the agreement, we purchased~~our purchase of approximately 7.0% of ~~its~~PLDT’s total outstanding common shares from NTT Com, for approximately ¥52.2 ~~billion and established a comprehensive businesstie-up~~ ~~with PLDT and its mobile network operator subsidiary Smart Communications, Inc. (“SMART”).~~

~~Since~~billion.

Starting in March 2007, we ~~have~~had acquired PLDT shares in stages ~~through the open markets, acquiring a total of~~in securities exchanges, which totaled approximately ¥98.9 billion ~~shares~~or equivalent to approximately 7.5% of PLDT’s outstanding ~~shares as of March 31, 2008; as a result,~~common shares.

The NTT group’s cumulative stake in PLDT, combined with NTT Com’s PLDT shares, reached 20.9% as at the ~~NTT group achieved a 20.9% stake in PLDT. Pursuant~~end of March 2008. Due to ~~the January 2006 agreement, we have the ability to exercise the voting rights of NTT Com, and since we obtained the~~our ability to exercise significant influence over PLDT by exercising voting rights on behalf of the NTT group pursuant to the aforementioned January 2006 agreement, we have ~~considered~~treated PLDT as anour affiliate and ~~accounted~~have applied the equity method since March 2008.

Furthermore, in May 2011, we entered into an option agreement with JG Summit Holdings, Inc., the holding company of a conglomerate in the Philippines, to give the parties options through which we would acquire approximately 2% of the total issued and outstanding shares of PLDT, worth an estimated amount of about ¥21.6 billion (as of April 28, 2011). This transaction creates an opportunity for additional acquisition of shares following PLDT’s planned acquisition of a majority stake in Digital Telecommunications Philippines Inc. via a share swap, which would lead to a dilution of the NTT group’s cumulative stake. Once the trade based on the option agreement is completed, we would hold approximately 14% of PLDT’s outstanding common shares, and the NTT group’s cumulative stake would be approximately 20%.

KT Corporation

In December 2005, we entered into an agreement with Korean mobile network operator KT Freetel Co., Ltd. (“KTF”) on the formation of a comprehensive business alliance including equity participation, under which we invested approximately KRW 564.9 billion (approximately ¥65.1 billion at the date of investment), and acquired 10% of KTF’s outstanding shares.

Under this partnership, the two companies established the Business & Technology Cooperation Committee (“BTCC”) and DOCOMO provided technical support to KTF to deploy a W-CDMA network across Korea. Other successful outcomes of the BTCC’s active endeavors include launching jointly developed terminals in Korea, offering a jointly developed service called Kaigai Plus Number and, further still, examining the mutual use of the NFC service between Japan and Korea.

In January 2009, as a result of the merger of KTF with KT Corporation (“KT”), which was a fixed-line telecommunications operator, and for the ~~investment by applying the equity method. We also have designated two directors each to~~

~~PLDT and SMART. Going forward, we will further strengthen ourtie-up~~purpose of a strategic partnership with PLDT and SMART and make efforts to increase their enterprise value through our operational support and technology cooperation such as advancement of network, introduction of value-added services and enhancement of international roaming services.

~~DOCOMO PACIFIC, INC.~~

~~In March 2006,~~KT, we agreed to ~~fully acquire both~~exchange 40% of our holdings for KT common shares and the remaining 60% for convertible bonds issued by KT. After we acquired the aforementioned shares and convertible bonds in June 2009, we had an approximately 2.4% stake in KT. In December 2009, we converted the aforementioned convertible bonds to KT’s American Depositary Receipts (ADRs), which made our stake roughly 5.9%.

DOCOMO PACIFIC, INC.

In December 2006, with a view to improving convenience for customers in Guam and the Northern Mariana Islands, a major destination for Japanese visitors, by enhancing the GSM network there and introducing packet roaming services by developing a GPRS network, we acquired Guam Cellular & Paging (“Guam Cellular”) and Guam Wireless Telephone Company, LLC (“Guam Wireless”), both of which were mobile network operators operating in Guam and the Northern Mariana Islands (including the island of Saipan), for a total amount of US$71.8 million ~~(at the time of investment, approximately~~(approximately ¥8.4 billion)~~. In December 2006, we transferred operations to Guam Cellular from Guam Wireless through a holding company~~ and ~~we integrated~~merged the operations of the two companies. ~~Through~~As a result of this acquisition, Guam Cellular became our wholly-owned subsidiary. We have endeavored to improve convenience of international roaming services for the large number of Japanese travelers who visit Guam and the Northern Mariana Islands, by enhancing Guam Cellular’s GSM network and introducing packet roaming services by developing its GPRS network. In July 2008, we launched 3G services, based on W-CDMA technology. In October 2008, the company name was changed to DOCOMO PACIFIC, INC. (DOCOMO PACIFIC). ~~Currently, under the DOCOMO brand, we are striving for further improvement in quality, and are directing our efforts to providing services offering high convenience to customers.~~ In December 2009, we began ~~providing to DOCOMO PACIFIC’s subscribers “MAX CHANNEL”,~~offering a push-type information distribution i-channel ~~service. DOCOMO PACIFIC’s revenue is recorded in Cellular Services Revenue in our consolidated results.~~

service called “MAX CHANNEL.”

Robi Axiata ~~(Bangladesh)~~ Limited

In September 2008, we acquired a 30% ~~equity interest in~~of the total outstanding shares of TM International (Bangladesh) Limited (“TMIB”), a mobile network operator based in ~~Dhaka,~~ Bangladesh, for approximately US$350 million (approximately ~~¥37~~¥37.5 billion). to facilitate the company’s business expansion in the fast-growing Bangladeshi mobile telecommunication market. In ~~addition, in~~ November of the same year, we made an additional investment of approximately US$30 million (approximately ¥3¥2.9 billion) ~~on a pro-rata basis. In May 2009, the~~in proportion to our capital contribution. The company name was changed to Axiata (Bangladesh) Limited in May 2009 and was then changed again to Robi Axiata Limited (“~~AXB”~~Robi”)~~. Through the investments,~~ in August 2010. As of March 2011, we ~~are participating in AXB’s management by actively drawing on our expertise to enhance the company’s business in the fast-growing Bangladesh mobile telecommunication market.~~

hold 30.0% of Robi shares.

Tata Teleservices Limited

In ~~November 2008,~~March 2009, we ~~reached agreement on a capital alliance with Tata Sons Limited (“Tata Sons”), the holding company~~acquired common shares of ~~Tata group, and the Indian telecommunication carrier~~ Tata Teleservices Limited (“TTSL”), ~~which is a unit of Tata group. Based on this agreement, we acquired~~an Indian communication carrier, that amounted to an approximately 26.5% ~~of TTSL’s~~ stake in the company for ~~approximately~~ 128.1 billion rupees (approximately ~~¥252~~¥252.3 billion) in ~~March 2009. We also made~~ a tender offer for shares of Tata Teleservices Maharashtra Limited (“TTML”), a TTSL affiliate, and acquired approximately 12.1% of TTML shares for a price of approximately 5.7 billion rupees (approximately ¥11 billion) in March 2009. Through this strategic investment and alliance, the three companies are aimingmove to expand ~~their~~our business areas in the Indian market, which is expected to ~~grow at a fast pace.~~achieve rapid economic growth in the coming years. In June 2009, weTTSL began offering ~~the~~ GSM services under the brand name “TATA ~~DOCOMO”~~DOCOMO,” and also launched a 3G service in November 2010, outpacing competitors to become the first private company to offer such a service. In March 2011, we announced a plan to accept the rights offering for approximately 8 billion rupees (approximately ¥14.4 billion) in proportion to our capital contribution. This transaction was completed in May 2011, and our ~~i-channel service, which is~~investment will be utilized to expand the coverage as well as strengthen the quality of the 3G network. As a ~~push-type information distribution service. In January 2010,~~result of this transaction, we ~~have also launched a~~hold approximately 26.5% of TTSL shares.

~~manga~~ ~~distribution service called “DOCOMICS.”~~

DOCOMO interTouch Pte. Ltd.

In December 2004, we ~~invested~~acquired all of the shares of inter-touch (BVI) Limited, a Singapore-based holding company, for US$70 million (approximately ¥7.3 billion as of the date of investment) to fully acquire inter-touch (BVI) Limited, a Singapore-based holding company of Internet providers which supply high-speed broadband connections and applications for travelers at hotels across the Asia-Pacific region, Europe, the Americas and other regions.

~~In February 2007,~~, with a view ~~toward~~to improving ~~our group~~the convenience for overseas travelers by further expanding its business ~~results~~ and ~~future business expansion,~~enhancing service offerings.

In January 2008, we ~~decided to reorganize the structure for further operational efficiency. We decided to make INTER-TOUCH PTE LTD (currently DOCOMO interTouch Pte. Ltd.) (“interTouch”), one~~acquired all of the inter-touch group’s operational companies in Singapore, a wholly owned subsidiary. The reorganization resulted in interTouch becoming a wholly-owned subsidiary of DOCOMO and the dissolution of three companies, inter-touch (BVI) Limited, INTER-

TOUCH (MIDDLE EAST) LIMITED and inter-touch Holdings (Singapore) Pte Ltd. Inter-touch (BVI) Limited was dissolved in February 2008, and inter-touch Holdings (Singapore) Pte Ltd. was dissolved in March 2008.

~~In December 2007, interTouch reached an agreement with the primary shareholder~~shares of MagiNet Pte. Ltd. (“MagiNet”), a high-speed Internet service and video distribution service provider for hotels, ~~to fully acquire the company~~ for approximately US$150 million (approximately ¥16.5 billion)~~. The acquisition was completed in January 2008. In conjunction~~ with ~~this acquisition, we~~the view to improving its group business results and future business expansion and also carried out a capital increase in interTouch of US$191 million (approximately ¥21 billion). In April 2008, we changed its name to DOCOMO interTouch Pte. Ltd. Currently, DOCOMO interTouch is one of the largest providers of high-speed Internet service for hotels in the Asia-Pacific region, providing services in approximately ~~1,200~~1,100 hotels in 7057 countries across the world. In April 2008, we announced that the name of the company had been changed to DOCOMO interTouch Pte. Ltd. Currently, under the DOCOMO brand, the company is endeavoring to further expand its business, and by providing a full range of services, enhance convenience for overseas travelers. Please note that interTouch’s revenue is recorded in Other Revenue in our consolidated results.

net mobile AG

In November 2009, in order to establish an international mobile-content distribution platform, by means of a tender offer implemented by our wholly owned subsidiary DOCOMO Deutschland GmbH, we acquired, at a cost of roughly 38.9 million Euros (roughly ¥5.2 billion), approximately 79.6% of the outstanding common shares of net mobile AG (“net mobile”), a German mobile content distribution platform business. As a result of this tender offer, net mobile became our subsidiary. In December 2009, by subscribing to a private placement of new shares issued by net mobile at a cost of roughly 4.89 million Euros (roughly ¥600 million), our stake in the company increased to approximately 81.5% of the outstanding common shares. ~~Please note~~

PacketVideo Corporation

In July 2009, we acquired 35% of the outstanding shares of PacketVideo Corporation (“PacketVideo”), a U.S. company, from NextWave Wireless Inc. (“NextWave”), also a U.S. company, for US$45.5 million (approximately ¥4.5 billion) to expand our music and video services. Then in October 2010, we acquired 65% of the outstanding shares of PacketVideo that ~~net mobile’s revenue will be recorded~~had been held by NextWave, at US$111.6 million (approximately ¥9.3 billion). As a result of this deal, PacketVideo became a wholly-owned subsidiary of DOCOMO.

PacketVideo is a leading company in ~~Other Revenue in our consolidated results from the fiscal year ending March 31, 2011.~~


6.	~~Networks~~

~~We currently provide our services on several different networks including 3G~~music and ~~2G networks. Each of these networks is composed of four basic components: base stations, antennas, switching centers~~video content player software and ~~transmission lines. When a person uses a~~content service platforms for mobile phone (or other portable device), an antenna on top of a base station receives the signal. The signal then travels via transmission lines to a switching center, which routes the signal to another base stationphones, and it also develops and provides its own cutting-edge solutions in the ~~vicinity~~area of ~~the intended recipient of the signal. In general, our 2G network~~services that enable music and ~~3G network use separate base stations, antennas~~video content to be shared among home electronics devices, including televisions, digital photo frames, and ~~switchboards, but we are moving ahead with providing common antennas and transmission lines for the 2G and 3G networks in our efforts to reduce network costs.~~

~~In order to establish and maintain our high-quality network economically and efficiently, we purchase high-quality network~~audio equipment, ~~at low costs from approximately 90 suppliers inside and outside Japan in accordance with our procurement policies, which stress openness and fairness.~~

~~At new procurement opportunities, we obtain high-quality equipment at competitive prices by receiving a wide range of proposals from domestic and international suppliers through our website.~~

~~• 3G Network~~

We developed our 3G network based on the IMT-2000 standards of the International Telecommunications Union, or ITU, and launched commercial service of our 3G network in October 2001. IMT-2000 indicates a third-generation (“3G”) mobile communication system which offers data communication at a speed higher than the conventional second-generation (“2G”) system as well as ~~international roaming services.~~

~~We are actively moving ahead on the migration of~~personal computers and mobile phones.

8. Research and Development

In our customers from our 2G to our 3G network and adding equipment and infrastructure for our 3G network in addition to our existing 2G network. We have been constructing an IP router network based on an optical fiber relay network aiming to transmit huge volumes of data efficiently and less costly. The Japanese government has allocated a total bandwidth of 335MHz as radio frequencies available for usebase located in the 3G network (including frequencies that are planned to be used in the future). Of this, we use 20MHz x2 (for uplink and downlink) in the 2GHz band across Japan. In the 800MHz band, which is in the process of reallocation, we currently use up to 10MHz x2 in regions where interference with existing systems can be avoided.

~~Further, in the 1.7GHz spectrum, we use 15MHz x2 in the Kanto, Kansai, and Tokai areas. Therefore, our 3G network operates on the three bands of 2GHz, 800MHz and 1.7GHz.~~

In the year ended March 31, 2010, we moved aggressively to improve area quality, based on quality surveys, for underground shopping areas, shopping facilities, and other places where customer needs are high. Also, we actively utilized low-cost repeaters to improve quality in small areas such as customers’ homes and offices.

We were the first company in the world to launch 3G services based on W-CDMA technology. Many foreign companies in which we have invested, including HTCL, FET, KT and PLDT, and many of our international strategic allies, including most of the Conexus Mobile Alliance member operators, have already launched 3G services based on W-CDMA.

~~By licensing our intellectual property with respect to W-CDMA under fair, reasonable and non-discriminatory terms and conditions, we have contributed to the spread of W-CDMA technology.~~

Furthermore, LTE (Long Term Evolution) has been discussed in 3GPP (3rd Generation Partnership Project), a standardization association of W-CDMA, and we have played a key role in the discussion. In response to specifications on LTE which were mostly finalized during the meeting of 3GPP held in March 2009, we launched the development of LTE for its commercialization. In tandem with these developments, we continue to vigorously participate in the 3GPP standardization activities in order to finalize LTE test specifications and investigate LTE-Advanced, a successor to LTE.

~~• 2G Network~~

~~Our 2G network, which is currently offered nationwide, is expected to terminate in March 2012.~~

~~The Japanese government has currently allocated 41MHz x2 (uplink and downlink) for the use of our 2G Network. We are using at 18MHz x2 in the 800MHz band for 2G network.~~


7.	~~Research and Development~~

In order to respond to swiftly growing demand for wireless telecommunication and to diversifying customer needs, we have upgraded our research and development capabilities and streamlined our research and development operations. As part of these activities, we built a center for research and development in Yokosuka Research Park, we engage in March 1998. This center is a highly advanced research and development center near Tokyo specializing in mobile telecommunication technology. With state-of-the-art testing facilities, the center is the base for research and development of basic ~~technologies, 3G, 4G and other~~technology, mobile communication systems and a wide variety of new products and services.

~~Research and development is performed primarily at our own facilities. Research and development expenditures in the year ended March 31, 2010 were 109.9 billion yen.~~ As part of our

ongoing research and development and in order to continue to improve our products, networks and services, each of our research and development departments collaborates with product development staff at other operating divisions. We are also working with major manufacturers of our handsets and network equipment.

In ~~addition, outside~~order to address technology innovations overseas, we have established research centers in the R&D Center, the following other departments have joined development activities; Product Department, Frontier Services Department, Ubiquitous Services Department, Services Platform Department, Solution Business DepartmentU.S., Germany and ~~Network Service Operation Department.~~

As to our overseas subsidiaries, we established DOCOMO Communications Laboratories USA, Inc., which engages in research and development of network technology, handset software and media encoding. In July 2005, we established DOCOMO Capital, Inc., whose purpose is to invest in venture businesses that have leading-edge and innovative technologies applicable to mobile communication.China. We also set up DOCOMO ~~Communications Laboratories Europe GmbH, which primarily researches network technologies, wireless technologies, next-generation IC/USIM card technologies, security technologies~~Capital, Inc. for the purpose of investing in ventures that boast advanced and ~~standardization activities. In November 2003, we established DOCOMO Beijing Communications Laboratories Co., Ltd.~~innovative technology that can be applied to ~~engage in the leading-edge research, in particular fourth-generation (“4G”) wireless technologies and beyond. We also established DOCOMO~~

mobile communication services.

Technology, Inc., which primarily carries out research and development to enhance our PDC system, IMT-2000 system and other existing systems and supplements our fundamental research and development activities.

Furthermore, we also conduct research with various universities inside and outside of Japan. In the collaborative research field, we have been involved in technological exchange in connection with not only 3G research and development but also 4G mobile communication systems and other advanced technology research.

~~In April 2003,~~

Recent development results are as follows:

•

Development of Handsets and Services

To provide our customers with a more comfortable communication environment, in addition to the commercialization of our Xi network, we ~~and other mobile network operators in Japan agreed to conduct a joint research on the possible biological effects~~undertook development of ~~exposure to radio waves from mobile phone systems. In April 2005 and January 2007, interim reports were issued, and at present research is still ongoing in collaboration~~data communications devices compatible with the ~~MIC.~~

~~• LTE~~

~~We have also undertaken the development of LTE. We began recruiting manufacturers for LTE equipment development in July 2006~~FOMA and commenced development geared towards commercial application. In September 2007, we succeeded to create a prototype of a Large Scale Integration (“LSI”) that uses our original technology to achieve high-performance signal separation of MIMO multiple signals at a downlink speed of 200 Mbps with low power consumption of under 100 mW. With this prototype, we are able to mount LTE high-speed signal transmission technology with power consumption suitable for use in portable devices. Indoor experiments started in July 2007 to confirm basic system performance and optimize the system. Outdoor trials with LTE systems began in February 2008 to determine the performance of actual wireless systems and further optimize the system, successfully achieving a downlink packet data transmission speed of 250 Mbps. In December 2008, we successfully created a prototype of low power consumption LSI that achieves a data reception processing speed of 100 Mbps, which is a requirement for LTE. Going forward, we will continue research and development of LTE and IMT-Advanced based on these prototype LSI chips and actively cooperate with the international standardization.

In September 2009, we developed remote radio equipment (“RRE”) unit for LTE base stations. The RRE are radio devices with radio wave modulating functions that can operate on the 2GHz band, and thus can be used with both LTE base stations and W-CDMA base stations. The deployment is a part of DOCOMO’s initial plan to layer a 2GHz LTE network over its existing 3G network to provide dual W-CDMA/LTE service, which will combine the benefits of LTE’s high transmission speeds with 3G’s wide-area coverage as the LTE network is expanded gradually.

In October 2009, together with NEC Corporation, Panasonic Mobile Communications Co., Ltd and Fujitsu Limited, we completed development of an LTE- PF chipset engineering sample. The platform’s technology is expected to be licensed in mobile phone markets worldwide, where its adoption as a common platform will free manufacturers of mobile phones and chipsets from developing proprietary technologies for basic functions. As a result, manufacturers will get products to market faster and at lower costs, and will be able to concentrate more resources on the development of enhanced lineups of unique products.

~~In January 2010, we developed a prototype multi-band power amplifier that accommodates eight frequency bands between 700 MHz and 2.5 GHz, paving the way for lightweight,all-in-one~~ mobile phones capable of standalone wireless communications of different standards, including the forthcoming extra-fast LTE standard as well as existing W-CDMA and GSM. Once commercialized, this technology, because it does not require an increase in the number of power amplifiers used, will enable mobile phones to be used with virtually all of the mobile telephone services worldwide, including LTE, W-CDMA and GSM, without an increase in handset size.

~~Going forward, we will continue to build areas that will prove satisfactory to our customers, and as a member of this pioneering group, will continue with preparations for the launch of LTE~~Xi services.

~~• 4G Mobile Communication System~~

We have conducted research regarding other advanced technologies, including fundamental research on a 4G mobile communication system aiming at further enhancement of cellular services. ITU has set forth as a requirement for 4G systems the ability to support transmission speed of up to 100Mbps for downlink at high-speed movement and 1Gbps at low-speed movement. If such a system is realized, high quality video equivalent to high-definition television will be provided and will allow high-speed transmission of large-capacity data on a

~~bandwidth of approximately 100MHz. We actively participate in the international standardization movement for 4G systems.~~

In the summer of 2002, we began practical evaluations of key technologies for our 4G mobile communication system, as well as implementing an experimental system to demonstrate their benefits. In October 2002, we successfully completed a 100Mbps downlink and a 20Mbps uplink transmission experiment in an indoor environment using an experimental 4G mobile communication system. In May 2003, the Kanto Bureau of Telecommunications granted us a preliminary license to conduct field trials of 4G mobile communication systems. In August 2004, we successfully completed experiments on real-time 1Gbps packet transmission in downlink. In May 2005, following the experiments in an indoor environment, we successfully realized outdoor experiments on real-time 1Gbps packet transmission in downlink, followed by 2.5Gbps packet transmission in downlink, in December 2005. In February 2007, we successfully tested packet transmissions with a maximum downlink speed of 5Gbps outdoors. Currently, we continue to evaluate and improve these high-speed transmission technologies through field trials.

~~• Development of Handsets~~

With respect to handset procurement costs, we continue to work to reduce the costs even though the enhancement of handset performance is driving up the costs. In the medium term, we will make further efforts to reduce handset procurement costs by simultaneously reviewing the handset development cycle, raising the efficiency of software development, and using shared components with an eye towards global deployment.

We also took the following measures to raise the efficiency of chip set and software development and for operating system standardization. By investing approximately ¥12.5 billion from the year ended March 31, 2005 to the year ended March 31, 2007 in the development of LSI technology relating to FOMA handset chipsets, having manufacturers incorporate our requirements from the LSI specification review stage and striving for one-chip LSI, we shortened development times and costs with the introduction of one-chip. In addition, in the second half of the year ended March 31, 2008, we jointly developed a mobile phone platform that integrates the baseband LSI, the application processor one-chip LSI, and core software including the OS platform. Even after the year ended March 31, 2008, we continue to work in the jointundertook development of a ~~mobile phone~~Xi-compatible communications platform, ~~compatible with HSDPA cat.8~~aiming for greater efficiency and ~~having an even faster processor, achieving greater functionality and cost efficiency.~~

~~To promote greater global collaboration concerning Linux~~^® ~~platforms, we~~lower costs in handset development.

We participated in the formation of the LiMo Foundation with six companies including Vodafone Group and Motorola, Inc. in January 2007 and we are a founding member of the Symbian Foundation, a non-profit organization that promotes the development of Symbian OS^tm~~-based software platforms for mobile handsets.~~

~~Further, we participate~~ in the Open Handset Alliance^tm™, which includes Google, and in cooperation with Google, we released handsets ~~loaded with~~using Android^™, a software platform for mobile handsets. We moved forward with the realization of handsets ~~including commercialization for us. By having a standardized platform for mobile handsets, we anticipate reductions of development costs and shortening of development terms, and this~~ in ~~turn will lead to the promotion and spread of W-CDMA services across the world, and for this reason we have been actively involved in these activities.~~

In February 2010, upon the formation of the NPO “Wholesale Applications Community,” which has the aim of promoting an open market for mobile telephone applications, we signed a memorandum of understanding to consider participation in this alliance. The “Wholesale Applications Community” aims to create an ecosystem for developing and providing applications that respond to the needs of the market by building a more open development environment for mobile phone applications and by providing a diverse range of appealing applications which are not limited to specific handsets.

~~In April 2008, we launched development of operator packs to be used in~~new fields, such as the development of ~~FOMA~~10 smartphone models, including Android^™ and BlackBerry^® handsets. We also developed the sp-mode ISP for smartphones, enabling the use of sp-mode mail and the “Disaster Message Board Service.”

Furthermore, to answer customers’ demands for using SIM cards from other mobile operators with DOCOMO handsets, ~~to achieve greater efficiency in~~we worked on the development of ~~FOMA handsets, encourage mobile handsets manufacturers to participate in FOMA handsets~~various functions for SIM unlocking functions.

•

Development of Technology for Commercialization

We undertook development of technologies including the standardization of multimedia broadcasting, that combine the characteristics of broadcasting and ~~improve~~communication. We also worked on the ~~international competitiveness~~development of ~~domestic handsets manufacturers.~~

~~The operator pack is an application software set for the Linux~~^® ~~and Symbian OS~~^tm ~~operating systems that comply with LiMo~~^tm ~~specifications for DOCOMO’s proprietary services including i-mode and i-appli. The operator~~

~~pack will make use of such properties as the middleware (MOAP*: Mobilephone Oriented Application Platform) and application software we have developed. The operator pack, combined with~~translator phone, which incorporates a ~~global handset software platform containing a suite of basic functions~~user interface using technology such as ~~calling, will enable us~~voice recognition and a translation function.

•

Efforts Relating to Future Technologies

We continued our research on LTE-Advanced, a fourth-generation mobile communication standard, obtained extra base station licenses for conducting testing and made preparations to ~~provide a variety of services for our cellular services.~~ commence demonstration experiments.

We ~~installed the operator pack~~continued research on ~~FOMA handsets starting in December 2009~~creating cutting-edge interfaces such as shoot, touch and ~~recommend handsets manufacturers~~play 3D technology. We also conducted research on “mobile space statistics*,” thought to ~~use the operator pack.~~


*	~~MOAP is a software platform that was first used on some models in the FOMA 901i series handsets. The Linux~~^®~~-version of MOAP was jointly developed with NEC Corporation and Panasonic Mobile Communications, Co., Ltd; the Symbian OS~~^tm ~~version of MOAP was jointly developed with Fujitsu Limited. We continue to develop the standardization of platforms and extension of functions.~~

In the case that the rights for FOMA handset patented technologies and know-how, in which we invested development expenditures on handsets manufacturers, are used in handsets by the manufacturers and the handsets are supplied to other 3G operators, we will receive royalties from the manufacturers. In December 2005, in order to promote cooperation in technological development focusing on browser technology, we invested approximately additional ¥15 billion in Access. Also in December 2005, in an effort to strengthen our cooperation in handset middleware centered on Java technology, we invested approximately ¥13 billion in Aplix Corporation. In March 2008, with a view towards greater technical cooperationbe effective in the field of ~~user interfaces and other terminal middleware, we invested approximately ¥1.8 billion in Acrodea, Inc., and received a distribution in kind~~disaster prevention planning, for estimating the number of Acrodea, Inc. shares held by JAIC Advanced-Tech No. 1 Venture Capital Investment, LP of which we are a limited partner. Advanced handset capabilities and a wide variety of model choices play an important rolepeople who will have difficulty returning home in the ~~success~~event of ~~3G services. By investing in FOMA handset expansion, we expect to motivate manufacturers to produce advanced value-added 3G handsets, promoting the development of 3G services~~a natural disaster, and ~~mobile multimedia as we have already seen with the popularity of our 90xi series.~~

~~Notes:~~

~~1: Linux~~^® ~~is a registered trademark of Linus Torvalds~~ in the ~~U.S.~~field of community development. Also, to promote environmentally-friendly homes and ~~other countries.~~

electric vehicles, we tested interfaces to learn the status of household power consumption by wireless communications and utilize that information. We performed verifications aiming for the creation and standardization of such new communications technology platforms.

*
2:	~~Symbian OS and all Symbian related trademarks and logos are trademarks or registered trademarks~~Mobile space statistics refers to an estimate of ~~Symbian Ltd.~~geographic population distribution compiled from operational data necessary for providing mobile phone services. Individual users cannot be identified from the statistical information.


8.	~~Competition~~

9. Competition

As Japan’s mobile phone market has continued to mature in line with the rise in the cellular penetration rate, competition among operators remains intense in such areas as acquisition of subscribers and further improvement of service offerings. We have ~~responded to the gains made~~vied with our competitors, who have been gaining momentum in recent years, by ~~competitors with a~~enhancing our comprehensive approach, including revisions in our billing plans, releases of attractive handsets, and improvement in network quality. In the meantime, competition in the network layer has intensified due to the increasing number of new MVNOs, with foreign companies also among them, in addition to existing mobile phone network operators. The arrival of global players, including Apple Inc., Google Inc., and Amazon.com, Inc., has also accelerated the shift from the vertical integration model led by existing mobile phone network operators to a model of horizontal division, and has given vigor to a new vertical integration model in which the key is the terminal layer as well as content, application, platform and other ~~companies have also expressed their intention to enter the mobile phone market.~~

upper layers.

Furthermore, in addition to direct competition with other mobile network operators, we believe that the telecommunications industry in Japan is organizing itself into integrated groups of telecommunications service providers that will offer local, long-distance and international services as well as mobile and other services. While we believe that we have certain competitive advantages over these groups, including our current market leadership position, our research and development capability and our affiliation with NTT, the effect of industry consolidation is difficult to predict and no assurance can be given that we will be able to continue to protect our current market position.

~~• Competition in the mobile telecommunication market~~

•

Competition in the Mobile Telecommunication Market

There are presently four mobile network operators in Japan: DOCOMO, KDDI CORPORATION and its subsidiaries (“KDDI group”), SOFTBANK MOBILE Corp. (“SOFTBANK MOBILE”), and EMOBILE Ltd. (“EMOBILE”). As of March 31, ~~2010,~~2011, we had a market share of ~~50.0%~~48.5%, the KDDI group had a market share of ~~28.4%~~27.6%, SOFTBANK MOBILE had a market share of ~~19.5%~~21.3% and EMOBILE had a market share of ~~2.1%~~2.6%. These mobile network operators have all received permission and licenses from the Japanese government for the establishment of 3G services in Japan.

The KDDI group is the second largest mobile network operator in Japan with approximately 31.9 million subscriptions as of March 31, 2010. SOFTBANK MOBILE operates nationwide and is the third largest mobile network operator with approximately 21.9 million subscriptions as of March 31, 2010.

Competition in the mobile communication industry has led the three mobile network operators (excluding EMOBILE) to enact similar rate plans and promotions. For example, KDDI group and SOFTBANK MOBILE both offer plans and services that are similar to our “Family ~~Discount,” “Two-Month CarryOver”~~Discount” and “Pake-hodai double” services. SOFTBANK MOBILE introduced a service called the “White ~~Plan” service that~~Plan,” which allows users to make unlimited free calls among SOFTBANK MOBILE subscribers between 1:00 a.m. and 9:00 p.m.

The rapid expansion of the smartphone market has prompted operators to focus on efforts to increase smartphone sales. Competition in the smartphone market has intensified due to growing sales of the iPhone from Apple Inc., and mobile phone companies are enhancing their handset lineups by offering a variety of features, including user interfaces and functions. We are working on providing product lineups, including Android^TM handsets and BlackBerry^® handsets, and introducing convenient payment plans. In March 2011, we introduced “Monthly Support,” thus creating an easier environment for customers to have a smartphone.

We also believe that the data communications market for PCs and other devices offers opportunities for secondary unit demand. In regard to competition in this market, although EMOBILE has captured a large number of new subscriptions, we also have been putting greater emphasis on sales and are seeing a steady increase in the number of sales.

Regarding potential competition with fixed-line telecommunication services companies, our management believes that fixed-line telecommunication services and ~~cellular~~mobile communications services are not necessarily competitive with, but rather are primarily complementary to, each ~~other —~~ other—customers typically use fixed-line networks when they are at their homes or offices and ~~cellular~~mobile networks when they are outside. However, with the expansion of services offered by both fixed-line and mobile network operators, improvements in fixed-line and ~~cellular~~

mobile technology, rate reductions in ~~cellular~~mobile services, deregulation, competition within the telecommunications industry and other developments (including technological developments that may enable us to lower the cost and further improve the capacity of ~~cellular~~mobile communication), there may be direct or indirect competition or conflicts of interest between us and other NTT subsidiaries.

~~• Entry of other MVNOs~~

•

Trends of MVNOs

An MVNO is a mobile virtual network operator that (1) uses the mobile communication services provided by a mobile network operator (“MNO”) or connects with an MNO to provide mobile communications services, and (2) does not build or operate its own radio stations to provide such mobile communications services.

The MVNO system was introduced so that by means of MVNO’s utilizing the wireless network of an MNO to provide a diverse range of services, a diverse range of business models that are designed to meet the needs of users appear, thereby benefiting users through the provision of diverse and low-cost services in the mobile communications market. Another goal of the system is to ensure the fair and efficient use of radio waves.

In the saturated mobile phone market, the entry of MVNOs can be expected to lead the creation of new services, we are looking to build win-win relationships with MVNOs, and are taking a proactive approach to connection and collaboration with MVNOs.

~~• Competition in the Data Communication Market~~

In Japan’s mature mobile phone market, we believe that the data communication market is a particularly appealing market, offering opportunities for secondary unit demand. It is our goal to build a mobile data communication society, where a great many people can use mobile data communications easily and with convenience.

With respect to competition in the data communication market, EMOBILE has captured a large number of new subscriptions. We too have been putting greater emphasis on sales since the second half of FY2008, and have been seeing a steady increase in the number of sales.

~~• Competition in the Smartphone Market~~

Smartphone market is seen as a growth market with a substantial in the number of users, and an essential area for our future growth. Competition in the smartphone market has intensified since the launch of the iPhone from Apple, and mobile phone companies are enhancing their handset lineups, by offering a variety of forms, user interfaces and functions. We are working on providing product lineups including the Blackberry and Android handsets, and introducing easy-to-use payment plans.

10. Regulations


9.	~~Regulation of the Mobile Telecommunication Industry in Japan~~

MIC is the primary regulatory body with responsibility for the telecommunications industry in Japan. We and other mobile telecommunication service providers are regulated by MIC primarily under the Telecommunications Business Act. We and other mobile telecommunication service providers are also subject to the Radio Act. We, however, are not subject to regulation under the Law Concerning Nippon Telegraph and Telephone Corporation, Etc.

~~• The Telecommunications Business Act~~

•

The Telecommunications Business Act

Under the Telecommunications Business Act, we are subject to a registration requirement as telecommunications operators.

The following table summarizes some of the major current regulatory requirements applicable to telecommunications carriers under the Telecommunications Business Act:


		Regulation

a. ~~Entry into Business~~		Registration with the Minister of MIC required for carriers that install large-size telecommunications circuit facilities. Notification to the Minister of MIC required for carriers other than the above.
~~b. Suspension and Discontinuation of business~~		~~Notification to the Minister of MIC and, in general, announcement to users are required.~~
c. Tariff settings, service offerings, etc.		Unregulated in principle (excluding universal service and certain designated telecommunication services). Accountability to users concerning outline of terms and conditions of telecommunications service and proper and swift processing of complaints and inquiries from the users are required.
d.
b. Business improvement order		The Minister of MIC may order a telecommunications carrier to improve business activities to protect the interests of the public and users with regard to the secrecy of communications, unreasonably discriminatory treatment, ensuring important communications, tariff and other service conditions, ~~sound development of telecommunications, national convenience,~~ etc.

~~e. Interconnection~~
Regulation
c. Interconnection
Obligation, in principle, for interconnection with other telecommunications carriers ~~in principle, which~~that propose interconnection.
In the event a telecommunications carrier does not accept entering into a consultation despite the other carrier’s proposal to enter into an agreement to interconnect telecommunications facilities or if said consultation fails to come to an agreement, except for certain cases, the Minister of MIC may order such telecommunications carrier to start or resume consultation.
~~f. Rights-of-way~~ Based on a request by a telecommunications carrier, except for certain cases, the Minister of MIC may designate the telecommunications carrier as an approved carrier who has the privilege to act as a public utility.
~~g. Securing of Essential communications~~ ~~Telecommunications carriers are required to prioritize important communications when natural disaster, accident or any other emergency occurs or is on the verge of occurring.~~
~~h. Permission of agreement with foreign governments, etc.~~ The Minister of MIC’s permission is required for conclusion, amendment or abolition of agreements/contracts on important matters relating to telecommunications business with foreign governments, nationals, or judicial persons/entities.

The Asymmetric Regulation


		~~Regulation~~

~~i. Self-Confirmation of Telecommunications Facilities~~		Telecommunications carriers that install telecommunications circuit facilities are obligated to maintain their facilities in compliance with technical standards and to confirm conformity of such facilities to technical standards by themselves, and notify the outcome to the Minister of MIC.

~~The asymmetric regulation~~

Our telecommunications facilities have been designated as Category II-designated ~~facilities. In interconnecting~~facilities due to our market share which exceeds 25 percent in terms of the number of handsets with ~~another mobile network operator,~~active subscriptions within the same service area. Consequently, in interconnection with other telecommunications carriers, we are obligated ~~for notification~~to specify in advance fees to be obtained and terms of connection, etc. in the form of articles of agreement, and report these to the Minister of MIC ~~of the Articles of Agreement Concerning Interconnection, prior to implementation as well as to~~and make them ~~available for public inspection. Any~~public. No agreements pertaining to the interconnection between Category II-designated facilities and other ~~mobile network operators cannot~~telecommunications carriers may be entered into or amended without complying with those articles of agreement. Regarding fees charged to the ~~Articles~~connecting carrier as a result of ~~Agreement. Regarding the fees obtained from connecting mobile network operators in conjunction with~~ interconnection (connection charges), we are obligated to charge an amount ~~equivalent to~~consisting of appropriate costs plus a reasonable ~~margin.~~

margin and accordingly need to calculate such an amount by the method specified in the “Guideline relating to operation of the Category II-designated telecommunications facility system” (described later), and submit the basis of the calculation to the MIC. We are also under an obligation to assemble and make public accounting information about the connection in accordance with the MIC Ordinance.

In addition, we are designated as a ~~mobile network operator~~telecommunications carrier subject to the prohibition of anti-competitive behavior on the grounds that it is necessary to do so in consideration of the fact that our market share in terms of profits exceeds 25 percent, transitions in this share and other circumstances; and also, for the purpose of ensuring a fair environment of competition with other telecommunications carriers, we are accordingly prohibited from engaging in ~~the~~ anti-competitive ~~behaviors~~behavior such as;

Use of information of other mobile network operators obtained from competitors through interconnection for other purposes;

Unduly favorable treatment of specific telecommunication carriers; and

Undue discipline imposed on or interference with other carriers, manufacturers or suppliers of telecommunications equipment.

Method of Connection Charges Calculation

To ensure a fair environment for competition in the telecommunications market, the MIC has, for quite some time, taken the initiative to reconsider the nature of the connection rules. In March 2010, the MIC announced the “Guideline relating to operation of the Category II-designated telecommunications facility system” to clearly define a connection charges calculation method and other matters.

The Guideline applies to telecommunications carriers that have Category II-designated telecommunications facilities (Category II-designated carriers) and to connection charges applicable in the fiscal year ended March 2010 and later, and clearly defines a connection charges calculation method, including the requirement that carriers exclude, in principle, sales costs as well as a certain amount of capital expenses from costs of connection charges.

In January 2011, we reported to the Minister of MIC on the connection charges applied in the fiscal year ended March 2011 calculated in accordance with the Guideline, which dropped by up to 35.6% (in voice connection charges, within the service area) from those applied in the fiscal year ended March 2010.

Mechanism for Unbundling

The aforementioned Guideline provides that, if certain function is associated with a highly required or important service, if another carrier requests this to be unbundled and if it is technically possible to do so, it is desirable that Category II-designated carriers unbundle the said function to an extent not causing excessive economic burdens. Specifically, the following are functions that should desirably be unbundled: (i) the voice connection function, (ii) the ISP connection function, (iii) the layer 3 connection function and (iv) the layer 2 connection function. We have been providing these functions stated as desirable for unbundling before the Guideline was made public.

Also, the MIC has positioned the following functions as those to be closely observed: (i) tariff information distribution, (ii) charging and collection agent for content information charges, (iii) bulk content distribution, (iv) continuous distribution of GPS information, (v) SMS connection, (vi) e-mail forwarding for mobile phones, (vii) packet inbound connection and (viii) handset information distribution. The MIC will closely observe discussions among operators for a certain period of time, and, if it determines that the discussions are unlikely to form an agreement among the operators, it will make a final decision on whether these functions should be positioned as desirably unbundled. Regarding these closely observed functions, we are responding to requests from other operators in an appropriate manner.

•
	•	~~Use of information of other mobile network operators obtained from competitors through interconnection for other purposes;~~

	•	~~Unduly favorable treatment of specific telecommunication carriers; and~~

	•	~~Undue discipline imposed on or interference with other carriers, manufacturers or suppliers of telecommunications equipment.~~ *The Radio Act*

~~For other recent discussions concerning the Telecommunications Business Act, please see “Latest Proposals concerning the Telecommunications Business Act and the Radio Act” below.~~

~~• The Radio Act~~

~~Outline~~

The Radio Act was established to promote public welfare by ensuring the equitable and efficient utilization of radio waves. There are certain important provisions of the Radio Act applicable to us and other mobile phone service providers.

~~Article 4~~

The Act states that the MIC must, in order to ensure convenience for those planning to build a wireless base station, draw up and make available to the public a list of the ~~Radio Act requires~~frequencies that ~~any person~~are available for allocation. Anyone who ~~intends~~wishes to ~~establish~~build a ~~radio station shall obtain a license from the Minister of MIC. This requires mobile network operators to obtain a license in connection with individual~~wireless base stations and handsets. However, with respect to increases in the number of base stations and sales of handsets within the already allocated spectrum, a technical standards verification system and other systems have been introduced to expedite the process by MIC. Under Article 6 of the Radio Act, persons wishing to obtain a license for a radio station must submit an application form to the Minister of MIC together with documents ~~setting forth~~in which required matters ~~such as~~are stated, including the purpose of and ~~the~~ reason for ~~requiring~~building a station, the ~~establishment of a base station, communications counterparties, communications matters, locations where radio equipment are to be installed, and frequencies to be used. Under Article 7~~location of the ~~Radio~~wireless facilities and its frequencies, and acquire a license. The Act ~~the Minister of MIC, upon receiving an application for~~also states that any telecommunications carrier who has obtained a license shall examine it to determine whether it satisfies, among others, the following criteria: conformity of the construction design to technical standards, the availability of the frequencies requested, and conformity with the fundamental standards for radio station establishment such as the applicant’s business need for the license. Generally, the Minister of MIC refers such important matters as spectrum allocation to new operators and new systems to the Radio Regulatory Council for consultation and will grant the license only after obtaining the Council’s reply thereto.

~~Article 17 of the Radio Act requires a licensee to~~should obtain ~~prior permission~~approval from the Minister of MIC ~~for~~in advance of any operational changes, such as a change in recipients of wireless communications or the ~~operations, including changes~~location of the ~~person with whom radio communications is conducted and location of radio equipment, and for~~wireless facilities, or the ~~initiation of~~intention to start any construction to modify ~~any radio equipment. As with licensing, regulatory~~

the wireless facilities.

•

Latest Proposals concerning the Telecommunications Business Act and the Radio Act

requirements with respect to the location of radio equipment and construction to change radio equipment for use within the allocated spectrum has been simplified by implementing a certification procedure.

Article 26 of the Radio Act also provides that a list setting out current frequency assignments and frequencies available for future assignment shall be made public for the convenience of any person that would like to establish a radio station. The frequency or spectrum allocated for a certain use, such as cellular or PHS is stipulated by a ministerial ordinance of MIC. From within the assigned frequency or spectrum for a certain service, MIC allocates a spectrum to the mobile network operators providing such services. In accordance with Article 4 of the Radio Act as noted above, the operators then apply for a license for radio stations (i.e. base stations and handsets) that use frequency from within their allocated spectrum.

~~Spectrum Allocation~~

Spectrum is allocated to mobile network operators by MIC, which is the regulation authority with respect to radio frequencies and the allocation of spectrum in Japan, pursuant to the Radio Act. As spectrum capacity is limited, spectrum is a highly valuable resource. MIC currently allocates 41MHz x2 for 2G network. From among these, we have been allocated a frequency spectrum of 18MHz x2 in the 800MHz band. Radio frequencies for 3G networks have been allocated as stated below:

On June 30, 2000, we obtained approval from MPT (currently MIC) allowing us to use 15MHz x2 of the 2GHz band. In May 2004, MIC announced its allocation policy allowing us to use an additional 5MHz x2 of spectrum in the 2GHz band. Thus in total, we have been allocated 20MHz x2 in the 2GHz band.

In February 2005, MIC announced its policy to allocate to us, from among the reorganized 800MHz band, 15MHz x2 of spectrum after completing the migration of existing systems currently operating in the 800MHz band to other frequency bands operated. Of this spectrum, we are presently using at most 10MHz x2 in the area where we can avoid interference with existing systems.

In August 2005, MIC announced guidelines for establishing specified base stations, describing its policy for new allocation of 35MHz x2 in the 1.7GHz band (of which, 15MHz x2 is nationwide, only for new businesses, and 20MHz x2 is for Tokyo, Nagoya and Osaka, for both new and existing businesses) and 15MHz x2 in the 2GHz band (nationwide, for new businesses only). In April 2006, we were authorized to carry out plans for establishing the specified base stations and were allocated 5MHz x2 for Tokyo, Nagoya and Osaka. Since we satisfied the conditions for the allocation of additional spectrum relating to the 1.7GHz band for use in Tokyo, Nagoya, and Osaka, as specified in the allocation guidelines, subsequently, 5MHz x2 were allocated for our use in these cities in July 2006 and June 2008. Currently, we have been allocated a total of 15MHz x2.

Furthermore, MIC announced guidelines for establishing specified base stations concerning the installation of new 3.9 generation mobile communication systems in April 2009, and 10MHz x2 in the 1.7GHz band (for nationwide use by new carriers only) which had not already been allocated as well as 35MHz x2 in the 1.5GHz band that had been used for 2G networks but were reorganized and available for allocation. We submitted a specified base station plan to the MIC in May 2009, as a result of the review, MIC approved the plan in June 2009, and we have been allocated spectrum of 15MHz x2 in the 1.5GHz.

~~Recent Amendments~~

Under partial amendments to the Radio Act that became effective in April 2008, a system for conciliation and mediation by the Telecommunications Dispute Resolution Committee for disputes relating to radio stations was established. The system promotes negotiations to solve the long-standing problems of mixing of signals between new entrants setting up radio stations and existing carriers.

Under amendments to the Radio Act that took effect in May 2008 and in October 2008, a review of usage and rates was undertaken with respect to charges for radio spectrum use. Radio spectrum use fees had been used as a source of funds to provide subsidies to support transmission line costs for “wireless system dissemination support businesses” which promote the bringing of services to hard to reach locations in depopulated regions, but subsidies have been expanded to include tower construction, and as “mobile phone, etc. area development support

~~businesses,” a system was introduced to subsidize costs for transmission lines to mobile phone base stations and tower construction.~~

Under partial amendments to the Radio Act that became effective in October 2008, a system was created allowing persons other than licensees to perform the operations of repairing or moving ultra-small base stations for mobile phones (femtocell base stations).

~~For other recent discussions concerning the Radio Act, please see “Latest Proposals concerning the Telecommunications Business Act and the Radio Act” below.~~

~~• Latest Proposals concerning the Telecommunications Business Act and the Radio Act~~

Besides the above-mentioned regulations of the Telecommunications Business Act and the Radio Act, several other changes have been recommended by various governmental bodies.

~~Radio Spectrum Use~~

The study group on policies concerning the effective radio spectrum use of MIC that was established in January 2002, published its first report in December 2002. Its proposals included the introduction of a compensation scheme for licensees who shoulder losses resulting from a short-term reallocation of spectrum or a shift to fiber-optic cables instead of an alternative spectrum. That proposal was reflected in the Amendments to the Radio Act that passed by the Diet in May 2003. The report also proposed that a comparative examination system based on market principles and licensing procedures is desirable instead of an auction system which could seriously hinder effective use of radio spectrums as shown by the extremely high bidding that occurred in various European countries. The report also proposed deregulation on experimental radio stations. In September 2003 and December 2003, the study group published its second and third reports, including discussion of such topics as an after-the-fact registration system (including exemption from prior licensing) primarily for public wireless LAN services, and discussions about cost burdens. They released a final report October 2004 proposing basic policyGuideline regarding amendment of the scheme for spectrum user fee. In this report, in order to secure the fairness of the burden for spectrum user fee imposed to every licensee, reexamination of the fee scheme for each type of radio station and imposition of spectrum user fee charged depending on areas and ranges of spectrum used as a radio spectrum exclusive for wide-range areas (a frequency mainly used in radio stations which are built considerably in wide-range area by same licensee) were incorporated. Also, in order to bridge the digital divide, a system to financially assist, with a certain criteria, the expense of the cable transmission line to the mobile base station in rural areas and allocation of funds for the research and development of effective use of spectrum are incorporated. The proposed measure was approved and materialized in the Diet in October 2005, and it was reflected in the amended Radio Act proclaimed and enforced in November of the same year (reexamination of the charging scheme was enforced in December of the same year).

~~Evaluation of Competition in the Telecommunications Field~~MVNOs

MIC has performed analyses and evaluations in the telecommunications field intended for four areas; fixed-line phone, Internet access services, mobile communication, and corporate network services annually from the year ended March 31, 2004.

~~In October 2009, MIC announced evaluation of the mobile communication field “competition review in the telecommunications field for fiscal year 2008” as follows:~~


	•	DOCOMO’s share in the PHS/Mobile phone market was 48.7% as of March 31, 2009, and even though its market share has been declining gradually, the difference in market share with its competitors remains substantial. Given the oligopolistic structure of the market, DOCOMO is in a position to control the market. However, because of regulations on Category II-designated facilities and the fierce competition for market share among mobile network operators, the possibility is small that DOCOMO will actually exercise market control, whether acting independently or in concert with others.

	•	Regarding concerns that multiple carriers could collaborate in exercising the market control, the introduction of Mobile Number Portability has resulted in the provision of a variety of flat-rate billing


		plans and discounts. In addition, EMOBILE is acquiring users primarily in data communications services, and since the second half of the fiscal year 2007, a number of MVNOs have entered in the market. Thus competition is even greater than before, and given this, the possibility of such an exercise of the market control is remote.

~~Promotion of new entry by MVNOs~~

With a view toward a more dynamic mobile telecommunication market achieved by promoting new entry by MVNOs, MIC has formulated “guidelines regarding the application of the Telecommunications Business Act and the Radio Act to MVNO.” Under the guidelines, whether wholesale telecommunications services are to be provided by a Mobile Network Operator (“MNO”) to an MVNO, or whether there will be an interconnection between an MNO and MVNO are matters, in principle, to be decided by consultations between the parties, and when an MNO has had a request for connection from an MVNO, unless it has grounds to refuse, it must comply with such request.

~~Adoption~~Guideline regarding SIM Unlocking Functions

While mobile network operators in the mobile phone market in Japan currently provide handsets and network services on the assumption that SIM locks are used, the MIC put together a guideline regarding SIM unlocking in June 2010. From the perspective of, ~~Open Communications Platforms~~

~~In conjunction~~for instance, ensuring further improvement of user convenience and enhanced international competitiveness of Japan’s ICT industry, operators are expected to proceed, on their own initiative, to implement SIM unlocking functions, starting with handsets possible to do so. However, in view of the ~~increased use of broadband and IP, we~~fact that there are ~~reinforcing the collaboration among the authentication, billing and other functions~~still issues left unaddressed, it has been decided that ~~are essential~~deliberations towards legislating this measure should be postponed for the ~~efficient~~time being.

In the meantime, in order to accommodate the wishes of customers to use our handsets with other companies’ SIM cards, we have decided, as a general rule, that all handsets launched on or after April 1, 2011, will have a SIM unlocking function and that we will accept customers’ requests for SIM unlocking. We also began offering SIM cards* for customers who wish to use SIM-unlocked handsets from other carriers on our network, on the condition that they enter into a contract with us.

*	We offer three types of SIM cards: FOMA cards, docomo UIM cards and docomo mini UIM cards. Of these, docomo UIM cards and docomo mini UIM cards are also compatible with the Xi service in addition to the FOMA services.

Idea of a “Broadband Super Highway”

Acting on the idea of a “Broadband Super Highway,” which envisions covering every household in the broadband ~~distribution~~network by roughly 2015, in December 2010 the MIC announced a basic policy which summarizes plans for realizing the “Broadband Super Highway.” Issues regarding our company are the promotion of ~~content~~shared steel towers and ~~applications. A report~~spectrum auctions.

Basic Policy for Securing Frequencies for Wireless Broadband Networks

In November 2010, policy measures for securing frequencies for wireless broadband networks were put together under the working group set up by the ~~Study Group on~~MIC to deliberate frequency issues. A basic policy is presented among those measures, which maintains that frequencies of over the ~~Communications Platform that discussed relevant issues~~300MHz bandwidth should be secured by the year 2015 and ~~addressed~~those of over the ~~direction of future policies concerning~~1,500MHz bandwidth by the ~~development~~year 2020.

Another basic policy is presented there as a result of the ~~market environment for encouraging the creation~~discussion of ~~new business was released in January 2009. Subsequently,~~ a ~~discussion group of private entities has been specifically examining the issues, and in light~~spectrum allocation policy regarding part of the ~~“Guidelines related~~700MHz and 900MHz bands slated to ~~the provision of settlement means~~become available for new allocation for mobile ~~content” formulated~~phones after July 2012: an appropriate allocation approach will be to use the 700MHz band and the 900MHz band separately with a view to ensuring compatibility with how frequencies are allocated in ~~December 2009, we~~other countries. Further, another policy has also been put forward for transferring and reorganizing frequencies in order to have ~~been working on~~ the ~~adoption of open platforms, including enhanced billing functions for i-mode non-official sites, while giving consideration to the comfort and security of our users.~~

~~Going forward, we plan to actively address this topic based on building win-win relationships and securing a common framework for the four mobile service providers.~~

~~Review of Interconnection Rules in Response to Changes in the Telecommunications Market Environment~~

~~In the mobile telecommunication market, the number~~use of mobile phone ~~subscriptions has surpassed 100 million~~systems start in 2015 for the 700MHz band and in 2012 for the ~~importance~~900MHz band.

As a step to implement the prompt reorganization of ~~mobile phones as~~frequencies, it is recommended that an ~~essential infrastructure~~auction-type approach should be introduced to cover the costs required for ~~business~~transferring frequencies, and ~~day-to-day activities is increasing. In the fixed-line broadband market, the numbers of FTTH and DSL subscriptions switched positions in the first quarter~~partial revision of the year ended March 31, 2009, with FTTH taking the dominant position. In conjunction with these developments, the business format of using the networks of other operators is accelerating, and further development of the communications platform market and the content distribution market can be expected in the future.

In response to these market changes, the MIC’s Telecommunications Council has received optimal interconnection rules from the perspective of maintaining a fair competitive environment in the telecommunications markets. They issued a response to the MIC in October 2009 and in light of this the MIC announced the “Guidelines relating to operation of the Category II-designated telecommunications facility system” in March 2010, clarifying the interconnection rules. The key issues that are particularly relevant for us, and our evaluation thereof, are as follows:


	~~(1)~~	“Interconnection Fee Computation Clarification and Rules” (concerning telecommunication facilities usage fees for interconnection) seeks to correct differences in the interconnection fees paid by mobile network operators, by bringing transparency and rules to the calculation of interconnection fees.

On the one hand, because the rules for calculation of interconnection fees exclude the operating expenses that are included in the interconnection fees, it is envisioned that the fall in interconnection fees will lead to a decrease in revenues, but because other mobile network operators will also be calculating interconnection fees based on the same calculation rules, the differences will narrow and payments will also decrease.


	~~(2)~~	~~The “Rules for Roaming etc.” (concerning mobile phone service area supplementation for other mobile network operators) assumes that roaming will be based upon an agreement between mobile network~~


		~~operators. We are pleased with the provision that failure by an MNO to keep its service area in proper order will constitute grounds for refusing interconnection.~~


	~~(3)~~	With respect to the “Adoption of Open Telecommunication Platforms” (concerning the provision of a variety of functions to content-based services), we are first of all pleased that agreements formed through negotiation between mobile network operators will be respected.

~~Review of the Legal System for Communications and Broadcasting~~

MIC recently concluded a review of the legal system for the convergence and collaboration between communications and broadcasting, and in August 2009 the Telecommunications Council announced its response, the foundation of which was a re-compilation and restructuring of current law. With the change in administrations, the details of this response were re-examined, and a bill was submitted to the Diet for amending the Telecommunications Act, Radio Act ~~and Broadcast Act in March 2010.~~

~~The proposed amendments to the Telecommunications Act include (1) provisions~~is being contemplated for ~~the enhancement of the dispute resolution function (adding contents providers and tower sharing~~that purpose. Further still, as areas eligible for dispute resolution) and (2) the formulation of an interconnection accounting system for mobile network operators installing Category II-designated facilities in light of the above-mentioned response regarding interconnection rules. The law is expected to be implemented within one year in the case that it is passed by the Diet and promulgated.

~~ICT Policy Task Force for a Global Era~~

As the Democratic Party of Japan administration took office in August 2009, a new task force was established at MIC in October 2009 for the purpose of investigating new ICT policies from a global perspective.

~~The task force subcommittees are expected to deliberate the following four issues for roughly a year.~~


	~~(1)~~	~~Past competition policy review~~

They will review the effects on fair trade in the telecommunications market brought about by deregulation and reform measures implemented since the liberalization of the telecommunications market in 1985 and the privatization of Nippon Telegraph and Telephone Public Corporation.


	~~(2)~~	~~Investigation of ways to address the environmental change in the telecommunications market~~

They will review measures from a global perspective to address the issues relating to further development, in light of the spread of IP, broadband and mobile networks and other recent and future changes to the market environment.


	~~(3)~~	~~Investigation of the strengthening of international competitiveness~~

With a view towards counterbalancing the contraction of the domestic market from the aging society and creating new employment, they will review measures to promote global development of fully Japan-based efforts by content providers, manufacturers and a wide range of other ICT-related companies.


	~~(4)~~	~~Investigation of global issues (e.g., environmental problems)~~

Based on the principles of business creation and cooperation, they will review measures to utilize ICT, including the distribution of content in order to address regional and global issues faced by countries across the world, such as environmental and medical issues, so that all persons can equally share the benefits of ICT.

~~On May 18, 2010, a report was issued indicating~~ a basic policy regarding ~~(i) establishing~~new wireless systems, such as a ~~“Hikari no Michi” (access network) and (ii) promoting ICT utilization. While there were no specific references to the~~4G mobile ~~phone business, we may be expected to perform a certain role in strengthening the broadband infrastructure, but the impact this may have is currently unknown.~~

~~In addition, the subcommittee addressing environmental changes to the telecommunications market formed a working group to consider frequencies~~communications system, for the ~~purpose of achieving wireless broadband, which is expected to formulate a policy for securing frequency allocation for broadband wireless around July 2010.~~

~~Deliberations regarding removal of SIM lock~~

~~In Japan’s mobile phone market, handsets and network services are provided by mobile network operators on~~“Broadband Super Highway,”, the assumption that those mobile phones are locked with the operators. The MIC, however, with a view towards improving user convenience and reinforcing the international competitiveness of the ICT industry, indicated its intention to review the propriety of SIM lock, and held a public hearing for mobile network operators on April 2, 2010.

~~The MIC is expected to release the guidelines on the details including products and the timing SIM lock is removed.~~

~~Our basic views on the removal of SIM lock are as follows;~~


	~~(1)~~	~~In principle, we will comply with the needs of subscribers;~~

	~~(2)~~	~~It is essential that subscribers make their decisions upon the full understanding of the effects of removing the SIM lock;~~

	~~(3)~~	~~It is necessary the four mobile network operators will keep step with each other and address the issue; and~~

	~~(4)~~	~~The removal of SIM lock must proceed as an initiative voluntarily undertaken by mobile network operators.~~

~~We intend to move forward in a manner consistent with the guidelines and measures of other operators so that we can deal with the removal of SIM lock without impairing the convenience of subscribers.~~

~~• Information Security Management~~

~~In order to protect customer information, in conjunction with the full~~ implementation of the Law on the Protection of Personal Information, we established the position of Chief Privacy Officer (CPO) and strengthened the system for protection of personal information, and we are making efforts to construct a company-wide information security system.

In addition, we agreed to take efforts to prevent personal information leaks by handling and managing all terminals and external storage devices containing personal information, periodically educating and training our employees, confirming matters for compliancespectrum auctions, held in information management with all entities to which we outsource services, instructing and supervising such entities, strengthening the security technology in all our systems, establishing system security standards and developing, operating and managing systems in compliance with such standards.

~~• Law to Prevent Unauthorized Use of Mobile Phones~~

In April 2006, with the enforcement of the Law to Prevent Unauthorized Use of Mobile Phones, we coped with imposition of identification and recording the documents verifying the customer’s proof of identity at the time of new contracts and reviewed an operative manual in order to comply with the law as a mobile network operator. In addition, we carry out the training for all the members performing duties such as identification and make an effort to ensure proper operation of such duties.

~~• Law to Promote a Healthful Internet Environment for Youth~~

~~In April 2009, with the enforcement of the Law to Promote a Healthful Internet Environment for Youth, we implemented~~ a number of other countries, is under consideration. A “Conference for Spectrum Auctions” has been set up, and by around December 2011, it will examine the current trend in spectrum auctions and discuss tasks and other details regarding implementation.

Committee on Competition Policy for Promoting Broadband Networks

To promote the expansion of broadband networks, the MIC established a new “Committee on Competition Policy for Promoting Broadband Networks” in March 2011, since it is essential to comprehensively pursue policies required to stimulate active competition among carriers, such as promoting competition of facilities by opening up wiring infrastructures (such as power poles and conduit lines), promoting competition of services

arising from the open architecture of NGNs (Next Generation Networks) and promoting competition in the mobile communications market, in which changes in market environment has been significant. Discussions are to be held and the findings are to be reported in December 2011.

Committee on Secure Communications in a State of Crisis caused by Large-Scale Disasters

The Great East Japan Earthquake caused congestion and/or disconnection of communications in wide areas. Based on this fact, because maintaining basic and key communications, including those for emergency alerts or confirmation of safety and communications for the police as well as the distribution of disaster preparedness information, are essential for securing the lives and property of citizens and for maintaining a functional nation in the event of a disaster, the MIC newly established a “Committee on Secure Communications in a State of Crisis caused by Large-Scale Disasters” in April 2011.

The committee will discuss the following issues: (i) how to control communication congestion in the event of a crisis, (ii) how to ensure communication measures ~~including~~when a ~~review~~base or a relay station is damaged, (iii) appropriate network infrastructure based on the experience of the Great East Japan Earthquake and (iv) effective use of the Internet based on the experience of the Great East Japan Earthquake.

11. Efforts to Address Disasters

Mobile phones represent an ~~operative manual for application of basic rules for filtering when subscribers under 18 years of age access~~important communications infrastructure that is critical to the ~~Internet using~~livelihood of people and they carry an expectation that they will play an extremely important role in the event of a disaster, such as an earthquake or wind or flood damage, by serving lifesaving purposes and providing communications functions of national agencies and local municipalities. We are working to develop communications networks that can withstand disasters, and it is also striving to ensure the security and reliability of our networks.

As a system to address the event of a disaster, a disaster response headquarters will be established in our head office or branch, etc. according to the scale of the disaster or damage. The disaster response headquarters will collect information hand in hand with unaffected branches, our group companies, NTT group companies and others and coordinate restoration work and support plans, etc. based on the information thus collected, and teams formed within the disaster response headquarters take command of their respective work. Depending on the scale of the disaster, we will work with the Cabinet Office, the MIC, the government’s emergency response headquarters, etc. to cooperate in reconstruction efforts of the government and others. We will also supply information to our customers by, for instance, explaining to the press specific information on the damage or the status of restoration.

•

Damages of the Great East Japan Earthquake

Following the Great East Japan Earthquake on March 11, 2011, some 6,700 base station equipment became inoperable due to physical damages to these facilities, disruption of commercial power supply and transmission lines and other factors. With regard to docomo Shops, in the immediate aftermath of the earthquake, 159 out of 195 shops in the Tohoku region were forced to close temporarily, and a total of 90 shops including those located in the Kanto region were either completely or partially destroyed.

Immediately after the earthquake, we established Disaster Countermeasures Offices in our headquarters and the Tohoku Regional Office to create an organizational structure capable of close collaboration 24 hours a day, and activated the “Disaster Message Board Service.” In cooperation with other NTT group companies and construction companies, we have worked to assess the damages and restore our communication facilities as quickly as possible and initiated support activities for disaster victims.

•
Restoration Activities

The specific actions undertaken by our group for the restoration of communication facilities and the support for disaster victims are as follows:

Restoration of Communication Facilities

In our efforts toward the restoration of damaged communication facilities, we mobilized a total of some 4,000 people, and deployed approximately 30 mobile base station vehicles, approximately 30 mobile power supply vehicles and approximately 400 units of portable power generators to supply electricity to base stations and other facilities where commercial power supply was disrupted. We also recovered the transmission lines through the use of optical fiber, micro-wireless circuits and satellite circuits, and deployed base stations employing a large zone scheme* on mountaintops and other locations to resume services as quickly as possible. In areas where access was restricted due to the accident at the Fukushima Daiichi Nuclear Power Plant, we used high-performance antennas to transmit signals from outside the 20-km exclusion zone and replaced the transmission lines inside exchange-office buildings within the 20-km exclusion zone. As a result of these efforts, most of the service areas near the nuclear power plant and along major trunk roads in its vicinity were restored, enabling the resumption of FOMA service.

*	“Large zone scheme” is a method to cover areas normally covered by multiple stations by utilizing a single station.

Initiatives for Securing Means for Communication

To assist the restoration of disaster-stricken areas, we rented to local administrative institutions and installed at evacuation shelters approximately 900 satellite mobile phones, approximately 1,700 mobile phones and approximately 300 tablet devices. We also established approximately 300 stations where mobile phones can be recharged for free using multi-chargers, solar chargers and other means.

Provision of Disaster Message Board Service

We activated the “Disaster Message Board Service” immediately after the earthquake to provide disaster victims with a means of communication. To allow a greater number of people to use this service, we expanded the areas from which messages can be posted to cover the entire nation within one week after the quake, and also enabled its use through smartphones.

Reopening of docomo Shops

To offer assistance to customers whose mobile phones were damaged or lost due to the disaster, we strived to reopen our docomo Shops as quickly as possible. As of March 31, 2011, approximately 90% of our docomo Shops, excluding those in ~~order~~buildings that were severely damaged or those within the exclusion zone around the Fukushima Daiichi Nuclear Power Plant, have reopened. For customers living in areas near shops which could not resume operations, nearby docomo Shops provided on-site services to ~~comply with~~answer to their needs.

Provision of Restoration Area Maps

For the ~~law~~three prefectures of Iwate, Miyagi and Fukushima, which suffered the severest damages from the earthquake, we started providing the “Restoration Area Maps” (Japanese only) on our home page from March 20, 2011, to allow users to confirm on maps such details as aareas where FOMA service is available, areas that have been restored or planned to be restored through the use of mobile ~~network operator.~~base station vehicles, locations where satellite mobile phones and free recharging services are available and information regarding docomo Shops.

Support for Disaster Victims

To support our customers affected by the disaster, we provided various services such as the extension of payment deadlines on phone bills, discounts on handset repair charges and free data restoration service for handsets damaged due to water exposure. In addition, for customers affected by the disaster, we ~~moved forward~~decided to refund the basic monthly fees and other charges for the periods when services were not available.

Launch of Charity Drive Website for Affected Areas, etc.

To support the disaster-stricken areas, we launched a website to collect donations from customers through the “docomo Mobile Remittance Service,” “docomo Points” and other methods. We have donated ¥780 million, which was collected through March 30, 2011. We have also started accepting donations through the sale of charity applications and content from April 2011, and a total sum of ¥120 million collected by April 13, 2011 was donated. In a separate effort, the Company made a disaster-relief donation of ¥500 million.

12. Relationship with ~~initiatives to protect youth, including mobile phone safety classes to help prevent youth from becoming involved in crimes through mobile phones.~~

NTT


~~10.~~	~~Relationship with NTT~~

NTT is our parent company and owned ~~66.43%~~66.65% of our voting rights as of March 31, ~~2010.~~2011. The government of Japan, in the name of the Minister of Finance, owned ~~40.16%~~40.15% of the voting rights of NTT as of the same date. The government of Japan, acting through MIC, also regulates the activities of NTT.

The NTT group is the largest provider of fixed-line and wireless voice, data, Internet and related telecommunications services in Japan and operates one of the largest telecommunications networks in the world. The NTT group’s main business is providing nationwide telecommunications services including voice communication services, data communication services, leased circuit services, system integration services and other services. As a holding company, NTT is directly responsible for the overall strategy of the NTT group. NTT is also responsible for basic research and development for its group companies.

Although NTT owned ~~66.43%~~66.65% of our voting rights as of March 31, ~~2010,~~2011, we conduct our day-to-day business operations independently of NTT and its other subsidiaries. All transactions between us and each of NTT and its subsidiaries and affiliates are conducted on an arm’s length basis. In the year ended March 31, ~~2010,~~2011, we had sales of ~~¥46,880~~¥38,336 million to NTT and its subsidiaries and had cost of services, selling, general and administrative expenses and capital expenditures of ~~¥208,178~~¥210,446 million, ~~¥118,265~~¥113,023 million and ~~¥72,928~~¥76,214 million, respectively, to NTT and its other subsidiaries, compared to sales of ~~¥57,279~~¥46,880 million and cost of services, selling, general and administrative expenses and capital expenditures of ~~¥236,004~~¥208,178 million, ~~¥131,849~~¥118,265 million and ~~¥70,840~~¥72,928 million, respectively, in the year ended March 31, ~~2009.~~2010. We also had receivables of ~~¥11,164~~¥10,430 million from NTT and its subsidiaries and payables of ~~¥70,751~~¥70,542 million to NTT and its subsidiaries at March 31, ~~2010,~~2011, compared to ~~¥12,510~~¥11,164 million and ~~¥73,476~~¥70,751 million at March 31, ~~2009.~~

2010.

In order to ensure fair competition in the mobile telecommunication business, the MPT (currently the MIC) in April 1992 established the following conditions of separation on NTT, ~~(which~~which was then ~~in operation of the~~operating fixed line telephone ~~services)~~services, and us, ~~(which~~which remain ~~applicable):~~applicable:

To the extent possible, we must establish transmission lines for our network independent of NTT. In the event that we use NTT transmission lines, the terms and conditions for such use shall be the same as those for our competitors.

NTT must not favor us in any transactions between NTT and us. The terms and conditions for our use of NTT utility poles, access to NTT’s network, access to NTT research and development and similar matters should be the same as for our competitors.


	•	To the extent possible, we must establish transmission lines for our network independent of NTT. In the event that we use NTT transmission lines, the terms and conditions for such use shall be the same as those for our competitors.

	•	NTT must not favor us in any transactions between NTT and us. The terms and conditions for our use of NTT utility poles, access to NTT’s network, access to NTT research and development and similar matters should be the same as for our competitors.

	•	~~All former NTT employees transferred to us were required to be permanent employees, rather than being seconded from NTT.~~

	•	~~We were to plan to have our shares listed and NTT’s ownership in us reduced approximately five years after incorporation.~~

	•	~~We must not engage in joint procurement with NTT so as not to use NTT’s purchasing power with the objective of obtaining favorable treatment or pricing from its suppliers and manufacturers.~~

All former NTT employees transferred to us were required to be permanent employees, rather than being seconded from NTT.

We were to plan to have our shares listed and NTT’s ownership in us reduced approximately five years after incorporation.

We must not engage in joint procurement with NTT so as not to use NTT’s purchasing power with the objective of obtaining favorable treatment or pricing from its suppliers and manufacturers.

At the time of separation from NTT, all trademarks and service marks for our products developed by NTT, other than the “NTT ~~DOCOMO”~~DoCoMo” trademark, the ~~“DOCOMO”~~“DoCoMo” trademark and the “NTT ~~DOCOMO”~~DoCoMo” service mark, were assigned to us. If NTT’s ownership of our shares is substantially reduced, we may not be able to continue to use the trademarks and service marks that include “NTT.” Patents, utility model rights and design rights are shared equally with NTT. While certain rights to programs concerning wireless telecommunication systems were assigned by NTT to us, NTT owns the rights to other programs concerning wireless telecommunication systems and grants us licenses to use such rights. Since the separation, NTT and we have each retained rights resulting from our own research and development. When we desire to use NTT’s technology, we are required to pay royalties equal to those other wireless telecommunication companies would pay for the use of such technology, and such technology is available equally to us and our competitors. We are also required to pay NTT certain basic research and development fees.

Although we operate independently of NTT, the following matters, among other things, relating to us are discussed directly with or reported to NTT: matters that are required to be voted on at shareholders’ meetings, including amendments to the Articles of Incorporation, mergers and consolidations, assignments and transfers of business, election and removal of directors and corporate auditors, and appropriation of profits; increases in share capital; investments, including international investments; loans and guarantees; and establishment of businesses plans. In addition, Mr. Hiroshi Tsujigami, a full-time employee of NTT, serves part-time on our board of directors.

To date, with respect to the stake in us held by NTT, such documents as the Deregulation Committee 1998 report, the 2000 opinion of the Regulatory Reform Committee, and the government’s “Three-year Program for Promoting Regulatory Reform” of 2001 have concluded that, from the perspective of promoting completion among NTT ~~Group~~group companies, efforts should be made to further lower the stake. NTT has declared its view that its ownership of our shares does not have any adverse effects on fair competition and that it intends to maintain its ownership stake in us at 51% or above. Further, the Japanese government has not decided what action, if any, it will take with respect to NTT’s ownership of our shares.

NTT has entered into agreements with each of DOCOMO, NTT East and NTT West and certain other subsidiaries that provide for NTT to receive compensation for performing basic research and development and for providing management and administrative services. NTT also receives dividends when dividends are declared by its subsidiaries, including DOCOMO.


~~11.~~	~~Employees~~

13. Employees

As of March 31, 2011, DOCOMO and its subsidiaries had 22,954 employees representing a increase of 657 employees since March 31, 2010. As of March 31, 2010, ~~DOCOMO~~2009 and ~~its subsidiaries~~2008 we had 22,297, ~~employees representing a increase of 466 employees since March 31, 2009. As of March 31, 2009, 2008~~21,831, and ~~2007 we had 21,831,~~ 22,100 ~~and 21,591~~ employees, respectively. The average number of temporary employees for the year ended March 31, ~~2010~~2011 was ~~6,969.~~

8,203.

Of our ~~22,297~~22,954 employees on March 31, ~~2010,~~2011, approximately ~~1,110~~2,151 were staff in departments such as human resources, general affairs, management planning, accounting and finance, while the rest were engaged in business operations, such as sales, research and development and related matters. Also, as of March 31, ~~2010,~~2011, approximately ~~1,360~~1,769 employees were working at overseas consolidated subsidiaries.

We consider our level of remuneration, non-wage benefits, including our employee share ownership program, working conditions and other allowances, including lump-sum payments and annuities to employees upon retirement, to be generally competitive with those offered in Japan by other large enterprises. We have an

extensive training program for new employees. To increase incentives, the NTT group has implemented a bonus plan based on overall business performance and personal results. The general retirement age has been 60.

Most of our non-management employees are members of ALL NTT WORKERS UNION OF JAPAN. We consider our relationship with such unions to be excellent. We have never had a strike.


~~12.~~	~~Legal Proceedings~~

14. Legal Proceedings

We have initiated normal actions relating to the collection of telecommunications charges and other legal proceedings in the ordinary course of business and are not involved in any litigation and have not been involved in other legal proceedings in the preceding 12 months from the date of this document that, if determined adversely to us, would individually or in the aggregate have a material adverse effect on our financial position or profitability.


C.	~~Organizational Structure~~

C. Organizational Structure

As of March 31, ~~2010,~~2011, NTT, our parent company, was our largest shareholder and owned ~~66.43%~~66.65% of our outstanding voting shares. We are the largest wireless telecommunication services provider in Japan based on the number of subscriptions.

There are no subsidiaries that are considered to be significant as of March 31, ~~2010.~~

2011.

D. Property, Plant and Equipment


D.	~~Property, Plant and Equipment~~

Our property includes buildings which contain wireless telecommunication equipment. As of March 31, ~~2010,~~2011, we and our regional offices owned ~~3,491,936~~3,445,356 square meters of land and ~~1,561,788~~1,560,661 square meters of office space, buildings containing switching centers, company dormitories and warehouses throughout Japan. In addition, as of March 31, ~~2010,~~2011, we leased ~~9,086,385~~11,223,067 square meters of land mainly for base stations and transmission facilities.


~~Item 4A.~~	*~~Unresolved Staff Comments~~*

We do not, directly or indirectly through a subsidiary, operate a coal or other mine subject to the U.S. Federal Mine Safety and Health Act of 1977.

Item 4A. Unresolved Staff Comments

Not applicable.


~~Item 5.~~	*~~Operating and Financial Review and Prospects~~*

Item 5. Operating and Financial Review and Prospects

You should read the following discussion of our financial condition and results of operations together with our consolidated financial statements and the notes thereto included in this annual report.

This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth under “Risk Factors” and elsewhere in this ~~annual~~ report.

We will discuss the following matters in this Item 5:

A. Operating Results

Overview

Trends in the Mobile Communications Industry in Japan


	•	~~Overview~~

	•	~~Trends in the Mobile Communications Industry in Japan~~

	•	~~Operating Strategies~~

	•	~~Operating Trends~~

	•	~~Operating Results for the years ended March 31, 2010 and 2009~~

	•	~~Segment Information~~

	•	~~Recent Accounting Pronouncements and Critical Accounting Policies~~

	•	~~Liquidity and Capital Resources~~

	•	~~Research and Development~~

	•	~~Trend Information~~

	•	~~Others~~

Operating Strategies


A.	~~Operating Results~~

Operating Trends

Operating Results for the year ended March 31, 2011

Operating Results for the year ended March 31, 2010

Segment Information

Recent Accounting Pronouncements

Critical Accounting Policies

B. Liquidity and Capital Resources

Cash Requirements

Sources of Cash

C. Research and Development

D. Prospects for Business Trends and Financial Performance

E. Off-Balance Sheet Arrangements

F. Tabular Disclosure of Contractual Obligations

A. Operating Results

Overview

We are the largest cellular network operator in Japan ~~in terms~~providing a wide array of ~~both revenues and number of subscriptions.~~wireless communication services including cellular phone service. As of March 31, ~~2010,~~2011, we had approximately ~~56.08~~58.01 million subscriptions, which represented ~~50.0%~~48.5% of all cellular subscriptions in Japan. We earn revenues and generate cash primarily by offering a variety of wireless voice and data ~~communications~~communication services and products. In cellular services, which account for the majority of our revenues, we provide voice communication services as well as ~~“i-mode”~~data communication services ~~which enable our subscribers to exchangee-mails~~ ~~and to access various sources of information including the Internet~~ via our nationwide packet communications network. In addition to cellular services, we presently provide ~~wireless LAN services nationwide,~~ credit payment services, ~~and~~ home shopping services, mobile advertisement sales, internet access services for hotels and various other services.

Now that the use of cellular phone has become widespread in Japan, it is difficult to duplicate the rapid growth we experienced in our earlier operations. ~~However,~~Under these market conditions, we announced our new corporate vision of “Pursuing Smart Innovation: HEART” in ~~order~~July 2010. In view of the anticipated changes in society in the future, we aim to ~~achieve sustainable~~drive innovation by leveraging the unique properties of mobile devices and partnering with a broad range of companies to connect people and society in smart, innovative ways for enhanced quality of life, and thereby create new revenue sources with the aim of achieving further growth and ~~create~~delivering new ~~sources of revenues, we are committed~~value to ~~upgrading our cellular communications services from a telecommunication~~

society.

~~infrastructure to an indispensable life-style infrastructure for everyday life that can bring abundance to the lives and business of users.~~

During the fiscal year ended March 31, ~~2010,~~2011, we ~~strived~~worked particularly to expand subscribers’ packet usage ~~through the expansion and enrichment of~~by enriching our video content ~~services as well as~~portfolio and taking other measures aimed at boosting users’ data usage and promoting various initiatives to expand the user base of smartphones and PC data cards. In particular, to respond to the rapid expansion of the smartphone market, we significantly reinforced our product lineup, revised our billing plans and worked toward the enrichment of content and applications for mobile phones. We also accelerated the personalization of services with the launch of an upgraded behavior support services compatible with the Auto-GPS (Global Positioning System) locating capability and other initiatives. In addition, we have takencarried out various ~~steps~~initiatives aimed at enhancing customer satisfaction ~~including~~on a continual basis from the ~~enrichment of our handset lineup, billing plans and after-sales support.~~

previous fiscal year.

For the year ended March 31, ~~2010,~~2011, our operating revenues were ~~¥4,284.4~~¥4,224.3 billion, ~~posting~~ a decrease of ~~¥163.6~~¥60.1 billion from the prior fiscal year due primary to the decline in voice revenues. On the other hand, we recognized operating income of ~~¥834.2~~¥844.7 billion, achieving an increase of ~~¥3.3~~¥10.5 billion from the prior fiscal year through our continuous efforts to reduce our operating expenses including network-related expenses. Net income attributable to NTT DOCOMO, INC. ~~increased~~decreased by ~~¥22.9~~¥4.3 billion from the prior fiscal year to ~~¥494.8~~¥490.5 billion. Cash flows from operating ~~activity was ¥1,182.8~~activities were ¥1,287.0 billion, increasing by ~~¥9.1~~¥104.2 billion from the prior fiscal year due mainly to the ~~increased amount~~decrease of ~~cash collections of~~fund-provision in relation to installment ~~receivable~~receivables for ~~handsets.~~subscribers’ handset purchases. Capital expenditures decreased by ~~¥51.1~~¥18.0 billion from the prior fiscal year to ~~¥686.5~~¥668.5 billion as we worked to improve our efficiency while enhancing the quality of our network.

On March 11, 2011, a magnitude 9.0 earthquake, the Great East Japan Earthquake, struck Japan with its epicenter located off the coast of Tohoku. The earthquake and the subsequent tsunami caused damage to our communication and other facilities, disruption of services due to power outage and other impacts. Immediately after the earthquake, we established the Disaster Countermeasures Offices in our Tokyo headquarters and the Tohoku Regional Office and worked toward early restoration of damaged facilities and resumption of services. As a result, by March 31, 2011, we resumed most of our FOMA service and reopened approximately 90% of our docomo Shops in the stricken area. In relation to the disaster, we recorded ¥7.1 billion in operating expenses for the fiscal year ended March 31, 2011, including write-downs of damaged facilities and equipment, and personnel and other expenses incurred in response for the disaster. However, there was no significant impact on our results for the fiscal year ended March 31, 2011.

Trends in the Mobile Communications Industry in Japan

According to an announcement by the Telecommunications Carriers Association, the mobile communications market in Japan saw a ~~4.70~~7.35 million net increase in cellular subscriptions for the year ended March 31, ~~2010.~~2011. The total number of cellular subscriptions in Japan grew to ~~112.18~~119.54 million as of March 31, ~~2010,~~2011, which represented a market penetration rate of ~~88.1%~~approximately 93%. ~~However,~~Although the total number of subscriptions expanded due to development of new markets such as smartphones, PC data cards and built-in communication modules, the annual growth rate of cellular subscriptions has slowed in line with the rise in penetration rate and the decrease in the future population, and was limited to ~~6.2%,~~ 4.6%, 4.4% and ~~4.4%~~6.6% for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010~~2011, respectively. We believe the growth rate of new cellular subscriptions in ~~Japan~~the coming years will also be limited to a similar level.

As of March 31, ~~2010,~~2011, cellular services were provided in Japan by four network operators ~~in Japan~~ including us and their group companies. In addition to providing cellular services, the network operators also develop mobile phones and other communications devices compatible with their communications services jointly with manufacturers, and subsequently sell them to agent resellers and other retailers for sale to subscribers. As for cellular services, after we launched our third-generation mobile communications (3G) services, FOMA, using the W-CDMA technology in 2001, other operator groups also introduced 3G services. In recent years, 3G services have become the mainstream service for all operator groups. As of March 31, ~~2010,~~2011, the number of 3G mobile communications service subscribers in Japan totaled ~~109.06~~118.13 million, accounting for ~~97.2%~~98.8% of the total number of mobile phone subscriptions.

~~Competition among~~ In December 2010, we launched Japan’s first commercial service using LTE (Long-Term Evolution), a technical standard developed as an extension to the ~~network operators~~3G system, in ~~Japan remains intense~~Tokyo, Nagoya and Osaka under a new service brand called “Xi”. As of March 31, 2011, the total number of subscriptions to Xi service was approximately 26,000. Meanwhile, the sales of smartphones have recorded a remarkable increase in recent years. We expect this trend of expanded smartphone sales will continue going forward. According to our forecast, the total number of smartphones to be sold in the fiscal year ending March 31, 2012 is projected to increase by more than two-fold compared to the previous fiscal year and the size of the smartphone market is likely to become larger than that of the existing feature phone market within the fiscal year ending March 31, 2013.

While the growth prospects for Japan’s mobile phone market may be limited in terms of the number of subscriptions, data usage has been increasing owing to the expanded uptake of smartphones and growing

adoption of flat-rate billing plans for unlimited packet access and high-speed data services, and new market opportunities are beginning to emerge in such areas as ~~the room~~content and applications for ~~growth became limited and user needs diversified.~~mobile devices. The network operators in Japan have been competing against one another ~~for the retention of~~to retain existing subscriptions, ~~and acquisition of~~to acquire new subscriptions and to capture revenues from new markets by addressing the following issues:


	•	Pricing strategy: Offering of free voice calls among family members subscribing to the same operator, free voice calls among phones subscribed under the same corporate subscription account, introduction of new discount services conditioned upon long-term subscriptions, ~~and~~ introduction of packet flat-rate services, and introduction of billing plans offering discounts to smartphone users, etc.;

	•	Handset sales promotion: Introduction of installment payment scheme for the purchase of a handset, and mobile phone protection service for lost or damaged handsets and delivery of a replacement phone, etc.;

	•	~~New service introduction: electronic payment using mobile phones, music and video distribution, automatic information delivery tailored to user’s preference, location information service, etc.;~~

	•	~~New handset development: Release of new handsets equipped with various features such as contactless IC (Integrated Circuit) chip, GPS, or security function as well as smartphones;~~

	•	~~Networks: Expansion of HSDPA area coverage and launch of LTE services, etc; and~~

Handset sales promotion: Introduction of installment payment scheme for the purchase of a handset, and mobile phone protection service for lost or damaged handsets and delivery of a replacement phone, etc.;

New service introduction: Electronic payment using mobile phones, music and video distribution, automatic information delivery tailored to user’s preference, location information service, provision of applications for mobile phones, electronic book service, etc.;

New handset development: Release of handsets and smartphones equipped with various features such as contactless IC (Integrated Circuit) chip, GPS-based positioning, or security functions, etc.;

Networks: Improvement of communications quality and expansion of high-speed data service areas using HSPA and LTE, etc.; and


	•	~~Alliances: Collaboration with external partners in other industries, such as retailers, financial institutions, content holders, etc.~~

Alliances: Collaboration with external partners in other industries, such as retailers, financial institutions, content holders, etc.

Changes in the Japanese regulatory environment in recent years have accelerated competition among cellular network operators. ~~Mobile Number Portability system, which enables subscribers to switch the network operator they subscribe to without changing the phone number, was introduced in~~In October ~~2006. In September 2007, the Mobile Business Study Group, which was appointed by~~2009, the Ministry of Internal Affairs and Communications (MIC) published its final report, which contained proposals pertaining to (1) a review on the sales method of mobile phones, (2) promotion of new MVNO entrants to the market and (3) development of a market environment for the revitalization of the mobile business, and called for their implementation by the regulatory authority. In October 2009, MIC published a report entitled “Interconnection Rules in Response to Changes in the Telecommunications Market Environment.” The report ~~addressed~~recommended that (1) in terms of interconnection charges, appropriate rules should be established for interconnection charges and same rules should be applied to all cellular network operators, and (2) in terms of establishing rules for roaming, each cellular network operator should construct its own telecommunication networks in principle, because spectrum is scarce but allocated to cellular network operators in the mobile telecommunication business. In ~~addition,~~the Japanese mobile phone market, operators have hitherto provided handsets and network services based on the premise of applying SIM lock to mobile devices. In April 2010, however, the MIC conducted a public hearing concerning the use of SIM locks in ~~April~~mobile devices, and established guidelines in June 2010 ~~and showed~~presenting a ~~direction of establishing guidelines to remove SIM-lock based upon the~~move toward disabling SIM locks through voluntary actions of network operators. In response to this move, we decided to install a feature that can disable the SIM locks in principle to all mobile devices we release after April 2011.

In Japan, radio spectrum has been used in accordance with the “spectrum utilization fee system,” under which mobile ~~phones and cellular services are currently offered by~~ network operators ~~based~~or other parties operating a radio base station using the spectrum allocated by the government are charged fees for the use of such spectrum. In December 2010, the MIC’s Policy Making Platform, a task force for ICT policies in a global era, presented a direction to promptly start studies on the ~~premises that mobile phones are SIM locked.~~ introduction of an auction system for allocation of radio spectrum.

Further changes in the regulatory environment could significantly affect the revenue structures and business models of incumbent cellular network operators including us.

Innovations in ~~Internet~~internet technology may have a material impact on the mobile communications industry including ourselves. IP (Internet Protocol) telephony, which is a form of voice communications based on IP technology, has already become a popular means of communications in fixed-line services as a result of the broad penetration of local broadband access. If the application of IP telephony technology to mobile communications becomes widely accepted, it could cause a significant change in the revenue structure of the

mobile communications industry. Meanwhile, progress has been made in the development of convergence services, combining fixed-line and mobile communications with rise in the penetration of mobile phones and broadband services. This concept of fixed-mobile convergence has already been partially realized in the form of single-bill service for both fixed and mobile services, or content/e-mail address sharing between the two networks. The demand for seamless connectivity between fixed and mobile networks or composite devices supporting access to both fixed and mobile networks may increase in the future. In the field of high-speed wireless networks, WiMAX was approved as a standard of the Institute of Electrical and Electronic Engineers in the United States. In Japan, two network operators were awarded the license to operate broadband wireless access systems using the 2.5 GHz spectrum band in December 2007, and their commercial services were commenced in July 2009.

Thus, we expect that the competitive environment for the mobile communications market will remain intense in the future due to market, regulatory and technology changes.

Operating Strategies

We believe that the cellular market in Japan has already entered a mature phase with its total cellular subscriptions exceeding 100 million in December 2007. In a mature market, it is necessary to attract subscribers of competitors because it is difficult to drive the acquisition of new subscribers relying on potential subscribers who have never owned a cellular phone. It is also indispensable to minimize the loss of subscriptions to competitors as a result of heated competition. As a market leader with the largest market share, we attach priority to the retention of existing subscriptions.

In April 2008, we announced “New DOCOMO Commitments,” our vision for transformation and, taking this opportunity, renewed our corporate brand logo. In July 2008, we reorganized our group structure by integrating our former eight regional subsidiaries for the purpose of improving customer services and enhancing the speed and effectiveness of our operations. In October 2008, we announced our medium-term business directions based on a new action plan, “DOCOMO’s Change and Challenge to Achieve New Growth,” to be implemented through March 2013. “DOCOMO’s Change” includes concrete actions to revisit every aspect of the business from the customers’ perspective, from customer relations to handsets and networks based on a thoroughly hands-on approach to serving

customers at all levels of our group ~~under~~as pledged in our “New DOCOMO ~~Commitments.”~~Commitments” proclamation. “DOCOMO’s Challenge” includes action plans to drive innovation in collaboration with a wide range of partners, committing us to take on the challenges of creating new value by leveraging the virtually unlimited potential of mobile phones by responding to further advancements and diversifications in the mobile market, where development of services that take advantage of unique mobile properties such as real time immediacy, personal authentication, and GPS capabilities in conjunction with the evolution of networks and handsets, as well as new services that transcend conventional boundaries through the increasing adoption of open-platform handsets and entry of new global players are taking place.

~~For~~

During the fiscal year ended March 31, ~~2010,~~2011, we ~~have~~ worked to ~~enhance~~improve customer satisfaction ~~through review~~by employing various measures such as reinforcement of our ~~operations from the customers’ perspective. These efforts are beginning to deliver tangible results. For example, our churn rate for the fiscal year ended March 31, 2010 dropped to a record low~~product lineup, enrichment of ~~0.46%.~~billing options and enhancement of after-sales support. We ~~also acquired the largest market share of net addition in cellular phone subscribers for the fiscal year ended March 31, 2010. In addition, we received the~~ranked No. 1 ~~rating~~ in ~~the customer~~a consumer satisfaction ~~survey carried out~~study conducted by J.D. Power Asia ~~Pacific, Inc. in the enterprise service segment, and~~Pacific. We also received the highest ~~score~~ranking in the satisfaction study of business customers by J. D Power Asia as well as the survey ofon mobile data ~~card~~device users ~~conducted~~ by Nikkei BP Consulting ~~Inc.~~

~~For~~for two straight years. As shown by these achievements, we believe our endeavors toward improved customer satisfaction have delivered tangible results.

In the fiscal year ending March 31, ~~2011, as a part of the “Change” initiatives,~~2012, we will continue to review every aspect of our ~~business~~ operations, ~~— such as products,~~ from products/services to customer ~~care, and~~responsiveness to network construction, under the “DOCOMO’s Change” initiatives aiming to further improve customer satisfaction. We are determined not to be content with the ~~aim~~acquisition of ~~enhancing the satisfaction of customers. Our target is to receive the~~ No. 1 ~~rating in overall~~ customer satisfaction ~~as a result of these efforts.~~

~~With respect~~scores, and we are committed to ~~the “Challenge” programs, we will position~~continuing our all-out efforts to achieve further improvement in customer satisfaction.

We are positioning the fiscal year ending March 31, ~~2011~~2012 as ~~“the~~the second year ~~to embark on~~in the execution ~~phase”~~phase of our ~~challenge toward~~“DOCOMO’s challenge” programs, with the goal of providing services that are tailored to the lifestyle and individual needs of each customer and ~~to contribute~~contributing to the sustained development of society by providing solutions to pressing ~~issues,~~issues. We will promptly and steadily ~~implementing~~implement the following actions:

Expansion of packet usage: We will aim to increase packet ARPU by promoting subscriptions to flat-rate billing plans for packet access, accelerating subscribers’ migration to smartphones, acquiring more users through subscriptions to second mobile devices such as data communications devices or tablets, and proliferating the use of video services.

Proliferation of smartphones: We will move ahead with our endeavors to offer attractive devices, transplant to smartphones “i-channel”, “i-concier” and various other services that have so far been provided only on i-mode phones, and introduce new services that take advantage of the unique properties of smartphones. We will also put in place organizational structures and systems, etc., to respond to the full-scale proliferation of the smartphone market.


	•	Achieve growth through expansion of packet usage: We will aim to increase packet ARPU by proliferating the use of video services and data communications devices, and growing the subscriptions to flat-rate billing plans for packet access.

	•	Roll-out of LTE and network evolution: Toward the commercial launch of LTE scheduled for December 2010, we will move ahead with the development of network, devices and services, to establish a foundation for promoting a wide array of advanced mobile broadband services.

	•	Promotion and further advancement of service personalization: By further advancing the “i-concier” service, which automatically delivers useful information for subscribers’ daily lives tailored to their lifestyles, areas in which they live, and time/location information collected via Auto-GPS functions, we will expand service personalization and offer a greater array of content tailored to the individual needs of customers.

	•	Roll-out of the Xi service and network evolution: To further enrich the Xi service launched in December 2010, we will move ahead with the development of network, devices and services to establish a foundation for promoting a wide array of advanced mobile broadband services. We will also work to further expand network coverage. Promotion and further advancement of service personalization: We will further advance “i-concier” and introduce this service on smartphones to support the daily life of each customer, and offer a rich portfolio of content tailored to each customer’s needs or usage opportunities. Deployment of social-support services: We will continually strive to create new businesses with the full-scale launch of social-support services in fields such ~~fields~~ as environment, health management and finance, ~~while seeking alliances with external partners to secure new revenue sources.~~

	•	Introduction and promotion of converged services: Through the expansion of “MyArea,” Japan’s first Femto BTS-based home area service, and “Otayori Photo service,” with which subscribers can send and display photos to a digital photo frame at a distant location from mobile phones or PCs, we will aim to provide more convenient services and comfortable usage environments to users.

	•	~~Further advancement of handsets: We will enrich the lineup of our products including smartphones to cater to the needs of broader customer segments.~~

	•	Collaboration of handsets and networks: We will aim to realize advanced services by optimizing the allocation of functions between handsets and networks, leveraging the high-speed, large-capacity and low-latency properties of LTE network.


	•	Basic research aimed at new value creation: We will work on the verification of our research so that we can create businesses that contribute to the development of society and industries, aiming to realize a more affluent society that fully leverages the advantageous characteristics of mobile communications.

	•	Expansion of international businesses: We will strive to expand the revenue streams from international businesses by further enriching our international service offerings and expanding our overseas service counters. We will also seek revenue expansion and sustained growth through overseas business deployment allying with partners.

	•	Domestic investments and alliances: We will endeavor to grow revenues and achieve sustained growth by creating new business and reinforcing core business through the pursuit of investments and alliances in Japan.

~~By working to raise our packet ARPU even further and promoting measures aimed at creating new revenue sources~~ while actively seeking ~~reduction~~alliances with external partners to secure new revenue sources.

Introduction and promotion of converged services: We will aim to provide more convenient services which are comfortable to use, such as the “Otayori Photo Service,” “docomo Drive Net” navigation and electronic books, and to further expand machine-to-machine businesses which connect devices not incorporated into a network.

Further advancement of devices: We will strengthen the lineup of our smartphones and other products to cater to the needs of broader customer segments. We also plan to add more variety to the lineup of Xi-enabled mobile devices.

Collaboration of devices and networks: We will aim to realize advanced services by optimizing the allocation of functions between devices and networks, leveraging the high-speed, large-capacity and low-latency properties of the LTE network.

Basic research aimed at new value creation: We will work on the verification of our research for creating businesses that contribute to the development of society and industries, and aim to realize a richer society that takes advantage of the characteristics of mobile communications. In particular, we will further advance our joint research on “Mobile Spatial Statistics.”

Expansion of international businesses: We will strive to expand the revenues streams from international businesses by further enriching our international services and enhancing our overseas service counters. We will also seek revenue expansion and sustained growth through overseas business deployment by allying with partners.

Domestic investments and alliances: We will endeavor to expand revenues and achieve sustained growth by creating new businesses and reinforcing our core business through the pursuit of investments and alliances in Japan. We will also drive innovation jointly with our partners and aim to create new value.

Taking the actions mentioned above as well as pursuing further operational efficiency by particularly focusing on cost reduction in such areas as network-related costs and other general expenses, we aim to achieve an operating income of over ¥900 billion for the fiscal year ending March 31, 2013.

We will also strive to further expand our business by cultivating new business opportunities as well as becoming a “comprehensive service provider” centered around mobile communications, which we envisioned in our new corporate vision, “Pursuing Smart Innovation: HEART.”

Operating Trends

This section describes our operating trends from the perspectives of revenues and expenses.

Revenues

~~Revenues~~

Wireless Services

We earn our wireless services revenues primarily from basic monthly charges, calling charges for outgoing calls, revenues from incoming calls including interconnection charges and charges for optional value-added services and features. Cellular services, which earn the majority of our overall revenues, consist of the third generation FOMA services, the second generation mova services and other services. We have decided to discontinue mova services on March 31, 2012 to more efficiently concentrate our business ~~resources on FOMA services.~~resources. We have been promoting the migration of mova subscribers to FOMA services, and the total number of FOMA subscriptions reached ~~53.20~~56.75 million or ~~94.9%~~97.8% of our total number of cellular subscriptions as of March 31, ~~2010.~~2011. We will continue our efforts to induce existing mova subscribers to migrate to FOMA services toward the scheduled termination of mova services on March 31, 2012.

Cellular services revenues include voice revenues and packet communications revenues. Voice revenues are derived from a combination of basic monthly charges for service and additional calling charges ~~depending on~~billed by connection time. ~~Our~~The main source of our packet communications revenues ~~which~~ are currently ~~dominated by~~ i-mode revenues, ~~accounted for a greater portion~~but smartphones and other new data services have become the largest drivers behind their growth. The contribution of packet communications revenues to our wireless services revenues has increased every year and accounted for 45.2% of wireless service revenues for the year ended March 31, ~~2010, representing 42.1% of wireless services revenues,~~2011, as compared to ~~39.4%~~42.1% and ~~33.0%~~39.4% for the years ended March 31, 2010 and 2009, ~~and 2008,~~ respectively.

Our top operational priorities include maintaining our current subscribers and the level of our average monthly revenue per unit (“ARPU”) ~~despite the increasingly competitive market environment in which we are operating, after the introduction of Mobile Number Portability.~~. Our cellular services revenues are essentially a function of our number of active subscriptions multiplied by ARPU.

Our number of subscriptions continues to grow, ~~while the~~but its growth rate ~~of subscriptions~~ has ~~declined.~~been confined to a limited level. Our subscription churn rate, or contract termination rate, is an important performance indicator for us to achieve ~~retention~~our important goal of retaining our current subscriptions. The churn rate has an impact on our number of subscriptions and in particular affects our number of net additional subscriptions for a given period. Efforts to reduce our churn rate through discount services and other customer incentive programs can increase our revenues by increasing our number of net additional subscriptions, but they can also have an adverse impact on our revenues by decreasing the amount of revenues we are able to collect from each subscriber on average. In order to keep our churn rate low, we have focused on subscriber retention by implementing certain measures including offering discounts for long-term subscribers. During the fiscal year ended March 31, ~~2010,~~2011, we employed various measures aimed for improving customer satisfaction on a continual basis from the previous fiscal year, including communications quality enhancement initiatives, revamping of after-sales support, and

introduction of attractive billing plans. To improve our communications quality, we offered a service in which we dispatch our field staff to customers’ premises within 48 hours, in principle, after setting up an appointment based on an inquiry from customers, and implemented various other measures aimed at enhancing our area coverage and network quality. To revamp our after-sales support, we ~~launched~~continued to offer the “Mobile Phone Checking Service,” which provides users with free basic checkups and cleaning of handsets, and also continued the program to provide a free battery

pack or FOMA portable charger. In order to offer attractive billing plans, we ~~revised~~focused mainly on the revision of our ~~rates~~billing structure for data communications services in view of the rise in demand for data services, introducing new flat-rate billing options for smartphones, “Pake-hodai flat” and “Pake-hodai double 2”, as well as the “Monthly Support” discount program, under which eligible subscribers purchasing a certain product such as a smartphone or a tablet device will be able to ~~make it easier~~receive certain levels of discounts, which will vary by each model, on their monthly phone bill for up to 24 months. We also started offering a flat-rate billing plan for unlimited packet access for users to switch to a smartphone, and introduced a number of new plans, such as the “Mail Tsukai-hodai” package, which offers free unlimited domestic i-mode mail, and the “Type Simple Student Discount” plan, a discount service for students and their family members.traveling abroad, “Overseas Pake-hodai.” As a result of these endeavors, our churn rate for the fiscal year ended March 31, ~~2010, dropped to~~2011 was maintained at a ~~very~~ low ~~level~~rate of ~~0.46%~~0.47%.

ARPU is calculated by dividing various revenue items included in operating revenues from our wireless services, such as basic monthly charges, calling charges and packet communications charges, from designated services by the number of active subscriptions to the relevant services. ARPU is another important performance indicator for us to measure average monthly revenues per subscription. Accordingly, the calculation of ARPU excludes revenues that are not representative of monthly average usage such as subscription activation fees. We believe that our ARPU figures calculated in this way provide useful information to analyze the trend of monthly average usage of our subscribers over time and the impact of changes in our billing arrangements. The revenue items included in the numerators of our ARPU figures are based on our U.S. GAAP results of operations. The ARPU calculation is described in “Item 4. Information on the Company — B. Business Overview — Cellular Phone Service Usage.” In August and September 2007, we introduced the “Fami-wari MAX50,” “Hitoridemo Discount50” and “Office-wari MAX50” discount packages (hereinafter collectively referred to as “new discount services”) which offer a 50% discount on basic monthly charges on condition of two-year usage of our service. The percentage of users subscribing to these new discount services to our total subscriptions reached over 60% as of March 31, 2010.

In November 2007, we introduced a ~~new~~ handset sales method called “Value Course.” “Value Course” is a sales method, where the purchase of a handset is not discounted by a certain type of sales commission which had previously been paid to agent resellers, specifically designed for providing discounts on handset sales. As this handset sales method requires customers to pay full price to purchase a new handset, it awards the subscribers with a subscription to a billing plan with discounted basic monthly charges called “Value Plan.” While we simultaneously introduced another sales method more similar to the conventional method called “Basic Course,” where a subscriber purchases a handset discounted by our direct subsidy and undiscounted billing plans are applied, so far more than 95% of subscribers have opted for the “Value Course,” and the number of “Value Plan” subscriptions reached approximately ~~32.70~~41.25 million, or ~~58%~~71% of our total subscriptions, as of March 31, ~~2010.~~2011. Our aggregate ARPU ~~(FOMA+~~(Xi+FOMA+mova) has been on a constant decline, and the drop of voice ARPU, in particular, has accelerated in recent years. This is due largely to the impact from the expanded uptake of “Value Plan” ~~and the new discount services (because~~because basic monthly charges are included in the calculation of voice ~~ARPU),~~ARPU and the impact from the drop of billable MOU resulting from the growing utilization of free ~~communication~~calling allowances.

~~Our cellular services revenues for~~ The revisions made to the calculation method of our interconnection fees (access charges) have also contributed to the decline in voice ARPU. From the fiscal year ended March 31, ~~2008 recorded a decline compared to~~2011, in accordance with the “Guidelines for the Operation of the Type II Specified Telecommunications Equipment Systems” published by the Ministry of Internal Affairs and Communications in March 2010, our interconnection fees are calculated excluding operating expenses (with the exception of some expense items) from the cost of interconnection.

For the fiscal year ended March 31, ~~2007, owing~~2011, although we achieved an increase in packet communications revenues as a result of our intensive efforts to boost the ~~widespread adoption~~usage of video and other data services and strengthen the ~~new discount services we introduced for the retention~~sales of ~~existing subscribers. Our~~smartphones and other devices, our total cellular ~~services~~service revenues ~~for the fiscal year ended March 31, 2009,~~ continued to ~~post ayear-on-year~~decline due mainly to the broad adoption of “Value Plan,” growth in the percentage of users subscribing to the new discount services and a decrease in inter-carrier settlement (access charge) revenues we receive from other carriers. In the fiscal year ended March 31, 2010, cellular services revenues dropped from the previous fiscal year mainly because of the expansion of “Value Plan” subscriptions and the impact of reduced billable MOU. For the fiscal year ending March 31, 2011, we project a decline in cellular services revenues from the fiscal year ended March 31, 2010, because the ~~negative impact on~~increase of data revenues fell short of completely offsetting the drop in voice revenues resulting from the expanded uptake of “Value Plan” and ~~further decline of~~reduced billable ~~MOU is likely to remain greater than the revenue-boosting effect owing to the increase in~~MOU.

Raising packet communications revenues and the moderate growth of subscribers. Although ARPU has been on a declining trend, we set a target to halt the decline of ARPU in the fiscal year ending March 31, 2012 when the effect of an increase in packet ARPU overtakes the effect of a decrease in voice ARPU. Raising the packet ARPU is one of the top priorities in our business strategy, and we have employed various measures aimed at expanding subscribers’ packet ~~usage, such as~~usage. Such measures include expanding user base of smartphones, PC data cards and mobile Wi-Fi routers, encouraging subscribers to join flat-rate packet billing plans, expansion of video usage, enrichment of everyday life-oriented content, improving the ease of use and

convenience of our ~~products and services, and expansion of the user base of PC data communications and smartphones.~~products. Through the execution of “DOCOMO’s Change and Challenge” action plan, we will strive to retain our existing subscriber base by enhancing the level of customer satisfaction, and achieve growth by increasing our packet ARPU.

Equipment Sales

We collaborate with handset manufacturers to develop handsets compatible with our cellular services, purchase the handsets from those handset manufacturers and then sell those handsets to agent resellers for sale to our subscribers. Starting from November 2008, we started offering handsets in newly organized four series — “docomo STYLE series,” “docomo PRIME series,” “docomo SMART series” and “docomo PRO series.”


	•	~~“docomo STYLE series”: Distinctive mobile phones designed like accessories and offered in a wide variety of fashionable designs and colors.~~

	•	~~“docomo PRIME series”: Full-feature mobiles phones for the maximum enjoyment of video, games and other entertainment.~~

	•	~~“docomo SMART series”: Sophisticated mobile phones for busy people who want to live productively and enhance the management of their professional and private lives.~~

	•	~~“docomo PRO series”: Most advanced high-spec mobile phones for those who love cutting-edge digital tools.~~

As described in the section of Wireless Services above, in November 2007, we introduced a ~~new~~ handset sales method, “Value Course.” Payment in installments is made available for a subscriber to purchase a handset from agent resellers inunder this “Value ~~Course.”~~Course” purchase scheme. If a subscriber chooses to ~~make installment payments,~~pay in installments, under the agreement entered into among the subscriber, the agent reseller and us, we provide funds by paying for the purchased handset to the agent resellers and include the installment charge for the purchased handset in the monthly bill for network usage for the installment payment term. This agreement is separate from the telecommunications service contract entered into between the subscriber and us, or the equipment sales contract concluded between the agent reseller and subscriber. Because the revenues from equipment sales are recognized upon the delivery of handsets to agent resellers, cash collection of the installments receivable for the purchased handset from subscribers do not have an impact on any of our revenues, including equipment sales revenues.

Revenues from equipment sales, primarily sales of handsets and other telecommunications equipment to agent resellers, accounted for ~~11.8%~~11.3% of total operating revenues for the year ended March 31, ~~2010.~~2011. We account for a portion of the sales commissions that we pay to agent resellers as a reduction in equipment sales revenues ~~and selling, general and administrative expenses~~ in accordance with ~~U.S~~U.S. GAAP. As a result, structurally, the cost of equipment sold has exceeded equipment sales revenues. However, with the introduction of “Value Course” in November 2007 and accompanying reduction of sales commissions, the amount of sales commissions deducted from equipment sales revenues decreased significantly, and the effects of the excess amount of cost of the equipment sold over equipment sales revenues has also weakened. During the year ended March 31, ~~2010,~~2011, equipment sales revenues decreased by ¥30.1 billion or 5.9% compared to the prior fiscal year due mainly to the decrease in the ~~number~~wholesale price per unit achieved as a result of ~~handsets sold to agent resellers (down more than 10% compared to the prior fiscal year) affected mainly by the economic downturn. For the year ending March 31, 2011, we expect only~~ a ~~slight~~ decrease in the number of handsets to be sold to agent resellers in anticipation of an increased demand for handset upgrade by those subscribers who purchased a handset upon the introduction of “Value Course” more than two years ago. We also expect to lower our equipment sales price per unit reflecting our efforts to reduce equipment procurement cost per ~~unit to strengthen our competitiveness in equipment sales. As a result, we expect equipment sales revenues to decrease from the prior fiscal year.~~ unit.

Because the trend of handset sales is closely interrelated with the cost of handsets sold, please refer to the “Cost of Equipment Sold” section below.

Creation of New Revenues Sources

As the Japanese mobile phone market continues to mature, the competition among carriers has intensified in such areas as rate reductions. Against this backdrop, with the aim of achieving a sustained growth, we have worked to diversify our revenue sources while stepping up our efforts to reinforce our wireless services business.

Following the launch of our credit brand “iD” in December 2005, we commenced a proprietary mobile credit payment service “DCMX” in April 2006. Through these services, which enable credit payment using mobile phones with the contactless IC chips embedded inside the handset, we would like to transform mobile phones into a tool that serves various needs in everyday life. With the subscriber base of “DCMX” reaching ~~11.26~~12.32 million and the number of “iD” reader/writer machines installed growing to ~~440,000~~approximately 510,000 as of March 31, ~~2010,~~2011, the amount of credit transactions handled has also been rising.

In April 2009, to invigorate the mobilee-commerce market that offers great potential for growth in the future, we acquired a majority stake in OAK LAWN MARKETING, INC., a leading TV and home shopping firm in Japan which subsequently became our consolidated subsidiary.

Our subsidiary for multimedia broadcasting service, Multimedia Broadcasting, Inc., which changed its name to mmbi, Inc. on April 1, 2011, received approval from the Ministry of Internal Affairs and Communications for setting up stations for commissioned broadcasting business in September 2010. To prepare for the commercial launch of multimedia broadcasting business scheduled for April 2012, the commissioned broadcasting business was spun off to an operating subsidiary, Japan Mobilecasting, Inc. in January 2011. Multimedia broadcasting

service is a new type of broadcast media based on the ISDB-Tmm standard, which can offer both storage-type broadcasting services that allow users to view a wide variety of content such as videos, music, newspapers, magazines and electronic books after automatically storing the content in mobile devices, as well as a high-quality streaming service that delivers high-quality, high-resolution broadcasting content in real time.

We will continue to strive to expand these ~~credit and home shopping businesses~~business fields going forward. We intend to pursue investments and alliances with the aim of strengthening our operations, without distinction as to core or new business, to expand our revenues and achieve sustained growth. We will continually seek opportunities of investment and alliance that will benefit our business management.

Expenses

~~Expenses~~

Cost of Services

Cost of services represents the expenses we incur directly in connection with providing our subscribers with wireless communication services and includes the cost for usage of other operators’ networks, maintenance of equipment or facilities and payroll for employees dedicated to the operations and maintenance of our wireless services. Cost of services accounted for ~~26.1%~~26.5% of our total operating expenses for the year ended March 31, ~~2010.~~2011. Major components of cost of services include facility maintenance expenses, which are incurred to maintain our network facilities, and communication network charges, which we pay for the usage of other operators’ networks or for access charges, accounting for ~~33.1%~~33.5% and ~~31.3%~~29.1% of the total cost of services, respectively. The amount of our communication network charges is dependent on the ~~number of our base stations installed and~~ rates set by ~~the~~ other operators. ~~In recent years, our communication network charges have steadily declined as a result~~Cost of ~~our buildup of our own back-bone network to replace circuits leased from NTT. Communication network charges decreased~~Services for the year ended March 31, ~~2010 as well due mainly~~2011 decreased by ¥4.1 billion or 0.5% to ¥896.5 billion from the discount in charges of NTT’s leased circuits and decrease of access charges payable to other operators. We expect that the downward trend will continue and the communication network charges will decrease for the year ending March 31, 2011.

prior fiscal year.

Cost of Equipment Sold

Cost of equipment sold arises mainly from our procurement of handsets for sale to our new or current subscribers through agent resellers, which is basically dependent on the number of handsets sold to agent resellers and the purchase price per handset. Cost of equipment sold represented ~~20.2%~~19.6% of our operating expenses for the year ended March 31, ~~2010.~~2011. The ~~total number~~cost of ~~handsets~~equipment sold ~~to agent resellers~~for the fiscal year ended March 31, 2011 decreased ~~from~~by ¥35.7 billion, or 5.1%, compared to the prior fiscal year due mainly to ~~overall sluggish consumer spending. The purchase price per handset also decreased as a result of~~ the ~~growing popularity of middle- and low-end handsets~~reduction in ~~our product portfolio and reduction of license fees included in handset price for which we own intellectual property rights while we pay part of~~ the ~~development costs incurred by handset manufactures. As a result,~~per-unit cost of ~~equipment sold decreased from~~procurement, which was achieved through the ~~prior fiscal year. For the year ending March 31, 2011, we expect cost~~preparation of ~~equipment sold will decrease from the current fiscal year due~~a product lineup consisting mainly of low-price handsets featuring stylish designs in response to ~~a slight decrease in the number of handsets to be sold to agent resellers and our continued efforts to reduce the handset procurement costs.~~

We have taken some measures to control the cost of equipment sold. We have saved on FOMA handset development cost by introducing a single-chip LSI and common platforms for the handset operating system. We have provided packaged software dedicated to our handsets to handset manufacturers to facilitate development of

customers’ orientation toward less expensive products.

FOMA handsets to hold down cost of equipment sold. For the year ended March 31, 2010, we facilitated efficiency improvements accompanied by a review of handset logistics, such as integration of handset logistics contractors. We are planning to optimize the level of equipment inventories through further efficiency improvement efforts.

Depreciation and Amortization

~~We expense the acquisition cost of a fixed asset such as telecommunications equipment, a network facility and software during its estimated useful life as depreciation and amortization.~~

Depreciation and amortization accounted for ~~20.3%~~20.5% of our operating expenses for the year ended March 31, ~~2010.~~2011. In order to respond attentively to demand from our subscribers, we ~~invested in~~made capital investments primarily for the FOMA services network during the period through March 31, 2011. The principal actions undertaken during the fiscal year ended March 31, ~~2010. Our investments in~~2011, included the following:

Further enhancement of FOMA network ~~included:~~service area quality to respond attentively to customers’ requests;

Reinforcement of network facilities in response to the traffic growth resulting from the increased adoption of smartphones, etc.; and


	•	~~further enhancement of FOMA network service area quality to respond attentively to customers’ requests;~~

	•	~~further expansion of HSDPA service coverage, offering high data transmission speed; and~~

	•	~~buildup of network facilities in response to an increase in traffic.~~

Roll-out of service areas for the launch of Xi, which utilizes LTE system

Our annual capital expenditures ~~in the FOMA~~have been declining after FOMA-related network investments peaked in the fiscal year ended March 31, ~~2007, and although we plan to start making capital investments for LTE rollout in the fiscal year ending March 31, 2011, we expect that~~2007. Therefore, depreciation and amortization expenses ~~will show~~have also been showing a downward ~~trend in the future.~~trend. In addition, we have been involved with cost saving efforts such as economized procurement, design and installment of low-cost devices and improvements in construction processes. ~~Depreciation~~As a consequence, depreciation and amortization expenses for the year ended March 31, 2010 decreased significantly from the prior fiscal year, since the depreciation and amortization expenses in the prior fiscal year included the effect of accelerated depreciation charges of mova-related assets through the changes in estimated useful lives accompanied by our decision to discontinue mova services on March 31, 2012. However, even without this effect, depreciation and amortization expenses would have2011 decreased from the prior fiscal year as a result of ongoing cost efficiency improvement efforts. Depreciation and amortization expenses are expected to decrease for the year ending March 31, 2011, following the recent downward trend. As foryear.

For more details concerning our capital expenditures, please refer to “Capital Expenditures” in this Item 5.B.

Selling, General and Administrative Expenses

Selling, general and administrative expenses represented ~~33.3%~~33.4% of our total operating expenses for the year ended March 31, ~~2010.~~2011. The primary components included in our selling, general and administrative expenses are expenses related to acquisition of new subscribers and retention of current subscribers, the most significant of which was commissions paid to agent resellers. While some of these commissions are linked to sales activities such as new subscriptions and handset upgrades, others result from non-sales activities such as processing of billing plan changes and handset repairs. In ~~addition, we provide subsidies directly to our subscribers in the form of a discount to the handset price to be purchased subject to competition in the market.~~

In accordance with U.S. GAAP, in our accounting, a portion of the sales activities linked commissions paid to agent resellers is recognized as a deduction from equipment sales ~~revenues~~while the rest of commissions, both sales activities linked and non-sales activities linked, as selling, general and administrative expenses. ~~For the fiscal year ended March 31, 2010, the~~

Our total amount of sales commissions before the application of the aforesaid accounting treatment decreased compared to the prior fiscal year, as a result of a decline in the number of handsets sold and our efforts to reduce sales commissions. However, the decrease in the amount of sales commissions included in the selling, general and administrative expenses after the application of the aforesaid accounting treatment was limited to a slight decline compared to the prior fiscal year. On the other hand, due to the increase in expenses appropriated for customer satisfaction improvement initiatives and other factors, the selling, general and administrative expenses for the fiscal year ended March 31, ~~2010, posted an increase over~~2011 declined compared to the prior fiscal ~~year. For~~year due to our efforts to decrease the ~~year ending March 31, 2011, we expect further reductions~~amount of the commissions included in ~~sales commissions through~~the selling, general and administrative expenses and to other measures dedicated to more efficient ~~usage.~~

use of operational expenses.

Operating Income

For the year ended March 31, ~~2010,~~2011, operating revenues decreased from the prior fiscal year ~~since both wireless services revenues and equipment sales revenues decreased due~~owing to a decline in wireless services revenues resulting from a drop in ARPU ~~as well as the number~~and a decrease of equipment ~~sold.~~sales revenues caused by a reduction in the wholesale price per unit. On the other hand, athe decrease in operating expenses ~~due mainly to a decrease~~resulting from the decline in costs of equipment

sold and other expenses associated with the sales of equipment and our ongoing efforts to reduce costs, including reductions in ~~network related~~network-related costs, ~~exceeded~~more than offset the decrease in operating revenues. As a result, operating income ~~increased.~~

The market environment remains very competitive after the introduction of Mobile Number Portability. We will be engaged in reinforcing our competitiveness by executing action plans of “DOCOMO’s Change and Challenge” in the area of customer satisfaction, actions to expand usage, creation of new revenue sources, and improvement of cost efficiency. For the year ending March 31, 2011, we expect operating income to increase despite the decline in operating revenues from the prior fiscal year for the following reasons:


	•	Cellular services revenues are expected to decrease, because the projected decline in voice revenues resulting from the impact of the expanded uptake of “Value Plan,” a billing plan that offers discounts on basic monthly charges, and reduction in billable MOU is expected to be larger than the growth in packet revenues, which we plan to achieve through boosting subscribers’ packet usage.

	•	~~Equipment sales revenues are expected to decline due to a decrease in the wholesale price of handsets and slight decrease in the number of handsets sold to agent resellers.~~

	•	Operating expenses are expected to decrease as a result of efficient use of sales commissions, a decrease in cost of equipment sold, ongoing reduction of network-related costs and other general costs, and other factors.

	•	~~Despite a decrease in operating revenues, operating income is expected to post~~recorded a year-on-year increase. ~~year-on-year~~ ~~gains, as we plan to secure income by offsetting the decline in voice revenues through the increase in packet revenues and various cost-cutting measures.~~

Other income and expenses, Equity in net income (losses) of affiliates

As part of our corporate strategy, we have made investments in foreign and domestic companies in businesses that complement our mobile communications business. See “Item 4. Information on the ~~Company —~~ Company—B. Business ~~Overview — 5~~Overview—7 Investments and Affiliations.” In accordance with U.S. GAAP, the investment is accounted for under the equity method and recognized under “Investments in affiliates” in our consolidated balance sheets when we are able to exercise significant influence over the investee, but do not have a controlling financial interest. In accordance with equity method accounting, we include our equity in the net income or losses of affiliates in our consolidated statements of income. Where we do not have an ability to exercise significant influence over the investee, we include the investment as “Marketable securities and other investments” in our consolidated balance sheets. Our results of operations can be affected by impairments of such investments and losses and gains on the sale of such investments. The impairment charges for “Marketable securities and other investments” and realized gains or losses from sales of “Investments in affiliates” and “Marketable securities and other investments” are recognized in “Other income and expenses,” whereas the impairment charges for “Investments in affiliates” are recognized in “Equity in net income (losses) of affiliates.” In the past, we experienced material impairments in the value of our investments in equity method affiliates that were included in “Equity in net losses of affiliates” in our consolidated statements of income and comprehensive income for relevant years. It is possible that we could experience similar impairments with respect to our ~~investments~~“Investments in ~~affiliates~~affiliates” and ~~marketable~~“Marketable securities and other ~~investments~~investments” again in the future. Please refer to ~~“- Critical~~“Critical Accounting ~~Policies —~~ Policies—Impairment of investments.” We may also experience material gains or losses on the sale of our investments. As of March 31, ~~2010,~~2011, the total carrying value of ~~our investments~~“Investments in ~~affiliates~~affiliates” was ~~¥578.1~~¥525.5 billion, while the total carrying value for investments in “Marketable securities and other investments” was ¥128.1 billion.

Operating Results for the year ended March 31, 2011

The following discussion includes analysis of our operating results for the year ended March 31, 2011. The tables below describe selected operating data and income statement data:

Key Performance Indicators


	Years ended March 31
	2010		2011		Increase (Decrease)			Change (%)
Cellular
Subscriptions (thousands)		56,082		58,010		1,928			3.4	%
Xi services (thousands)		—		26		—			—
FOMA services (thousands)		53,203		56,746		3,542			6.7	%
mova services (thousands)		2,879		1,239		(1,640	)		(57.0)	%
i-mode services (thousands)		48,992		48,141		(851	)		(1.7)	%
sp-mode services (thousands)		—		2,095		—			—
Market Share (%) ^(1) (2)		50.0		48.5		(1.5	)		—
Aggregate ARPU (Xi+FOMA+mova) (yen/month/subscription)⁽³⁾		5,350		5,070		(280	)		(5.2)	%
Voice ARPU (yen/month/subscription)⁽⁴⁾		2,900		2,530		(370	)		(12.8)	%
Packet ARPU (yen/month/subscription)		2,450		2,540		90			3.7	%
MOU (Xi+FOMA+mova) (minutes/month/subscription)^(3) (⁵⁾		136		134		(2	)		(1.5)	%
Churn Rate (%) ⁽²⁾		0.46		0.47		0.01			—

(1)	Source for other cellular telecommunications operators: Data announced by Telecommunications Carriers Association

(2)	Data calculated including Communication Module Services subscriptions.

(3)	Data are calculated excluding communication module services-related revenues and communication module services subscriptions, and Phone Number Storage and Mail Address Storage services-related revenues and those subscriptions.

(4)	Inclusive of circuit switched data communications.

(5)	MOU (Minutes of Use): Average communication time per month per subscription

Breakdown of Financial Information


	Millions of yen
	Years ended March 31
	2010			2011			Increase (Decrease)			Change (%)
Operating revenues:
Wireless services	¥	3,776,909		¥	3,746,869		¥	(30,040	)		(0.8)%
Cellular services revenues		3,499,452			3,407,145			(92,307	)		(2.6)%
—Voice revenues⁽⁶⁾		1,910,499			1,712,218			(198,281	)		(10.4)%
Including: FOMA services		1,785,518			1,658,863			(126,655	)		(7.1)%
—Packet communications revenues		1,588,953			1,694,927			105,974			6.7 %
Including: FOMA services		1,558,284			1,679,840			121,556			7.8 %
Other revenues		277,457			339,724			62,267			22.4 %

Equipment sales		507,495			477,404			(30,091	)		(5.9)%

Total operating revenues		4,284,404			4,224,273			(60,131	)		(1.4)%


Operating expenses
Cost of services		900,642			896,502			(4,140	)		(0.5)%
Cost of equipment sold		698,495			662,829			(35,666	)		(5.1)%
Depreciation and amortization		701,146			693,063			(8,083	)		(1.2)%
Selling, general and administrative		1,149,876			1,127,150			(22,726	)		(2.0)%

Total operating expense		3,450,159			3,379,544			(70,615	)		(2.0)%

Operating income		834,245			844,729			10,484			1.3 %
Other income (expense)		1,912			(9,391	)		(11,303	)		—

Income before income taxes and equity in net income (losses) of affiliates		836,157			835,338			(819	)		(0.1)%
Income taxes		338,197			337,837			(360	)		(0.1)%

Income before equity in net income (losses) of affiliates		497,960			497,501			(459	)		(0.1)%
Equity in net income (losses) of affiliates (net of applicable taxes)		(852	)		(5,508	)		(4,656	)		(546.5)%

Net Income		497,108			491,993			(5,115	)		(1.0)%
Less: Net (income) loss attributable to noncontrolling interests		(2,327	)		(1,508	)		819			35.2 %

Net income attributable to NTT DOCOMO, INC.	¥	494,781		¥	490,485		¥	(4,296	)		(0.9)%

(6)	Inclusive of circuit switched data communications.

Analysis of operating results for the year ended March 31, 2011 and comparison with the prior fiscal year

The total number of our cellular (Xi+FOMA+mova) subscriptions as of March 31, 2011 was 58.01 million, up 1.93 million, or 3.4%, compared to 56.08 million as of the end of the prior fiscal year. As of March 31, 2011, the number of FOMA subscriptions reached 56.75 million, which equaled 97.8% of our total cellular subscriptions, posting an increase of 3.54 million, or 6.7%, compared to 53.20 million as of March 31, 2010. On the other hand, the number of mova subscriptions has decreased constantly since the fiscal year ended March 31, 2004 as a result of our efforts to migrate subscribers to the FOMA network. As of March 31, 2011, the total number of mova subscriptions was 1.24 million, decreasing by 1.64 million, or 57.0%, from 2.88 million as of the end of the prior fiscal year. Our subscriber market share as of March 31, 2011 was 48.5%, dropping by

1.5 points from 50.0% as of the end of the prior fiscal year. The number of i-mode subscriptions was 48.14 million as of March 31, 2011, recording a decrease of 0.85 million or 1.7% from 48.99 million as of March 31, 2010. On the other hand, the subscriptions to “sp mode”, our ISP service for smartphones launched in September 2010, reached 2.09 million as of March 31, 2011.

The total number of handsets sold in the fiscal year ended March 31, 2011 grew to 19.06 million, posting an increase of 1.02 million, or 5.6%, compared to 18.04 million for the prior fiscal year, driven by the surge in the sales of smartphones.

Aggregate ARPU for cellular (Xi+FOMA+mova) service for the fiscal year ended March 31, 2011 dropped to ¥5,070, down ¥280 or 5.2%, compared to ¥5,350 for the prior fiscal year. Voice ARPU decreased by ¥370 or 12.8% to ¥2,530, compared to ¥2,900 for the prior fiscal year. The primary factor behind this decline was the increase in the number of users subscribing to the “Value Plan” and decline in billable MOU. Packet ARPU, on the other hand, grew to ¥2,540, recording an increase of ¥90 or 3.7% from ¥2,450 for the prior fiscal year. The main reasons for the increase in packet ARPU include the impact of expanded data usage resulting from our efforts for boosting the usage of i-mode service, migrating existing subscribers to smartphones and acquiring new smartphone subscriptions, and cultivating new demand for mobile Wi-Fi routers and tablet devices. The MOU (Xi+FOMA+mova) decreased by 2 minutes or 1.5% to 134 minutes compared to 136 minutes for the prior fiscal year. The billable MOU, in particular, decreased from 118 minutes for the prior fiscal year to 114 minutes, posting a decline of 4 minutes or 3.4%, due mainly to the expansion of free communications allowances.

Our cellular churn rate was 0.47% and 0.46% for the fiscal years ended March 31, 2011 and March 31, 2010, respectively. The churn rate for the fiscal year ended March 31, 2011 maintained a level comparable to the previous fiscal year in which we saw a record low churn rate, owing to our customer satisfaction improvement initiatives. We have successfully maintained our churn rate lower than that of other carriers in Japan, which we believe was attained as a result of various factors, including among other things, introduction of competitive billing plans and gaining the confidence of customers in our network and services. However, no assurance can be given that we can maintain the churn rate at the current level or achieve a further reduction.

Our operating revenues for the fiscal year ended March 31, 2011, were ¥4,224.3 billion, a decline of ¥60.1 billion or 1.4% from ¥4,284.4 billion for the prior fiscal year. Wireless services revenues were ¥3,746.9 billion, decreasing by ¥30.0 billion or 0.8% compared to ¥3,776.9 billion for the prior fiscal year. Consequently, the contribution of wireless services revenues to our total operating revenues for the fiscal year ended March 31, 2011 increased to 88.7% from 88.2% for the prior fiscal year. The year-on-year decrease in wireless services revenues was primarily attributable to the drop of cellular services revenues, particularly voice revenues. The decline in cellular services revenues was the net result of the decrease in voice revenues (which dropped by ¥198.3 billion or 10.4% to ¥1,712.2 billion from ¥1,910.5 billion for the prior fiscal year), which was partially offset by the increase in packet revenues (which grew by ¥106.0 billion or 6.7% from ¥1,589.0 billion in the prior fiscal year to ¥1,694.9 billion). An analysis on the reasons for the decline in voice revenues and increase in packet revenues is provided in the section explaining the changes in ARPU. Of the cellular services revenues, the revenues generated by FOMA voice services decreased by ¥126.7 billion or 7.1% from ¥1,785.5 billion for the prior fiscal year to ¥1,658.9 billion for the fiscal year ended March 31, 2011. On the other hand, the revenues generated by FOMA packet services increased to ¥1,679.8 billion, up ¥121.6 billion or 7.8%, from ¥1,558.3 billion for the prior fiscal year. Equipment sales revenues decreased by ¥30.1 billion or 5.9% to ¥477.4 billion for the year ended March 31, 2011 from ¥507.5 billion for the prior fiscal year, due mainly to a reduction in the wholesale price per unit.

Operating expenses decreased by ¥70.6 billion or 2.0% from ¥3,450.2 billion for the prior fiscal year to ¥3,379.5 billion for the fiscal year ended March 31, 2011. This was mainly attributable to a decrease in cost of equipment sold, which dropped by ¥35.7 billion or 5.1% to ¥662.8 billion from ¥698.5 billion for the prior fiscal year as a result of a reduction in the handset procurement cost per unit: a reduction in selling, general and administrative expenses of ¥22.7 billion or 2.0% from ¥1,149.9 billion for the prior fiscal year to ¥1,127.2 billion for the fiscal year ended March 31, 2011 resulting from the decline in customer service-related expenses: and a

decrease in depreciation and amortization, which declined by ¥8.1 billion or 1.2% from ¥701.1 billion for the prior fiscal year to ¥693.1 billion for the fiscal year ended March 31, 2011

As a result of the foregoing, operating income for the fiscal year ended March 31, 2011 increased by ¥10.5 billion or 1.3%, from ¥834.2 billion for the prior fiscal year to ¥844.7 billion. Accordingly, the operating income margin improved from 19.5% for the prior fiscal year to 20.0%. The growth of operating income, despite a decrease in operating revenues, contributed to this improvement, which was attained by making up for the decline in operating revenues resulting mainly from the reduction of voice revenues by a reduction of network-related costs and other operating expenses.

Other income (expense) includes items such as interest income, interest expense, gains and losses on sale of “Marketable securities and other investments” and foreign exchange gains and losses. We accounted for ¥9.4 billion as other expense for the fiscal year ended March 31, 2011, increasing expenses by ¥11.3 billion compared to the prior fiscal year, during which we recorded other income of ¥1.9 billion. This is mainly because we recorded other-than-temporary impairment charges for marketable securities and ~~securities accounted~~other investment in the fiscal year ended March 31, 2011, while we recognized only minimal other-than-temporary impairment charges in the prior fiscal year ended March 31, 2010.

Income before income taxes and equity in net income (losses) of affiliates decreased by ¥0.8 billion or 0.1% to ¥835.3 billion for ~~under~~ the ~~cost method was ¥151.0 billion.~~

fiscal year ended March 31, 2011, from ¥836.2 billion for the prior fiscal year.

Income taxes were ¥337.8 billion for the year ended March 31, 2011 and ¥338.2 billion for the year ended March 31, 2010, representing effective income tax rate of approximately 40.4% for both fiscal years. We are subject to income taxes imposed by various taxing authorities in Japan, including corporate income tax, corporate enterprise tax, corporate inhabitant income taxes and special local corporation tax, which in the aggregate amounted to a statutory income tax rate of 40.8% for both fiscal years ended March 31, 2011 and March 31, 2010. The Japanese government introduced various special tax benefits, one of which enabled us to deduct from our taxable income a portion of investments in research and development (“R&D investment tax incentive”). The difference between our effective tax rate and statutory income tax rate for the years ended March 31, 2011 and 2010 arose primarily from such special tax allowances.

For equity in net losses of affiliates (net of applicable taxes), we recognized our equity in the net losses of our affiliates of ¥5.5 billion for the fiscal year ended March 31, 2011 and ¥0.9 billion for the fiscal year ended March 31, 2010.

As a result of the foregoing, we recorded ¥490.5 billion in net income attributable to NTT DOCOMO, INC., posting a decrease of ¥4.3 billion or 0.9% from ¥494.8 billion for the prior fiscal year.

Operating Results for the year ended March 31, 2010

The following discussion includes analysis of our operating results for the year ended March 31, 2010. The tables below describe selected operating data and income statement data:

Key Performance Indicators

Years ended March 31
Increase

2009 2010 (Decrease) Change (%)

Cellular

Subscriptions (thousands) 54,601 56,082 1,481 2.7 %
FOMA services (thousands) 49,040 53,203 4,163 8.5 %
mova services (thousands) 5,560 2,879 (2,682 ) (48.2 )%
i-mode services (thousands) 48,474 48,992 518 1.1 %
Market Share (%)⁽¹⁾⁽²⁾
50.8 50.0 (0.8 ) —
Aggregate ARPU (FOMA+mova) (yen/month/subscription)⁽³⁾
5,710 5,350 (360 ) (6.3 )%
Voice ARPU (yen/month/subscription)⁽⁴⁾
3,330 2,900 (430 ) (12.9 )%
Packet ARPU (yen/month/subscription) 2,380 2,450 70 2.9 %
MOU (FOMA+mova) (minutes/month/subscription)⁽³⁾⁽⁵⁾
137 136 (1 ) (0.7 )%
Churn Rate (%)⁽²⁾
0.50 0.46 (0.04 ) —


	Years ended March 31
	2009		2010		Increase (Decrease)			Change (%)
Cellular
Subscriptions (thousands)		54,601		56,082		1,481			2.7	%
FOMA services (thousands)		49,040		53,203		4,163			8.5	%
mova services (thousands)		5,560		2,879		(2,682	)		(48.2	)%
i-mode services (thousands)		48,474		48,992		518			1.1	%
Market Share (%) ^(1) (2)		50.8		50.0		(0.8	)		—
Aggregate ARPU (FOMA+mova) (yen/month/subscription)⁽³⁾		5,710		5,350		(360	)		(6.3	)%
Voice ARPU (yen/month/subscription)⁽⁴⁾		3,330		2,900		(430	)		(12.9	)%
Packet ARPU (yen/month/subscription)		2,380		2,450		70			2.9	%
MOU (FOMA+mova) (minutes/month/subscription)^(3) (⁵⁾		137		136		(1	)		(0.7	)%
Churn Rate (%) ⁽²⁾		0.50		0.46		(0.04	)		—


(1)		Source for other cellular telecommunications operators: Data announced by Telecommunications Carriers Association

(2)		Data calculated including Communication Module Services subscriptions.

(3)		Data calculated excluding Communication Module Services-related revenues and Communication Module Services subscriptions.

(4)		Inclusive of circuit switched data communications.

(5)

MOU (Minutes of ~~usage)~~Use): Average communication time per month per subscription

Breakdown of Financial Information

Millions of yen
Years ended March 31
Increase

2009 2010 (Decrease) Change (%)

Operating revenues :

Wireless services ¥ 3,841,082 ¥ 3,776,909 ¥ (64,173 ) (1.7 )%
Cellular services revenues 3,661,283 3,499,452 (161,831 ) (4.4 )%
— Voice revenues⁽⁶⁾
2,149,617 1,910,499 (239,118 ) (11.1 )%
Including: FOMA services 1,877,835 1,785,518 (92,317 ) (4.9 )%
— Packet communications revenues 1,511,666 1,588,953 77,287 5.1 %
Including: FOMA services 1,449,440 1,558,284 108,844 7.5 %
Other revenues 179,799 277,457 97,658 54.3 %

Equipment sales 606,898 507,495 (99,403 ) (16.4 )%

Total operating revenues 4,447,980 4,284,404 (163,576 ) (3.7 )%

Operating expenses

Cost of services 872,438 900,642 28,204 3.2 %
Cost of equipment sold 827,856 698,495 (129,361 ) (15.6 )%
Depreciation and amortization 804,159 701,146 (103,013 ) (12.8 )%
Selling, general and administrative 1,112,568 1,149,876 37,308 3.4 %

Total operating expense 3,617,021 3,450,159 (166,862 ) (4.6 )%

Operating income
830,959 834,245 3,286 0.4 %
Other income (expense)
(50,486 ) 1,912 52,398 —

Income before income taxes and equity in net income (losses) of affiliates
780,473 836,157 55,684 7.1 %
Income taxes
308,400 338,197 29,797 9.7 %

Income before equity in net income (losses) of affiliates
472,073 497,960 25,887 5.5 %
Equity in net income (losses) of affiliates (net of applicable taxes) (672 ) (852 ) (180 ) (26.8 )%

Net Income
471,401 497,108 25,707 5.5 %
Less: Net (income) loss attributable to noncontrolling interests 472 (2,327 ) (2,799 ) —

Net income attributable to NTT DOCOMO, INC.
¥ 471,873 ¥ 494,781 ¥ 22,908 4.9 %


	Millions of yen
	Years ended March 31
	2009			2010			Increase (Decrease)			Change (%)
Operating revenues
Wireless services	¥	3,841,082		¥	3,776,909		¥	(64,173	)		(1.7	)%
Cellular services revenues		3,661,283			3,499,452			(161,831	)		(4.4	)%
—Voice revenues⁽⁶⁾		2,149,617			1,910,499			(239,118	)		(11.1	)%
Including: FOMA services		1,877,835			1,785,518			(92,317	)		(4.9	)%
—Packet communications revenues		1,511,666			1,588,953			77,287			5.1	%
Including: FOMA services		1,449,440			1,558,284			108,844			7.5	%
Other revenues		179,799			277,457			97,658			54.3	%

Equipment sales		606,898			507,495			(99,403	)		(16.4	)%

Total operating revenues		4,447,980			4,284,404			(163,576	)		(3.7	)%


Operating expenses
Cost of services		872,438			900,642			28,204			3.2	%
Cost of equipment sold		827,856			698,495			(129,361	)		(15.6	)%
Depreciation and amortization		804,159			701,146			(103,013	)		(12.8	)%
Selling, general and administrative		1,112,568			1,149,876			37,308			3.4	%

Total operating expenses		3,617,021			3,450,159			(166,862	)		(4.6	)%

Operating income		830,959			834,245			3,286			0.44	%
Other income (expense)		(50,486	)		1,912			52,398			—

Income before income taxes and equity in net income (losses) of affiliates		780,473			836,157			55,684			7.1	%
Income taxes		308,400			338,197			29,797			9.7	%

Income before equity in net income (losses) of affiliates		472,073			497,960			25,887			5.5	%
Equity in net income (losses) of affiliates (net of applicable taxes)		(672	)		(852	)		(180	)		(26.8	)%

Net Income		471,401			497,108			25,707			5.5	%
Less: Net (income) loss attributable to noncontrolling interests		472			(2,327	)		(2,799	)		—

Net income attributable to NTT DOCOMO, INC.	¥	471,873		¥	494,781		¥	22,908			4.9	%


(6)		Inclusive of circuit switched data communications.

Analysis of operating results for the year ended March 31, 2010 and comparison with the prior fiscal year

The total number of our cellular (FOMA+mova) subscriptions as at March 31, 2010 was 56.08 million, up 1.48 million, or 2.7%, compared to 54.60 million as of the end of the prior fiscal year. ~~We expect that the growth rate of our cellular subscriptions will decelerate in the future as the growth of the Japanese market slows due to maturity.~~ As of March 31, 2010, the number of FOMA subscriptions reached 53.20 million, which equaled 94.9% of our total cellular subscriptions, posting an increase of 4.16 million, or 8.5%, compared to 49.04 million as of March 31, 2009. On the other hand, the number of mova subscriptions has decreased constantly since the fiscal year ended March 31, 2004, as a result of our efforts to migrate subscribers to the FOMA network. As of March 31, 2010, the total number

of mova subscriptions was 2.88 million, decreasing by 2.68 million, or 48.2%, from 5.56 million as of the end of the prior fiscal year. ~~We decided to terminate mova service on March 31, 2012, in order to concentrate our managerial resources on FOMA service.~~ Our subscriber market share as of March 31, 2010 dropped by 0.8 points from 50.8% as of the

end of the prior fiscal year to 50.0%. The number of i-mode subscriptions reached 48.99 million as of March 31, 2010, recording an increase of 0.52 million or 1.1% from 48.47 million as of March 31, 2009.

Aggregate ARPU for cellular (FOMA+mova) service for the fiscal year ended March 31, 2010 dropped to ¥5,350, down ¥360 or 6.3%, compared to ¥5,710 for the prior fiscal year. Voice ARPU decreased by ¥430 or 12.9% to ¥2,900, compared to ¥3,330 for the prior fiscal year. The primary ~~factor~~factors behind this decline ~~was~~were the significant increase in the number of users subscribing to the “Value Plan” and decline in billable MOU. Packet ARPU, on the other hand, grew to ¥2,450, recording an increase of ¥70 or 2.9% from ¥2,380 for the prior fiscal year. The main reasons for the increase in packet ARPU include the growth in the number of users subscribing to flat-rate packet plans for unlimited i-mode access, and the widespread adoption of “i-channel” and other services designed to boost i-mode usage. The MOU (FOMA+mova) decreased by 1 minute or 0.7% to 136 minutes compared to 137 minutes for the prior fiscal year. The billable MOU, in particular, decreased from 124 minutes for the prior fiscal year to 118 minutes, posting a decline of 6 minutes or 4.8%, due mainly to the expansion of free communications allowances.

Our cellular churn rate was 0.46% and 0.50% for the fiscal years ended March 31, 2010 and March 31, 2009, respectively. The churn rate for the fiscal year ended March 31, 2010 dropped by 0.04 points to a record low, owing to our efforts to promote the adoption of new handset sales methods and customer satisfaction improvement initiatives. We have successfully maintained our churn rate lower compared to that of other carriers in Japan, which we believe was attained as a result of various factors, including among other things, introduction of competitive billing plans and gaining the confidence of customers in our network and services. However, no assurance can be given that we can maintain the churn rate at the current level or achieve a further reduction.

During the fiscal year ended March 31, 2010, we strived to expand subscribers’ packet usage through the expansion and enrichment of our video content services and other measures, and also accelerated the personalization of services with the launch of an upgraded behavior support service compatible with the Auto-GPS locating capability. In addition, we have taken various steps aimed at enhancing customer satisfaction, including the enrichment of our handset lineup, billing plans and after-sales support.

Our operating revenues for the fiscal year ended March 31, 2010, were ¥4,284.4 billion, posting a decline of ¥163.6 billion or 3.7% from ¥4,448.0 billion for the prior fiscal year. Wireless services revenues were ¥3,776.9 billion, decreasing by ¥64.2 billion or 1.7% compared to ¥3,841.1 billion for the prior fiscal year. The contribution of wireless services revenues to our total operating revenues for the fiscal year ended March 31, 2010 increased to 88.2% from 86.4% for the prior fiscal year. Theyear-on-year decrease in wireless services revenues was primarily attributable to the drop of cellular services revenues, particularly voice revenues. The decline in cellular services revenues was the net result of the decrease in voice revenues (which dropped by ¥239.1 billion or 11.1% to ¥1,910.5 billion from ¥2,149.6 billion for the prior fiscal year) and the increase in packet revenues (which grew by ¥77.3 billion or 5.1% from ¥1,511.7 billion in the prior fiscal year to ¥1,589.0 billion). An analysis on the reasons for the decline in voice revenues and increase in packet revenues is provided in the section explaining the changes in ARPU. Of the cellular services revenues, the revenues generated by FOMA voice services decreased by ¥92.3 billion or 4.9% from ¥1,877.8 billion for the prior fiscal year to ¥1,785.5 billion for the fiscal year ended March 31, 2010. On the other hand, the revenues generated by FOMA packet services increased to ¥1,558.3 billion, up ¥108.8 billion or 7.5%, from ¥1,449.4 billion for the prior fiscal year. Equipment sales revenues decreased by ¥99.4 billion or 16.4% to ¥507.5 billion for the year ended March 31, 2010 from ¥606.9 billion for the prior fiscal year, because our handset sales were negatively affected by the sluggish economic conditions and ~~others~~other factors.

Operating expenses decreased by ¥166.9 billion or 4.6% from ¥3,617.0 billion for the prior fiscal year to ¥3,450.2 billion for the fiscal year ended March 31, 2010. This was mainly attributable to (i) a decrease in cost of equipment sold, which dropped by ¥129.4 billion or 15.6% to ¥698.5 billion from ¥827.9 billion for the prior fiscal year, as a result of a decrease in the total number of handsets sold and the reduction in the handset procurement cost per unit, and (ii) a decrease in depreciation and amortization, which declined by ¥103.0 billion

or 12.8% from ¥804.2 billion (inclusive of accelerated depreciation charges of mova-related assets) for the prior fiscal year to

~~¥701.1~~ ¥701.1 billion for the fiscal year ended March 31, 2010. On the other hand, due to the increase in customer service-related expenses, cost of services increased by ¥28.2 billion or 3.2% from ¥872.4 billion for the prior fiscal year to ¥900.6 billion for the fiscal year ended March 31, 2010, while selling, general and administrative expenses grew to ¥1,149.9 billion, up ¥37.3 billion or 3.4%, compared to ¥1,112.6 billion for the prior fiscal year.

As a result of the foregoing, operating income for the fiscal year ended March 31, 2010 increased by ¥3.3 billion or 0.4%, from ¥831.0 billion for the prior fiscal year to ¥834.2 billion. Accordingly, the operating income margin improved from 18.7% for the prior fiscal year to 19.5%. The growth of operating income, despite a decrease in operating revenues, contributed to this improvement, which was attained by making up for the decline in operating revenues resulting mainly from the reduction of voice revenues by a reduction of network-related costs and other operating expenses, and performance improvements in miscellaneous businesses segment.

Other income (expense) includes items such as interest income, interest expense, gains and losses on sale of ~~marketable~~“Marketable securities and other ~~investments~~investments” and foreign exchange gains and losses. We accounted for ¥1.9 billion as other income for the fiscal year ended March 31, 2010, achieving an improvement of ¥52.4 billion compared to the prior fiscal year, during which we recorded other expenses of ¥50.5 billion. This is because we recorded only minimal other-than-temporary impairment charges for ~~marketable~~“Marketable securities and other ~~investment~~investments” in the fiscal year ended March 31, 2010, while we recognized other-than-temporary impairment charges of ¥57.8 billion in the prior fiscal year ended March 31, 2009. The other-than-temporary impairment charges recognized in the prior fiscal year included an impairment of ¥26.3 billion, which resulted mainly from foreign currency fluctuation, for the common shares of KT Freetel Co., Ltd. (KTF) based on its fair market value as of March 31, 2009 in connection with the merger of KTF and KT Corporation (KT) in June 2009, under which KTF shares would be exchanged for KT common shares and KT exchangeable bonds.

Income before income taxes and equity in net income (losses) of affiliates increased by ¥55.7 billion or 7.1% to ¥836.2 billion for the fiscal year ended March 31, 2010, from ¥780.5 billion for the prior fiscal year.

Income taxes were ¥338.2 billion for the year ended March 31, 2010, and ¥308.4 billion for the year ended March 31, 2009, representing effective income tax rate of approximately 40.4% and 39.5%, respectively. We are subject to income taxes imposed by various taxing authorities in Japan, including corporate income tax, corporate enterprise tax, corporate inhabitant income taxes and special local corporation tax, which in the aggregate amounted to a statutory income tax rate of 40.8% for both fiscal years ended March 31, 2010 and March 31, 2009. The Japanese government introduced various special tax benefits, one of which enabled us to deduct from our taxable income a portion of investments in research and development (“R&D investment tax incentive”). The difference between our effective tax rate and statutory income tax rate for the years ended March 31, 2010 and 2009 arose primarily from such special tax allowances. ~~In addition, for the year ended March 31, 2009, there was a tax refund of interests and penalties previously paid, which lowered the effective income tax rate for the year ended March 31, 2009.~~

For equity in net losses of affiliates (net of applicable taxes), we ~~incurred~~recognized our equity in the net losses of our affiliates of ¥0.9 billion for the fiscal year ended March 31, 2010 and ¥0.7 billion for the fiscal year ended March 31, 2009.

As a result of the foregoing, for the fiscal year ended March 31, 2010, we recorded ¥494.8 billion in net income attributable to NTT DOCOMO, INC., posting an increase of ¥22.9 billion or 4.9% from ¥471.9 billion for the prior fiscal year.

~~Operating Results for the year ended March 31, 2009~~

~~The following discussion includes analysis of our operating results for the year ended March 31, 2009. The tables below describe selected operating data and income statement data:~~

~~Key Performance Indicators~~

Years ended March 31
Increase

2008 2009 (Decrease) Change (%)

Cellular

Subscriptions (thousands) 53,388 54,601 1,213 2.3 %
FOMA services (thousands) 43,949 49,040 5,091 11.6 %
mova services (thousands) 9,438 5,560 (3,878 ) (41.1 )%
i-mode services (thousands) 47,993 48,474 481 1.0 %
Market Share(%)⁽¹⁾⁽²⁾
52.0 50.8 (1.2 ) —
Aggregate ARPU (FOMA+mova) (yen/month/subscription)⁽³⁾
6,360 5,710 (650 ) (10.2 )%
Voice ARPU (yen/month/subscription)⁽⁴⁾
4,160 3,330 (830 ) (20.0 )%
Packet ARPU (yen/month/subscription) 2,200 2,380 180 8.2 %
MOU (FOMA+mova) (minutes/month/subscription)⁽³⁾⁽⁵⁾
138 137 (1 ) (0.7 )%
Churn Rate(%)⁽²⁾
0.80 0.50 (0.30 ) —


~~(1)~~		~~Source for other cellular telecommunications operators: Data announced by Telecommunications Carriers Association~~

~~(2)~~		~~Data calculated including Communication Module Services subscriptions.~~

~~(3)~~		~~Data calculated excluding Communication Module Services-related revenues and Communication Module Services subscriptions.~~

~~(4)~~		~~Inclusive of circuit switched data communications.~~

~~(5)~~		~~MOU (Minutes of usage): Average communication time per month per subscription~~

~~Breakdown of Financial Information~~

Millions of yen
Years ended March 31
Increase

2008 2009 (Decrease) Change (%)

Operating revenues :

Wireless services
¥ 4,165,234 ¥ 3,841,082 ¥ (324,152 ) (7.8 )%
Cellular services revenues 4,018,988 3,661,283 (357,705 ) (8.9 )%
— Voice revenues⁽⁶⁾
2,645,096 2,149,617 (495,479 ) (18.7 )%
Including: FOMA services 2,084,263 1,877,835 (206,428 ) (9.9 )%
— Packet communications revenues 1,373,892 1,511,666 137,774 10.0 %
Including: FOMA services 1,254,648 1,449,440 194,792 15.5 %
Other revenues⁽⁷⁾
146,246 179,799 33,553 22.9 %

Equipment sales 546,593 606,898 60,305 11.0 %

Total operating revenues 4,711,827 4,447,980 (263,847 ) (5.6 )%

Operating expenses

Cost of services 811,133 872,438 61,305 7.6 %
Cost of equipment sold 1,150,261 827,856 (322,405 ) (28.0 )%
Depreciation and amortization 776,425 804,159 27,734 3.6 %
Selling, general and administrative 1,165,696 1,112,568 (53,128 ) (4.6 )%

Total operating expense 3,903,515 3,617,021 (286,494 ) (7.3 )%

Operating income
808,312 830,959 22,647 2.8 %
Other income (expense)
(7,624 ) (50,486 ) (42,862 ) (562.2 )%

Income before income taxes and equity in net income (losses) of affiliates
800,688 780,473 (20,215 ) (2.5 )%
Income taxes
322,955 308,400 (14,555 ) (4.5 )%

Income before equity in net income (losses) of affiliates
477,733 472,073 (5,660 ) (1.2 )%
Equity in net income (losses) of affiliates (net of applicable taxes) 13,553 (672 ) (14,225 ) —

Net income
491,286 471,401 (19,885 ) (4.0 )%
Less: Net (income) loss attributable to noncontrolling interests (84 ) 472 556 —

Net income attributable to NTT DOCOMO, INC.
¥ 491,202 ¥ 471,873 ¥ (19,329 ) (3.9 )%


~~(6)~~		~~Inclusive of circuit switched data communications.~~

~~(7)~~		~~“PHS services revenues” for the year ended March 31, 2008 has been reclassified into “Other revenues.”~~

~~Analysis of operating results for the year ended March 31, 2009 and comparison with the prior fiscal year~~

As of March 31, 2009, the number of our cellular (FOMA+mova) subscriptions reached 54.60 million and increased by 1.21 million or 2.3% from 53.39 million at the end of the prior fiscal year. We expect that the growth rate of our cellular subscriptions will decelerate in the future as the growth rate of cellular subscriptions declines due to the maturity of the market in Japan. The number of FOMA subscriptions increased by 5.09 million or 11.6% to 49.04 million as of March 31, 2009 from 43.95 million at the end of the prior fiscal year. The ratio of FOMA subscriptions to the total cellular subscriptions reached 89.8% as of March 31, 2009. On the other hand, the number

of mova subscriptions, which has decreased since the year ended March 31, 2004, decreased by 3.88 million or 41.1% to 5.56 million as of March 31, 2009 from 9.44 million as of the end of the prior fiscal year. We have decided to discontinue mova services on March 31, 2012 and focus our business resources on FOMA services. Our market share decreased by 1.2 points to 50.8% as of March 31, 2009 from 52.0% as of the end of the prior fiscal year. The number of i-mode subscriptions increased by 0.48 million or 1.0% to 48.47 million as of March 31, 2009 from 47.99 million at the end of the prior fiscal year.

Aggregate ARPU of cellular (FOMA+mova) service decreased by ¥650 or 10.2% to ¥5,710 for the year ended March 31, 2009 from ¥6,360 in the prior fiscal year. Voice ARPU decreased by ¥830 or 20.0% to ¥3,330 for the year ended March 31, 2009 from ¥4,160 in the prior fiscal year. This decrease in voice ARPU was due to the large increase in the number of subscribers to “Value Plan” and new discount services introduced in the last fiscal year. Packet ARPU increased by ¥180 or 8.2% to ¥2,380 for the year ended March 31, 2009 from ¥2,200 in the prior fiscal year. This increase in packet ARPU was due to penetration of services such as “i-channel,” which promote i-mode usage and of an optional packet flat-rate service for unlimited i-mode usage, in addition to a raise in the i-mode monthly subscription fee of ¥100 per month effective from June 2008. The MOU (FOMA+mova) decreased by 1 minute or 0.7% to 137 minutes from 138 minutes in the prior fiscal year.

Our churn rate for cellular subscriptions was 0.50% and 0.80% for the years ended March 31, 2009 and 2008, respectively. The churn rate decreased by 0.30 points and was one of the lowest levels, reflecting our efforts to promote new sales methods and improve customer satisfaction. We believe that, due to various factors, such as the implementation of competitive billing arrangements, customer confidence in our network and services and the introduction of new services, our churn rate was lower than that of other operators. However, no assurance can be given that our churn rate will decline or remain low.

During the year ended March 31, 2009, in order to improve customer satisfaction, we have taken measures such as lowering basic monthly charge of “Type SS Value” billing plan, introduction of new packet flat-rate services “Pake-hodai double” and “Biz-hodai double,” enhancement of services for the loyalty membership program “docomo Premier Club,” rollout of newly organized handset series, expansion of FOMA high speed areas (achieved 100% POP coverage) and~~on-site~~ ~~visits and investigations in response to customers’ claims for network area quality, normally within 48 hours of contacts from our investigation staffs.~~

Operating revenues decreased by ¥263.8 billion or 5.6% to ¥4,448.0 billion for the year ended March 31, 2009 from ¥4,711.8 billion in the prior fiscal year. Wireless services revenues decreased by ¥324.2 billion or 7.8% to ¥3,841.1 billion from ¥4,165.2 billion in the prior fiscal year. As a result, wireless services accounted for 86.4% of operating revenues for the year ended March 31, 2009, decreasing from 88.4% in the prior fiscal year. The decrease in wireless services revenues resulted from a decrease in cellular services revenues, especially voice revenues. The decrease in cellular services revenues was a net of a decrease in voice revenues by ¥495.5 billion or 18.7% to ¥2,149.6 billion from ¥2,645.1 billion in the prior fiscal year, and an increase in packet communications revenues by ¥137.8 billion or 10.0% to ¥1,511.7 billion from ¥1,373.9 billion in the prior fiscal year. The factors for the decrease in cellular services revenues and the increase in packet communications revenues were already discussed in the analysis of changes in ARPU. Voice revenues from FOMA services decreased by ¥206.4 billion or 9.9% to ¥1,877.8 billion from ¥2,084.3 billion in the prior fiscal year, while packet communications revenues increased by ¥194.8 billion or 15.5% to ¥1,449.4 billion from ¥1,254.6 billion in the prior fiscal year. Equipment sales increased by ¥60.3 billion or 11.0% to ¥606.9 billion for the year ended March 31, 2009 from ¥546.6 billion in the prior fiscal year because of a decrease in sales commissions to be deducted from gross equipment sales due to the introduction of “Value Course.”

Operating expenses decreased by ¥286.5 billion or 7.3% to ¥3,617.0 billion for the year ended March 31, 2009 from ¥3,903.5 billion in the prior fiscal year. This decrease resulted mainly from a decrease in cost of equipment sold by ¥322.4 billion or 28.0% to ¥827.9 billion for the year ended March 31, 2009 from ¥1,150.3 billion in the prior fiscal year and in selling, general and administrative expenses, by ¥53.1 billion or 4.6% to ¥1,112.6 billion for the year ended March 31, 2009 from ¥1,165.7 billion for the prior fiscal year, due to the decrease in sales commissions through the penetration of “Value Course.” Cost of services increased by ¥61.3 billion or 7.6% to ¥872.4 billion for the year ended March 31, 2009 from ¥811.1 billion in the prior fiscal year due to an increase in customer service related costs. Depreciation and amortization increased by ¥27.7 billion or 3.6% to ¥804.2 billion

for the year ended March 31, 2009 from ¥776.4 billion in the prior fiscal year, due to the effect of accelerated depreciation charges of mova-related assets through the changes in estimated useful lives of such assets based on our decision to discontinue mova services on March 31, 2012.

The operating income margin improved to 18.7% for the year ended March 31, 2009 from 17.2% for the prior fiscal year. The decrease in cost of equipment sold due to the decrease in the number of handsets sold and the decrease in selling, general and administrative expenses contributed to this improvement.

~~As a result of the foregoing, our operating income increased by ¥22.6 billion or 2.8% to ¥831.0 billion for the year ended March 31, 2009 from ¥808.3 billion for the prior fiscal year.~~

Other income (or expense) includes items such as interest income, interest expense, gains and losses on sale of marketable securities and other investments and foreign exchange gains and losses. We accounted for ¥50.5 billion as other expenses for the year ended March 31, 2009 as we recorded other than temporary impairment charges for marketable securities and other investments of ¥57.8 billion. Other expenses increased by ¥42.9 billion from ¥7.6 billion for the year ended March 31, 2008. For the year ended March 31, 2009, other than temporary impairment charges included an impairment of ¥26.3 billion for KTF common shares based on its fair value as of March 31, 2009 in connection with the merger between KTF and KT in June 2009, under which KTF shares would be exchanged for KT common shares and KT exchangeable bonds.

Income before income taxes and equity in net income (losses) of affiliates decreased by ¥20.2 billion or 2.5% to ¥780.5 billion for the year ended March 31, 2009 from ¥800.7 billion for the prior fiscal year.

Income taxes were ¥308.4 billion for the year ended March 31, 2009 and ¥323.0 billion in the prior fiscal year, representing effective income tax rates of approximately 39.5% and 40.3%, respectively. We are subject to income taxes imposed by various taxing authorities in Japan, including corporate income tax, corporate enterprise tax and corporate inhabitant income taxes, which in the aggregate amounted to a statutory income tax rate of approximately 40.8% and 40.9% for the years ended March 31, 2009 and 2008, respectively. The Japanese government introduced various special tax benefits, one of which enabled us to deduct from our taxable income a portion of investments in research and development (“R&D investment tax incentive”). The difference between our effective income tax rate and statutory income tax rate for the year ended March 31, 2009 and 2008 arose primarily from such special tax allowances. In addition, for the year ended March 31, 2009, there was a tax refund of interests and penalties previously paid, which lowered the effective income tax rate for the year ended March 31, 2009.

Equity in net losses of affiliates (net of applicable taxes) was ¥0.7 billion for the year ended March 31, 2009 compared to net income of ¥13.6 billion for the prior fiscal year. The decrease resulted from the adjustment to reflect the earnings impact of purchase price allocations in Philippine Long Distance Telephone Company, a telecommunications operator in the Philippines (“PLDT”).

We acquired common equity interest of PLDT in March 2006 and during the period between March 2007 and February 2008, and started to apply the equity method in the prior fiscal year. In applying the equity method, we started the evaluation of purchase price allocations in order to recognize and account for our share of tangible, intangible and other assets and liabilities of PLDT. For the fiscal year ended March 31, 2009, upon the completion of the evaluation, depreciation and amortization expenses of corresponding tangible and intangible assets from the date of the initial acquisition were included as a reduction of equity in net income (losses) of affiliates.

As a result of the foregoing, we recorded net income attributable to NTT DOCOMO, INC. of ¥471.9 billion for the year ended March 31, 2009, a decrease of ¥19.3 billion or 3.9% from ¥491.2 billion for the prior fiscal year.

Segment Information

General

Our business consists of two reportable segments: mobile phone business and miscellaneous businesses. Our management monitors and evaluates the performance of our segments based on the information that follows, as derived from our management reports.

The mobile phone business segment includes Xi services, FOMA services, mova services, packet communications services, satellite mobile communications services, international services and the equipment sales related to these services. The miscellaneous businesses segment includes home shopping services, high-speed internet connection services for hotel facilities, advertisement services, development, sales and maintenance of IT systems, credit services, multimedia broadcasting services and other miscellaneous services, which in the aggregate are not significant in amount.

~~PHS business, which had been previously identified as a reportable segment, was terminated in January 2008 and reclassified into miscellaneous businesses segment.~~

Mobile phone business segment

For the year ended March 31, ~~2010,~~2011, operating revenues from our mobile phone business segment decreased by ~~¥213.6~~¥77.0 billion or ~~4.9%~~1.8% to ~~¥4,167.7~~¥4,090.7 billion from ~~¥4,381.3~~¥4,167.7 billion in the prior fiscal year. Cellular services revenues, which are revenues from voice and packet communications of mobile phone services, decreased by ~~¥161.8~~¥92.3 billion or ~~4.4%~~2.6% to ~~¥3,499.5~~¥3,407.1 billion for the year ended March 31, ~~2010~~2011 from ~~¥3,661.3~~¥3,499.5 billion in the prior fiscal year. Equipment sales revenues ~~decreased~~ for the year ended March 31, ~~2010~~2011 decreased from the prior fiscal year due to a reduction in the ~~decrease in number of handsets sold to agent resellers.~~wholesale price per unit. Revenues from our mobile phone business segment represented ~~97.3%~~96.8% and ~~98.5%~~97.3% of total operating revenues for the years ended March 31, ~~2010~~2011 and ~~2009,~~2010, respectively. Operating expenses in our mobile phone business segment decreased by ~~¥203.9~~¥88.1 billion or ~~5.8%~~2.7% to ~~¥3,322.1~~¥3,233.9 billion from ~~¥3,526.0~~¥3,322.1 billion in the prior fiscal year. As a result, operating income from our mobile phone business segment ~~decreased~~increased by ~~¥9.6~~¥11.1 billion or ~~1.1%~~1.3% to ~~¥845.6~~¥856.7 billion ~~from ¥855.3~~compared to ¥845.6 billion in the prior fiscal year. Analysis of the changes in revenues and expenses of our mobile phone business segment is also presented in “Operating Trends” and “Operating Results for the year ended March 31, ~~2010,~~2011,” which were discussed above.

Miscellaneous businesses segment

Operating revenues from our miscellaneous businesses increased by ~~¥50.0~~¥16.9 billion or ~~74.9%~~14.5% from ~~¥66.7~~¥116.7 billion in the prior fiscal year to ~~¥116.7~~¥133.6 billion for the year ended March 31, ~~2010,~~2011, which represented ~~2.7%~~3.2% of total operating revenues. Operating expenses from our miscellaneous businesses increased by ~~¥37.0~~¥17.5 billion or ~~40.7%~~13.7% from ~~¥91.1~~¥128.1 billion in the prior fiscal year to ~~¥128.1~~¥145.6 billion. The increase in operating revenues and expenses resulted primarily from the ~~acquisition~~steadfast expansion of ~~OAK LAWN MARKETING, INC., a newly consolidated subsidiary from~~ the ~~current fiscal year, which provides~~ home shopping ~~services.~~business, which uses television as its main medium. As ~~a result,~~we have also promoted the measures aimed for the launch and expansion of multimedia broadcasting and other new businesses, operating loss from our miscellaneous businesses for the year ended March 31, ~~2010, improved~~2011 grew to ~~¥11.4~~¥12.0 billion from ~~¥24.3~~¥11.4 billion in the prior fiscal year.

Recent Accounting Pronouncements

In October 2009, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update2009-13 “Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements” (“ASU2009-13”). ASU2009-13 ~~will require~~requires allocation of the overall consideration to each deliverable in an arrangement with multiple deliverables using the estimated selling price in the absence of vendor-specific objective evidence or third-party evidence of selling price for deliverables and ~~eliminate~~eliminates residual method of allocation. ASU2009-13 is effective for fiscal years beginning on or after June 15, 2010. We ~~are~~ currently ~~evaluating~~estimate that the impact of adopting ASU2009-13 on our ~~result~~results of operations and financial ~~position.~~

position will be immaterial.

Critical Accounting Policies

The preparation of our consolidated financial statements requires our management to make estimates about expected future cash flows and other matters that affect the amounts reported in our financial statements in accordance with accounting policies established by our management. Note 2 to our consolidated financial statements includes a summary of the significant accounting policies used in the preparation of our consolidated financial statements. Certain accounting policies are particularly sensitive because of their significance to our reported results and because of the possibility that future events may differ significantly from the conditions and assumptions underlying the estimates used and judgments relating thereto made by our management in preparing

our financial statements. Our senior management has discussed the selection and development of the accounting estimates and the following disclosure regarding the critical accounting policies

with our independent public accountants as well as our corporate auditors. The corporate auditors attend meetings of the board of directors and certain executive meetings to express their opinion and are under a statutory duty to ~~oversee~~audit the administration of our affairs by our directors and to ~~examine~~audit our financial statements. Our critical accounting policies are as follows.

Useful lives of property, plant and equipment, internal use software and other intangible assets

The values of our property, plant and equipment, such as the base stations, antennas, switching centers and transmission lines used by our cellular business, our internal-use software and our other intangible assets are recorded in our financial statements at acquisition or development cost and depreciated or amortized over their estimated useful lives. We estimate the useful lives of property, plant and equipment, internal-use software and other intangible assets in order to determine the amount of depreciation and amortization ~~expense~~expenses to be recorded in each fiscal year. Our total depreciation and amortization expenses for the years ended March 31, 2011, 2010 and 2009 ~~and 2008~~ were ¥693.1 billion, ¥701.1 billion ~~¥804.2 billion~~ and ~~¥776.4~~¥804.2 billion, respectively. For the year ended March 31, 2009, depreciation and amortization expenses included the effect of accelerated depreciation charges of ¥60.1 billion for mova-related assets through the changes in estimated useful lives accompanied by our decision to discontinue mova services on March 31, 2012, while the effect of such accelerated depreciation charges was not material for the year ended March 31, 2011 and 2010. We determine the useful lives of our assets at the time the assets are acquired and base our determinations on expected usage, experience with similar assets, established laws and regulations as well as taking into account anticipated technological or other changes. The estimated useful lives of our wireless telecommunications equipment are generally set at from 8 to 16 years. The estimated useful life of our internal-use software is set at 5 years. If technological or other changes occur more rapidly or in a different form than anticipated, new laws or regulations are enacted, or the intended usage changes, the useful lives assigned to these assets may need to be shortened, resulting in recognition of additional depreciation and amortization expenses or losses in future periods.

Impairment of long-lived assets

We perform an impairment review for our long-lived assets to be held and used, including fixed assets such as our property, plant and equipment and certain identifiable intangibles such as software for telecommunications network, internal-use software and rights to use telecommunications facilities of wire line network operators, whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. This analysis is separate from our analysis of the useful lives of our assets, although it is affected by some similar factors. Factors that we consider important and that can trigger an impairment review include, but are not limited to, the following trends or conditions related to the business that utilizes a particular asset:

significant decline in the market value of an asset;

loss of operating cash flow in current period;


	•	~~significant decline in the market value of an asset;~~

	•	~~loss of operating cash flow in current period;~~

	•	~~introduction of competitive technologies and services;~~

	•	~~significant underperformance of expected or historical cash flows;~~

	•	~~significant or continuing decline in subscriptions;~~

	•	~~changes in the manner of usage of an asset; and~~

	•	~~other negative industry or economic trends.~~

introduction of competitive technologies and services;

significant underperformance of expected or historical cash flows;

significant or continuing decline in subscriptions;

changes in the manner of usage of an asset; and

other negative industry or economic trends.

When we determine that the carrying amount of specific assets may not be recoverable based on the existence or occurrence of one or more of the above or other factors, we estimate the future cash inflows and outflows expected to be generated by the assets over their expected useful lives. We also estimate the sum of expected undiscounted future net cash flows based upon historical trends adjusted to reflect our best estimate of

future market and operating conditions. If the carrying value of the assets exceeds the sum of the expected undiscounted future net cash flows, we record an impairment loss based on the fair values of the assets. Such fair values may be based on established markets, independent appraisals and valuations or discounted cash flows. If actual market and operating conditions under which assets are used are less favorable or subscriber numbers are less than those projected by

management, either of which results in loss of cash flows, additional impairment charges for assets not previously written-off may be required. For the year ended March 31, 2008, we recorded an impairment charges for certain long-lived assets but the impairment charges did not have a material impact on our results of operations and financial position. We did not recognize any impairment charges for the years ended March 31, 2011, 2010 and 2009.

Impairment of investments

We have made investments in certain domestic and foreign entities. These investments are accounted for under the equity method, cost method, or at fair value as appropriate based on various conditions such as ownership percentages, exercisable influence over the investments and marketability of the investments. The total carrying value for the ~~investments~~“Investments in ~~affiliates~~affiliates” was ~~¥578.1~~¥525.5 billion, while the total carrying value for ~~investments in marketable~~“Marketable securities and ~~securities accounted for under the cost method~~other investments” was ~~¥151.0~~¥128.1 billion as of March 31, ~~2010.~~2011. Equity method and cost method accounting require that we assess if a decline in value or an associated event regarding any such investment has occurred and, if so, whether such decline is other than temporary. We perform a review for impairment whenever events or changes in circumstances indicate that the carrying amount of an investment may not be recoverable. Factors that we consider important and that can trigger an impairment review include, but are not limited to, the following:

significant or continued declines in the market values of the investee;

loss of operating cash flow in current period;


	•	~~significant or continued declines in the market values of the investee;~~

	•	~~loss of operating cash flow in current period;~~

	•	~~significant underperformance of historical cash flows of the investee;~~

	•	~~significant impairment losses or write-downs recorded by the investee;~~

	•	~~significant changes in the quoted market price of public investee affiliates;~~

	•	~~negative results of competitors of investee affiliates; and~~

	•	~~other negative industry or economic trends.~~

significant underperformance of historical cash flows of the investee;

significant impairment losses or write-downs recorded by the investee;

significant changes in the quoted market price of public investee affiliates;

negative results of competitors of investee affiliates; and

other negative industry or economic trends.

In performing our evaluations, we utilize various information including discounted cash flow valuations, independent valuations and, if available, quoted market values. Determination of recoverable amounts sometimes require estimates involving results of operations and financial position of the investee, changes in technology, capital expenditures, market growth and share, discount factors and terminal values.

In the event we determine as a result of such evaluations that there are other than temporary declines in value of investment below its carrying value, we record an impairment charge. Such write-down to fair value establishes a new cost basis in the carrying amount of the investment. The impairment charge of ~~investment~~“Investment in ~~affiliates~~affiliates” is included in “Equity in losses of affiliates” while the impairment charge of ~~marketable~~“Marketable securities ~~or securities under the cost method~~and other investments” is reflected in “Other income (expense)” in our consolidated statements of income and comprehensive income.

For the year ended March 31, 2009, ~~and 2008,~~ we recorded impairment charges accompanying ~~with~~ other than temporary declines in the values of certain investee affiliates, but the impairment charges did not have a material impact on our results of operations and financial position. We did not recognize any impairment charges on “Investments in affiliates” for the year ended March 31, 2011 and 2010.

We also recorded impairment charges on certain investments which were classified as ~~marketable~~“Marketable securities orand other investments.” The amount of impairment charges on “Marketable securities ~~under the cost method. For~~and other investments” was ¥13.4 billion, ¥4.0 billion and ¥57.8 billion for the year ended March 31, ~~2009, the amount of impairment charges was ¥57.8 billion. For the years ended March 31,~~2011, 2010 and ~~2008, the impairment charges did not have a material impact on our results of operations and financial position.~~

2009, respectively.

While we believe that the remaining carrying values of our investments are nearly equal to their fair value, circumstances in which the value of an investment is below its carrying amount or changes in the estimated realizable value can require additional impairment charges to be recognized in the future.

Accrued liabilities for point programs

We offer “docomo Points Service,” which provides benefits, including discounts on handset, to customers in exchange for points that we grant customers based on the usage of cellular and other services and record “Accrued liabilities for point programs” relating to the points that customers earn. The total amount of accrued liabilities for

point programs recognized as short-term and long-term liabilities as of March 31, 2011 and 2010 ~~and 2009~~ was ~~¥174.9~~¥199.6 billion and ~~¥116.7~~¥174.9 billion, respectively. Point program expense for the years ended March 31, 2011, 2010 and 2009 ~~and 2008~~ was ¥126.8 billion, ¥142.2 billion and ¥114.7 billion, ~~and ¥84.3 billion,~~ respectively.

In determining the accrued liabilities for point programs, we estimate such factors as the point utilization rate reflecting the forfeitures by, among other things, cancellation of subscription. Higher-than-estimate utilization rate could result in the need for recognizing additional expenses or accrued liabilities in the future. In determining the accrued liabilities for point programs as of March 31, ~~2010,~~2011, one percent raise in point utilization rate would result in an additional accrual of approximately ~~¥1.4~~¥1.6 billion, if all the other factors are held constant.

Pension liabilities

We sponsor a non-contributory defined benefit pension plan which covers almost all of our employees. We also participate in the NTT CDBP, a contributory defined benefit welfare pension plan sponsored by NTT group.

Calculation of the amount of pension cost and liabilities for retirement allowances requires us to make various judgments and assumptions including the discount rate, expected long-term rate of return on plan assets, long-term rate of salary increases and expected remaining service lives of our plan participants. We believe that the most significant of these assumptions in the calculations are the discount rate and the expected long-term rate of return on plan assets. We determine an appropriate discount rate based on current market interest rates on high-quality, fixed-rate debt securities that are currently available and expected to be available during the period to maturity of the pension benefits. In determining the expected long-term rate of return on plan assets, we consider the current and projected asset allocations, as well as expected long-term investment returns and risks for each category of the plan assets based on analysis of historical performances. The rates are reviewed annually and we review our assumptions in a timely manner when an event occurs that would have significant influence on the rates or the investment environment changes dramatically.

The discount rates applied in determination of the projected benefit obligations as of March 31, ~~2010~~2011 and ~~2009,~~2010, and expected long-term rates of return on plan assets for the years ended March 31, ~~2010~~2011 and ~~2009~~2010 were as follows:

Years ended March 31
2009 2010

Non-contributory defined benefit pension plan
Discount rate 2.2% 2.1%
Expected long-term rate of return on plan assets 2.5% 2.5%
Actual return on plan assets Approximately (17)% Approximately 14%
NTT CDBP
Discount rate 2.2% 2.1%
Expected long-term rate of return on plan assets 2.5% 2.5%
Actual return on plan assets Approximately (12)% Approximately 13%


	2010		2011
Non-contributory defined benefit pension plan
Discount rate		2.1%		2.0%
Expected long-term rate of return on plan assets		2.5%		2.3%
Actual return on plan assets		Approximately 14%		Approximately (2)%
NTT CDBP
Discount rate		2.1%		2.0%
Expected long-term rate of return on plan assets		2.5%		2.5%
Actual return on plan assets		Approximately 13%		Approximately (2)%

The amount of projected benefit obligations of our non-contributory defined benefit pension plan as of March 31, 2011 and March 31, 2010 ~~and 2009~~ was ~~¥190.4~~¥196.1 billion and ~~¥186.2~~¥190.4 billion, respectively. The amount of

projected benefit obligations of the NTT CDBP as of March 31, ~~2010~~2011 and ~~2009,~~March 31, 2010, based on actuarial computations which covered only DOCOMO employees’ participation, was ~~¥88.7~~¥96.4 billion and ~~¥83.5~~¥88.7 billion, respectively. The amount is subject to a substantial change due to differences in actual performance or changes in assumptions. In conjunction with the differences between estimates and the actual benefit obligations, net losses in excess of 10% of the greater of the projected benefit obligation or the fair value of plan assets are amortized from “Accumulated other comprehensive income (loss)” over the expected average remaining service life of employees in accordance with U.S. GAAP.

The following table shows the sensitivity of our non-contributory defined benefit pension plan and the NTT CDBP as of March 31, ~~2010~~2011 to the change in the discount rate or the expected long-term rate of return on plan assets, while holding other assumptions constant.

Billions of yen

Change in Assumptions

Change in projected
benefit obligation

Change in pension
cost, before
applicable taxes

Accumulated other
comprehensive
income (loss), net
of applicable taxes

Non-contributory defined benefit pension plan

0.5% increase/decrease in discount rate

(11.8) / 12.6

~~Billions of yen~~

~~Change in~~
0.4 / (0.3)

~~Accumulated other~~

~~projected~~

~~Change in pension~~

~~comprehensive~~

~~benefit~~

~~cost, before~~

~~income (loss), net~~

~~Change in Assumptions~~

~~obligation~~

~~applicable taxes~~

~~of applicable taxes~~

~~Non-contributory defined benefit pension plan~~

7.2 / (7.7)

~~0.5% increase/decrease in discount rate~~

~~(11.5)/12.2~~

~~0.3/(0.3)~~

~~7.0/(7.4)~~

0.5% increase/decrease in expected long-term rate of return on plan assets

—

~~(0.4)/0.3~~

—

~~NTT CDBP~~(0.4) / 0.3

—

NTT CDBP

0.5% increase/decrease in discount rate

~~(8.8)~~

(9.6) /~~9.9~~ 10.7

~~0.1/(0.0)~~

~~5.3/(5.9)~~0.1 / (0.1)

5.8 / (6.4)

0.5% increase/decrease in expected long-term rate of return on plan assets

—

(0.3)/0.3

—

Please also refer to Note 15 “Employees’ retirement benefits” to our consolidated financial statements for further discussion.

Revenue recognition

We defer upfront activation fees and recognize them as revenues over the expected term of a subscription. Related direct cost to the extent of the activation fee amount are also being deferred and amortized over the same period. The reported amounts of revenue and cost of services are affected by the level of activation fees, related direct cost and the estimated length of the subscription period over which such fees and cost are amortized. Factors that affect our estimate of the subscription period over which such fees and cost are amortized include subscriber churn rate and newly introduced or anticipated competitive products, services and technology. The current amortization periods are based on an analysis of historical trends and our experiences. For the years ended March 31, 2011, 2010 ~~2009~~ and ~~2008,~~2009, we recognized as revenues deferred activation fees of ¥14.6 billion, ¥18.4 billion ~~¥29.0 billion~~ and ~~¥38.2~~¥29.0 billion, respectively, as well as corresponding amounts of related deferred cost. As of March 31, ~~2010,~~2011, remaining unrecognized deferred activation fees were ¥83.7 billion.


B. Liquidity	~~Liquidity~~ and Capital Resources

Cash Requirements

Our cash requirements for the year ending March 31, ~~2011~~2012 include cash needed to pay to the agent resellers to provide funds under the installment payment scheme, to expand our ~~FOMA infrastructure,~~network, to invest in other facilities, to make repayments for interest bearing liabilities and other contractual obligations and to pay for strategic investments, acquisitions, joint ventures or other ~~investments.~~investments aimed for capturing business opportunities. We believe that cash generated from our operating activities, future borrowings from banks and other financial institutions or future offerings of debt or equity securities in the capital markets will provide sufficient financial resources to meet our currently anticipated capital and other expenditure requirements and to satisfy our debt

service requirements. We believe we have enough financing ability supported by our high creditworthiness resulting from our stable financial performance and strong financial standing. Also, our management is of the opinion that the working capital is sufficient for our present requirements. When we determine the necessity for external financing, we take into consideration the amount of cash demand, timing of payments, available reserves of cash and cash equivalents and expected cash flows from operations. If we determine that demand for cash exceeds the amount of available reserves of cash and cash equivalents and expected cash flows from operations, we plan on obtaining external financing through borrowing or the issuance of debt or equity securities. Additional debt, equity or other financing may be required if we underestimate our capital or other expenditure requirements, or overestimate our future cash flows. There can be no assurance that such external financing will be available on commercially acceptable terms or in a timely manner.

Capital Expenditures

The wireless telecommunications industry in general is highly capital intensive because significant capital expenditures are required for the construction of the wireless telecommunications network. Our capital requirements for our networks are determined by the nature of facility or equipment, the timing of its installment, the nature and the area of coverage desired, the number of subscribers served in the area and the expected volume of traffic. They are also influenced by the number of cells required in the service area, the number of radio channels in the cell and the switching equipment required. Capital expenditures are also required for information technology and servers for ~~Internet-related~~internet-related services.

In recent years, the usage of data communications services has expanded remarkably as a result of a rapid surge in the use of smartphones and other factors. We intend to accommodate the projected growth in data communications traffic through the combination of a number of measures, including capacity expansion of our existing FOMA network, coverage expansion of Xi services, application of traffic control against excessive network use, and data offloading through the use of Wi-Fi and other technologies.

Our capital expenditures for the fiscal year ended March 31, ~~2010,~~2011 recorded a decrease of ¥18.0 billion or 2.6% compared to the prior fiscal year. This was achieved by reducing the capital expenditures related to the construction of the FOMA network, which have continued to decline since the fiscal year ~~as a result of our efforts to improve~~ended March 31, 2007, and by employing various measures for improving the efficiency of capital investments ~~and cut costs through~~ such ~~measures~~ as ~~the~~ reduction of procurement costs, introduction of economical equipment and devising efficient designs and construction ~~efforts, while working to~~processes, which more than offset factors that caused an increase in the amount of investments, such as further ~~improve the coverage and~~ quality enhancement of FOMA ~~services and reinforcing our facilities~~areas, capacity buildup in response to ~~accommodate~~ the growth in data ~~traffic.~~communications traffic and roll-out of Xi network. Moving ahead with the conversion ~~into~~to an IP-based network, we facilitated the integration and capacity enhancement of our network equipment. These initiatives enabled us to construct our service areas and improve the efficiency of quality enhancement activities by choosing from various different options the optimal equipment for each site taking into consideration the surrounding environmental conditions, traffic volume and other factors. During the fiscal year ended March 31, ~~2010,~~2011, we added ~~approximately 7,200~~7,100 outdoor base stations to our FOMA network, growing the cumulative number of FOMA outdoor base stations to ~~approximately 55,700.~~62,800. The cumulative number of ~~facilities where we installed our~~ indoor ~~systems~~base stations grew to ~~approximately 24,700,~~29,200, as we completed the installation in ~~4,800 facilities~~4,400 base stations during the fiscal year ended March 31, ~~2010.~~

2011. As for Xi service, which was launched during the fiscal year ended March 31, 2011, we completed the installation of 700 outdoor and 300 indoor base stations.

Total capital expenditures for the years ended March 31, 2011, 2010 and 2009 ~~and 2008~~ were ¥668.5 billion, ¥686.5 billion ~~¥737.6 billion~~ and ~~¥758.7~~¥737.6 billion, respectively. For the year ended March 31, ~~2010, 66.1%~~2011, 56.7% of capital expenditures were used for construction of the FOMA network, ~~1.1%~~3.9% for construction of the ~~second generation mova~~Xi network, ~~13.9%~~17.3% for the installation of servers and other cellular facilities and equipment and ~~18.9%~~22.1% for general capital expenditures such as an internal IT system. By comparison, in the prior fiscal year, ~~66.4%~~66.1% of capital expenditures were used for construction of the FOMA network, ~~1.5%~~1.1% for the mova network, ~~13.6%~~13.9% for other cellular facilities and equipment, and ~~18.5%~~18.9% for general capital expenditures.

For the year ending March 31, ~~2011,~~2012, we expect total capital expenditures to be ~~¥675.0~~¥705.0 billion, of which approximately ~~55.6%~~47.0% will be appropriated for the FOMA network, ~~5.2%~~11.2% for ~~LTE networks, 15.5%~~the Xi network, 18.0% for servers and other cellular facilities and equipment and ~~23.7%~~23.8% for general capital expenditures. ~~We intend~~In the fiscal year ending March 31, 2012, we plan to ~~promote~~build up the FOMA network facilities and expand Xi service areas on a continual basis to accommodate the projected growth in data traffic, while pursuing efficiency enhancement ~~of facilities for~~by further ~~quality improvement of FOMA service area, while promoting efficiency efforts of capital expenditures such as further advancement of~~accelerating the IP conversion of ~~networks.~~

~~We currently expect that~~our voice network. The estimated total annual capital expenditures for the ~~next~~fiscal year ending March 31, 2012 include the investments required for the replacement of facilities damaged by the Great East Japan Earthquake and new disaster preparedness measures of approximately ¥30.0 billion. Experiencing the earthquake, we have been currently reviewing the structure of our business facilities to construct a system to counter natural disasters. In response to the review, our management may take measures that require us to make additional capital expenditures.

According to our current estimates, the total annual capital expenditures for the fiscal year ending March 31, 2013 and the subsequent few fiscal years will likely be ~~still on a declining trend despite our planned expenditures~~maintained below ¥700.0 billion. Although we are projecting an increase in investments arising from the expansion of the Xi service areas and the launch of new services and businesses such as multimedia broadcasting service for mobile devices, because the ~~rollout of LTE services in fiscal year ending March 2011, primarily because~~FOMA-related capital expenditures ~~related to expanding, maintaining and upgrading our~~have already peaked, we will pursue efficient capital expenditures by rolling out the Xi service areas economically in view of actual demand while sharing common facilities with the FOMA network ~~already peaked in~~and continuing other endeavors aimed for enhancing the ~~fiscal year ended March 31, 2007, resulting in an expected decrease in total amount~~efficiency of ~~capital expenditures.~~

our investments.

Our actual level of capital expenditures may vary significantly from expected levels for a number of reasons. Capital expenditures for expansion and enhancement of our existing cellular network may be influenced by the growth in subscriptions and traffic, which is difficult to predict with certainty, the ability to identify and procure suitably located base station sites on commercially reasonable terms, competitive environments in particular regions and other factors. The nature, scale and timing of capital expenditures to reinforce our 3G network may be materially different from our current plans due to demand for the services, delays in the construction of the network or in the introduction of services and changes in the variable cost of components for the network. We expect that these capital expenditures will be affected by market demand for ~~our mobile multimedia services, including i-mode and other~~ data ~~transmission~~communications services, and by ~~our schedule for ongoing expansion~~the state of ~~the~~our existing network expansion efforts that are being continued to ~~meet demand.~~

satisfy these communication demands.

Long-term Debt and other Contractual Obligations

As of March 31, ~~2010,~~2011, we had ~~¥610.3~~¥428.1 billion in outstanding long-term debt including the current portion, primarily in corporate bonds and loans from financial institutions, compared to ~~¥639.2~~¥610.3 billion as of the end of the prior fiscal year. We issued domestic straight bonds in the aggregate amount of ¥239.9 billion in the year ended March 31, 2009 for the purpose of capital expenditures and refinancing of existing long-term debt. We did not implement any long-term financing in the years ended March 31, ~~2010~~2011 or ~~2008.~~2010. We repaid ¥180.1 billion, ¥29.0 billion ~~¥77.1 billion~~ and ~~¥131.0~~¥77.1 billion of long-term debt, in the years ended March 31, 2011, 2010 and 2009, ~~and 2008,~~ respectively.

Of our long-term debt outstanding as of March 31, ~~2010, ¥38.2~~2011, ¥21.1 billion, including the current portion, was indebtedness to financial institutions, majority of which has fixed interest ~~rate and its~~rates, with a weighted average interest rate ~~was~~of 1.4% per annum. The term of maturities was from the year ending March 31, ~~2011~~2012 through 2013. As of March 31, ~~2010,~~2011, we also had ~~¥572.1~~¥407.0 billion, including the current portion, in bonds due from the year ending March 31, ~~2011~~2012 to 2019 with a weighted average coupon rate of ~~1.5%~~1.2% per annum. For information about our debt servicing schedule, see also Item 11, “Quantitative and Qualitative Disclosures about Market Risk.”

As of March 31, ~~2010,~~2011, we and our long-term debt obligations were rated by rating agencies as shown in the table below. Such ratings were issued by the rating agencies upon our requests. On May 18, 2009, Moody’s changed the outlook for our long-term obligation rating from “stable” to “negative.” On May 13, 2011, Moody’s announced that it placed Aa1 long-term obligation ratings on us under review for possible downgrade. Credit ratings reflect rating agencies’ current opinions about our financial capability of meeting payment obligations of

our debt in accordance with their terms. Rating agencies are able to upgrade, downgrade, reserve or withdraw their credit ratings on us anytime at their discretions. The rating is not a market rating or recommendation to buy, hold or sell our shares or any financial obligations of us.


Rating agencies	Type of rating	Rating	Outlook
~~Rating agencies~~	~~Type of rating~~	~~Rating~~	~~Outlook~~

Moody’s	Long-Term Obligation Rating	Aa1	Negative
Standard & Poor’s	Long-Term Issuer Credit Rating	AA	Stable
Standard & Poor’s	Long-Term Issue Credit Rating	AA	—
Japan Credit Rating Agency, Ltd.	Long-Term Senior Debt Rating	AAA	Stable
Rating and Investment Information, ~~Inc.~~ Inc	Issuer Rating	AA+	Stable

None of our debt obligations include a clause in which a downgrade of our credit rating could lead to a change in a payment term of such an obligation so as to accelerate its maturity.

The following table summarizes our long-term debt, interest payments on long-term debt, lease obligations and other contractual obligations (including current portion) over the next several years.

As most of our long-term debt bears interest at fixed-rate, we use interest rate swap transactions, under which we receive fixed rate interest payments and pay floating rate interest payments, to hedge the changes in fair value of certain debt as a part of our asset-liability management (“ALM”).

Long-Term Debt, Lease Obligations and other Contractual Obligations

Millions of yen
Payments Due by Period
1 year
1-3
3-5
After

Category of Obligations Total or less years years 5 years

Long-Term Debt
Bonds ¥ 572,097 ¥ 163,630 ¥ 228,467 ¥ 70,000 ¥ 110,000
Loans 38,172 17,086 21,086 — —
Interest Payments on Long-Term Debt 28,066 7,196 8,443 5,080 7,347
Capital Leases 7,621 3,098 3,381 1,076 66
Operating Leases 21,632 2,958 4,272 3,012 11,390
Other Contractual Obligations 123,644 123,311 333 — —

Total ¥ 791,232 ¥ 317,279 ¥ 265,982 ¥ 79,168 ¥ 128,803


			Millions of yen
			Payments Due by Period
Category of Obligations	Total		1 year or less		1-3 years		3-5 years		After 5 years
Long-Term Debt
Bonds	¥	407,032	¥	167,032	¥	130,000	¥	—	¥	110,000
Loans		21,070		6,070		15,000		—		—
Interest Payments on Long-Term Debt		20,725		4,606		6,673		4,198		5,248
Capital Leases		8,804		4,355		3,475		937		37
Operating Leases		20,047		2,874		3,924		3,234		10,015
Other Contractual Obligations		74,834		73,101		1,733		—		—

Total	¥	552,512	¥	258,038	¥	160,805	¥	8,369	¥	125,300


*		The amount of contractual obligations which is immaterial in amount is not included in “Other Contractual Obligations” in the above table.

“Other contractual obligations” principally consisted of commitments to purchase property and equipment for our cellular network, commitments to purchase inventories, mainly handsets, and commitments to purchase services. As of March 31, ~~2010,~~2011, we had committed ~~¥26.7~~¥28.9 billion for property, plant and equipment, ~~¥50.4~~¥23.8 billion for inventories and ~~¥46.6~~¥22.1 billion for other purchase commitments.

In addition to our existing commitments, we expect to make significant capital expenditures on an ongoing basis for our FOMA ~~network, LTE rollout~~and Xi networks and for other purposes. Also, we consider potential opportunities for entry to new areas of business, merger and acquisitions, establishment of joint ventures, strategic investments or other arrangements primarily in wireless communications businesses from time to time. Currently, we have no contingent liabilities related to litigation or guarantees that could have a materially adverse effect on our financial position.

Sources of Cash

The following table sets forth certain information about our cash flows during the years ended March 31, 2011, 2010 ~~2009~~ and ~~2008:~~

Millions of yen
Years ended March 31
2008 2009 2010

Net cash provided by operating activities ¥ 1,560,140 ¥ 1,173,677 ¥ 1,182,818
Net cash used in investing activities (758,849 ) (1,030,983 ) (1,163,926 )
Net cash used in financing activities (497,475 ) (182,441 ) (260,945 )

Net increase (decrease) in cash and cash equivalents 303,843 (47,357 ) (241,833 )
Cash and cash equivalents at beginning of year 343,062 646,905 599,548

Cash and cash equivalents at end of year ¥ 646,905 ¥ 599,548 ¥ 357,715

2009:


	Millions of yen
	Years ended March 31
	2009			2010			2011
Net cash provided by operating activities	¥	1,173,677		¥	1,182,818		¥	1,287,037
Net cash used in investing activities		(1,030,983	)		(1,163,926	)		(455,370	)
Net cash used in financing activities		(182,441	)		(260,945	)		(421,969	)

Net increase (decrease) in cash and cash equivalents		(47,357	)		(241,833	)		407,836
Cash and cash equivalents at beginning of year		646,905			599,548			357,715

Cash and cash equivalents at end of year	¥	599,548		¥	357,715		¥	765,551

Analysis of cash flows for the year ended March 31, 2011 and comparison with the prior fiscal year

For the year ended March 31, 2011, net cash provided by operating activities was ¥1,287.0 billion, an increase of ¥104.2 billion or 8.8% from the prior fiscal year, mainly due to an increase in cash inflow resulting from a decrease of fund-provision in relation to installment receivables for subscribers’ handset purchases, and due to a decrease in the payment of income taxes.

Net cash used in investing activities was ¥455.4 billion, a decrease of ¥708.6 billion or 60.9% from the prior fiscal year. This was mainly due to an increase of proceeds from redemption of short-term investments, an increase of proceeds from redemption of short-term bailment for consumption to a related party and a decrease in purchases of non-current assets, which were partially offset by an increase in purchases of short-term investments of more than three months for cash management purpose.

Net cash used in financing activities was ¥422.0 billion, an increase of ¥161.0 billion or 61.7% from the prior fiscal year. This was mainly due to an increase in repayment of long-term debt and an increase in dividends paid.

The balance of cash and cash equivalents was ¥765.6 billion as of March 31, 2011, an increase of ¥407.8 billion or 114.0% from the prior fiscal year end. The balance of investments with original maturities of longer than three months, which were made to manage a part of our cash efficiently, was ¥161.0 billion as of March 31, 2011, compared to ¥403.0 billion as of March 31, 2010.

Analysis of cash flows for the year ended March 31, 2010 and comparison with the prior fiscal year

Net cash provided by operating activities for the fiscal year ended March 31, 2010 was ¥1,182.8 billion, an increase of ¥9.1 billion or 0.8% from the prior fiscal year. The increase was mainly due to an increased amount of cash collection of installment receivable for handsets from customers, which was partially offset by (1) a decrease in cash inflow due mainly to a decrease in voice ARPU and (2) an increase in cash outflow due to factors such as an increase in payment for income taxes as a result of a tax adjustment for accelerated depreciation of mova-related assets recorded in the previous year.

Net cash used in investing activities was ¥1,163.9 billion, an increase of ¥132.9 billion or 12.9% from the prior fiscal year. The increase was mainly due to an increase in purchases of short-term investments of more than three months for cash management purposes, a decrease of proceeds from redemption of long-term bailment for consumption to a related party, and an increase in short-term bailment for consumption to a related party, which were partially offset by a decrease in purchases of property, plant and equipment and non-current investments.

Net cash used in financing activities was ¥260.9 billion, an increase of ¥78.5 billion or 43.0% from the prior fiscal year. The increase was mainly due to a decrease of proceeds from long-term debt, which was partially offset by a decrease in payments to acquire treasury stock and repayment of long-term debt.

The balance of cash and cash equivalents was ¥357.7 billion as of March 31, 2010, a decrease of ¥241.8 billion or 40.3% from the prior fiscal year end. The balance of investments with original maturities of longer than three months, which were made to manage a part of our cash efficiently, was ¥403.0 billion and ¥2.4 billion as of March 31, 2010 and 2009, respectively.

~~Analysis of cash flows for the year ended March 31, 2009 and comparison with the prior fiscal year~~

Net cash provided by operating activities was ¥1,173.7 billion, a decrease of ¥386.5 billion or 24.8% from the prior fiscal year. The decrease was mainly due to an increase of ¥182.1 billion to ¥361.8 billion in the payment of income taxes (the payment of income taxes during the prior fiscal year was ¥179.7 billion due to the realization of

~~the tax deduction for the impairment of our investment in Hutchison 3G UK Holdings Limited) as well as an increase of the payment in providing funds for installment receivable for handsets.~~

Net cash used in investing activities was ¥1,031.0 billion, an increase of ¥272.1 billion or 35.9% from the prior fiscal year. The increase resulted mainly from an increase in acquisition of long-term investments such as equity investments and a decrease of proceeds from sales or redemption of long-term investments.

Net cash used in financing activities was ¥182.4 billion, a decrease of ¥315.0 billion or 63.3% from the prior fiscal year. The decrease resulted mainly from an increase of proceeds from long-term debt through issuances of corporate bonds and a decrease of repayment of long-term debt.

We spent ¥136.8 billion during the fiscal year ended March 31, 2009 to repurchase our own stock in the market, purchase of treasury stock at the request of dissenting shareholders who opposed the merger under which our regional subsidiaries were dissolved and merged into the Company, and purchase of fractional shares.

The balance of cash and cash equivalents was ¥599.5 billion as of March 31, 2009, a decrease of ¥47.4 billion or 7.3% from the prior fiscal year end. The balance of investments with original maturities of longer than three months, which were made to manage a part of our cash efficiently, was ¥2.4 billion and ¥52.2 billion as of March 31, 2009 and 2008, respectively.

Prospect of cash flows for the year ending March 31, ~~2011~~2012

As for our sources of cash for the year ending March 31, ~~2011,~~2012, we currently expect our net cash flows from operating activities to decrease from the prior fiscal year due to ~~a decrease~~an increase in ~~voice revenues due~~cash outflows resulting mainly from ~~a continued uptake~~the increase in handset installment claims payable to agent resellers caused by the expanded sales of ~~“Value Plan” and a decrease in billable MOU,~~handset equipments, although it is expected to be partially offset by a decrease in the payment of income taxes.

Our net cash flow used in investing activities for the year ending March 31, 2011 is expected to ~~decrease~~increase due to ~~factors including~~ a ~~decrease~~projected increase in ~~our~~ capital expenditures to ~~approximately ¥675.0~~¥705.0 billion ~~from ¥686.5~~compared to ¥668.5 billion for the fiscal year ended March 31, ~~2010.~~


C.	~~Research and Development~~

2011.

C. Research and Development

Our research and development activities include development of new products and services, development related to LTE and research on fourth-generation mobile communications systems ~~and~~or LTE-Advanced, conversion into IP networks for economical network ~~constructions.~~constructions and basic research aimed for driving innovation. Research and development costs are charged to expenses as incurred. We incurred ¥109.1 billion, ¥109.9 billion ~~¥100.8 billion~~ and ~~¥100.0~~¥100.8 billion as research and development expenses for the years ended March 31, 2011, 2010 and 2009, respectively.

D. Prospects for Business Trends and ~~2008, respectively.~~


D.	~~Trend Information~~

Financial Performance

The mobile communication market in Japan is undergoing changes brought about by such factors as increasing rate of mobile phone penetration, diversification of customer needs, ~~the introduction of Mobile Number Portability,~~ and ~~market entry by new competitors.~~rapid growth in smartphone adoption. Under these market conditions, with operators stepping up their efforts in such areas as reinforcement of handset lineup, provision of value-added services and introduction of less expensive billing plans, the competition among operators is expected to remain intense.

~~For the fiscal year ending March 31, 2011, we are projecting a decrease in operating revenues but an increase in operating income compared to the prior fiscal year. Trends~~

The trends in the market ~~observed during the fiscal year ended March 31, 2010 and~~ expected for the fiscal year ending March 31, ~~2011,~~2012, are summarized below:

Operating revenues:

Although it will be difficult to expect a significant increase in the number of new subscriptions given the rise in the penetration rate to a high level, we will aim to expand our subscription count by cultivating new demands for smartphones, PC data cards, mobile Wi-Fi routers, embedded communication modules and other devices. Also, we intend to strive to expand the customer base of our Xi service. On the other hand, we will strive to maintain our low churn rate through loyalty marketing targeted at enhancing the satisfaction of our existing users. As a result of these actions, we believe we can achieve an increase in our total cellular subscriptions during the fiscal year ending March 31, 2012. We will also facilitate the migration of mova subscribers to FOMA and Xi networks in view of the scheduled termination of mova service on March 31, 2012.

In the fiscal year ended March 31, 2011, both our aggregate cellular ARPU (Xi+FOMA+mova) and voice ARPU recorded a decline over the prior fiscal year, but packet ARPU posted year-on-year gains.

• Our total number of cellular subscriptions is expected to increase during the fiscal year ending March 31, 2011, as we will strive to lower the churn rate through loyalty marketing targeted at enhancing the satisfaction of our existing users, because the growth of new subscriptions will likely be limited given that the cellular penetration rate has already risen to a high level. The percentage of FOMA subscriptions to our total cellular subscriptions as of March 31, 2011 is projected to reach approximately 98%, as a result of our ongoing subscriber migration efforts.


	•	~~In the fiscal year ended March 31, 2010, our aggregate cellular ARPU (FOMA+mova) and voice ARPU both recorded a decline over the prior fiscal year, but packet ARPU postedyear-on-year~~ ~~gains.~~ This trend is likely to continue in the fiscal year ending March 31, ~~2011. The primary reason behind~~2012, but the ~~decline~~pace of voice ARPU is the negative revenue impact from the expanded uptake of “Value Plan” introduced in November 2007 which offers discounts on basic monthly charges and a decrease in billable MOU. On the other hand, the main reasons for the growth of packet ARPU include the revenue growth resulting from an increase in the subscriptions to flat-rate packet billing plans, expansion of packet usage, growth in the number of users using data plans and smartphones.

	•	Equipment sales revenues for the fiscal year ended March 31, 2010 decreased due to the decline in the number of handsets sold to agent resellers. For the year ending March 31, 2011, because we are projecting a slight decrease in the number of handsets sold to agent resellers and a reduction in the whole sale price per unit, a continual decline from the prior fiscal year is expected.

	•	As a result of the foregoing, operating revenues for the fiscal year ending March 31, 2011 is expected to drop from the fiscal year ended March 31, 2010, primarily because the negative revenue impact of the decline in aggregate ARPU ~~will likely be larger than the revenue-boosting effect expected from the growth in the total number of subscriptions.~~

	•	Selling, general and administrative expenses, network-related costs (communication network charges, depreciation and amortization costs) and other operating expenses for the fiscal year ending March 31, 2011 areis expected to ~~decrease from the previous fiscal year due~~slow as we plan to the improvement of cost efficiency to be achieved through a review on sales policies, enhancement of operational efficiency expected from the integration of nationwide common operations, and efficient facility roll-out to be achieved through the introduction of new technologies and review of design methods.step up our measures for boosting packet ARPU.

The primary reasons behind the decline in voice ARPU include the reduction of revenues resulting from the expanded uptake of “Value Plan”, a billing plan introduced in November 2007 which offers discounts on basis monthly charges, a decrease in billable MOU, and the impact of reduced interconnection fees revenue resulting from the revisions made to the calculation method of interconnection charges.

The primary reason behind the increase in packet ARPU is the growth in revenues derived from the increase in the number of smartphone and PC data card users, expansion in the subscriptions to flat-rate billing plans for packet access and other factors. We expect the total number of smartphones to be sold in the fiscal year ending March 31, 2012 will increase, compared to 2.52 million for the fiscal year ended March 31, 2011.

Equipment sales revenues for the fiscal year ended March 31, 2011 decreased due to the decline in the wholesale price per unit resulting from reduced cost of procurement. The reduction of procurement and wholesale price per unit is necessary for us to maintain and improve our competitiveness, and we expect to achieve a reduction in both procurement and wholesale price per unit in the fiscal year ending March 31, 2012. We also expect to improve the efficiency of our handset sales commissions in the fiscal year ending March 31, 2012, which is expected to result in reduced commission fees deducted from the equipment sales revenues under the U.S. GAAP. Because this revenue boosting effect of improving the efficiency of sales commissions is likely to become greater than the negative revenue impact resulting from a reduction in the wholesale price per unit, the equipment sales revenues for the fiscal year ending March 31, 2012 are projected to record an increase compared to the prior fiscal year.

“Other revenues”, which are the revenues generated by businesses other than cellular phone business, recorded an increase in the fiscal year ended March 31, 2011 as a result of actions implemented for their growth. We expect to achieve a year-on-year increase in other revenues in the fiscal year ending March 31, 2012 as well, as we plan to take actions to drive the growth of credit payment, home shopping and other businesses.

As a result of the foregoing, operating revenues for the fiscal year ending March 31, 2012 are expected to increase from the fiscal year ended March 31, 2011.

Operating Expenses:

Cost of equipment sold recorded a decrease in the fiscal year ended March 31, 2011, as we prepared a product lineup mainly comprising low-price handsets in view of the growing demands for less expensive products among our customers. Because we anticipate a similar trend to continue in the fiscal year ending March 31, 2012, cost of equipment sold is projected to decline in the fiscal year ending March 31, 2012.

Improvement of cost efficiency is expected for Selling, general and administrative expenses, network-related costs (communication network charges, depreciation and amortization costs) and other operating expenses for the fiscal year ending March 31, 2012. We aim to achieve the improvement of cost efficiency through a review on sales policies, enhancement of operational efficiency expected from the integration of nationwide common operations, and efficient facility roll-out to be achieved through the introduction of new technologies and review of design methods and other factors.

For the restoration of facilities damaged by the Great East Japan Earthquake and additional measures for enhanced disaster preparedness, we plan to incur expenses of approximately ¥20.0 billion in the fiscal year ending March 31, 2012.

As a result of the foregoing, the operating expenses for the fiscal year ending March 31, 2012 are expected to increase slightly compared to the fiscal year ended March 31, 2011.

Due to the above, we expect operating income ~~and net income~~ for the fiscal year ending March 31, ~~2011~~2012 to increase from the fiscal year ended March 31, ~~2010.~~

2011.

The Great East Japan Earthquake that hit Japan on March 11, 2011 caused disruptions to our business activities and those of our partners such as agent resellers and equipment vendors. The possible occurrence of social infrastructure paralysis caused by such events as aftershocks, deterioration of power supply, proliferation of radioactive substance from the disaster-hit nuclear power plant, and stagnation in Japan’s overall economy may restrict our business activities and those of our partner companies, or may require us to incur additional expenses or investments that are currently unforeseen, or may disrupt the provision of our services resulting in a loss of sales opportunities, which could lead to a failure to generate the expected revenues.

In particular, concerns of power supply shortages have been mounting in the aftermath of the Great East Japan Earthquake due to damage sustained by the nuclear power plant in Fukushima, and in May 2011, the Japanese Government decided to introduce the restriction of electricity use during certain periods and times during July and September 2011, based on Article 27 of the Business Electricity Act. The restriction requests large electricity customers to reduce, in principle, 15% of the maximum power use during the periods and times of 2010 that corresponds to the restricted periods and times of 2011. Introduction of the restriction and other additional measures that restrict electricity use could have an adverse effect on our business activities in terms of the provision of services to customers, including the provision of telecommunications service or sales of mobile devices and other activities. It could also affect the production activities of our partner companies and result in an impact on our supply chain, including the supply of handset equipment for sale and network facilities, and the consumption behavior of our customers. These potential impacts are not factored in the results forecasts for the fiscal year ending March 31, 2012, as it is difficult to assess the scale of such impacts at this point.

Further information regarding trend information is contained elsewhere in this Item 5.

The discussion above includes forward-looking statements based on management’s assumptions and beliefs as to the factors set forth above, as to market and industry conditions and as to our performance under those conditions and are subject to the qualifications set forth in “Special Note Regarding Forward-looking Statements” which can be found immediately following the table of contents. Our actual results could vary significantly from these projections and could be influenced by a number of factors and uncertainties, including changes in the market and industry conditions, competition and other factors and risks as discussed in “Risk Factors” in Item 3.D. Additionally, unanticipated events and circumstances may affect our actual financial and operating results. As a result, no representation can be or is made with respect to the accuracy of the foregoing projections.


E.	~~Off-Balance Sheet Arrangements~~

E. Off-Balance Sheet Arrangements

We do not have any material off-balance sheet arrangements.


F.	~~Tabular Disclosure of Contractual Obligations~~

F. Tabular Disclosure of Contractual Obligations

Please refer to ~~Item.~~Item 5.B.


~~Item 6.~~	*~~Directors, Senior Management and Employees~~*


A.	~~Directors and Senior Management~~

Item 6. Directors, Senior Management and Employees

A. Directors and Senior Management

Directors, Corporate Executives and Corporate Auditors

Our board of directors has the ultimate responsibility for the administration of our affairs. Our Articles of Incorporation ~~provide for a maximum~~specify the number of ~~15 directors.~~directors as not more than 15. Directors are elected at a general meeting of

shareholders from among those candidates nominated by the board of directors. The candidates may also be nominated by shareholders. The normal term of office of directors is two years, although they may serve any number of

consecutive terms. The board of directors elects from among directors one or more representative directors, who have the authority individually to represent us. From among directors, the board of directors also elects the president and may elect a chairman and one or more senior executive vice presidents and executive vice presidents.

We have a board of corporate auditors as an organization that is independent from the board of directors. The board of corporate auditors audits execution of duties by directors and carries out accounting audits. Our Articles of Incorporation provide for not more than five corporate auditors. Under the Corporation Law ~~(“Corporation Law”)~~ of Japan, the board of corporate auditors is composed of all of our corporate auditors. Corporate auditors, more than half of whom must be from outside our company, are elected at a general meeting of shareholders from among those candidates nominated by the board of directors with the prior consent of our board of corporate auditors. The candidates may also be nominated by shareholders. The board of corporate auditors may, by its resolution, request that the board of directors submit to a general meeting of shareholders an item of business concerning election of corporate auditorsand/or proposed candidates of corporate auditors. The normal term of office of a corporate auditor is four years, although they may serve any number of consecutive terms. Corporate auditors are under a statutory duty to ~~oversee~~audit the administration of our affairs by our directors, to ~~examine~~audit our financial statements and business reports submitted by our directors to the general meetings of shareholders and to report to the shareholders the results of investigations regarding any actions by our directors that are unreasonable or which are in violation or breach of laws, ordinances or the Articles of Incorporation of our company. They are obliged to attend meetings of the board of directors and to express their opinions if they deem necessary, but they are not entitled to vote. The board of corporate auditors has a statutory duty to prepare and submit an audit report to the directors each year. A corporate auditor may note his or her opinion in the audit report if his or her opinion is different from the opinion expressed in the audit report. The board of corporate auditors is empowered to decide audit policy, the methods of examination of our affairs and financial position and other matters concerning the execution of the corporate auditors’ work duties.

In addition to corporate auditors, we must appoint independent public accountants who have statutory duties to examine the financial statements to be submitted by the board of directors to the general meetings of shareholders, reporting thereon to the board of corporate auditors and the directors, and examining the financial statements to be filed with the director of the Kanto Local Finance Bureau of Japan. Since our incorporation, KPMG AZSA ~~& Co.,~~LLC, has acted as our independent public accountant.

We introduced an executive officer system in 2005 with the aim of clarifying the board’s managerial supervision function and further enhancing its business execution functions.

The following table sets forth our board of directors and corporate auditors as of June ~~24, 2010~~23, 2011 and certain other information.

Name

(Date of Birth)

Position/

Responsibility

History, Positions, Responsibilities and

Principal Concurrent Positions

Shares
Owned ⁽¹⁾

Date
Current
Terms
Ends

Initial
Appointment
Date

Directors:

~~Initial~~

~~Name~~

~~History, Positions, Responsibilities~~

~~Shares~~

~~Appointment~~

~~(Date of Birth)~~

~~Position~~

~~Responsibility~~

~~and Principal Concurrent Positions~~

~~Owned~~⁽¹⁾

~~Date~~

~~Directors:~~

Ryuji Yamada^{(2)
(2}⁾

(May 5, 1948)

President and Chief Executive Officer

April 1973

June 2001

~~April 1973~~

Entered NTT Public Corporation

~~322~~

June 2007*

~~June 2001~~

Senior Vice President and Executive Manager of Plant Planning Department of Nippon Telegraph and Telephone West Corporation (“NTT West”)

413

June

2012

June

2007

June 2002

Executive Vice President and Senior Executive Manager of the Marketing and Support Solutions Headquarters of NTT West

June 2004

Representative Director and Senior Executive Vice President of Nippon Telegraph and Telephone Corporation (“NTT”)

~~Initial~~

~~Name~~

~~History, Positions, Responsibilities~~

~~Shares~~

~~Appointment~~

~~(Date of Birth)~~

~~Position~~

~~Responsibility~~

~~and Principal Concurrent Positions~~

~~Owned~~⁽¹⁾

~~Date~~

June 2007

Senior Executive Vice President and Managing Director of Corporate Marketing Division of the Company

June 2008

President and Chief Executive Officer of the Company

Kiyoyuki Tsujimura⁽²⁾⁽²
⁾

(Jan. 11, 1950)

Senior Executive Vice ~~President~~

President/

Responsible for Multimedia Services, Technology

April 1975

Entered NTT Public Corporation

~~235~~

June 2001*

281

June
2012

June
2001

June 2001

Senior Vice President and Managing Director of Global Business Department of the Company

June 2002

Senior Vice President and Managing Director of Corporate Strategy and Planning Department of the Company

June 2004

Executive Vice President and Managing Director of Corporate Strategy and Planning Department of the Company

June 2005

Executive Vice President and Managing Director of Products and Services Division of the Company

June 2008

Senior Executive Vice President and Managing Director of Products and ~~Service~~

Services Division of the Company

July 2008

Senior Executive Vice President and Responsible for Multimedia Services and Technology of the Company’s Division of the Company

Masatoshi Suzuki^(2) (2
⁾

(Oct. 30, 1951)

Senior Executive Vice ~~President~~

President/

Responsible for Global Business, Corporate

April 1975

Entered NTT Public Corporation

~~127~~

June 2007*

174

June
2012

June
2007

June 2004

Senior Vice President and Managing Director of Public Relations Department of the Company

June 2005

(Implementation of executive officer system)

Senior Vice President and Managing Director of Public Relations Department of the Company

June 2007

Executive Vice President and Managing Director of Human Resources Management Department of the Company

June 2008

Senior Executive Vice President and Managing Director of Global Business Division of the Company

Name
(Date of Birth)
Position/
Responsibility
History, Positions, Responsibilities and
Principal Concurrent Positions
Shares
Owned ⁽¹⁾ Date
Current
Terms
Ends ~~July 2008~~Initial
Appointment
Date

July 2008
Senior Executive Vice President and Responsible for Global Business and Corporate of the Company
(Principal concurrent position)
Member of the Board of Tata Teleservices Limited (India)

Hiroshi Matsui⁽²⁾⁽²
⁾
(Aug. 6, 1946)

Senior Executive Vice ~~President~~
President/
Responsible for CSR, Branches in Kanto and Koshinetsu areas
July 1969 Entered Ministry of Posts and Telecommunications 90 June 2008*
130
June
2012

June
2008
January 2003 Vice-Minister for Policy Coordination, Ministry of Public Management, Home Affairs, Posts and Telecommunications

~~Initial~~

~~Name~~

~~History, Positions, Responsibilities~~

~~Shares~~

~~Appointment~~

~~(Date of Birth)~~

~~Position~~

~~Responsibility~~

~~and Principal Concurrent Positions~~

~~Owned~~⁽¹⁾

~~Date~~

August 2005

President of Postal Savings Promotion Society

~~September2007~~September 2007

Advisor to the Company

June 2008

Senior Executive Vice President of the Company

July 2008

Senior Executive Vice President and Responsible for CSR and Branches in Kanto and Koshinetsu areas of the Company

~~Bunya Kumagai~~⁽³⁾
~~(Oct. 13, 1952)~~

~~Executive Vice President~~

Kazuto Tsubouchi⁽³⁾

(May 2, 1952)

~~Responsible for Consumer Sales~~

~~April 1975~~

~~Entered NTT Public Corporation~~

~~124~~

June 2006*

~~June 2003~~

~~Senior Vice President and Managing Director of Sales Promotion Department of the Company~~

~~June 2005~~

Executive Vice President ~~and Managing Director of Marketing Division of NTT DoCoMo Tokai, Inc.~~

~~June 2006~~

~~Senior Vice President and Managing Director of Marketing Division of the Company~~

~~June 2007~~

~~Executive Vice President and Managing Director of Marketing Division of the Company~~

~~July 2008~~

~~Executive Vice President and Responsible for Consumer Sales of the Company~~

~~Kazuto Tsubouchi~~⁽³⁾
~~(May 2, 1952)~~

~~Executive Vice President~~

Managing Director of Accounts and Finance Department

Responsible for Business Alliance Department

April 1976

Entered NTT Public Corporation

121

June 2006*
2012

June
2006

December 2000

General Manager of Kanazawa Branch of NTT West

June 2004

Senior Vice President and Managing Director of Accounts and Finance Department of NTT DoCoMo Kansai, Inc.

June 2006

Senior Vice President and Managing Director of Accounts and Finance Department of the Company

June 2008

Executive Vice President, Chief Financial Officer and Managing Director of Accounts and Finance Department of the Company

July 2008

Executive Vice President, Chief Financial Officer, Managing Director of Accounts and Finance Department and Responsible for Business Alliance Department of the Company

(Principal concurrent position)

Member of the Board of Tata Teleservices Limited (India)

Kaoru Kato⁽³⁾

(May 20, 1951)

Executive Vice President

/ Managing Director of Corporate Strategy & Planning Department ~~Research Institute~~

April 1977

Entered NTT Public Corporation

June 2008*

June
2012

June
2008

July 2005

Representative Director and Senior Corporate Executive Officer of Sumitomo Mitsui Card Co., Ltd.

~~Initial~~

~~Name~~

~~History, Positions, Responsibilities~~

~~Shares~~

~~Appointment~~

~~(Date of Birth)~~

~~Position~~

~~Responsibility~~

~~and Principal Concurrent Positions~~

~~Owned~~⁽¹⁾

~~Date~~

June 2007

Executive Vice President of NTT DoCoMo Kansai, Inc.

July 2007

Executive Vice President and Managing Director of Corporate Strategy Planning Department of NTT DoCoMo Kansai, Inc.

Name
(Date of Birth)
Position/
Responsibility
History, Positions, Responsibilities and
Principal Concurrent Positions
Shares
Owned ⁽¹⁾ Date
Current
Terms
Ends Initial
Appointment
Date
June 2008 Executive Vice President and Managing Director of Corporate Strategy and Planning Department of the Company
April 2009 Executive Vice President, Managing Director of Corporate Strategy and Planning Department and Managing Director of Mobile Society Research Institute of the Company
July 2009 Executive Vice President and Managing Director of Corporate Strategy and Planning Department of the Company
Mitsunobu Komori⁽³⁾
(Sep. 18, 1952)

Executive Vice ~~President~~
President/
Managing Director of R&D Center
April 1977 Entered NTT Public Corporation 79 June 2008*
96
June
2012

June
2008
July 2002 Senior Manager of Department V of NTT
June 2005 Senior Vice President and Managing Director of Core Network Engineering Department of the Company
July 2007 Senior Vice President and General Manager of Kanagawa Branch of the Company
June 2008 Executive Vice President, Chief Technical Officer and Managing Director of Research and Development Division of the Company
July 2008 Executive Vice President, Chief Technical Officer and Managing Director of R&D Center of the Company
~~Akio Oshima~~
Fumio Iwasaki ⁽³⁾
(~~June 23, 1951)~~
Feb. 28, 1953)

Executive Vice ~~President~~
~~Managing Director of Corporate Marketing Division~~ ~~April 1974~~ ~~Entered NTT Public Corporation~~ ~~116~~ June 2010*
~~June 2004~~ ~~Senior Vice President and Managing Director of Corporate Marketing Department II of the Company~~
~~July 2004~~ ~~Senior Vice President and Managing Director of System Marketing Department II of the Company~~
~~June 2005~~ ~~Senior Vice President and Managing Director of System Marketing Department II of the Company~~
~~April 2006~~ ~~Senior Vice President and Managing Director of Marketing Department II of the Company~~
~~June 2006~~ ~~Executive Vice President and Managing Director of Marketing Division of NTT DoCoMo Kansai, Inc.~~

President/

~~Initial~~

~~Name~~

~~History, Positions, Responsibilities~~

~~Shares~~

~~Appointment~~

~~(Date of Birth)~~

~~Position~~

~~Responsibility~~

~~and Principal Concurrent Positions~~

~~Owned~~⁽¹⁾

~~Date~~

~~December 2006~~

~~Senior Executive Vice President and Managing Director of Marketing Division of NTT DoCoMo Kansai, Inc.~~

~~June 2007~~

~~Senior Executive Vice President of NTT DoCoMo Kansai, Inc.~~

~~June 2008~~

~~Executive Vice President and Managing Director of Corporate Marketing Division of the Company~~

~~July 2008~~

~~Executive Vice President and Managing Director of Corporate Marketing Division of the Company~~

~~June 2010~~

~~Executive Vice President and Managing Director of Corporate Marketing Division of the Company~~

~~Fumio Iwasaki~~⁽³⁾
~~(Feb, 28, 1953)~~

~~Executive Vice President~~

Responsible for Network

April 1977

Entered NTT Public Corporation

June 2010*

109

June
2012

June
2010

June 2004

Senior Vice President and Managing Director of Network Planning Department of the Company

June 2005

Senior Vice President and Managing Director of Network Planning Department of the Company

June 2007

Senior Executive Vice President and Managing Director of Corporate Marketing Division of NTT DoCoMo Kyushu, Inc.

July 2008

Senior Vice President and Managing Director of Kyushu Regional Office of the Company

June 2010

Executive Vice President and Responsible for Network of the Company

Tsutomu Shindou⁽³⁾

(Sep. 4, 1954)

Executive Vice President/

Managing Director of Corporate Marketing Division

April 1978

Entered NTT Public Corporation

June
2012

June
2011

July 2005

Managing Director of System Marketing Department III of the Company

~~Takashi Tanaka~~⁽³⁾
~~(Jun. 2, 1955)~~

~~Senior Vice President~~April 2006

Managing Director of ~~Human Resources Management~~Corporate Marketing Department III of the Company

April 2007

Managing Director of Corporate Marketing Department I of the Company

June 2007

Senior Vice President and Managing Director of Corporate Marketing Department I of the Company

Name
(Date of Birth)
Position/
Responsibility
History, Positions, Responsibilities and
Principal Concurrent Positions
Shares
Owned ⁽¹⁾ Date
Current
Terms
Ends Initial
Appointment
Date
June 2011 Executive Vice President, Managing Director of Corporate Marketing Division and Managing Director of Corporate Marketing Department I of the Company
(effective June 24, 2011)
Executive Vice President and Managing Director of Corporate Marketing Division of the Company
Takashi Tanaka⁽³⁾
(Jun. 2, 1955)
Executive Vice President/ Responsible for Consumer Sales April 1979 Entered NTT Public Corporation 98 June 2007*
123
June
2012

~~July 2001~~June
2007    ~~Senior Director of Human Resources Management Department of the Company~~

June 2003 Managing Director of Affiliated Companies Department of the Company
June 2007 Senior Vice President and Managing Director of General Affairs Department of the Company

June 2008 Senior Vice President and Managing Director of Human Resources Management Department of the Company

July 2008 Senior Vice President and Managing Director of Human Resources Management Department of the Company (change in Japanese department name)
June 2011 Executive Vice President and Responsible for Consumer Sales of the Company
~~Katsuhiro Nakamura~~
Wataru Kagawa^{(3) (}
³⁾
(~~Mar. 2,~~Oct. 4, 1953)
Senior Vice ~~President~~ President/ Managing Director of General Affairs Department, ~~Managing Director of~~ Corporate Citizenship Department and Business Process Improvement Office April ~~1977~~1978 Entered NTT Public Corporation 71 51
June 2008*
2012

June
2011
~~June~~July 2004 ~~Senior Vice President and~~ Managing Director of ~~Marketing Division~~IR Department of ~~NTT DoCoMo Hokkaido, Inc.~~

the Company

~~Initial~~

~~Name~~

~~History, Positions, Responsibilities~~

~~Shares~~

~~Appointment~~

~~(Date of Birth)~~

~~Position~~

~~Responsibility~~

~~and Principal Concurrent Positions~~

~~Owned~~⁽¹⁾

~~Date~~

June 2005

~~Representative Director, Senior Vice President and Managing Director~~General Manager of ~~Corporate Strategy and Planning Department and Managing Director~~Saitama Branch of ~~Marketing Division of NTT DoCoMo Hokkaido, Inc.~~

the Company

June 2007

~~Senior Vice President and Responsible for Business Process Reform~~Member of the ~~Company~~

Board and Managing Director of General Affairs Department of NTT DoCoMo Kansai, Inc.

July 2008

Associate Senior Vice President and Managing Director of Kansai Regional Office of the Company

June ~~2008~~2011

Senior Vice President and Managing Director of General Affairs Department, Corporate Citizenship Department and Business Process Improvement Office of the Company

Kazuhiro Yoshizawa⁽³⁾

(Jun. 21, 1955)

Senior Vice President/ Managing Director of Human Resources Management Department

April 1979

Entered NTT Public Corporation

June
2012

June
2011

December 1996

Senior Director of Corporate Strategy and Planning Department of the Company

July 2001

Senior Director of Human Resources Management Department of the Company

July 2003

Senior Director of Corporate Strategy and Planning Department of the Company

June 2007

Senior Vice President and Managing Director of Corporate Marketing Department II of the Company

Name
(Date of Birth)
Position/
Responsibility
History, Positions, Responsibilities and
Principal Concurrent Positions
Shares
Owned ⁽¹⁾ Date
Current
Terms
Ends Initial
Appointment
Date
June 2011
Senior Vice President and Managing Director of Human Resources management Department of the Company
Hiroshi Tsujigami
(Sep. 8, 1958)
Member of the Board
April 1983
July 1999
Entered NTT Public Corporation
Manager of Department I of NTT
10
June
2012

June
2008

~~July 2008~~ ~~Senior Vice President, Managing Director of General Affairs Department and Managing Director of Corporate Citizenship Department of the Company~~
~~Hiroshi Tsujigami~~
~~(Sep. 8, 1958)~~ ~~Member of the Board~~ ~~April 1983~~ ~~Entered NTT Public Corporation~~ 10 June 2008*
~~July 1999~~ ~~Manager of Department I of NTT~~
October 2000 Senior Manager of Department I of NTT
July 2003 Senior Manager of Corporate Strategy and Planning Department of NTT West
July 2007 Senior Manager of Corporate Strategy and Planning Department of NTT
June 2008
Member of the Board of the Company
(Principal concurrent positions)
Senior Manager of Corporate Strategy and Planning Department of NTT
Member of the Board of NTT Investment Partners, Inc.

Corporate Auditors:

~~Kenichi Aoki~~
Shunichi Tamari ⁽⁴⁾
(~~Oct. 9, 1946)~~
Jan. 10, 1949)
Corporate Auditor
April 1971
June 2001
~~May 1970~~
Entered NTT Public Corporation
62 June 2008**
~~June 1998~~ ~~Senior Vice President and Managing Director of General Affairs Department of the Company~~
~~January 1999~~ ~~Senior Vice President and Managing Director of Affiliated Companies Department of the Company~~
~~June 2000~~ ~~Senior Vice President and General Manager of Chiba Branch of the Company~~
~~June 2002~~ ~~Senior Executive Vice President and Managing Director Mobile Multimedia Division of NTT DoCoMo Chugoku, Inc.~~

~~Initial~~

~~Name~~

~~History, Positions, Responsibilities~~

~~Shares~~

~~Appointment~~

~~(Date of Birth)~~

~~Position~~

~~Responsibility~~

~~and Principal Concurrent Positions~~

~~Owned~~⁽¹⁾

~~Date~~

~~June 2004~~

~~Representative Director, Executive Vice President and Managing Director of Corporate Strategy Planning Department of DoCoMo Support, Inc.~~

~~June 2005~~

~~President of DoCoMo Support, Inc.~~

~~June 2008~~

~~Corporate Auditor of the Company~~

~~Shunichi Tamari~~⁽⁴⁾
~~(Jan. 10, 1949)~~

~~Corporate Auditor~~

~~April 1971~~

~~Entered NTT Public Corporation~~

June 2008*

~~June 2001~~

Representative Director, Executive Vice President and Managing Director of Corporate Strategy and Planning Department of NTT DoCoMo Hokuriku, Inc.

June
2012

June
2008

June 2002

Senior Vice President and Managing Director of Service Operation and Maintenance Department of the Company

January 2004

Senior Vice President and Managing Director of Service Quality Management Department of the Company

June 2004

Executive Vice President and General Manager of Chiba Branch of the Company

June 2005

President of DoCoMo Engineering, Inc.

June 2008

Corporate Auditor of the Company

~~Yoshitaka Makitani~~

Shuro Hoshizawa ⁽⁴⁾

(~~July 30, 1947)~~

Jun. 17, 1949)

Corporate Auditor

~~May 1970~~April 1973

Entered NTT Public Corporation

48125

June 2009**
2015

June
2011

June 2002

~~September 2000~~

~~Member of the Board,~~ Senior Vice President ~~Senior Executive Manager~~and Managing Director of ~~Accounts and Finance~~Corporate Marketing Department ~~Senior Executive Manager~~I of ~~Affiliated Companies Department of NTT DATA Corporation (“NTT DATA”)~~

the Company

June 2004

~~July 2001~~

Executive Vice President, Member of the Board ~~Senior Vice President~~ and ~~Senior Executive Manager~~Managing Director of ~~Accounts and Finance Department~~Corporate Marketing Division of ~~NTT DATA~~

the Company

June 2005

(Implementation of executive officer system)

Executive Vice President, Member of the Board and Managing Director of Corporate Marketing Division

~~June 2002~~

~~Member of the Board, Executive Vice~~

June 2007

President and ~~Senior Executive Manager of Accounts and Finance Department~~Representative Director of NTT ~~DATA~~DoCoMo Hokkaido, Inc.

Name
(Date of Birth)
Position/
Responsibility
History, Positions, Responsibilities and
Principal Concurrent Positions
Shares
Owned ⁽¹⁾
Date
Current
Terms
Ends Initial
Appointment
Date
July 2008 Associate Senior Vice President and Managing Director of Hokkaido Regional Office of the Company
July 2008 President and Representative Director of DOCOMO Support, Inc.
June ~~2003~~ ~~Member of the Board, Executive Vice President, Senior Executive Manager of General Affairs Department and Senior Executive Manager of Affiliated Companies Department of NTT DATA~~
~~June 2005~~ ~~President of NTT BUSINESS ASSOCIE Corporation~~
~~June 2009~~2011 Corporate Auditor of the Company
Kyouichi Yoshizawa⁽⁴⁾
(Apr. 12, 1950)
Corporate Auditor
April 1969
August 2000
~~April 1969~~
Entered NTT Public Corporation
80 June 2007**

~~Initial~~

~~Name~~

~~History, Positions, Responsibilities~~

~~Shares~~

~~Appointment~~

~~(Date of Birth)~~

~~Position~~

~~Responsibility~~

~~and Principal Concurrent Positions~~

~~Owned~~⁽¹⁾

~~Date~~

~~August 2000~~

Secretary General of East Japan Headquarters of All NTT Workers Union of Japan

105

June
2015

June
2007

July 2002

President of East Japan Headquarters of All NTT Workers Union of Japan

August 2004

Secretary General of National Headquarters of All NTT Workers Union of Japan

September 2006

Advisor, , NTT Travel Service Co. Ltd.

June 2007

Corporate Auditor of the Company

~~Takaaki Wakasugi~~

Haruo Morosawa ^(4) (5)

(~~Mar. 11, 1943)~~Dec. 27, 1950)

Corporate Auditor

April 1974

~~June 1985~~Entered Board of Audit of Japan

~~Professor, Faculty of Economics, University of Tokyo~~

June
2015

June 2007**
2011

December 1999

~~September 1990~~

~~Co-director, Mitsui Life Financial Research Center, University~~Director for Accounting, Secretariat of ~~Michigan Ross School~~General Executive Bureau, Board of ~~Business~~

Audit of Japan

December 2000

~~April 2003~~

~~Director and~~Deputy Director-General, Secretariat of General ~~Manager~~Executive Bureau, Board of Audit of Japan ~~Corporate Governance Research Institute~~

~~April~~December 2004

~~Professor~~Director General of ~~Finance, School~~1st Bureau, Board of ~~Business administration, Tokyo Keizai University~~

Audit of Japan

April 2009

~~June 2004~~

~~Professor Emeritus, University~~Deputy Secretary General of ~~Tokyo~~

General Executive Bureau, Board of Audit of Japan

April 2010

Member of the West Block Bidding Inspection Commission of Japan Railway Construction, Transport and Technology Agency

June ~~2007~~2011

Corporate Auditor of the Company

Eiko Tsujiyama ⁽⁵⁾

(Dec. 11, 1947)

Corporate Auditor

August 1980

Assistant Professor, Humanities Department, Ibaraki University

June
2015

June
2011

April 1985

~~(Directorship at other companies)~~

Assistant Professor, Faculty of Economics, Musashi University

April 1991

Professor, ~~School~~Faculty of ~~Business Administration, Tokyo Keizai~~Economics, Musashi University

~~Outside director, Nissui, Ltd.~~

~~Outside director, Ricoh Corporation~~

~~Outside corporate auditor, JFE Holdings, Inc.~~

~~(Notes)~~

~~(1)~~

April 2003

Professor of Accounting Faculty of Business & Commerce, Waseda University

June 2011

Corporate Auditor of the Company

(Principal concurrent positions)

Professor of Accounting Faculty of Business & Commerce, Waseda University

Corporate Auditor of Mitsubishi Corporation

Director of ORIX Corporation

Corporate Auditor of LAWSON, INC.

(1)	DOCOMO shares owned as of May 31, ~~2010~~2011

(2)		Representative director

(3)		Concurrently serves as a EVP/SVP

(4)		Full-time corporate auditor

(5)		Independent ~~director~~director/corporate auditor under the Security Listing Regulations of the Tokyo Stock Exchange ~~regulations.~~

*		~~Current term expires in June 2012~~

**		~~Current term expires in June 2011~~regulations

The following table shows information about our ~~corporate executives~~executive officers as of June ~~24, 2010,~~23, 2011, including their positions and responsibilities.


Name	Position		Responsibility
~~Name~~	~~Position~~		~~Responsibility~~

~~EVPs/SVPs:~~
~~Toru Kobayashi~~Katsuhiro Nakamura	Executive Vice President		Managing Director of Tokai Regional Office

Kiyoshi Tokuhiro	Executive Vice President		Managing Director of Kansai Regional Office

Yoshiyuki Takeda	Executive Vice President		Deputy Managing Director of R&D Center
~~Hiroaki Nishioka~~
Tomohiro Kurosawa	Senior Vice President		Managing Director of Hokkaido Regional Office

Yuji Araki	Senior Vice President		Managing Director of Tohoku Regional Office

Mitoshi Hirokane	Senior Vice President		Managing Director of Hokuriku Regional Office

Akiko Ide	Senior Vice President		Managing Director of Chugoku Regional Office
~~Masaaki Sado~~
Shoji Suto	Senior Vice President		Managing Director of Shikoku Regional Office

Toshinari Kunieda	Senior Vice President		Managing Director of Kyusyu Regional Office
~~Yasuhiro Taguchi~~		~~Senior Vice President~~		~~General Manager, Kanagawa Branch~~
Seizo Onoe	Senior Vice President		Managing Director of R&D Strategy Department
~~Hiroshi Sawada~~		~~Senior Vice President~~		~~Managing Director of Core Network Development Department~~
Kiyohito Nagata	Senior Vice President		Managing Director of Strategic Marketing Department Responsible for Product Business Strategy

Hiroyasu Asami	Senior Vice President		Managing Director of ~~Consumer~~Smart Communication Services Department
~~Tomohiro Kurosawa~~
Kei Irie	Senior Vice President		Managing Director of ~~Communication Device Support~~Network Department

Hiroshi Sawada	Senior Vice President		Managing Director of Service Platform Department

Kazunori Yamamoto	Senior Vice President		Managing Director of Sales Promotion Department
~~Tsutomu Shindou~~
Morikazu Takahashi	Senior Vice President		Deputy Managing Director of Corporate Marketing Division

Hirotaka Sato	Senior Vice President		(effective June 24, 2011) Managing Director of Corporate Marketing Department I
~~Kazuhiro Yoshizawa~~
Koji Aoyama	Senior Vice President		Managing Director of Corporate Marketing Department II

Yasuhiro Taguchi	Senior Vice President		Managing Director of Corporate Marketing Department III

Masaki Yoshikawa	Senior Vice President		Managing Director of Credit Card Business Division

Seiji Nishikawa	Senior Vice President		Managing Director of Information Systems Department

Kiyohiro Omatsuzawa	Senior Vice President		Managing Director of Procurement and Supply Department
~~Tooru Azumi~~		~~Senior Vice President~~		~~Managing Director of Business Process Improvement Office~~
Yoshikiyo Sakai	Senior Vice President		Managing Director of Public Relations Department Deputy Managing Director of Mobile Society Research Institute

~~Notes:~~

~~Directors who concurrently serve as EVPs/SVPs are not included in the above list.~~

Note: Directors

who concurrently serve as EVPs/SVPs are not included in the above list.

B. Compensation

The aggregate compensation to the directors and corporate auditors during the year ended March 31, ~~2010~~2011 was as follows:

~~(in millions, except number of persons)~~

Breakdown of Compensation
Total
Base
Stock
Retirement
Number of
Position Compensation Salary Option Bonus Bonus Persons

Director* ¥515 ¥404 — ¥111 — 12
Corporate Auditor** 60 60 — — — 2
Outside Director/Corporate Auditor 69 69 — — — 4

Total 644 533 — 111 — 18

~~(Notes)~~


	Millions of yen
			Breakdown of Compensation
Position	Total Compensation		Base Salary		Stock Option		Bonus		Retirement Bonus		Number of Persons
Director^*	¥	514	¥	396		—	¥	118		—		14
Corporate Auditor^**		60		60		—		—		—		2
Outside Director/ Corporate Auditor		69		69		—		—		—		3

Total		643		525		—		118		—		19

(Notes)

1.		Upper limits on compensation to directors and corporate auditors were set at ¥600 million annually for directors and ¥150 million annually for corporate auditors at the 15th ordinary general meeting of shareholders held on June 20, 2006.

The above includes ~~one corporate auditor~~two directors who retired at the end of the ~~18th~~19th ordinary general meeting of shareholders held on June ~~19, 2009.~~18, 2010.


*		Excluding Outside Director

Excluding Outside Corporate Auditor

C.
C.	Board Practices

Information required by this item is set forth in Items 6.A. and 6.B. of this annual report. We do not have any contracts with directors or corporate auditors providing for severance benefits upon termination of employment.

In order to enable our directors (including former directors) and corporate auditors (including former corporate auditors) to fully perform the roles expected of them in the execution of their work duties, we are permitted, pursuant to the Corporation Law and our Articles of Incorporation, to release directors and corporate auditors from liability for damages resulting from neglect of duties, with such release to be made by resolution of the board of directors, and to be within the range permitted by law. Further, we can conclude agreements with outside directors and auditors limiting their liability for damages resulting from neglect of duties. However, the liability limit pursuant to these agreements is the amount stipulated by law.

D.
D.	Employees

The information required by this item is set forth in Item 4.B. of this annual report.

E.
E.	Share Ownership

Information required by this item is set forth in Item 6.A. of this annual report and below. We have not granted stock options to any of our directors or corporate auditors and we do not currently have any stock option plans approved pursuant to which they may be granted shares or stock options.

As of May 31, ~~2010,~~2011, our directors and corporate auditors owned ~~1,864~~2,097 of our shares. Currently, most of our full-time directors and corporate auditors participate in a director stock purchase plan, pursuant to which a plan administrator makes open market purchases of shares for the accounts of participating directors on a monthly basis.

Certain of our employees and certain other of our subsidiaries’ employees participate in an employee stock purchase plan, pursuant to which a plan administrator makes open market purchases of our shares for the accounts of participating employees on a monthly basis. Such purchases are made out of amounts deducted from each

participating employee’s salary. In addition, if the employee chooses to participate in an optional benefit plan, we contribute a maximum of ¥80 for each ¥1,000 contributed by the employee.

Item 7. Major Shareholders and Related Party Transactions

A.
~~Item 7.~~	*~~Major Shareholders and Related Party Transactions~~*


A.	Major Shareholders

As of March 31, ~~2010,~~2011, NTT owned 27,640,000 shares, or ~~66.43%~~66.65% of our outstanding voting shares and ~~63.12%~~63.32% of our total issued shares. To the best of our knowledge, no other shareholder beneficially owned more than 5% of the outstanding shares (excluding treasury shares). The ~~Government,~~Japanese government, in the name of the Minister of Finance, owned ~~40.16%~~40.15% of the voting rights of NTT as of the same date. NTT does not have any special voting rights. For more information regarding our relationship with NTT, see Item 4.B. “Business ~~Overview —~~ Overview—Relationship with NTT.”

~~At the end of March 2008, we canceled approximately 1.01 million shares, which were held as treasury stock, increasing NTT’s share ownership of our total issued shares from 60.24% to 61.60%.~~

At the end of March 2009, we canceled approximately 0.92 million shares, which were held as treasury stock, increasing NTT’s share ownership of our total issued shares from 61.60% to 62.89%. At the end of March 2010, we canceled approximately 0.16 million shares, which were held as treasury stock, increasing NTT’s share ownership of our total issued shares from 62.89% to 63.12%.

At the end of March 2011, we canceled approximately 0.14 million shares, which were held as treasury stock, increasing NTT’s share ownership of our total issued shares from 63.12% to 63.32%.

The ownership and distribution of the shares by category of shareholders according to our register of shareholders and register of beneficial shareholders as of March 31, ~~2010~~2011 were as follows:

Outstanding
Number of
Number of
Voting
Category Shareholders Shares Held Shares

Japanese financial institutions 263 4,656,043 10.63 %
Japanese securities companies 74 462,693 1.06 %
Other Japanese corporations 2,328 28,141,639 64.27 %
Foreign corporations and individuals 930 5,496,148 12.55 %
Japanese individuals, treasury shares and others 326,506 5,033,477 11.49 %

Total 330,101 43,790,000 100.00 %


Category	Number of Shareholders		Number of Shares Held		Outstanding Voting Shares
Japanese financial institutions		264		4,542,376		10.41	%
Japanese securities companies		52		375,835		0.86	%
Other Japanese corporations		2,215		28,149,551		64.49	%
Foreign corporations and individuals		929		5,691,226		13.04	%
Japanese individuals, treasury shares and others		312,084		4,891,012		11.20	%

Total		351,544		43,650,000		100.00	%

According to The Bank of New York Mellon, depositary for our ADSs, as of March 31, ~~2010, 155,425~~2011, 180,564 shares of our common stock were held in the form of ~~15,542,500~~18,056,400 ADRs. According to our register of shareholders, as of March 31, ~~2010,~~2011, there were ~~330,101~~315,544 holders of common stock of record worldwide. As of March 31, ~~2010,~~2011, there were ~~212~~217 record holders of our common stock with addresses in the United States, whose shareholdings represented approximately ~~5.06%~~5.53% of the issued common stock on that date. Because some of these ADSs and shares were held by brokers or other nominees, the number of record holders with addresses in the United States may be fewer than the number of beneficial owners in the United States.

None of our shares of common stock entitles the holder to any preferential voting rights.

We know of no arrangements the operation of which may at a later time result in a change of control.

B.
B.	Related Party Transactions

~~DOCOMO has~~

We have entered into a number of different types of transactions with NTT, its other subsidiaries and its affiliated companies in the ordinary course of business. For information regarding our relationship with NTT, see Item 4.B. “Business ~~Overview —~~ Overview—Relationship with NTT.”

~~DOCOMO has~~

We have also entered into contracts of bailment of cash for consumption with NTT FINANCE CORPORATION (“NTT FINANCE”) for cash management purposes. For information regarding our transactions with NTT FINANCE, see Note 13 of “Notes to Consolidated Financial ~~Statements —~~ Statements—Related Party Transactions.”

C.
C.	Interests of Experts and Counsel

Not applicable.

Item 8. Financial Information

A.
~~Item 8.~~	*~~Financial Information~~*


A.	Consolidated Statements and Other Financial Information

Financial Statements

The information required by this item is set forth beginning onpage F-2 of this annual report.

Legal or Arbitration Proceedings

The information on legal or arbitration proceedings required by this item is set forth in Item 4.B. of this annual report.

Dividend Policy

We believe that providing returns to shareholders is one of the most important issues in corporate management while at the same time we are making efforts to strengthen our financial position and maintain internal reserves. We aim to continue stable dividend payments taking into account our consolidated financial results and the operating environment, with the goal to continue to pay regular dividends.

We expect to pay an annual dividend of ~~¥5,200~~¥5,600 per share for the year ending March 31, ~~2011,~~2012, which will consist of a ~~¥2,600~~¥2,800 interim dividend and a ~~¥2,600~~¥2,800 year-end dividend.

B.
B.	Significant Changes

Except as otherwise disclosed herein, there has been no significant change in our financial position since March 31, ~~2010,~~2011, the date of our last audited financial statements.

Item 9. The Offer and Listing

A.
~~Item 9.~~	*~~The~~ Offer and Listing Details*

~~A. Offer and Listing Details~~

Price Ranges of Shares

Since October 1998, our shares have been listed on the First Section of the Tokyo Stock Exchange (“TSE”). On June ~~11, 2010,~~9, 2011, the closing sale price of our shares on the TSE was ~~¥133,300~~¥146,000 per share. Our shares are also quoted and traded through the New York Stock Exchange (“NYSE”) and the London Stock Exchange. The following table lists the reported high and low sale prices of our shares on the TSE, highs and lows of Tokyo Stock Price Exchange (“TOPIX”) and Nikkei Stock Average for the periods indicated:

TSE TOPIX Nikkei Stock Average
(Japanese yen) (Points) (Japanese yen)
Fiscal Year ended March 31, High Low High Low High Low

2006 216,000 159,000 1,735.25 1,104.30 17,125.64 10,770.58
2007 229,000 162,000 1,823.89 1,439.00 18,300.39 14,045.53
2008 224,000 148,000 1,796.89 1,139.62 18,297.00 11,691.00
2009 180,300 129,500 1,449.14 698.46 14,601.27 6,994.90
1st Quarter 169,000 149,000 1,449.14 1,214.92 14,601.27 12,521.84
2nd Quarter 179,100 151,500 1,334.52 1,069.69 13,603.31 11,160.83
3rd Quarter 177,800 136,000 1,107.68 721.53 11,456.64 6,994.90
4th Quarter 180,300 129,500 896.21 698.46 9,325.35 7,021.28
2010 150,400 127,500 987.27 778.21 11,147.62 8,084.62
1st Quarter 145,000 132,600 954.08 778.21 10,170.82 8,084.62
2nd Quarter 150,400 134,700 987.27 852.11 10,767.00 9,050.33
3rd Quarter 144,300 127,500 920.54 809.24 �� 10,707.51 9,076.41
4th Quarter 143,700 129,600 984.06 876.77 11,147.62 9,867.39
Calendar Year 2009

December 134,600 129,200 920.54 829.56 10,707.51 9,233.20
Calendar Year 2010

January 139,800 129,600 966.40 901.12 10,982.10 10,198.04
February 143,700 135,200 921.90 876.77 10,449.75 9,867.39
March 143,100 137,100 984.06 893.81 11,147.62 10,116.86
April 154,400 142,100 1,001.77 968.79 11,408.17 10,865.92
May 145,700 135,100 970.46 850.88 10,847.9 9,395.29
June (through June 11, 2010) 137,300 132,000 895.09 846.47 9,962.42 9,378.23


	TSE				TOPIX				Nikkei Stock Average
	(Japanese yen)				(Points)				(Japanese yen)
Fiscal Year ended March 31,	High		Low		High		Low		High		Low
2007		229,000		162,000		1,823.89		1,439.00		18,300.39		14,045.53
2008		224,000		148,000		1,796.89		1,139.62		18,297.00		11,691.00
2009		180,300		129,500		1,449.14		698.46		14,601.27		6,994.90
2010		150,400		127,500		987.27		778.21		11,147.62		8,084.62
1st Quarter		145,000		132,600		954.08		778.21		10,170.82		8,084.62
2nd Quarter		150,400		134,700		987.27		852.11		10,767.00		9,050.33
3rd Quarter		144,300		127,500		920.54		809.24		10,707.51		9,076.41
4th Quarter		143,700		129,600		984.06		876.77		11,147.62		9,867.39
2011		159,000		128,000		1,001.77		725.90		11,408.17		8,227.63
1st Quarter		154,400		132,000		1,001.77		835.91		11,408.17		9,347.07
2nd Quarter		149,000		133,000		874.25		800.69		9,807.36		8,796.45
3rd Quarter		144,800		133,200		909.67		799.64		10,394.22		9,123.62
4th Quarter		159,000		128,000		976.28		725.90		10,891.60		8,227.63

Calendar Year 2010
December		144,800		135,000		909.67		858.87		10,394.22		9,918.55

Calendar Year 2011
January		149,000		141,800		939.70		904.25		10,620.57		10,182.57
February		159,000		145,600		976.28		910.28		10,891.60		80,245.75
March		157,500		128,000		964.18		725.90		10,768.48		8,227.63
April		151,800		143,100		874.35		824.61		9,849.74		9,405.19
May		151,800		144,400		866.65		812.52		10,017.47		9,406.04
June (through June 9, 2011)		150,400		145,300		839.59		805.23		9,720.73		9,358.31

Since March 2002, our American Depositary Shares have been listed on the NYSE. On June ~~11, 2010,~~9, 2011, the closing sale price of American Depositary Shares on the NYSE was ~~$14.62~~$18.25 per share. The following table lists the reported high and low sale prices of our American Depositary Shares on the NYSE for the periods indicated:

NYSE
(U.S. dollars)
Fiscal Year Ended March 31, High Low

2006 18.78 14.09
2007 18.85 13.83
2008 18.73 13.02
2009 20.35 12.22
1st Quarter 15.99 13.96
2nd Quarter 16.72 13.89
3rd Quarter 20.35 12.22
4th Quarter 19.93 13.26
2010 16.49 13.11
1st Quarter 15.11 13.11
2nd Quarter 16.49 14.23
3rd Quarter 16.03 13.98
4th Quarter 16.07 14.05
Calendar Year 2009

December 15.39 13.98
Calendar Year 2010

January 15.45 14.05
February 16.07 15.14
March 15.92 15.06
April 16.49 15.20
May 15.84 14.88
June (through June 11, 2010) 15.01 14.47


	NYSE
	(U.S. dollars)
Fiscal Year ended March 31,	High		Low
2007		18.85		13.83
2008		18.73		13.02
2009		20.35		12.22
2010		16.49		13.11
1st Quarter		15.11		13.11
2nd Quarter		16.49		14.23
3rd Quarter		16.03		13.98
4th Quarter		16.07		14.05
2011		19.23		14.47
1st Quarter		16.49		14.47
2nd Quarter		17.52		15.10
3rd Quarter		17.46		16.09
4th Quarter		19.23		16.00

Calendar Year 2010
December		17.46		16.21

Calendar Year 2011
January		18.06		17.03
February		19.14		17.93
March		19.23		16.00
April		18.53		17.15
May		18.66		17.81
June (through June 9, 2011)		18.57		18.13

B.
B.	Plan of Distribution

Not applicable.

C.
C.	Markets

See Item 9.A. of this annual report for information on the markets on which our common stock is listed or quoted.

D.
D.	Selling Shareholders

Not applicable.

E.
E.	Dilution

Not applicable.

F.
F.	Expenses of the Issue

Not applicable.

Item 10. Additional Information

A.
~~Item 10.~~	*~~Additional Information~~*


A.	Share Capital

Not applicable.

B.
B.	Memorandum and Articles of Association


1.	~~Objects and Purposes in Our Articles of Incorporation~~

1. Objects and Purposes in Our Articles of Incorporation

Article 2 of our Articles of Incorporation, which are attached as an exhibit to this annual report, ~~states~~state our purposes, which ~~includes~~include engaging in the telecommunications business, other businesses related to the operation of a wireless telecommunication services provider and non-related businesses.


2.	~~Provisions Regarding Our Directors~~

2. Provisions Regarding Our Directors

There is no provision in our Articles of Incorporation as to a director’s power to vote on a proposal, arrangement or contract in which a director is materially interested, but, under the Corporation Law, a director is required to refrain from voting on such matters at meetings of the board of directors.

The Corporation Law provides that compensation for directors is fixed by resolution of a general meeting of shareholders of a company. Within the upper limit approved by the shareholders’ meeting, the board of directors will determine the amount of compensation for each director. The board of directors may, by its resolution, leave such decision to the discretion of the Company’s president.

The Corporation Law provides that the incurrence by a company of a significant loan from a third party should be approved by a resolution of the Company’s board of ~~directors, by its resolution.~~directors. Our Regulations of the Board of Directors have adopted this policy.

There is no mandatory retirement age for our directors under the Corporation Law or our Articles of Incorporation.

There is no requirement concerning the number of shares one individual must hold in order to qualify him or her as a director of NTT DOCOMO, INC. under the Corporation Law or our Articles of Incorporation.


3.	~~Holding of Our Shares by Foreign Investors~~

3. Holding of Our Shares by Foreign Investors

There are no limitations on the rights of non-residents or foreign shareholders to hold or exercise voting rights on our shares imposed by the Corporation Law or our Articles of Incorporation or our other constituent documents.


4.	~~Rights of Our Shareholders~~

4. Rights of Our Shareholders

The following section contains certain information relating to the shares, including summaries of certain provisions of our Articles of Incorporation and Share Handling Regulations and of the Corporation Law relating to joint stock corporations.

~~• General~~

•

General

At present, our authorized share capital is 188,130,000 shares with no par value of which ~~43,790,000~~43,650,000 shares have been issued. All issued shares are fully paid and non-assessable.

On January 5, 2009, a new central clearing system for shares of Japanese listed companies was established pursuant to the Law Concerning Book-Entry Transfer of Corporate Bonds, Shares, Etc. of Japan (including the

cabinet order and ministerial ordinances promulgated thereunder; the “Book-Entry Law”), and since then the shares of all Japanese companies listed on any Japanese financial instruments exchange, including our shares, have become subject to this new system. On the same day, all existing shares were dematerialized and all existing share certificates for such shares became null and void. At present, the Japan Securities Depository Center, Inc. (“JASDEC”) is the sole institution that is designated by the relevant authorities as a book-entry transfer institution which is permitted to engage in the clearing operations of shares of Japanese listed companies

under the Book-Entry Law. Under the new clearing system, in order for any person to hold, sell or otherwise dispose of shares of Japanese listed companies, such person must have an account at an account management institution unless such person has an account directly at JASDEC. “Account management institutions” are, in general, financial instruments firms engaged in type 1 financial instruments business (i.e., securities brokers/dealers), banks, trust companies and certain other financial institutions which meet the requirements prescribed by the Book-Entry Law.

Under the Book-Entry Law, any transfer of shares is effected through book entry, and title to the shares passes to the transferee at the time when the number of the shares to be transferred is, by an application for book entry, recorded in the transferee’s account at an account management institution. The holder of an account at an account management institution is presumed to be the legal owner of the shares recorded in such account.

Under the Corporation Law and the Book-Entry Law, in order to assert shareholders’ rights against us, a shareholder must have its name and address registered in the register of shareholders, except in limited circumstances. Although, in general, holders of an account with shares recorded are to be registered in the register of shareholders on the basis of information notified by JASDEC to us at certain prescribed time, in order to exercise minority shareholders’ rights (other than those for which the record dates ~~for which~~ are fixed) against us, a holder of an account with shares needs to make an application though an account management institution to JASDEC, which will then give a notice of the name and address of such holder, the number of shares held by such holder and other requisite information to us, and to exercise rights within four weeks from such notice.

The registered beneficial holder of deposited shares underlying the ADSs is the depositary for the ADSs. Accordingly, holders of ADSs will not be able to directly assert shareholders’ rights against us.

~~• Dividends~~

•

Dividends

Dividends on our shares are generally distributed in proportion to the number of shares owned by each shareholder.

In Japan, the ex-dividend date and the record date for any dividend precede the date of determination of the amount of the dividend to be paid. Generally, the ex-dividend date is two business days prior to the record date.

Under the Corporation Law, we are permitted to make distributions of surplus to our shareholders any number of times per fiscal year pursuant to resolutions of our general meeting of shareholders, subject to certain limitations described below. Distributions of surplus are required, in principle, to be authorized by a resolution of the general meeting of shareholders. In an exception to the above rule, we are permitted to make distributions of surplus in cash to our shareholders by board resolution once per fiscal year if our Articles of Incorporation so provide. Currently, our Articles of Incorporation so provide. This exception is intended to make it possible to distribute an interim dividend.

We are also permitted to make distributions of surplus pursuant to a board resolution if certain requirements under the Corporation Law are met, including that our Articles of Incorporation provide that the board of directors may determine to distribute surplus. Currently, our Articles of Incorporation do not so provide. Accordingly, distributions of our surplus must be approved by a general meeting of shareholders.

Distributions of surplus may be made in cash or in-kind in proportion to the number of shares held by each shareholder. If a distribution of surplus is to be made in-kind, we may, pursuant to a general meeting of

shareholders resolution, or as the case may be, a board resolution, grant our shareholders a right to require us to make the distribution in cash instead of in-kind. If no such right is granted, the relevant distribution must be approved by a special resolution of a general meeting of shareholders (see ~~“— Voting~~“Voting Rights”). Currently, we do not have any concrete plan to make a distribution of surplus in-kind.

Under the Corporation Law, when we make a distribution of surplus, we must set aside in our additional paid-in capital or legal reserves an amount equal to one-tenth of the amount of surplus so distributed, until the sum of our additional paid-in capital and legal reserves reaches one-quarter of our stated capital as required by an ordinance of the Ministry of Justice.

Under the Corporation Law, we may distribute any dividends up to the amount of the aggregate of (a) and (b) below, less the aggregate of (c) through (f) below, on an unconsolidated basis, as of the effective date of such distribution, if our net assets are not less than ¥3,000,000:


	(a)	the amount of surplus, as described below;

	(b)	in the event that extraordinary financial statements as of, or for a period from the beginning of the ~~business~~fiscal year to, the specified date are approved, the aggregate amount of (i) the aggregate amount of the current net income for such period described in the profit and loss statement included in the extraordinary financial statements and (ii) the amount of consideration that we received for the treasury stock that we disposed of during such period;

	(c)	the book value of our treasury stock;

	(d)	in the event that we disposed of treasury stock after the end of the previous ~~business~~fiscal year, the amount of consideration that we received for such treasury stock;

(e)

in the event of that which is described in (b) in this paragraph, the absolute difference between zero and the amount of current net profit and loss for such period described in the profit and loss statement included in the extraordinary financial statements; and


	(f)	the aggregate amount of accounts provided for in an ordinance of the Ministry of Justice.

For the purposes of this section, the amount of surplus is the excess of the aggregate of I. through IV. below, less the aggregate of V. through VII. below, on an unconsolidated basis:


	I.	the total amount of (x) assets and (y) the book value of treasury stock less the total amount of (i) liabilities, (ii) stated capital, (iii) additional paid-in capital, (iv) legal reserve and (v) certain other amounts set forth in an ordinance of the Ministry of Justice;

	II.	in the event that we disposed of treasury stock after the end of the previous ~~business~~fiscal year, the difference between the book value of such treasury stock and the consideration that we received for such treasury stock;

	III.	in the event that we reduced our stated capital after the end of the previous ~~business~~fiscal year, the amount of such reduction less the portion thereof that has been transferred to additional paid-in capitaland/or the legal reserve (if any);

	IV.	in the event that additional paid-in capitaland/or legal reserves were reduced after the end of the previous ~~business~~fiscal year, the amount of such reduction less the portion thereof that has been transferred to stated capital (if any);

	V.	in the event that we canceled treasury stock after the end of the previous ~~business~~fiscal year, the book value of such treasury stock;

VI. in the event that we distributed dividends after the end of the previous ~~business~~fiscal year, the aggregate of the following amounts:


	a.	the aggregate amount of the book value of the distributed assets, excluding the book value of such assets that would be distributed to shareholders for their exercise of the right to receive dividends in cash instead of dividends in kind;

	b.	~~the aggregate amount of cash distributed to shareholders who exercised the right to receive dividends in cash instead of dividends in kind; and~~

	c.	~~the aggregate amount of cash paid to shareholders holding fewer shares that was required in order to receive dividends in kind;~~

b. the aggregate amount of cash distributed to shareholders who exercised the right to receive dividends in cash instead of dividends in kind; and

c. the aggregate amount of cash paid to shareholders holding fewer shares that was required in order to receive dividends in kind;


	VII.	the aggregate amounts of a. through d. below, less e. and f. below:


	a.	~~in the event that the amount of surplus was reduced and transferred to additional paid-in capital, the legal reserveand/or~~ ~~stated capital after the end of the previous business year, the amount so reduced;~~

	b.	~~in the event that we distributed dividends after the end of the previous business year, the amount set aside in additional paid-in capitaland/or~~ ~~legal reserve;~~

	c.	in the event that we disposed of treasury stock in the process of (x) a merger in which we succeeded all rights and obligations of a merged company, (y) a corporate split in which we succeeded all or a part of the rights and obligations of a split company or (z) a share exchange in which we acquired all shares of a company after the end of the previous business year, the difference between the book value of such treasury stock and the consideration that we received for such treasury stock;

	d.	in the event that we reduced the amount of surplus in the process of a corporate split (including absorption-type corporate split and incorporation-type corporate split) in which we became a split company after the end of the previous business year, the amount so reduced;

	e.	in the event that we made (x) a merger in which we succeeded all rights and obligations of a merged company, (y) a corporate split in which we succeeded all or a part of the rights and obligations of a split company or (z) a share exchange in which we acquired all shares of a company after the end of the previous business year, the aggregate amount of (i) the amount of our capital surplus after such merger, corporate split or share exchange, less the amount of our capital surplus before such merger, corporate split or share exchange, and (ii) the amount of our retained earnings after such merger, corporate split or share exchange, less the amount of our retained earnings after such merger, corporate split or share exchange; and

	f.	in the event that the amount of capital surplus increased in accordance with the provisions of an ordinance of the Ministry of Justice after the end of the previous business year, such increased amount.

a. in the event that the amount of surplus was reduced and transferred to additional paid-in capital, the legal reserve and/or stated capital after the end of the previous fiscal year, the amount so reduced;

b. in the event that we distributed dividends after the end of the previous fiscal year, the amount set aside in additional paid-in capital and/or legal reserve;

c. in the event that we disposed of treasury stock in the process of (x) a merger in which we succeeded all rights and obligations of a merged company, (y) a corporate split in which we succeeded all or a part of the rights and obligations of a split company or (z) a share exchange in which we acquired all shares of a company after the end of the previous fiscal year, the difference between the book value of such treasury stock and the consideration that we received for such treasury stock;

d. in the event that we reduced the amount of surplus in the process of a corporate split (including absorption-type corporate split and incorporation-type corporate split) in which we became a split company after the end of the previous fiscal year, the amount so reduced;

e. in the event that we made (x) a merger in which we succeeded all rights and obligations of a merged company, (y) a corporate split in which we succeeded all or a part of the rights and obligations of a split company or (z) a share exchange in which we acquired all shares of a company after the end of the previous fiscal year, the aggregate amount of (i) the amount of our capital surplus after such merger, corporate split or share exchange, less the amount of our capital surplus before such merger, corporate split or share exchange, and (ii) the amount of our retained earnings after such merger, corporate split or share exchange, less the amount of our retained earnings before such merger, corporate split or share exchange; and

f. in the event that the amount of capital surplus increased in accordance with the provisions of an ordinance of the Ministry of Justice after the end of the previous fiscal year, such increased amount.

Under the Corporation Law, we will be permitted to prepare non-consolidated extraordinary financial statements consisting of a balance sheet as of any date subsequent to the end of the previous ~~business~~fiscal year and an income statement for the period from the first day of the current ~~business~~fisccal year to the date of such balance sheet. If we prepare such extraordinary financial statements, special provisions may apply to the calculation of distributable amount.

We plan to make distributions of surplus twice per fiscal year, if possible. The record date for annual dividends is March 31 and the record date for interim dividends is September 30. Under the Book-Entry Law, holders of account with shares recorded as of the respective record dates are deemed to be registered in the register of shareholders as of such record dates on the basis of information notified by JASDEC to us.

For information as to Japanese taxes on dividends, see ~~“Taxation —~~ “Taxation—Japanese Taxation” below.

~~• Capital and Reserves~~

•

Capital and Reserves

An increase in our authorized share capital is only possible pursuant to an amendment of our articles of incorporation.

The entire paid-in amount of new shares is required to be accounted for as stated capital, although we may account for an amount not exceeding one-half of such paid-in amount as additional paid-in capital. We may at any time reduce the whole or any part of our additional paid-in capital and legal reserve or transfer them to stated capital by ~~shareholder’s resolution. The whole or any part of surplus may also be transferred to stated capital or additional paid-in capital or legal reserve by~~ resolution of a general meeting of shareholders.

•

Stock Splits

~~• Stock Splits~~

We may at any time split our issued shares into a greater number of shares by resolution of the board ~~resolution.~~of directors. So long as the shares are our only class of issued shares, we may increase the number of authorized shares in the same ratio as that of any stock split by amending our Articles of Incorporation, which amendment may be effected by board resolution without shareholder’s approval.

Under the Book-Entry Law, we must give notice to JASDEC regarding a stock split at least two weeks prior to the relevant record date. On the effective date of the stock split, the numbers of shares recorded in all accounts held by our shareholders at account management institutions or at JASDEC will be increased in accordance with the applicable ratio.

~~• Consolidation of Shares~~

•

Consolidation of Shares

Generally, we may consolidate shares into a smaller number of shares by a special resolution of a general meeting of shareholders. A company that conducts a consolidation of shares is required by the Corporation Law to give public notice to its shareholders in order to inform them of the ratio and effective date of the consolidation of shares.

Under the Book-Entry Law, we must give notice to JASDEC regarding a consolidation of shares at least two weeks prior to the relevant record date. On the effective date of the consolidation of shares, the number of shares recorded in all accounts held by our shareholders at account management institutions or at JASDEC will be decreased in accordance with the applicable ratio.

~~• Fractional Shares~~

The fractional share system was terminated on August 1, 2008 pursuant to the amendment to our Articles of Incorporation approved at the Ordinary General Meeting of Shareholders held on June 20, 2008.

~~• General Meeting of Shareholders~~

•

General Meeting of Shareholders

The ordinary general meeting of our shareholders is usually held in June of each fiscal year in Tokyo. In addition, we may hold an extraordinary general meeting of shareholders whenever necessary. Notice of a shareholders’ meeting stating the purpose thereof and a summary of the matters to be acted upon must be dispatched to each shareholder having voting rights (or, in the case of a non-resident shareholder, to his or her mailing address or standing proxy in Japan) at least two weeks prior to the date set for the meeting. The record date for an ordinary general meeting of shareholders is March 31.

Under the Corporation Law and our Articles of Incorporation, any shareholder of record as of the relevant record date who is holding 300 or more voting rights or one percent or more of the total number of voting rights for six months or longer may propose a matter to be considered at a general meeting of shareholders by submitting a written request to our director at least eight weeks prior to the date of such meeting. To the contrary, under the Book-Entry Law, such shareholder is not required to be registered in the register of shareholders when exercising the right of proposal, but such shareholder is required to make an application though an account management institution to JASDEC, which will then give us notice of the name and address of such shareholder, the number of shares held by such shareholder and other requisite information, and to exercise the right of proposal within four weeks from such notice.

~~• Voting Rights~~

•

Voting Rights

Generally, a holder of our shares is entitled to one vote for each such share. Except as otherwise provided in law and our Articles of Incorporation, a resolution can be adopted at a meeting of shareholders by shareholders

holding a majority of our shares having voting rights represented at such meeting. Shareholders may also exercise their voting rights through proxies, provided that a proxy is one of our shareholders or that in the case of a shareholder being the ~~Government,~~Japanese government, local government or juridical person, its proxy may be its employee. Shareholders who intend to be absent from the shareholders’ meeting may exercise their voting rights in writing or by electronic means. The Corporation Law and our Articles of Incorporation provide that the quorum for appointment of directors and

corporate auditors shall not be less than one-third of the total number of the voting ~~rights.~~rights represented at the meeting. Our Articles of Incorporation provide that shares may not be voted cumulatively for the appointment of directors.

Under the Corporation Law and our Articles of Incorporation, certain corporate actions must be approved by a “special resolution” of our meeting of shareholders, when the quorum is one-third of the total number of shares having voting rights and the approval of the holders of two-thirds of our shares having voting rights represented at the meeting is required. Examples of corporate actions that require a special resolution are:

any amendment of our articles of incorporation (except for amendments that may be authorized solely by the board of directors under the Corporation Law);

a reduction of stated capital, except for a reduction of stated capital for the purpose of replenishing capital deficiencies at the day of the ordinary general meeting;


	•	~~any amendment of our articles of incorporation (except for amendments that may be authorized solely by the board of directors under the Corporation Law);~~

	•	~~a reduction of stated capital, except for a reduction of stated capital for the purpose of replenishing capital deficiencies at the day of the ordinary general meeting;~~

	•	~~a distribution by us of surplus in-kind, if we do not grant shareholders the right to require us to effect the distribution in cash, instead of in-kind;~~

	•	~~a dissolution, a merger, subject to a certain exception under which a shareholders’ resolution is not required;~~

	•	the transfer of the whole or an important part of the business, except for the transfer of an important part of the business in which the book value of transferred assets does not exceed 20% of that of the Company’s total assets;

	•	~~the taking over of the whole of the business of any other corporation;~~

	•	~~a share exchange or share transfer for the purpose of establishing a 100% parent-subsidiary relationship, subject to a certain exception under which a shareholders’ resolution is not required;~~

	•	~~a company split, subject to a certain exception under which a shareholders’ resolution is not required;~~

	•	the offering of shares at a “specially favorable” price and any offering of stock acquisition rights or bonds with stock acquisition rights at a “specially favorable” price or in a “specially favorable” condition to any persons other than shareholders; and

	•	~~any purchase of the Company’s own shares from a certain person.~~

a distribution by us of surplus in-kind, if we do not grant shareholders the right to require us to effect the distribution in cash, instead of in-kind;

a dissolution or a merger, subject to a certain exception under which a shareholders’ resolution is not required;

the transfer of the whole or an important part of the business, except for the transfer of an important part of the business in which the book value of transferred assets does not exceed 20% of that of the Company’s total assets;

the taking over of the whole of the business of any other corporation;

a share exchange or share transfer for the purpose of establishing a 100% parent-subsidiary relationship, subject to a certain exception under which a shareholders’ resolution is not required;

a company split, subject to a certain exception under which a shareholders’ resolution is not required;

the offering of shares at a “specially favorable” price and any offering of stock acquisition rights or bonds with stock acquisition rights at a “specially favorable” price or in a “specially favorable” condition to any persons other than shareholders; and

any purchase of the Company’s own shares from a certain person.

The voting rights of holders of ADSs are exercised by the depositary based on instructions from those holders. With respect to voting by holders of ADSs, please see Item 12.D of our registration statement onForm 20-F filed with the Securities and Exchange Commission on January 25, 2002.

~~• Liquidation Rights~~

•

Liquidation Rights

In the event of our liquidation, the assets remaining after payment of all taxes, liquidation expenses and debts will be distributed among the shareholders in proportion to the respective number of shares which they hold.

~~• Issue of Additional Shares and Pre-emptive Rights~~

•

Issue of Additional Shares and Pre-emptive Rights

Shareholders have no pre-emptive rights. Authorized but unissued shares may be issued at such times and upon such terms as the board of directors determines, by its resolution subject to the limitations as to the offering

of shares at a “specially favorable” price mentioned above. Under the Corporation Law, the board of directors may, however, determine to grant shareholders subscription rights in connection with a particular issue of shares. Any such subscription rights must be granted on uniform terms to all shareholders on a pro rata basis. In addition, we are required to notify each shareholder of certain matters regarding such subscription rights, as well as the date by which shareholders need to exercise such rights.

We may issue stock acquisition rights or bonds with stock acquisition rights in relation to which stock acquisition rights are non-separable. Except where the issue of stock acquisition rights would be on “specially favorable” terms or price, the issue of stock acquisition rights or of bonds with stock acquisition rights may be authorized by a resolution of the board of directors. Upon exercise of the stock acquisition rights, the holder of such rights may, subject to the terms and conditions thereof, either acquire shares by paying the applicable exercise price

~~100~~

or, if so determined by a resolution of the board of directors, by making a substitute payment, such as having bonds redeemed without payment to the holder in lieu of the exercise price.

~~• Dilution~~

•

Dilution

It is possible that, in the future, market conditions and other factors might make subscription rights allocated to shareholders desirable at a subscription price substantially below their ~~then~~ current market price, in which case shareholders who do not exercise and are unable otherwise to realize the full value of their subscription rights will suffer dilution of their equity interest in us. As of March 31, ~~2010,~~2011, we have not issued stock acquisition rights or bond with stock acquisition rights.

~~• Report to Shareholders~~

•

Report to Shareholders

We furnish to our shareholders notices of shareholders’ meetings, annual business reports, including non-consolidated and consolidated financial reports, and notices of resolutions adopted at the shareholders’ meetings, ~~all of which are~~ in ~~Japanese.~~Japanese and English translation. Such notices as described above may be given by electronic means to those shareholders who have agreed to such method of notice.

~~• Record Date~~

•

Record Date

In addition to the record dates for an ordinary general meeting of shareholders and annual and interim dividends which are provided for in our Articles of Incorporation, by a resolution of the board of directors and after giving at least two weeks’ prior public notice, we may at any time set a record date in order to determine shareholders who are entitled to certain rights pertaining to the shares.

Under the Book-Entry Law, we are required to give notice of each record date to JASDEC at least two weeks prior to such record date. JASDEC is required to promptly give us notice of the names and addresses of all of our shareholders of record, the numbers of shares held by them and other relevant information as of such record date.

~~• Repurchase by Us of Shares and Treasury Shares~~

•

Repurchase of our Own Shares

Under the Corporation Law, we are generally required to obtain authorization for any acquisition of our own shares by means of:


	(i)	a resolution at a general meeting of shareholders;

	(ii)	a resolution of the board of directors if the acquisition is in accordance with our Articles of Incorporation; or

(iii)

a resolution of the board of directors if the acquisition is to purchase our shares from a subsidiary.

We may only dispose of shares we may so acquire in accordance with the procedures applicable to a new share issuance under the Corporation Law.

Upon due authorization, we may acquire our own shares:

in the case of (i) and (ii) above:

through the stock exchanges on which the shares are listed or the over-the-counter markets on which the shares are traded; or


	•	~~in the case of (i) and (ii) above:~~

by way of tender offer;


	•	~~through the stock exchanges on which the shares are listed or the over-the-counter markets on which the shares are traded; or~~

	•	~~by way of tender offer;~~

in the case of (i) above, from a specific person, but only if our shareholders approve this acquisition by special resolution; and


	•	~~in the case of (i) above, from a specific person, but only if our shareholders approve this acquisition by special resolution; and~~

	•	~~in the case of (iii) above, from the subsidiary.~~

in the case of (iii) above, from the subsidiary.

In the event we are to acquire our own shares from a specific person other than a subsidiary at the price which exceeds market price, each other shareholder may request the directors to acquire the shares held by such shareholder as well.

~~101~~

Acquisitions described in (i) ~~through (iii)~~and (ii) above must satisfy certain other requirements, including that the total amount of the purchase price may not exceed the distributable amount.

~~• Shareholders of Unknown Location~~

•

Shareholders of Unknown Location

We are not required to send a notice to a shareholder if a notice to such shareholder fails to arrive at the registered address of the shareholder in our register of shareholders or at the address otherwise notified to us continuously for five years or more.

In addition, we may dispose of the shares at the then market price of the shares and hold or deposit the proceeds for such shareholder, the location of which is unknown, (i) notices to the shareholders fails to arrive continuously for five years or more at the registered address of the shareholder in our register of shareholders or at the address otherwise notified to us, and (ii) the shareholder fails to receive dividends on the shares continuously for five years or more at the address registered in our register of shareholders or at the address otherwise notified to us.

~~• American Depositary Receipts~~

•

American Depositary Receipts

The current ADS/share ratio is 100 ADSs per each share of common stock.

For further information regarding our American Depositary Receipt program, please refer to the our registration statement filed with the Securities and Exchange Commission onForm 20-F on February 8, 2002.

~~• Reporting of Substantial Shareholdings~~

•

Reporting of Substantial Shareholdings

The Financial Instruments and Exchange ~~Law~~Act of Japan and its related regulations require any person who has become, solely or jointly, a holder of more than 5% of the total issued shares of a company that is listed on any Japanese financial instruments exchange, to file a report with the director of the competent Local Finance Bureau of the Ministry of Finance within five business days from the date of becoming such holder. With certain exceptions, a similar report must also be filed in respect of any subsequent change of 1% or more in the holding or of any change specified in the ordinance in material matters set out in any previously-filed reports. For this purpose, shares issuable upon exercise of stock acquisition rights are taken into account in determining both the number of shares held by the holder and the issuer’s total issued shares. Copies of each report must also be furnished to the issuer of the shares and to all Japanese financial instruments exchanges on which the shares are listed. These reports are made available for public inspection.

~~• Daily Price Fluctuation Limits under Japanese Financial Instruments Exchange Rules~~

•
Daily Price Fluctuation Limits under Japanese Financial Instruments Exchange Rules

Share prices on Japanese financial instruments exchanges are determined on a real-time basis by the equilibrium between bids and offers. These exchanges set daily price limits, which limit the maximum range of fluctuation within a single trading day. Daily price limits are set according to the previous day’s closing price or special quote. Although transactions may continue at the upward or downward limit price if the limit price is reached on a particular trading day, no transactions may take place outside these limits. Consequently, an investor wishing to sell at a price above or below the relevant daily limit may not be able to sell his or her shares at such price on a particular trading day, or at all.

~~102~~

On June ~~11, 2010,~~9, 2011, the closing price of our shares on the Tokyo Stock Exchange was ~~¥133,300~~¥146,000 per share. The following table shows the daily price limit for a stock on the Tokyo Stock Exchange with a closing price of between ¥100,000 and ¥150,000 per share, as well as the daily price limit if our per share price were to rise to between ¥150,000 and ¥200,000, or fall to between ¥70,000 and ¥100,000.

Selected Daily Price Limits

Maximum Daily Price
Previous Day’s Closing Price or Special Quote Movement

Over ¥ 70,000 Less than ¥ 100,000 ¥ 15,000
Over 100,000 Less than 150,000 30,000
Over 150,000 Less than 200,000 40,000


Previous Day’s Closing Price or Special Quote					Maximum Daily Price Movement
Over	¥ 70,000	Less than	¥	100,000	¥	15,000
Over	100,000	Less than		150,000		30,000
Over	150,000	Less than		200,000		40,000

For a history of the trading price of our shares on the Tokyo Stock Exchange, see Item 9.A.

C.
C.	Material Contracts

We have not entered into any material contracts (which would present any significant impact on our financial condition), other than in the ordinary course of business.

D.
D.	Exchange Controls

There are no laws, decrees, regulations or other legislation which materially affect our ability to import or export capital for our use or our ability to pay dividends to nonresident holders of our shares.

E.
E.	Taxation


1.	~~United States Federal Income Taxation~~

1. United States Federal Income Taxation

This section describes the material United States federal income tax consequences of owning shares or ADSs. It applies to you only if you are a U.S. holder (as defined below) and hold your shares or ADSs as capital assets for tax purposes. This section does not apply to you if you are a member of a special class of holders subject to special rules, including:

a dealer in securities;

a trader in securities that elects to use a mark-to-market method of accounting for securities holdings;


	•	~~a dealer in securities;~~

	•	~~a trader in securities that elects to use a mark-to-market method of accounting for securities holdings;~~

	•	~~a tax-exempt organization;~~

	•	~~a life insurance company;~~

	•	~~a person liable for alternative minimum tax;~~

	•	~~a person that actually or constructively owns 10% or more of our voting stock;~~

	•	~~a person that holds shares or ADSs as part of a straddle or a hedging or conversion transaction; or~~

	•	~~a person whose functional currency is not the U.S. dollar.~~

a tax-exempt organization;

a life insurance company;

a person liable for alternative minimum tax;

a person that actually or constructively owns 10% or more of our voting stock;

a person that holds shares or ADSs as part of a straddle or a hedging or conversion transaction; or

a person whose functional currency is not the U.S. dollar.

This section is based on the Internal Revenue Code of 1986, as amended, its legislative history, existing and proposed regulations, published rulings and court decisions, all as currently in effect, as well as on the Convention Between the Government of the United States of America and the Government of the Japan for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with ~~respect~~Respect to Taxes on Income (the “Treaty”). These laws are subject to change, possibly on a retroactive basis. In addition, this section is based in part upon the representations of The Bank of New York Mellon as depositary and the assumption that each obligation in the deposit agreement and any related agreement will be performed in accordance with its terms.

If a partnership holds shares or ADSs, the United States federal income tax treatment of a partner will generally depend on the status of the partner and the tax treatment of the partnership. A partner in a partnership holding the

~~103~~

shares or ADSs should consult its tax advisor with regard to the United States federal income tax treatment of an investment in shares or ADSs.

In general, and taking into account ~~this assumption,~~the earlier assumptions, for United States federal income tax purposes, if you hold ADRs evidencing ADSs, you will be treated as the owner of the shares represented by those ADRs. Exchanges of shares for ADRs, and ADRs for shares, generally will not be subject to United States federal income tax.

You are a U.S. holder if you are a beneficial owner of shares or ADSs and you are for United States federal income tax purposes:

a citizen or resident of the United States;

a domestic corporation;


	•	~~a citizen or resident of the United States;~~

	•	~~a domestic corporation;~~

	•	~~an estate whose income is subject to United States federal income tax regardless of its source; or~~

	•	a trust if a United States court can exercise primary supervision over the trust’s administration and one or more United States persons are authorized to control all substantial decisions of the trust.

an estate whose income is subject to United States federal income tax regardless of its source; or

a trust if a United States court can exercise primary supervision over the trust’s administration and one or more United States persons are authorized to control all substantial decisions of the trust.

You should consult your own tax advisor regarding the United States federal, state and local and the Japanese and other tax consequences of owning and disposing of shares and ADSs in your particular circumstances.


2.	~~Taxation of Dividends~~

2. Taxation of Dividends

Under the United States federal income tax laws, and subject to the passive foreign investment company rules discussed below, if you are a U.S. holder, the gross amount of any dividend paid by us out of our current or accumulated earnings and profits (as determined for United States federal income tax purposes) is subject to United States federal income taxation. If you are a non corporate U.S. holder, dividends paid to you in taxable years beginning before January 1, ~~2011~~2013 that constitute qualified dividend income will be taxable to you at a maximum tax rate of 15% provided that you hold the shares or ADSs for more than 60 days during the121-day period beginning 60 days before the ex-dividend date and meet other holding period requirements. Dividends paid by us with respect to our shares or ADSs generally will be qualified dividend income. You must include any Japanese tax withheld from the dividend payment in this gross amount even though you do not in fact receive it. The dividend is taxable to you when you, in the case of shares, or the depositary, in the case of ADSs, receive the dividend, actually or constructively. The dividend will not be eligible for the dividends-received deduction generally allowed to United States corporations in respect of dividends received from other United States corporations. The amount of the dividend distribution that you must include in your income as a U.S. holder will

be the U.S. dollar value of the Japanese yen payments made, determined at the spot Japanese yen/U.S. dollar rate on the date the dividend distribution is includible in your income, regardless of whether the payment is in fact converted into U.S. dollars. Generally, any gain or loss resulting from currency exchange fluctuations during the period from the date you include the dividend payment in income to the date you convert the payment into U.S. dollars will be treated as ordinary income or loss and will not be eligible for the special tax rate applicable to qualified dividend income. The gain or loss generally will be income or loss from sources within the United States for foreign tax credit limitation purposes. Distributions in excess of current and accumulated earnings and profits, as determined for United States federal income tax purposes, will be treated as a nontaxable return of capital to the extent of your basis in the shares or ADSs and thereafter as capital gain.

Subject to certain limitations, the Japanese tax withheld in accordance with the Treaty and paid over to Japan will be creditable or deductible against your United States federal income tax liability. To the extent a refund of the tax withheld is available to you under Japanese law or under the Treaty, the amount of tax that is refundable will not be eligible for credit against your United States federal income tax liability. Please see “Japanese Taxation”, below, for the procedures for obtaining a reduced rate of withholding under the Treaty or a tax refund. In addition, special rules apply in determining the foreign tax credit limitation with respect to dividends that are subject to the maximum 15% tax rate. Dividends will be income from sources outside the United States and will, depending on your circumstances, generally be either “passive” or “general” income for purposes of computing the foreign tax credit allowable to you.

~~104~~

Distributions of additional shares or ADSs to you with respect to shares or ADSs that are made as part of apro ratadistribution to all of our shareholders generally will not be subject to United States federal income tax. Your basis in the new shares or ADSs received will be determined by allocating your basis in the shares or ADSs you held at the time of the distribution between the new shares or ADSs and the shares or ADSs you held at the time of the distribution based on their relative fair market values on the date of the distribution.

~~• Taxation of Capital Gains~~

•

Taxation of Capital Gains

Subject to the passive foreign investment company rules discussed below, if you are a U.S. holder and you sell or otherwise dispose of your shares or ADSs, you will recognize capital gain or loss for the United States federal income tax purposes equal to the difference between the U.S. dollar value of the amount that you realize and your tax basis, determined in U.S. dollars, in your shares or ADSs. Capital gain of a non-corporate U.S. holder recognized in taxable years beginning before January 1, 2013 is generally taxed at preferential rates where the property is held for more than one year. The gain or loss will generally be income or loss from sources within the United States for foreign tax credit limitation purposes.

~~• Passive Foreign Investment Company Rules~~

•

Passive Foreign Investment Company Rules

We do not expect our shares and ADSs to be treated as stock of a passive foreign investment company, or “PFIC,” for United States federal income tax purposes, but this conclusion is a factual determination that is made annually and thus may be subject to change. If we were to be treated as a PFIC, unless a U.S. holder elects to be taxed annually on a mark-to-market basis with respect to the shares or ADSs, gain realized on the sale or other disposition of your shares or ADSs would in general not be treated as capital gain. Instead, if you are a U.S. holder, you would be treated as if you had realized such gain and certain “excess distributions” ratably over your holding period for the shares or ADSs and would be taxed at the highest tax rate in effect for each such year to which the gain was allocated, together with an interest charge in respect of the tax attributable to each such year. With certain exceptions, your shares or ADSs will be treated as stock in a PFIC if we were a PFIC at any time during your holding period in your shares or ADSs. In addition, dividends that you receive from us will not be eligible for the special tax rates applicable to qualified dividend income if we are treated as a PFIC with respect to you either in the taxable year of the distribution or the preceding taxable year, but instead will be taxable at rates applicable to ordinary income.

~~If you own shares or ADSs during any year that we are a PFIC with respect to you, you must file Internal Revenue Service Form 8621.~~


3.	~~Japanese Taxation~~

3. Japanese Taxation

The following is a summary of the principal Japanese tax consequences to owners of our shares or ADSs who are non-resident individuals or non-Japanese corporations without a permanent establishment in Japan to which income from our shares is attributable. The tax treatment is subject to possible changes (including changes that may be introduced if a bill currently proposed by the Japanese government is made into law) in the applicable Japanese laws or double taxation conventions occurring after that date. This summary is not exhaustive of all possible tax considerations that may apply to a particular investor. Potential investors should consult their own tax advisors as to:

the overall tax consequences of the acquisition, ownership and disposition of shares or ADSs, including specifically the tax consequences under Japanese law;

the laws of the jurisdiction of which they are resident; and


	•	~~the overall tax consequences of the acquisition, ownership and disposition of shares or ADSs, including specifically the tax consequences under Japanese law;~~

	•	~~the laws of the jurisdiction of which they are resident; and~~

	•	~~any tax treaty between Japan and their country of residence.~~

any tax treaty between Japan and their country of residence.

Generally, a non-resident individual or a non-Japanese corporation as a holder of shares or ADSs is subject to Japanese withholding tax on dividends paid by us. In the absence of any applicable tax treaty, convention or agreement reducing the maximum rate of withholding tax, the rate of Japanese withholding tax applicable to dividends paid by us to a non-resident individual of Japan or a non-Japanese corporation is 20%. With respect to dividends paid on listed shares issued by a Japanese corporation (such as our shares) to a non-resident individual of Japan or a non-Japanese corporation, the aforementioned 20% withholding tax rate is reduced to (i) 7% for dividends to be ~~paid until~~due and payable on or before December 31, ~~2011,~~2013, and (ii) 15% for dividends to be ~~paid thereafter, except~~due and payable thereafter. This tax reduction is not available for ~~dividends paid to any~~a non-resident individual ~~shareholder~~ who holds ~~5% or more~~a certain ratio (or more) of the issued shares of ~~that corporation.~~a Japanese corporation, such ratio being 5% with respect to dividends to be due and payable on or before September 30, 2011 and 3% thereafter. Japan has ~~entered into~~ income tax treaties ~~conventions or agreements,~~ whereby the ~~maximum~~above-mentioned withholding tax rate is reduced, generally ~~set at~~

~~105~~

to 15% for portfolio investors with, among others, ~~Australia,~~ Belgium, Canada, Denmark, Finland, Germany, Ireland, Italy, Luxembourg, the Netherlands, New Zealand, Norway, Singapore, Spain, Sweden, and ~~Switzerland. Pursuant to~~Switzerland, while the ~~Convention Between~~income tax treaties with Australia, France, the United Kingdom and the United States ~~of America and Japan~~generally reduce the withholding tax rate to 10% for ~~the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, a~~ portfolio ~~investor that is a U.S. holder that is eligible for benefits~~investors. In addition, under the ~~treaty is generally subject to Japanese withholding tax on dividends on shares at a rate of 10%. A similar withholding tax treatment applies under the~~income tax treaty between the United ~~Kingdom~~States and Japan, ~~for~~ dividends ~~at 10%, under~~paid to pension funds of qualified United States residents eligible to enjoy treaty benefits are exempt from Japanese income taxation by way of withholding or otherwise unless such dividends are derived from the carrying on of a business, directly or indirectly, by such pension funds. Under the income tax treaty between ~~France~~Japan and ~~Japan for portfolio investors on dividends taxed at 10%. In addition, under~~ the ~~tax treaty between Australia and Japan, the standard treaty withholding rate on dividends taxed on or after January 1, 2009 has been reduced in general from 15%~~United Kingdom, similar treatment will be applied to ~~10%.~~dividends. Under Japanese tax law, ~~the~~any reduced maximum rate applicable under ~~the~~a tax ~~treaties, conventions or agreements~~treaty shall be ~~applicable, subject to completion of below-described application procedures, except~~available when such maximum rate is ~~higher than~~below the rate otherwise applicable under the Japanese ~~statutory rate.~~

tax law referred to in the preceding paragraph with respect to the dividends to be paid by us on the shares.

Non-resident holders who are entitled to a reduced rate of Japanese withholding tax on payments of dividends on the shares by us are required to submit an Application Form for the Income Tax Convention regarding Relief from Japanese Income Tax on Dividends in advance through us to the relevant tax authority before the payment of dividends. A standing proxy for non-resident holders may provide the application. With respect to ADSs, this reduced rate is applicable if the depositary or its agent submits in duplicate two Application Forms for Income Tax Convention (one is FORM 4 subtitled “Extension of Time for Withholding of Tax on Dividends with respect to Foreign Depositary Receipt” to the payer of dividends, who has to file the original with the district director of tax office for the place where the payer resides, by the day before the payment of dividends and the other is FORM 5 subtitled “Relief from Japanese Income Tax on Dividends with respect to Foreign Depositary Receipt” to the district director of tax office through the payer of Dividends in eight months from the day following the base date of payment of dividends for application purposes for which FORM 4 has been submitted). To claim this reduced rate, a non-resident holder of ADSs will be required to file proof of taxpayer status, residence and beneficial ownership (as applicable) and to provide other information or documents as may be required by the depositary. Non-resident holders who do not submit an application in

advance will generally be entitled to claim a refund from the relevant Japanese tax authority of withholding taxes withheld in excess of the rate of an applicable tax treaty.

Gains derived from the sale of shares or ADSs outside Japan, or from the sale of shares within Japan by a nonresident holder, generally are not subject to Japanese income or corporation taxes provided that such gains are from portfolio investments where the shareholding ratio is within certain prescribed level.

Japanese inheritance and gift taxes at progressive rates may be payable by an individual who has acquired shares or ADSs as a legatee, heir or donee, even if the individual is not a Japanese resident.

F.
F.	Dividends and Paying Agents

Not applicable.

G.
G.	Statement by Experts

Not applicable.

H.
H.	Documents on Display

We have filed with the SEC this annual report onForm 20-F under the Securities Exchange Act of 1934 with respect to our shares and ADSs.

You may review a copy of the annual report and other information without charge at the SEC’s public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may also ~~get~~obtain copies of all or any portion of the annual report from the public reference room. For information regarding the procedures of the public reference room, please call the SEC at1-800-SEC-0330. The ~~Securities and Exchange Commission~~SEC also maintains a web site at www.sec.gov that contains reports, proxy statements and other information regarding registrants that file electronically with the ~~Securities and Exchange Commission.~~

~~106~~

SEC.

As a foreign private issuer, we are exempt from the rules under the Securities Exchange Act of 1934 prescribing the furnishing and content of proxy statements to shareholders.

I.
I.	Subsidiary Information

Not applicable.


~~Item 11.~~	*~~Quantitative and Qualitative Disclosures about Market Risk~~*

Item 11. Quantitative and Qualitative Disclosures about Market Risk

We are primarily exposed to market risks from changes in interest rates, foreign currency exchange rates and stock prices. The fair value of our assets and liabilities, ~~and~~ our earnings and cash flows may be negatively impacted by these market risks.

To manage these risks, ~~of fluctuating interest rates and foreign currency exchange rates,~~ we use derivative instruments such as interest rate swap agreements, foreign exchange forward contracts, ~~and~~ foreign currency option contracts, ~~etc~~etc. as needed. The derivative instruments are executed with creditworthy financial institutions and our management believes that there is little risk of default by these counterparties. We set and follow internal regulations that establish conditions to enter into derivative contracts and procedures offor approving and monitoring such contracts. We do not hold or issue derivative instruments for trading purposes.

No specific hedging activities are taken against the ~~price~~fluctuations in prices of ~~fluctuations of stocks held by us as~~ marketable securities.

Interest rate risk

We use interest rate swap transactions, under which we receive fixed rate interest payments and pay floating rate interest payments, to hedge the changes in fair value of certain debt as a part of our asset-liability management (“ALM”).

The following table below provides information about financial instruments that are sensitive to changes in interest rates:

Weighted

Average

Interest
Fair
Rate (per
Expected Maturity (Year Ending March 31) value
annum) 2011 2012 2013 2014 2015 Thereafter Total 3/31/10
(Millions of yen)

DEBT

Corporate bonds
Japanese Yen Bonds 1.2 % 163,630 168,467 60,000 70,000 — 110,000 572,097 583,109
Borrowings from banks and others
Japanese Yen Loans 1.4 % 17,000 6,000 15,000 — — — 38,000 38,684
Euro Loans 4.6 % 86 86 — — — — 172 173
Long term debt, including current portion Total 180,716 174,553 75,000 70,000 — 110,000 610,269 621,966

Expected Maturity and Weighted Average Interest Rate (per annum)
Fair
(Year Ending March 31) value
2011 2012 2013 2014 2015 Thereafter Total 3/31/10
(Millions of yen)

INTEREST RATE SWAP AGREEMENTS

Fixed to Floating (Japanese Yen)
Notional Amount 70,000 165,800 — — — — 235,800 3,297
Fixed receive rate 1.4 % 1.6 % — — — — 1.5 %
Floating pay rate 0.5 % 0.8 % — — — — 0.7 %

~~107~~


	Weighted Average Interest Rate (per annum)			Millions of yen
				Expected Maturity														Fair value 3/31/11
				Year ending March 31,
				2012		2013		2014		2015		2016		Thereafter		Total
DEBT
Corporate bonds Japanese Yen Bonds		1.2	%		167,032		60,000		70,000		—		—		110,000		407,032		417,139
Borrowings from banks and others
Japanese Yen Loans		1.4	%		6,000		15,000		—		—		—		—		21,000		21,274
Euro Loans		2.4	%		70		—		—		—		—		—		70		70
Long term debt, including current portion Total					173,102		75,000		70,000		—		—		110,000		428,102		438,483

				Millions of yen
				Expected Maturity and Weighted Average Interest Rate (per annum)														Fair value 3/31/11
				Year ending March 31,
				2012		2013		2014		2015		2016		Thereafter		Total
INTEREST RATE SWAP AGREEMENTS
Fixed to Floating (Japanese Yen)
Notional Amount					165,800		—		—		—		—		—		165,800		1,232
Fixed receive rate					1.6%		—		—		—		—		—		1.6%
Floating pay rate					0.7%		—		—		—		—		—		0.7%

Foreign exchange risk

In order to ~~decrease~~mitigate foreign currency risks we engage in foreign currency hedge and option transactions. As of March 31, ~~2010,~~2011, the foreign exchange forward contracts outstanding totaled ~~¥4,478~~¥4,296 million, ~~and had a fair value~~with an unrealized loss of ~~¥108~~¥154 million. As of March 31, ~~2010,~~2011, the foreign currency option transaction contracts outstanding totaled ~~¥21,285~~¥15,143 million, ~~and had a fair value~~with an unrealized loss of ~~¥1,552~~¥1,859 million.

Investment price risk

The fair values of a certain investments of ours, primarily in marketable securities, expose us to fluctuation risks of securities prices. In general, we have invested in highly-liquid and low-risk instruments, which are not held for trading purposes. These investments are subject to changes in the market prices of the securities. The following table below provides information about our market sensitive marketable ~~securities and constitutes a “forward-looking statement.”~~

March 31,
2010
Carrying
Fair
Amount Value
(Millions of yen)

Equity securities available-for-sale 136,627 136,627
Debt securities available-for-sale:
Due within 1 year — —
Due after 1 year through 5 years 4 4
Due after 5 years through 10 years — —
Due after 10 years — —
Total 136,631 136,631

securities:


	Millions of yen
	March 31, 2011
	Carrying Amount		Fair Value
Equity securities available-for-sale		117,759		117,759
Debt securities available-for-sale:
Due within 1 year		—		—
Due after 1 year through 5 years		4		4
Due after 5 years through 10 years		—		—
Due after 10 years		—		—

Total		117,763		117,763

Concentrations of credit risk

As of March 31, ~~2010,~~2011, we did not have any significant concentration of business transacted with an individual counterparty or groups of counterparties that could, if suddenly eliminated, severely impact our operations.

~~108~~

Item 12. Description of Securities Other Than Equity Securities


~~Item 12.~~	*~~Description of Securities Other Than Equity Securities~~*

Fees payable by ADR Holders

The following table shows the fees and charges that a holder of our ADR may have to pay, either directly or indirectly:


Services		Fees[USD]
~~Services~~		~~Fees[USD]~~

Taxes and other governmental charges		As applicable

Such registration fees as may from time to time be in effect for the registration of transfers of Shares generally on the Share register of the Issuer or Foreign Registrar and applicable to transfers of Shares to the name of the Depositary or its nominee or the Custodian or its nominee on the making of deposits or withdrawals hereunder		As applicable

Such cable, telex and facsimile transmission expenses as are expressly provided in this Deposit Agreement		As applicable

Such expenses as are incurred by the Depositary in the conversion of Foreign Currency		As applicable

The execution and delivery of Receipts and the surrender of Receipts		$5.00 or less per 100 ADR

Any cash distribution made pursuant to the Deposit Agreement		$.02 or less per ADR

The distribution of securities, such fee being in an amount equal to the fee for the execution and delivery of American Depositary Shares referred to above which would have been charged as a results of the deposit of such securities, but which securities are instead distributed by the Depositary to ~~Owners~~Owners.		As applicable

Fees paid to DOCOMO by the Depositary

The Bank of New York Mellon, as Depositary, has agreed to reimburse DOCOMO for the New York Stock Exchange listing fees of $38,000 for the calendar year 2010. Furthermore, from April 1, ~~2009~~2010 to March 31, ~~2010,~~2011, the Bank of New York Mellon has waived a total of ~~$133~~$131 thousand in fees associated with the administration of the ADR program, investor relations expenses and administrative fees for routine corporate actions such as, among others, proxy process fees and cash distribution process fees, in addition to their standard fees for providing investor relations information services.

PART II
Item 13. Defaults, Dividend Arrearages and Delinquencies


~~Item 13.~~	*~~Defaults, Dividend Arrearages and Delinquencies~~*

None.


~~Item 14.~~	*~~Material Modifications to the Rights of Security Holders and Use of Proceeds~~*

Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds

None.


~~Item 15.~~	*~~Controls and Procedures~~*


1.	~~Disclosure Controls and Procedures~~

Item 15. Controls and Procedures

1. Disclosure Controls and Procedures

The Company’s management carried out an evaluation, with the participation of the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of March 31, ~~2010~~2011 pursuant to the U.S. Securities Exchange Act of 1934. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that our disclosure controls and procedures as of March 31, ~~2010~~2011 were effective.

~~109~~

2. Management’s Report on Internal Control over Financial Reporting

2. ~~Management’s Report on Internal Control over Financial Reporting~~
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting as defined inRule 13a-15(f) under the U.S. Securities Exchange Act of 1934. Internal control over financial reporting of the Company is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.
Because of its inherent limitations, however, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness of internal control to future periods are subject to risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
The Company’s management evaluated the effectiveness of the Company’s internal control over financial reporting as of March 31, ~~2010~~2011 by using the criteria set forth in Internal ~~Control —~~ Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based upon this evaluation, our management concluded that the Company’s internal control over financial reporting as of March 31, ~~2010~~2011 was effective.
Our independent registered public accounting firm, KPMG AZSA ~~& Co.,~~LLC, has issued an audit report on the effectiveness of our internal control over financial reporting as of March 31, ~~2010,~~2011, which appears onpage F-3 of this annual report onForm 20-F.
3. Changes in Internal Control over Financial Reporting
3. ~~Changes in Internal Control over Financial Reporting~~
There has been no change in our internal control over financial reporting that occurred during the year ended March 31, ~~2010~~2011 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
~~Item 16A.~~ ~~Audit Committee Financial Expert~~
Item 16A. Audit Committee Financial Expert
Our board of corporate auditors has resolved to elect ~~Mr. Yoshitaka Makitani and Mr. Takaaki Wakasugi~~Ms. Eiko Tsujiyama as an “audit committee financial ~~experts”~~expert” within the meaning of the rules of the Securities and Exchange Commission. In addition, ~~Mr. Makitani and Mr. Wakasugi are~~Ms. Tsujiyama is an outside corporate ~~auditors~~auditor under the Corporation Law and ~~are~~is independent from us.
~~Item 16B.~~ ~~Code of Ethics~~
Item 16B. Code of Ethics
We have a code of ethics that applies to our chief executive officer, chief financial officer and other senior officers in order to promote honesty, integrity, transparency, and ethical conduct in such persons’ performance of their management responsibilities. Our code of ethics, as of June ~~24, 2010,~~23, 2011, is attached to this annual report onForm 20-F as exhibit 11.1.

~~Item 16C.~~
~~Principal Accountant Fees and Services~~

Item 16C. Principal Accountant Fees and Services

Fees Paid to the Independent Auditor

The Company and its subsidiaries engaged KPMG AZSA ~~& Co.~~LLC to perform an annual audit of the Company’s financial statements. Audit fees and audit-related fees paid to KPMG AZSA ~~& Co.~~LLC and its affiliates for the year ended March 31, ~~2010~~2011 were ~~¥892~~¥888 million. In addition, the fees other than audit fees and audit-related fees we paid to KPMG AZSA ~~& Co.~~LLC and its affiliates were ~~¥26~~¥84 million as tax ~~fees.~~

~~110~~

fees, etc.

The following table presents information concerning fees paid to KPMG AZSA ~~& Co.~~LLC and its affiliates for the years ended March 31, ~~2009~~2010 and ~~2010.~~

Year ended

March 31,
2009 2010
(in millions)

Audit fees⁽¹⁾
¥ 920 ¥ 892
Audit-related fees⁽²⁾
4 —
Tax fees⁽³⁾
49 26
All other fees⁽⁴⁾
— —

Total ¥ 973 ¥ 918

2011.


	Millions of yen
	Year ended March 31,
	2010		2011
Audit fees⁽¹⁾	¥	892	¥	888
Audit-related fees⁽²⁾		—		—
Tax fees⁽³⁾		26		27
All other fees⁽⁴⁾		—		57

Total	¥	918	¥	972


(1)		These are fees for professional services performed by KPMG AZSA ~~& Co.~~LLC and its affiliates for the audit of the Company and its subsidiaries’ annual financial statements and services that are normally provided in connection with statutory and regulatory filings.

(2)		These are fees for assurance and related services rendered by these accountants that are reasonably related to the performance of the audit or review of the Company’s and its subsidiaries’ financial statements ~~such as the issuance of comfort letters in connection with corporate bond offerings,~~ and ~~that~~ are not reported under audit fees.

(3)		These are fees for professional services ~~performed~~rendered by KPMG ~~AZSA & Co. and its affiliates tax division except those related to the audit and includes~~for tax returns and tax ~~consultations.~~consultation services.

(4)

These are fees for the services provided by KPMG AZSA ~~& Co.~~LLC and its affiliates, other than the fees reported in paragraphs (1) through (3)., such as providing guidance and counsel on International Financial Reporting Standards.

Pre-Approval of Services Provided by KPMG AZSA ~~& Co.~~LLC and its affiliates

The Company and its subsidiaries have adopted policies and procedures for the Company’s board of ~~directors~~directors’ and the board of corporate auditors’ pre-approving all audit and non-audit work performed by KPMG AZSA ~~& Co.~~LLC and its affiliates. Specifically, the policies and procedures prohibit KPMG AZSA ~~& Co.~~LLC and its affiliates from performing any services for the Company or its subsidiaries without the prior approval of the Company’s board of directors and the board of corporate auditors.

All of the services provided by KPMG AZSA ~~& Co.~~LLC and its affiliates sinceRule 2-01(c)(7) ofRegulation S-X became effective were approved by the Company’s board of directors and the board of corporate auditors pursuant to the approval policies described above, and none of such services were approved pursuant to the procedures described inRule 2-01(c)(7)(i)(C) ofRegulation S-X, which waives the general requirement for pre-approval in certain circumstances.


~~Item 16D.~~	*~~Exemptions from the Listing Standards for Audit Committees~~*

Item 16D. Exemptions from the Listing Standards for Audit Committees

With respect to the requirements ofRule 10A-3 under the Securities Exchange Act of 1934 relating to listed company audit committees, which apply to us through Section 303A.06 of the New York Stock Exchange’s Listed Company Manual, we rely on an exemption provided by paragraph (c)(3) of that Rule available to foreign private issuers with boards of corporate auditors meeting certain requirements. For a New York Stock Exchange-listed Japanese company with a board of corporate auditors, the requirements for relying on paragraph (c)(3) ofRule 10A-3 are as follows:


	•	The board of corporate auditors must be established, and its members must be selected, pursuant to Japanese law ~~expressly~~ requiring such a board for Japanese companies that elect to have a corporate governance system with corporate auditors.

	•	Japanese law must and does require the board of corporate auditors to be separate from the board of directors.

	•	None of the members of the board of corporate auditors may be elected by management, and none of the listed company’s executive officers may be a member of the board of corporate auditors.

•

Japanese law must and does set forth standards for the independence of the members of the board of corporate auditors from the listed company or its management.

~~111~~


	•	The board of corporate auditors, in accordance with Japanese law or the listed company’s governing documents, must be responsible, to the extent permitted by Japanese law, for the appointment, retention and oversight of the work of any registered public accounting firm engaged (including, to the extent permitted by Japanese law, the resolution of disagreements between management and the auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the listed company, including its principal accountant which audits its consolidated financial statements included in its annual reports onForm 20-F.

•

To the extent permitted by Japanese law:

the board of corporate auditors must establish procedures for (i) the receipt, retention and treatment of complaints received by the listed company regarding accounting, internal accounting controls, or auditing matters, and (ii) the confidential, anonymous submission by the listed company’s employees of concerns regarding questionable accounting or auditing matters;


	•	the board of corporate auditors must establish procedures for (i) the receipt, retention and treatment of complaints received by the listed company regarding accounting, internal accounting controls, or auditing matters, and (ii) the confidential, anonymous submission by the listed company’s employees of concerns regarding questionable accounting or auditing matters;

	•	~~the board of corporate auditors must have the authority to engage independent counsel and other advisers, as it determines necessary to carry out its duties; and~~

	•	the listed company must provide for appropriate funding, as determined by its board of corporate auditors, for payment of (i) compensation to any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the listed company, (ii) compensation to any advisers employed by the board of corporate auditors, and (iii) ordinary administrative expenses of the board of corporate auditors that are necessary or appropriate in carrying out its duties.

the board of corporate auditors must have the authority to engage independent counsel and other advisers, as it determines necessary to carry out its duties; and

the listed company must provide for appropriate funding, as determined by its board of corporate auditors, for payment of (i) compensation to any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the listed company, (ii) compensation to any advisers employed by the board of corporate auditors, and (iii) ordinary administrative expenses of the board of corporate auditors that are necessary or appropriate in carrying out its duties.

In our assessment, our board of corporate auditors, which meets the requirements for reliance on the exemption in paragraph (c)(3) ofRule 10A-3 described above, is not ~~materially less effective than~~significantly different from an audit committee meeting all the requirements of paragraph (b) ofRule 10A-3 (without relying on any exemption provided by that Rule) at acting independently of management and performing the functions of an audit committee as contemplated therein.


~~Item 16E.~~	*~~Purchases of Equity Securities by Issuer and Affiliated Purchasers~~*

Item 16E. Purchases of Equity Securities by Issuer and Affiliated Purchasers

ISSUER PURCHASES OF EQUITY SECURITIES

(c) Total Number
(d) Maximum
of
Number
(a) Total
Shares Purchased as
of Shares that May
Number of
Part of Publicly
Yet Be Purchased
Shares
(b) Average Price
Announced Plans
Under the Plans or
Period Purchased Paid per Share or Programs Programs*

April 2009
(from April 1 to April 30) 0 — 0 354,917
May 2009
(from May 1 to May 31) 0 — 0 354,917
June 2009
(from June 1 to June 30) 0 — 0 354,917
July 2009
(from July 1 to July 31) 0 — 0 0
August 2009
(from August 1 to August 31) 0 — 0 0
September 2009
(from September 1 to September 30) 0 — 0 0
October 2009
(from October 1 to October 31) 0 — 0 0
November 2009
(from November 1 to November 30) 154,065 129,815 154,065 5,935
December 2009
(from December 1 to December 31) 0 — 0 0

~~112~~


Period	(a) Total Number of Shares Purchased		(b) Average Price Paid per Share (yen)		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		(d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs^*
April 2010 (from April 1 to April 30)		0		—		0		0
May 2010 (from May 1 to May 31)		0		—		0		0
June 2010 (from June 1 to June 30)		0		—		0		0
July 2010 (from July 1 to July 31)		0		—		0		0
August 2010 (from August 1 to August 31)		0		—		0		0
September 2010 (from September 1 to September 30)		0		—		0		0
October 2010 (from October 1 to October 31)		0		—		0		0
November 2010 (from November 1 to November 30)		0		—		0		0
December 2010 (from December 1 to December 31)		22,155		143,026		22,155		137,845
January 2011 (from January 1 to January 31)		115,986		145,114		115,986		0
February 2011 (from February 1 to February 28)		0		—		0		0
March 2011 (from March 1 to March 31)		0		—		0		0

Total		138,141		144,779		138,141		—


*		The ~~numbers from April 1~~company announced a share purchase plan, which was approved by the Board of Directors on December 17, 2010, authorizing the repurchase of up to ~~June 30, 2009 for maximum number of shares to be purchased, described in column (d), are based on the~~an aggregate number of shares authorized at the general shareholders meeting held on June 20, 2008. The number for maximum number of shares to be purchased in November 2009, described in column (d), is based on the maximum number of 160,000 shares ~~authorized at~~and up to an aggregate purchase price of 20 billion yen from December 20, 2010 to January 28, 2011. On January 26, 2011, the ~~board~~aggregate price of ~~directors meeting held on November 9, 2009.~~share repurchases reached 19,999,930,791 yen, and thus the share repurchases were concluded in accordance with the aforesaid resolution.

Item 16F. Change in Registrant’s Certifying Accountant

Not applicable.

Item 16G. Corporate Governance


~~Item 16F.~~•		*~~Change in Registrant’s Certifying Accountant~~Committees*

~~Not applicable.~~


~~Item 16G.~~	*~~Corporate Governance~~*

~~• Committees~~

Under the Corporation Law, Japanese joint stock corporations (~~kabushiki kaisha~~)(kabushiki kaisha) above a certain size whose shares are transferable without the approval of such corporations, including the Company, may elect to structure their corporate governance system to be either that of a company with a board of corporate auditors (~~kansayakukai secchigaisha~~)(kansayakukai secchigaisha) or that of a company with committees (~~iinkai secchigaisha~~)(iinkai secchigaisha). The Company is currently a company with a board of corporate auditors.

As a company with a board of corporate auditors, the Company is not required under the Corporation Law to have any outside directors on its board of directors. The tasks of auditing the performance of its directors and auditing the Company’s financial statements are assigned to the Company’s corporate auditors, who are separate from the Company’s directors. Under the Corporation Law, at least one half of a company’s corporate auditors are required to be “outside” corporate auditors who must meet certain requirements. An “outside” corporate auditor is defined as a corporate auditor who has never served as a corporate auditor, accounting councilor, executive officer, manager or any other employee of the Company or any of its subsidiaries.

In addition, the Securities Listing Regulations of the Tokyo Stock Exchange (“TSE”) requires the Company as a TSE-listed company to designate at least one “independent” director/corporate auditor. An “independent”

director/corporate auditor is defined as an outside director/corporate auditor who is unlikely to have conflicts of interest with general investors. As of June ~~2010,~~2011, we have appointed ~~one~~two corporate ~~auditor~~auditors as an “independent” director/corporate ~~auditor.~~

~~• Board of Corporate Auditors~~

auditors.

•

Board of Corporate Auditors

Under the corporate auditor system that the Company employs, the board of corporate auditors is a legally separate and independent body from the board of directors. The function of the board of corporate auditors and each corporate auditor is similar to that of independent directors, including those who are members of the audit committee, of a U.S. company: to audit the performance of the directors, and express an opinion if it is the opinion of the board of corporate auditors that the method, or the results, of the audit by the Company’s accounting firm is not suitable and express the reason for such opinion, for the protection of the Company’s shareholders.

~~113~~

Under the Corporation Law, the Company is required to have not less than three corporate auditors. The Articles of Incorporation of the Company permit it to have up to five corporate auditors. Currently, five corporate auditors of the Company have been elected. The term of office of each corporate auditor is ~~for~~ up to four years afterhis/her election, whereas the term of office of each director is ~~for~~ up to two years afterhis/her election.

With respect to the requirements ofRule 10A-3 under the U.S. Securities Exchange Act of 1934, relating to listed company audit committees, the Company relies on an exemption under that rule which is available to foreign private issuers with boards of corporate auditors meeting certain criteria.

~~• Directors~~

•

Directors

The Company’s directors must be elected at a general meeting of shareholders. Its board of directors does not have the power to fill vacancies thereon.

The Company’s corporate auditors must also be elected at a general meeting of shareholders. The Company’s board of directors must obtain the consent of its board of corporate auditors in order to submit a proposal for election of a corporate auditor to a general meeting of shareholders. The board of corporate auditors is also empowered to request that the Company’s directors submit a proposal for election of a corporate auditor to a general meeting of shareholders. All corporate auditors have the right to state their opinion concerning the election of a corporate auditor at the general meeting of shareholders.

~~• Compensation~~

•

Compensation

The maximum aggregate compensation amount for the Company’s directors and that of the Company’s corporate auditors must be, and accordingly has been, approved at a general meeting of shareholders.

The Company must also obtain the approval at a general meeting of shareholders if the Company desires to change such maximum amount of compensation.

The compensation amount for each director is determined by the Company’s President or another director who is delegated to do so by the board of directors, and that for each corporate auditor is determined upon consultation among the corporate auditors.

~~• Shareholder Approval with respect to any Equity Compensation Plan~~

•

Shareholder Approval with respect to any Equity Compensation Plan

Pursuant to the Corporation Law, if the Company desires to adopt an equity compensation plan under which stock acquisition rights are granted on specially favorable conditions (except where such rights are granted to all of its shareholders on apro ratabasis), the Company must approve the said plan by a “special resolution” of a general meeting of shareholders, where the quorum is one-third of the total number of voting rights and the approval of at least two-thirds of the voting rights represented at the meeting is required.

~~Item 17.~~

~~Financial Statements~~

~~In lieu of responding to this item, we have responded to~~ Item ~~18 of this annual report.~~


~~Item 18.~~	*~~Financial Statements~~*

17. Financial Statements

Not applicable.

Item 18. Financial Statements

The information required by this item is set forth beginning onpage F-2 of this annual report.

~~114~~

Item 19. Exhibits


~~Item 19.~~	*~~Exhibits~~*

Exhibit

Number Description

1 .1 Articles of Incorporation of the registrant (English translation)
1 .2 Share Handling Regulations of the registrant (English translation)
1 .3 Regulations of the Board of Directors of the registrant (English translation)
1 .4 Regulations of the Board of Corporate Auditors of the registrant (English translation)*
2 .1 Form of Deposit Agreement among the registrant, The Bank of New York Mellon as Depositary and all owners and holders from time to time of American Depositary Receipts, including the form of American Depositary Receipt (incorporated by reference to Post-Effective Amendment No. 3 to Registration Statement onForm F-6 (File No. 333-9694) filed on May 15, 2002)
11 .1 Code of Ethics**
12 .1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12 .2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13 .1 Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
13 .2 Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350


*Exhibit Number		Description
1.1		Articles of Incorporation of the registrant (English translation)
1.2		Share Handling Regulations of the registrant (English translation)
1.3		Regulations of the Board of Directors of the registrant (English translation)
1.4		Regulations of the Board of Corporate Auditors of the registrant (English translation)^*
2.1		Form of Deposit Agreement among the registrant, The Bank of New York Mellon as Depositary and all owners and holders from time to time of American Depositary Receipts, including the form of American Depositary Receipt (incorporated by reference to Post-Effective Amendment No. 3 to Registration Statement on Form F-6 (File No. 333-9694) filed on May 15, 2002)
11.1		Code of Ethics^**
12.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
13.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350

*	Previously filed with the Securities and Exchange Commission on June 25, 2007 and herein incorporated by reference.

Previously filed with the Securities and Exchange Commission on June 27, 2006 and herein incorporated by reference.

We have not included as exhibits certain instruments with respect to our long-term debt. The amount of debt authorized under each such debt instrument does not exceed 10% or our total assets. We agree to furnish a copy of any such instrument to the Commission upon request.

~~115~~

FeliCa is a registered trademark of Sony Corporation.

Google, Android and Android Market are trademarks of Google Inc.

Wi-Fi is a registered trademark of the Wi-Fi Alliance.

Xperia is a trademark or registered trademark of Sony Ericsson Mobile Communications AB.

Windows Mobile is a trademark or registered trademark of Microsoft Corporation in the U.S. and other countries.

TOUCH WOOD is a registered trademark of Rightning Inc.

BlackBerry, related trademarks and names are the property of Research In Motion Limited and are registered and/or used in the U.S. and countries around the world. Used under license from Research In Motion Limited.

iPhone is a trademark of Apple Inc.

All other trademarks are the property of their respective owners.

NTT DOCOMO, INC. AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE


	Page

Reports of independent registered public accounting firm		F-2
Consolidated balance sheets at March 31, ~~2009~~2010 and ~~2010~~2011		F-4
Consolidated statements of income and comprehensive income for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010~~2011		F-6
Consolidated statements of changes in equity for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010~~2011		F-7
Consolidated statements of cash flows for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010~~2011		F-8
Notes to consolidated financial statements		F-9
Financial statement schedule for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010:~~2011:
Schedule II—Valuation and qualifying accounts
~~Schedule II — Valuation and qualifying accounts~~		~~F-55~~F-56

~~F-1~~

Report of Independent Registered Public Accounting Firm

The Board of Directors and the Shareholders

NTT DOCOMO, INC.:

We have audited the consolidated financial statements of NTT DOCOMO, INC. and subsidiaries as listed in the accompanying index. In connection with our audits of the consolidated financial statements, we also have audited the financial statement schedule as listed in the accompanying index. These consolidated financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of NTT DOCOMO, INC. and subsidiaries as of March 31, ~~2010~~2011 and ~~2009,~~2010, and the results of their operations and their cash flows for each of the years in the three-year period ended March 31, ~~2010,~~2011, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), NTT DOCOMO, INC.’s internal control over financial reporting as of March 31, ~~2010,~~2011, based on criteria established in Internal ~~Control —~~ Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated June ~~18, 2010~~17, 2011 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

(signed) KPMG AZSA ~~& Co.~~

LLC

Tokyo, Japan

June ~~18, 2010~~

~~F-2~~17, 2011

Report of Independent Registered Public Accounting Firm

The Board of Directors and the Shareholders

NTT DOCOMO, INC.:

We have audited NTT DOCOMO, INC.’s internal control over financial reporting as of March 31, ~~2010,~~2011, based on criteria established in Internal ~~Control —~~ Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). NTT DOCOMO, INC.’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting appearing under Item 15. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, NTT DOCOMO, INC. maintained, in all material respects, effective internal control over financial reporting as of March 31, ~~2010,~~2011, based on criteria established in Internal ~~Control —~~ Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of NTT DOCOMO, INC. and subsidiaries as of March 31, ~~2010~~2011 and ~~2009,~~2010, and the related consolidated statements of income and comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended March 31, ~~2010,~~2011, and our report dated June ~~18, 2010~~17, 2011 expressed an unqualified opinion on those consolidated financial statements.

(signed) KPMG AZSA ~~& Co.~~

LLC

Tokyo, Japan

June ~~18, 2010~~

~~F-3~~17, 2011

NTT DOCOMO, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

MARCH 31, ~~2009~~2010 and ~~2010~~2011

Millions of yen
2009 2010

ASSETS

Current assets:

Cash and cash equivalents ¥ 599,548 ¥ 357,715
Short-term investments
Third parties 2,448 313,010
Related parties — 90,000
Accounts receivable
Third parties 822,548 827,052
Related parties 12,515 11,174

Sub-total 835,063 838,226
Less: Allowance for doubtful accounts (15,072 ) (15,633 )

Total accounts receivable, net 819,991 822,593
Credit card receivables 72,996 126,009
Inventories 123,206 141,277
Deferred tax assets 102,903 100,545
Prepaid expenses and other current assets
Third parties 100,764 102,263
Related parties 5,872 7,566

Total current assets 1,827,728 2,060,978

Property, plant and equipment:

Wireless telecommunications equipment 5,361,043 5,478,833
Buildings and structures 814,056 830,921
Tools, furniture and fixtures 519,213 516,084
Land 198,985 199,018
Construction in progress 99,232 83,608

Sub-total 6,992,529 7,108,464
Accumulated depreciation and amortization (4,301,044 ) (4,500,874 )

Total property, plant and equipment, net 2,691,485 2,607,590

Non-current investments and other assets:

Investments in affiliates 572,014 578,095
Marketable securities and other investments 141,544 151,026
Intangible assets, net 578,728 628,691
Goodwill 154,385 198,436
Other assets
Third parties 261,724 247,530
Related parties 11,716 10,381
Deferred tax assets 248,896 274,048

Total non-current investments and other assets 1,969,007 2,088,207

Total assets
¥ 6,488,220 ¥ 6,756,775


	Millions of yen
	2010			2011
ASSETS
Current assets:
Cash and cash equivalents	¥	357,715		¥	765,551
Short-term investments
Third parties		313,010			141,028
Related parties		90,000			—
Accounts receivable
Third parties		827,052			751,809
Related parties		11,174			10,602

Sub-total		838,226			762,411
Credit card receivables		126,009			160,446
Less: Allowance for doubtful accounts		(15,633	)		(18,021	)

Total accounts receivable and credit card receivables, net		948,602			904,836
Inventories		141,277			146,357
Deferred tax assets		100,545			83,609
Prepaid expenses and other current assets
Third parties		102,263			107,380
Related parties		7,566			6,538

Total current assets		2,060,978			2,155,299

Property, plant and equipment:
Wireless telecommunications equipment		5,478,833			5,569,818
Buildings and structures		830,921			845,588
Tools, furniture and fixtures		516,084			507,914
Land		199,018			198,842
Construction in progress		83,608			95,251

Sub-total		7,108,464			7,217,413
Accumulated depreciation and amortization		(4,500,874	)		(4,694,094	)

Total property, plant and equipment, net		2,607,590			2,523,319

Non-current investments and other assets:
Investments in affiliates		578,095			525,456
Marketable securities and other investments		151,026			128,138
Intangible assets, net		628,691			672,256
Goodwill		198,436			205,573
Other assets
Third parties		247,530			220,232
Related parties		10,381			29,687
Deferred tax assets		274,048			331,633

Total non-current investments and other assets		2,088,207			2,112,975

Total assets	¥	6,756,775		¥	6,791,593

See accompanying notes to consolidated financial statements.

~~F-4~~

NTT DOCOMO, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE ~~SHEETS —~~ SHEETS—(Continued)

MARCH 31, ~~2009~~2010 and ~~2010~~2011

Millions of yen
2009 2010

LIABILITIES AND EQUITY

Current liabilities:

Current portion of long-term debt ¥ 29,000 ¥ 180,716
Short-term borrowings — 78
Accounts payable, trade
Third parties 545,717 524,526
Related parties 122,808 107,911
Accrued payroll 58,627 54,580
Accrued interest 1,187 995
Accrued income taxes 238,742 185,890
Other current liabilities
Third parties 150,241 131,337
Related parties 2,113 2,129

Total current liabilities 1,148,435 1,188,162

Long-term liabilities:

Long-term debt (exclusive of current portion) 610,233 429,553
Accrued liabilities for point programs 94,023 151,628
Liability for employees’ retirement benefits 146,326 138,447
Other long-term liabilities
Third parties 143,103 184,036
Related parties 2,792 2,503

Total long-term liabilities 996,477 906,167

Total liabilities 2,144,912 2,094,329

Equity:

NTT DOCOMO, INC. shareholders’ equity
Common stock, without a stated value —
Authorized — 188,130,000 and 188,130,000 shares at March 31,
2009 and 2010, respectively
Issued — 43,950,000 and 43,790,000 shares at March 31,
2009 and 2010, respectively
Outstanding — 41,759,807 and 41,605,742 shares at March 31,
2009 and 2010, respectively 949,680 949,680
Additional paid-in capital 785,045 757,109
Retained earnings 3,061,848 3,347,830
Accumulated other comprehensive income (loss) (65,689 ) (37,379 )
Treasury stock, 2,190,193 and 2,184,258 shares at March 31, 2009 and 2010, respectively, at cost (389,299 ) (381,363 )

Total NTT DOCOMO, INC. shareholders’ equity 4,341,585 4,635,877
Noncontrolling interests 1,723 26,569

Total equity 4,343,308 4,662,446

Commitments and contingencies

Total liabilities and equity
¥ 6,488,220 ¥ 6,756,775


	Millions of yen
	2010			2011
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	¥	180,716		¥	173,102
Short-term borrowings		78			276
Accounts payable, trade
Third parties		524,526			495,842
Related parties		107,911			113,495
Accrued payroll		54,580			54,801
Accrued interest		995			916
Accrued income taxes		185,890			162,032
Other current liabilities
Third parties		131,337			120,993
Related parties		2,129			1,711

Total current liabilities		1,188,162			1,123,168

Long-term liabilities:
Long-term debt (exclusive of current portion)		429,553			255,000
Accrued liabilities for point programs		151,628			199,587
Liability for employees’ retirement benefits		138,447			152,647
Other long-term liabilities
Third parties		184,036			181,275
Related parties		2,503			2,322

Total long-term liabilities		906,167			790,831

Total liabilities		2,094,329			1,913,999

Equity:
NTT DOCOMO, INC. shareholders’ equity
Common stock, without a stated value—
Authorized shares
188,130,000 shares at March 31, 2010
188,130,000 shares at March 31, 2011
Issued shares
43,790,000 shares at March 31, 2010
43,650,000 shares at March 31, 2011
Outstanding shares
41,605,742 shares at March 31, 2010
41,467,601 shares at March 31, 2011		949,680			949,680
Additional paid-in capital		757,109			732,914
Retained earnings		3,347,830			3,621,965
Accumulated other comprehensive income (loss)		(37,379	)		(76,955	)
Treasury stock
2,184,258 shares at March 31, 2010
2,182,399 shares at March 31, 2011		(381,363	)		(377,168	)

Total NTT DOCOMO, INC. shareholders’ equity		4,635,877			4,850,436
Noncontrolling interests		26,569			27,158

Total equity		4,662,446			4,877,594

Commitments and contingencies
Total liabilities and equity	¥	6,756,775		¥	6,791,593

See accompanying notes to consolidated financial statements.

~~F-5~~

NTT DOCOMO, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

YEARS ENDED MARCH 31, ~~2008,~~ 2009, 2010 and ~~2010~~2011

Millions of yen
2008 2009 2010

Operating revenues:

Wireless services
Third parties ¥ 4,107,844 ¥ 3,786,917 ¥ 3,727,801
Related parties 57,390 54,165 49,108
Equipment sales
Third parties 538,195 600,630 503,086
Related parties 8,398 6,268 4,409

Total operating revenues 4,711,827 4,447,980 4,284,404

Operating expenses:

Cost of services (exclusive of items shown separately below)
Third parties 561,763 630,415 685,774
Related parties 249,370 242,023 214,868
Cost of equipment sold (exclusive of items shown separately below) 1,150,261 827,856 698,495
Depreciation and amortization 776,425 804,159 701,146
Selling, general and administrative
Third parties 1,025,812 980,251 1,031,011
Related parties 139,884 132,317 118,865

Total operating expenses 3,903,515 3,617,021 3,450,159

Operating income
808,312 830,959 834,245

Other income (expense):

Interest expense (4,556 ) (4,618 ) (5,061 )
Interest income 2,487 2,162 1,289
Other, net (5,555 ) (48,030 ) 5,684

Total other income (expense) (7,624 ) (50,486 ) 1,912

Income before income taxes and equity in net income (losses) of affiliates
800,688 780,473 836,157
Income taxes:

Current 334,462 395,467 381,507
Deferred (11,507 ) (87,067 ) (43,310 )

Total income taxes 322,955 308,400 338,197

Income before equity in net income (losses) of affiliates
477,733 472,073 497,960
Equity in net income (losses) of affiliates, net of applicable taxes 13,553 (672 ) (852 )

Net income
491,286 471,401 497,108

Less: Net (income) loss attributable to noncontrolling interests (84 ) 472 (2,327 )

Net income attributable to NTT DOCOMO, INC.
¥ 491,202 ¥ 471,873 ¥ 494,781

Net income
¥ 491,286 ¥ 471,401 ¥ 497,108
Other comprehensive income (loss):

Unrealized holding gains (losses) onavailable-for-sale securities, net of applicable taxes
(16,769 ) (30,310 ) 13,159
Less: Reclassification of realized gains and losses, net of applicable taxes included in net income 431 28,709 1,937
Change in fair value of derivative instruments, net of applicable taxes (525 ) (4 ) (63 )
Less: Reclassification of realized gains and losses, net of applicable taxes included in net income 658 (121 ) —
Foreign currency translation adjustment, net of applicable taxes 7,299 (47,538 ) 5,917
Less: Reclassification of realized gains and losses, net of applicable taxes included in net income (127 ) (54 ) (35 )
Pension liability adjustment, net of applicable taxes
Actuarial gains (losses) arising during period, net (4,909 ) (16,316 ) 6,828
Less: Amortization of prior service cost (1,338 ) (1,340 ) (1,340 )
Less: Amortization of actuarial gains and losses 502 797 1,858
Less: Amortization of transition obligation 75 81 79
Less: Reclassification of actuarial gains and losses due to transfer of the substitutional portion to the government 2,232 — —

Total other comprehensive income (loss) (12,471 ) (66,096 ) 28,340

Comprehensive income
478,815 405,305 525,448

Less: Comprehensive (income) loss attributable to noncontrolling interests (77 ) 469 (2,357 )

Comprehensive income attributable to NTT DOCOMO, INC.
¥ 478,738 ¥ 405,774 ¥ 523,091

Per share data:

Weighted average common shares outstanding — Basic and Diluted (shares) 43,120,586 42,238,715 41,705,738

Basic and Diluted earnings per share attributable to NTT DOCOMO, INC. (yen) ¥ 11,391.36 ¥ 11,171.58 ¥ 11,863.62


	Millions of yen
	2009			2010			2011
Operating revenues:
Wireless services
Third parties	¥	3,786,917		¥	3,727,801		¥	3,702,658
Related parties		54,165			49,108			44,211
Equipment sales
Third parties		600,630			503,086			474,506
Related parties		6,268			4,409			2,898

Total operating revenues		4,447,980			4,284,404			4,224,273

Operating expenses:
Cost of services (exclusive of items shown separately below)
Third parties		630,415			685,774			678,666
Related parties		242,023			214,868			217,836
Cost of equipment sold (exclusive of items shown separately below)		827,856			698,495			662,829
Depreciation and amortization		804,159			701,146			693,063
Selling, general and administrative
Third parties		980,251			1,031,011			1,012,267
Related parties		132,317			118,865			114,883

Total operating expenses		3,617,021			3,450,159			3,379,544

Operating income		830,959			834,245			844,729

Other income (expense):
Interest expense		(4,618	)		(5,061	)		(4,943	)
Interest income		2,162			1,289			1,326
Other, net		(48,030	)		5,684			(5,774	)

Total other income (expense)		(50,486	)		1,912			(9,391	)

Income before income taxes and equity in net income (losses) of affiliates		780,473			836,157			835,338
Income taxes:
Current		395,467			381,507			355,734
Deferred		(87,067	)		(43,310	)		(17,897	)

Total income taxes		308,400			338,197			337,837

Income before equity in net income (losses) of affiliates		472,073			497,960			497,501
Equity in net income (losses) of affiliates, net of applicable taxes		(672	)		(852	)		(5,508	)

Net income		471,401			497,108			491,993

Less: Net (income) loss attributable to noncontrolling interests		472			(2,327	)		(1,508	)

Net income attributable to NTT DOCOMO, INC.	¥	471,873		¥	494,781		¥	490,485


Net income	¥	471,401		¥	497,108		¥	491,993
Other comprehensive income (loss):
Unrealized holding gains (losses) on available-for-sale securities, net of applicable taxes		(30,310	)		13,159			(12,297	)
Less: Reclassification of realized gains and losses, net of applicable taxes included in net income		28,709			1,937			7,003
Change in fair value of derivative instruments, net of applicable taxes		(4	)		(63	)		4
Less: Reclassification of realized gains and losses, net of applicable taxes included in net income		(121	)		—			—
Foreign currency translation adjustment, net of applicable taxes		(47,538	)		5,917			(28,258	)
Less: Reclassification of realized gains and losses, net of applicable taxes included in net income		(54	)		(35	)		356
Pension liability adjustment, net of applicable taxes
Actuarial gains (losses) arising during period, net		(16,316	)		6,828			(6,367	)
Prior service cost arising during period, net		—			—			48
Less: Amortization of prior service cost		(1,340	)		(1,340	)		(1,346	)
Less: Amortization of actuarial gains and losses		797			1,858			1,144
Less: Amortization of transition obligation		81			79			88

Total other comprehensive income (loss)		(66,096	)		28,340			(39,625	)

Comprehensive income		405,305			525,448			452,368

Less: Comprehensive (income) loss attributable to noncontrolling interests		469			(2,357	)		(1,459	)

Comprehensive income attributable to NTT DOCOMO, INC.	¥	405,774		¥	523,091		¥	450,909

Per share data:
Weighted average common shares outstanding—Basic and Diluted (shares)		42,238,715			41,705,738			41,576,859

Basic and Diluted earnings per share attributable to NTT DOCOMO, INC. (yen)	¥	11,171.58		¥	11,863.62		¥	11,797.07

See accompanying notes to consolidated financial statements.

~~F-6~~

NTT DOCOMO, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

YEARS ENDED MARCH 31, ~~2008,~~ 2009, 2010 and ~~2010~~2011

Millions of yen
NTT DOCOMO, INC. shareholders’ equity
Accumulated
Total NTT

Additional
other
Treasury
DOCOMO, INC.

Common
paid-in
Retained
comprehensive
stock
shareholders’
Noncontrolling
Total

stock capital earnings income (loss) at cost equity interests equity

Balance at March 31, 2007 ¥ 949,680 ¥ 1,135,958 ¥ 2,493,155 ¥ 12,874 ¥ (430,364 ) ¥ 4,161,303 ¥ 1,164 ¥ 4,162,467

Purchase of treasury stock (173,002 ) (173,002 ) (173,002 )
Retirement of treasury stock (187,387 ) 187,387 — —
Cash dividends declared (¥4,400 per share) (190,543 ) (190,543 ) (190,543 )
Acquisition of new subsidiaries — 44 44
Others — 3 3
Comprehensive income
Net income 491,202 491,202 84 491,286
Other comprehensive income (loss)
Unrealized holding gains (losses) onavailable-for-sale securities
(16,331 ) (16,331 ) (7 ) (16,338 )
Change in fair value of derivative instruments 133 133 133
Foreign currency translation adjustment 7,172 7,172 7,172
Pension liability adjustment:
Actuarial gains (losses) arising during period, net (4,909 ) (4,909 ) (4,909 )
Less: Amortization of prior service cost (1,338 ) (1,338 ) (1,338 )
Less: Amortization of actuarial gains and losses 502 502 502
Less: Amortization of transition obligation 75 75 75
Less: Reclassification of actuarial gains and losses due to transfer of the substitutional portion to the government 2,232 2,232 2,232

Balance at March 31, 2008 ¥ 949,680 ¥ 948,571 ¥ 2,793,814 ¥ 410 ¥ (415,979 ) ¥ 4,276,496 ¥ 1,288 ¥ 4,277,784

Purchase of treasury stock (136,846 ) (136,846 ) (136,846 )
Retirement of treasury stock (163,526 ) 163,526 — —
Cash dividends declared (¥4,800 per share) (203,839 ) (203,839 ) (203,839 )
Acquisition of new subsidiaries — 944 944
Others — (40 ) (40 )
Comprehensive income
Net income 471,873 471,873 (472 ) 471,401
Other comprehensive income (loss)
Unrealized holding gains (losses) onavailable-for-sale securities
(1,610 ) (1,610 ) 9 (1,601 )
Change in fair value of derivative instruments (125 ) (125 ) (125 )
Foreign currency translation adjustment (47,586 ) (47,586 ) (6 ) (47,592 )
Pension liability adjustment:
Actuarial gains (losses) arising during period, net (16,316 ) (16,316 ) (16,316 )
Less: Amortization of prior service cost (1,340 ) (1,340 ) (1,340 )
Less: Amortization of actuarial gains and losses 797 797 797
Less: Amortization of transition obligation 81 81 81

Balance at March 31, 2009 ¥ 949,680 ¥ 785,045 ¥ 3,061,848 ¥ (65,689 ) ¥ (389,299 ) ¥ 4,341,585 ¥ 1,723 ¥ 4,343,308

Purchase of treasury stock (20,000 ) (20,000 ) (20,000 )
Retirement of treasury stock (27,936 ) 27,936 — —
Cash dividends declared (¥5,000 per share) (208,799 ) (208,799 ) (208,799 )
Acquisition of new subsidiaries — 22,588 22,588
Others — (99 ) (99 )
Comprehensive income
Net income 494,781 494,781 2,327 497,108
Other comprehensive income (loss)
Unrealized holding gains (losses) onavailable-for-sale securities
15,096 15,096 0 15,096
Change in fair value of derivative instruments (63 ) (63 ) (63 )
Foreign currency translation adjustment 5,852 5,852 30 5,882
Pension liability adjustment:
Actuarial gains (losses) arising during period, net 6,828 6,828 6,828
Less: Amortization of prior service cost (1,340 ) (1,340 ) (1,340 )
Less: Amortization of actuarial gains and losses 1,858 1,858 1,858
Less: Amortization of transition obligation 79 79 79

Balance at March 31, 2010
¥ 949,680 ¥ 757,109 ¥ 3,347,830 ¥ (37,379 ) ¥ (381,363 ) ¥ 4,635,877 ¥ 26,569 ¥ 4,662,446


	Millions of yen
	NTT DOCOMO, INC. shareholders’ equity
	Common stock		Additional paid-in capital			Retained earnings			Accumulated other comprehensive income (loss)			Treasury stock at cost			Total NTT DOCOMO, INC. shareholders’ equity			Noncontrolling interests			Total equity
Balance at March 31, 2008	¥	949,680	¥	948,571		¥	2,793,814		¥	410		¥	(415,979	)	¥	4,276,496		¥	1,288		¥	4,277,784

Purchase of treasury stock													(136,846	)		(136,846	)					(136,846	)
Retirement of treasury stock				(163,526	)								163,526			—						—
Cash dividends declared (¥4,800 per share)							(203,839	)								(203,839	)					(203,839	)
Cash distributions to noncontrolling interests																—			(3	)		(3	)
Acquisition of new subsidiaries																—			944			944
Others																—			(37	)		(37	)
Comprehensive income
Net income							471,873									471,873			(472	)		471,401
Other comprehensive income (loss)
Unrealized holding gains (losses) on available-for-sale securities										(1,610	)					(1,610	)		9			(1,601	)
Change in fair value of derivative instruments										(125	)					(125	)					(125	)
Foreign currency translation adjustment										(47,586	)					(47,586	)		(6	)		(47,592	)
Pension liability adjustment:
Actuarial gains (losses) arising during period, net										(16,316	)					(16,316	)					(16,316	)
Prior service cost arising during period, net																—						—
Less: Amortization of prior service cost										(1,340	)					(1,340	)					(1,340	)
Less: Amortization of actuarial gains and losses										797						797						797
Less: Amortization of transition obligation										81						81						81
																			��
Balance at March 31, 2009	¥	949,680	¥	785,045		¥	3,061,848		¥	(65,689	)	¥	(389,299	)	¥	4,341,585		¥	1,723		¥	4,343,308

Purchase of treasury stock													(20,000	)		(20,000	)					(20,000	)
Retirement of treasury stock				(27,936	)								27,936			—						—
Cash dividends declared (¥5,000 per share)							(208,799	)								(208,799	)					(208,799	)
Cash distributions to noncontrolling interests																—			(3	)		(3	)
Acquisition of new subsidiaries																—			22,588			22,588
Others																—			(96	)		(96	)
Comprehensive income
Net income							494,781									494,781			2,327			497,108
Other comprehensive income (loss)
Unrealized holding gains (losses) on available-for-sale securities										15,096						15,096			0			15,096
Change in fair value of derivative instruments										(63	)					(63	)					(63	)
Foreign currency translation adjustment										5,852						5,852			30			5,882
Pension liability adjustment:
Actuarial gains (losses) arising during period, net										6,828						6,828						6,828
Prior service cost arising during period, net																—						—
Less: Amortization of prior service cost										(1,340	)					(1,340	)					(1,340	)
Less: Amortization of actuarial gains and losses										1,858						1,858						1,858
Less: Amortization of transition obligation										79						79						79

Balance at March 31, 2010	¥	949,680	¥	757,109		¥	3,347,830		¥	(37,379	)	¥	(381,363	)	¥	4,635,877		¥	26,569		¥	4,662,446

Purchase of treasury stock													(20,000	)		(20,000	)					(20,000	)
Retirement of treasury stock				(24,195	)								24,195			—						—
Cash dividends declared (¥5,200 per share)							(216,350	)								(216,350	)					(216,350	)
Cash distributions to noncontrolling interests																—			(1,243	)		(1,243	)
Acquisition of new subsidiaries																—						—
Others																—			373			373
Comprehensive income
Net income							490,485									490,485			1,508			491,993
Other comprehensive income (loss)
Unrealized holding gains (losses) on available-for-sale securities										(5,293	)					(5,293	)		(1	)		(5,294	)
Change in fair value of derivative instruments										4						4						4
Foreign currency translation adjustment										(27,854	)					(27,854	)		(48	)		(27,902	)
Pension liability adjustment:
Actuarial gains (losses) arising during period, net										(6,367	)					(6,367	)					(6,367	)
Prior service cost arising during period, net										48						48						48
Less: Amortization of prior service cost										(1,346	)					(1,346	)					(1,346	)
Less: Amortization of actuarial gains and losses										1,144						1,144						1,144
Less: Amortization of transition obligation										88						88						88

Balance at March 31, 2011	¥	949,680	¥	732,914		¥	3,621,965		¥	(76,955	)	¥	(377,168	)	¥	4,850,436		¥	27,158		¥	4,877,594

See accompanying notes to consolidated financial statements.

~~F-7~~

NTT DOCOMO, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED MARCH 31, ~~2008,~~ 2009, 2010 and ~~2010~~2011

Millions of yen
2008 2009 2010

Cash flows from operating activities:

Net income ¥ 491,286 ¥ 471,401 ¥ 497,108
Adjustments to reconcile net income to net cash provided by operating activities —
Depreciation and amortization 776,425 804,159 701,146
Deferred taxes (2,471 ) (87,626 ) (44,550 )
Loss on sale or disposal of property, plant and equipment 54,359 43,304 32,735
Impairment loss on marketable securities and other investments 11,418 57,812 4,007
Equity in net (income) losses of affiliates (22,810 ) 1,239 2,122
Dividends from affiliates 15,349 15,500 12,854
Changes in assets and liabilities:
Decrease / (increase) in accounts receivable 187,434 (148,909 ) (1,056 )
Increase / (decrease) in allowance for doubtful accounts 1,803 67 242
(Increase) / decrease in credit card receivables (6,627 ) (32,857 ) (30,042 )
(Increase) / decrease in inventories (10 ) 23,327 (17,262 )
Decrease / (increase) in prepaid expenses and other current assets 10,803 18,196 1,582
(Increase) / decrease in non-current installment receivable for handsets (58,931 ) (37,712 ) 13,860
(Decrease) / increase in accounts payable, trade (50,477 ) (49,286 ) (21,227 )
Increase / (decrease) in accrued income taxes 134,912 35,158 (53,765 )
Increase / (decrease) in other current liabilities 6,206 (29,126 ) (22,019 )
(Decrease) / increase in accrued liabilities for point programs (3,552 ) 37,390 57,605
(Decrease) / increase in liability for employees’ retirement benefits (19,002 ) 29,438 (8,015 )
Increase / (decrease) in other long-term liabilities 12,332 17,753 35,878
Other, net 21,693 4,449 21,615

Net cash provided by operating activities 1,560,140 1,173,677 1,182,818

Cash flows from investing activities:

Purchases of property, plant and equipment (548,517 ) (517,776 ) (480,080 )
Purchases of intangible and other assets (216,816 ) (241,373 ) (245,488 )
Purchases of non-current investments (124,312 ) (313,889 ) (10,027 )
Proceeds from sale and redemption of non-current investments 101,341 660 9,534
Acquisitions of subsidiaries, net of cash acquired (14,797 ) 568 (29,209 )
Purchases of short-term investments (6,562 ) (32,977 ) (377,591 )
Redemption of short-term investments 5,443 32,255 69,605
Proceeds from redemption of long-term bailment for consumption to a related party 50,000 50,000 —
Short-term bailment for consumption to a related party — — (90,000 )
Other, net (4,629 ) (8,451 ) (10,670 )

Net cash used in investing activities (758,849 ) (1,030,983 ) (1,163,926 )

Cash flows from financing activities:

Proceeds from long-term debt — 239,913 —
Repayment of long-term debt (131,005 ) (77,071 ) (29,042 )
Proceeds from short-term borrowings 15,249 62,274 138,214
Repayment of short-term borrowings (15,351 ) (64,032 ) (138,149 )
Principal payments under capital lease obligations (2,821 ) (2,837 ) (3,256 )
Payments to acquire treasury stock (173,002 ) (136,846 ) (20,000 )
Dividends paid (190,543 ) (203,839 ) (208,709 )
Other, net (2 ) (3 ) (3 )

Net cash provided by (used in) financing activities (497,475 ) (182,441 ) (260,945 )

Effect of exchange rate changes on cash and cash equivalents 27 (7,610 ) 220

Net increase (decrease) in cash and cash equivalents
303,843 (47,357 ) (241,833 )
Cash and cash equivalents at beginning of year
343,062 646,905 599,548

Cash and cash equivalents at end of year
¥ 646,905 ¥ 599,548 ¥ 357,715

Supplemental disclosures of cash flow information:

Cash received during the year for:

Income tax refunds ¥ 20,346 ¥ 21,999 ¥ 1,323
Cash paid during the year for:

Interest, net of amount capitalized 4,656 4,141 5,251
Income taxes 200,079 383,838 436,459
Non-cash investing and financing activities:

Assets acquired through capital lease obligations 2,579 2,334 2,347
Acquisitions of shares through share exchange — — 15,023
Acquisitions of exchangeable bonds through share exchange — — 20,821
Acquisitions of shares through conversion of exchangeable bonds — — 26,326
Retirement of treasury stock 187,387 163,526 27,936


	Millions of yen
	2009			2010			2011
Cash flows from operating activities:
Net income	¥	471,401		¥	497,108		¥	491,993
Adjustments to reconcile net income to net cash provided by operating activities—
Depreciation and amortization		804,159			701,146			693,063
Deferred taxes		(87,626	)		(44,550	)		(22,563	)
Loss on sale or disposal of property, plant and equipment		43,304			32,735			27,936
Impairment loss on marketable securities and other investments		57,812			4,007			13,424
Equity in net (income) losses of affiliates		1,239			2,122			10,539
Dividends from affiliates		15,500			12,854			12,757
Changes in assets and liabilities:
(Increase) / decrease in accounts receivable		(148,909	)		(1,056	)		75,200
(Increase) / decrease in credit card receivables		(32,857	)		(30,042	)		(19,746	)
Increase / (decrease) in allowance for doubtful accounts		67			242			2,469
Decrease / (increase) in inventories		23,327			(17,262	)		(5,217	)
Decrease / (increase) in prepaid expenses and other current assets		18,196			1,582			(2,753	)
(Increase) / decrease in non-current installment receivable for handsets		(37,712	)		13,860			7,029
(Decrease) / increase in accounts payable, trade		(49,286	)		(21,227	)		(30,988	)
Increase / (decrease) in accrued income taxes		35,158			(53,765	)		(23,805	)
(Decrease) / increase in other current liabilities		(29,126	)		(22,019	)		(14,464	)
Increase / (decrease) in accrued liabilities for point programs		37,390			57,605			47,959
Increase / (decrease) in liability for employees’ retirement benefits		29,438			(8,015	)		14,203
Increase / (decrease) in other long-term liabilities		17,753			35,878			(8,791	)
Other, net		4,449			21,615			18,792

Net cash provided by operating activities		1,173,677			1,182,818			1,287,037

Cash flows from investing activities:
Purchases of property, plant and equipment		(517,776	)		(480,080	)		(423,119	)
Purchases of intangible and other assets		(241,373	)		(245,488	)		(250,757	)
Purchases of non-current investments		(313,889	)		(10,027	)		(11,746	)
Proceeds from sale of non-current investments		660			9,534			3,946
Acquisitions of subsidiaries, net of cash acquired		568			(29,209	)		(7,678	)
Purchases of short-term investments		(32,977	)		(377,591	)		(745,602	)
Redemption of short-term investments		32,255			69,605			917,492
Long-term bailment for consumption to a related party		—			—			(20,000	)
Proceeds from redemption of long-term bailment for consumption to a related party		50,000			—			—
Short-term bailment for consumption to a related party		—			(90,000	)		(20,000	)
Proceeds from redemption of short-term bailment for consumption to a related party		—			—			110,000
Other, net		(8,451	)		(10,670	)		(7,906	)

Net cash used in investing activities		(1,030,983	)		(1,163,926	)		(455,370	)

Cash flows from financing activities:
Proceeds from long-term debt		239,913			—			—
Repayment of long-term debt		(77,071	)		(29,042	)		(180,075	)
Proceeds from short-term borrowings		62,274			138,214			717
Repayment of short-term borrowings		(64,032	)		(138,149	)		(488	)
Principal payments under capital lease obligations		(2,837	)		(3,256	)		(4,597	)
Payments to acquire treasury stock		(136,846	)		(20,000	)		(20,000	)
Dividends paid		(203,839	)		(208,709	)		(216,283	)
Other, net		(3	)		(3	)		(1,243	)

Net cash provided by (used in) financing activities		(182,441	)		(260,945	)		(421,969	)

Effect of exchange rate changes on cash and cash equivalents		(7,610	)		220			(1,862	)

Net increase (decrease) in cash and cash equivalents		(47,357	)		(241,833	)		407,836
Cash and cash equivalents at beginning of year		646,905			599,548			357,715

Cash and cash equivalents at end of year	¥	599,548		¥	357,715		¥	765,551

Supplemental disclosures of cash flow information:
Cash received during the year for:
Income tax refunds	¥	21,999		¥	1,323		¥	301
Cash paid during the year for:
Interest, net of amount capitalized		4,141			5,251			5,023
Income taxes		383,838			436,459			378,998
Non-cash investing and financing activities:
Assets acquired through capital lease obligations		2,334			2,347			5,631
Acquisitions of shares through share exchange		—			15,023			—
Acquisitions of exchangeable bonds through share exchange		—			20,821			—
Acquisitions of shares through conversion of exchangeable bonds		—			26,326			—
Retirement of treasury stock		163,526			27,936			24,195

See accompanying notes to consolidated financial statements.

~~F-8~~

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.	~~Nature of operations:~~

1. Nature of operations:

NTT DOCOMO, INC. and subsidiaries (“DOCOMO”) is a joint stock corporation that was incorporated under the laws of Japan in August 1991 as the wireless telecommunications arm of NIPPON TELEGRAPH AND TELEPHONE CORPORATION (“NTT”). NTT, ~~33.71%~~36.62% of which is owned by the Japanese government, owns ~~63.12%~~63.32% of DOCOMO’s issued stock and ~~66.43%~~66.65% of DOCOMO’s voting stock outstanding as of March 31, ~~2010.~~

2011.

DOCOMO provides its subscribers with wireless telecommunications services such as Xi, FOMA, ~~(3G wireless services),~~ mova, ~~(2G wireless services),~~ packet communications services (wireless data communications services using packet switching) and satellite mobile communications services, primarily on its own nationwide networks. In addition, DOCOMO sells handsets and related equipment primarily to agent resellers who in turn sell such equipment to subscribers.

~~DOCOMO terminated Personal Handyphone System (“PHS”) services on January 7, 2008. Also,~~

DOCOMO plans to terminate mova services on March 31, 2012.


2.	~~Summary of significant accounting and reporting policies:~~

2. Summary of significant accounting and reporting policies:

DOCOMO maintains its books and records and prepares its statutory financial statements in conformity with the Japanese Telecommunications Business Act and the related accounting regulations and accounting principles generally accepted in Japan, which differ in certain respects from accounting principles generally accepted in the United States of America (“U.S. GAAP”).

The accompanying consolidated financial statements are prepared in accordance with U.S. GAAP and, therefore, reflect certain adjustments to DOCOMO’s books and records.


~~(1)~~	~~Adoption of new accounting standards~~

~~Business Combinations~~(1) Adoption of new accounting standard

Financing Receivables

Effective ~~April~~October 1, ~~2009,~~2010, DOCOMO adopted Accounting Standards Update (“ASU”) 2010-20 “Receivables (Topic 310): Disclosures about the ~~accounting pronouncement~~Credit Quality of Financing Receivables and the Allowance for Credit Losses” issued ~~in December 2007 relating to business combinations. This pronouncement requires an acquirer in a business combination to generally recognize and measure all~~by the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at their fair values as of the acquisition date. This pronouncement also requires the acquirer to recognize and measure as goodwill the excess of consideration transferred plus the fair value of any noncontrolling interest in the acquiree at the acquisition date over the fair value of the identifiable net assets acquired. The excess of the fair value of the identifiable net assets acquired over consideration transferred plus the fair value of any noncontrolling interest in the acquiree at the acquisition date is required to be recognized and measured as a gain from a bargain purchase. The adoption of this pronouncement did not have a material impact on DOCOMO’s results of operations and financial position.

~~Noncontrolling Interests in Consolidated Financial Statements~~

Effective April 1, 2009, DOCOMO adopted the accounting pronouncement issued in December 2007 relating to noncontrolling interests in the consolidated financial statements. This pronouncement requires noncontrolling interests held by parties other than the parent be clearly identified, labeled and presented in the consolidated statement of financial position within equity, but separate from the parent’s equity. This pronouncement also requires changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary be accounted for as equity transactions. Upon the adoption of this pronouncement, “Noncontrolling

~~F-9~~

~~NTT DOCOMO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

interests”, which was previously referred to as “Minority interests” and classified between “Total liabilities” and “Shareholders’ equity” in the consolidated balance sheets, is now included as a separate component of “Equity”. In addition, “Net income” in the consolidated statements of income and comprehensive income now includes net income or loss attributable to noncontrolling interests, which was previously referred to as “Minority interests” and deducted. As a result, the adoption of this pronouncement changed the presentation and disclosure of noncontrolling interests in the consolidated financial statements retrospectively, but did not have a material impact on DOCOMO’s results of operations and financial position.

~~Fair Value Measurements and Disclosures~~

~~In January 2010,~~ Financial Accounting Standards Board ~~(“FASB”) issued Accounting Standards Update (“ASU”)2010-06~~ ~~“Fair Value Measurements~~in July 2010. ASU2010-20 requires enhanced disclosures regarding the nature of the credit risk inherent in the entity’s financing receivables, how that credit risk is analyzed and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements”. ASU2010-06 requires disclosure of fair value measurements by class instead of major category as well as significant transfers between Level 1 and Level 2assessed, and the reasons for the ~~transfers regarding assets and liabilities that~~change in the allowance for credit losses. The required additional disclosures are ~~measured on a recurring basis. The adoption of ASU2010-06 resulted~~ in ~~expanded disclosure but did not have any impact on DOCOMO’s results of operations and financial position. See~~ Note 18 for further discussion. ASU2010-06 will require separate disclosures regarding the amounts of purchases, sales, issuances and settlements in Level 3 fair value measurements. This requirement is effective for fiscal years beginning after December 15, 2010.


~~(2)~~	~~Significant accounting policies~~

20.
(2) Significant accounting policies

Principles of consolidation—

The consolidated financial statements include accounts of DOCOMO and its majority-owned subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation.

DOCOMO also evaluates whether DOCOMO has a controlling financial interest in an entity through means other than voting rights and accordingly determines whether DOCOMO should consolidate the entity. For the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010,~~2011, DOCOMO had no variable interest entities to be consolidated or disclosed.

Use of estimates—

The preparation of DOCOMO’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. DOCOMO has identified the following areas where it believes estimates and assumptions are particularly critical to the consolidated financial statements. These are determination of useful lives of property, plant and equipment, internal use software and other intangible assets, impairment of long-lived assets, impairment of investments, accrued liabilities for point programs, pension liabilities and revenue recognition.

During the year ended March 31 2009, DOCOMO decreased the estimated useful lives of its long lived assets related to its mova services. This change in accounting estimate was due to the scheduled termination of mova services on March 31, 2012. As mova subscribers ~~have~~had been steadily migrating to FOMA, DOCOMO ~~has~~had decided to discontinue mova services and concentrate on FOMA services. The change resulted in a decrease of ¥60,072 million in “Income before income taxes and equity in net income (losses) of affiliates”, ¥35,563 million in “Net income attributable to NTT DOCOMO, INC.” and ¥841.95 in “Basic and Diluted earnings per share attributable to NTT DOCOMO, INC.” in the accompanying consolidated statement of income

~~F-10~~

~~NTT DOCOMO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

and comprehensive income for the year ended March 31, 2009. The impact on the results of operations and financial position for the ~~year~~years ended March 31, 2010 isand 2011 are not material. ~~The change is reflected prospectively and prior periods have not been adjusted.~~

Cash and cash equivalents—

DOCOMO considers cash in banks and short-term highly liquid investments with original maturities of 3 months or less at the date of purchase to be cash and cash equivalents.

Short-term investments—

Highly liquid investments, which have original maturities of longer than 3 months at the date of purchase and remaining maturities of 1 year or less at the end of fiscal year, are considered to be short-term investments.

Allowance for doubtful accounts—

The allowance for doubtful accounts is computed based on historical bad debt experience and the estimated uncollectible amount based on the analysis of certain individual accounts, including claims in bankruptcy.

Inventories—

Inventories are stated at the lower of cost or market. The cost of equipment sold is determined by thefirst-in, first-out method. Inventories consist primarily of handsets and accessories. DOCOMO evaluates its inventory mainly for obsolescence on a periodic basis and records valuation adjustments as required. Due to the rapid technological changes associated with the wireless ~~communications~~telecommunications business, DOCOMO ~~wrote down~~recognized losses on write-downs and ~~disposed of obsolete handsets~~disposals during the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010~~2011 resulting in losses totaling ~~¥16,946 million,~~ ¥14,180 million, ¥18,539 million and ~~¥18,539~~¥9,821 million, respectively, which were included in “Cost of equipment sold” in the accompanying consolidated statements of income and comprehensive income.

Property, plant and equipment—

Property, plant and equipment are stated at cost and include interest cost incurred during construction, as discussed below in “Capitalized interest”. Property, plant and equipment under capital leases are stated at the present value of minimum lease payments. Depreciation is computed by the declining-balance method at rates based on the estimated useful lives of the respective assets with the exception of buildings, which are depreciated

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

on a straight-line basis. Useful lives are determined at the time the asset is acquired and are based on its expected use, past experience with similar assets and anticipated technological or other changes. If technological or other changes occur more or less rapidly or in a different form than anticipated or the intended use changes, the useful lives assigned to these assets are adjusted as appropriate. Property, plant and equipment held under capital leases and leasehold improvements are amortized using either the straight-line method or the declining-balance method, depending on the type of the assets, over the shorter of the lease term or estimated useful life of the asset.

The estimated useful lives of major depreciable assets are as follows:


Major wireless telecommunications equipment			8 to 16 years
Steel towers and poles for antenna equipment			30 to 40 years
Reinforced concrete buildings			42 to 56 years
Tools, furniture and fixtures			4 to 15 years

~~F-11~~

~~NTT DOCOMO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

Depreciation and amortization expenses for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010~~2011 were ~~¥579,101 million,~~ ¥614,481 million, ~~and~~ ¥513,753 million, and ¥488,973 million, respectively.

When depreciable telecommunications equipment is retired or abandoned in the normal course of business, the amounts of such telecommunications equipment and its accumulated depreciation are deducted from the respective accounts. Any remaining balance is charged to expense immediately. DOCOMO estimates the fair values of its asset retirement obligations to restore certain leased land and buildings used for DOCOMO’s wireless telecommunications equipment to their original states. The aggregate fair ~~values~~value of its asset retirement obligations dodoes not have a material impact on DOCOMO’s results of operations or financial position.

Expenditures for replacements and betterments are capitalized, while expenditures for maintenance and repairs are expensed as incurred. Assets under construction are not depreciated until placed in service. The rental costs associated with ground or building operating leases that are incurred during a construction period are expensed.

Capitalized interest—

DOCOMO capitalizes interest related to the construction of property, plant and equipment over the period of construction. DOCOMO also capitalizes interest associated with the development of internal-use software. DOCOMO amortizes such capitalized interest over the estimated useful lives of the related assets.

Investments in affiliates—

The equity method of accounting is applied to investments in affiliates where DOCOMO is able to exercise significant influence over the investee, but does not have a controlling financial interest. Under the equity method of accounting, DOCOMO records its share of ~~earnings~~income and losses of the affiliate and adjusts its carrying amount. DOCOMO periodically reviews the facts and circumstances related thereto to determine whether or not it can exercise significant influence over the operating and financial policies of the affiliate. For some investees accounted for under the equity method, DOCOMO records its share of income or losses of such investees with up to a 3 ~~months~~month lag in its consolidated statements of income and comprehensive income.

DOCOMO evaluates the recoverability of the carrying value of its investments in affiliates, which includes investor level goodwill, when there are indicators that a decline in value below its carrying amount may be other than temporary. In performing its evaluations, DOCOMO utilizes various information including cash flow projections, independent valuations and, as applicable, quoted market values to determine recoverable amounts

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

and the length of time an investment’s carrying value exceeds its estimated current recoverable amount. In the event of a determination that a decline in value is other than temporary, a charge to earnings is recorded for the loss, and a new cost basis in the investment is established.

Marketable securities and other investments—

Marketable securities consist of debt and equity securities. DOCOMO determines the appropriate classification of its investment securities at the time of purchase. DOCOMO periodically reviews the carrying amounts of its marketable securities for impairments that are other than temporary. If this evaluation indicates that a decline in value is other than temporary, the security is written down to its estimated fair value. The impairment is charged to earnings and a new cost basis for the security is established. To determine whether a decline in value is other than temporary, DOCOMO considers whether DOCOMO has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the decline in

~~F-12~~

~~NTT DOCOMO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

value, the severity and duration of the decline, changes in value subsequent to year-end, forecasted earnings performance of the investee and the general market condition in the geographic area or industry the investee operates in.

Equity securities held by DOCOMO, whose fair values are readily determinable, are classified as ~~available-for-sale.~~available-for-sale securities. Available-for-sale equity securities are carried at fair value with unrealized holding gains or losses, net of applicable taxes, included in “Accumulated other comprehensive income (loss)”. Realized gains and losses are determined using the average cost method and are reflected currently in earnings.

Debt securities held by DOCOMO, which DOCOMO has the positive intent and ability to hold to maturity, are classified as held-to-maturity, and the other debt securities that may be sold before maturity are classified as available-for-sale securities. Held-to-maturity debt securities are carried at amortized cost. Available-for-sale debt securities are carried at fair value with unrealized holding gains or losses, net of applicable taxes, included in “Accumulated other comprehensive income (loss)”. Realized gains and losses are determined using thefirst-in, first-out cost method and are reflected currently in earnings. Debt securities with original maturities of 3 months or less at the date of purchase are recorded as “Cash and cash equivalents”, while those with original maturities of longer than 3 months at the date of purchase and remaining maturities of 1 year or less at the end of fiscal year are recorded as “Short-term investments” in the consolidated balance sheets.

DOCOMO did not hold or transact any trading securities during the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010.~~

2011.

Other investments include equity securities whose fair values are not readily determinable. Equity securities whose fair values are not readily determinable are carried at cost. Other-than-temporary declines in value are charged to earnings. Realized gains and losses are determined using the average cost method and are reflected currently in earnings.

Goodwill and other intangible assets—

Goodwill is an asset representing the ~~excess of the acquisition cost of businesses over the fair value of the identifiable net~~future economic benefits arising from other assets ~~acquired.~~acquired in a business combination that are not individually identified and separately recognized. Other intangible assets primarily consist of software for telecommunications network, internal-use software, software acquired to be used in manufacture of handsets and rights to use certain telecommunications facilities of wireline operators.

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DOCOMO does not amortize either goodwill, including investor level goodwill related to the investments accounted for under the equity method, or other intangible assets acquired in a purchase business combination and determined to have an indefinite useful life. However, (1) goodwill, except those related to equity method investments, and (2) other intangible assets that have indefinite useful lives are tested for impairment at least annually.

The goodwill impairment test is a two-step test. Under the first step, the fair value of the reporting unit is compared with its carrying value (including goodwill). Fair value of the reporting unit is determined using discounted cash flow method. If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and DOCOMO performs the second step of the impairment test (measurement). Under the second step, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation. If the fair value of the reporting unit exceeds its carrying value, the second step does not need to be performed.

~~F-13~~

~~NTT DOCOMO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

Goodwill related to equity method investments is tested for impairment as a part of the other-than-temporary impairment assessment of the equity method investment as a whole.

Intangible assets that have finite useful lives, consisting primarily of software for telecommunications network, internal-use software, software acquired to be used in manufacture of handsets and rights to use telecommunications facilities of wireline operators are amortized on a straight-line basis over their useful lives.

DOCOMO capitalizes the cost of internal-use software which has a useful life in excess of 1 year. Subsequent costs for additions, modifications or upgrades to internal-use software are capitalized only to the extent that the software is able to perform a task it previously did not perform. Software acquired to be used in ~~the~~ manufacture of handsets is capitalized if the technological feasibility of the handset to be ultimately marketed has been established at the time of ~~purchase.~~acquisition. Software maintenance and training costs are expensed ~~in the period in which they are~~as incurred. Capitalized software costs are ~~being~~ amortized over ~~a period of~~up to 5 ~~years at a maximum.~~

Customer related assets principally consist of contractual customer relationships in the mobile phone business that were recorded in connection with the acquisition of noncontrolling interests of the regional subsidiaries in November 2002 through the process of identifying separable intangible assets apart from goodwill. The customer related assets had been amortized over 6 years, which was the expected term of subscription in mobile phone business.

years.

Amounts capitalized related to rights to use certain telecommunications assets of wireline operators, primarily NTT, are amortized over 20 years.

Impairment of long-lived assets—

DOCOMO’s long-lived assets other than goodwill, such as property, plant and equipment, software and intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Recoverability of assets to be held for use is evaluated by a comparison of the carrying amount of the asset with future undiscounted cash flows expected to be generated by the asset or asset group. If the asset (or asset group) is determined to be impaired, the loss recognized is the amount by which the carrying value of the asset (or asset group) exceeds its fair value as measured through various valuation techniques, including discounted cash flow models, quoted market value and third-party independent appraisals, as considered necessary.

Hedging activities—

DOCOMO uses derivative instruments, including interest rate swap agreements, foreign currency swap contracts and foreign exchange forward contracts, and other financial instruments in order to manage its exposure to fluctuations in interest rates and foreign exchange rates. DOCOMO does not hold or issue derivative instruments for trading purposes.

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

These financial instruments are effective in meeting the risk reduction objectives of DOCOMO by generating either transaction gains and losses which offset transaction gains and losses of the hedged items or cash flows which offset the cash flows related to the underlying position in respect of amount and timing.

All derivative instruments are recorded on the consolidated balance sheets at fair value. The recorded fair values of derivative instruments represent the amounts that DOCOMO would receive or pay to terminate the contracts at each fiscal year end.

~~F-14~~

~~NTT DOCOMO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

For derivative instruments that qualify as fair value hedge instruments, the changes in fair value of the derivative instruments are recognized currently in earnings, which offset the changes in fair value of the related hedged assets or liabilities that are also recognized in earnings of the period.

For derivative instruments that qualify as cash flow hedge instruments, the changes in fair value of the derivative instruments are initially recorded in “Accumulated other comprehensive income (loss)” and reclassified into earnings when the relevant hedged transaction is realized.

For derivative instruments that do not qualify as hedging instruments, the changes in fair value of the derivative instruments are recognized currently in earnings.

DOCOMO discontinues hedge accounting when it is determined that the derivative instruments or other financial instruments are no longer highly effective as a hedge or when DOCOMO decides to discontinue the hedging relationship.

Cash flows from derivative instruments that are designated as qualifying hedges are classified in the consolidated statements of cash flows under the same categories as the cash flows from the relevant assets, liabilities or anticipated transactions.

Accrued liabilities for point programs—

DOCOMO offers “docomo Points Service,” which provides benefits, including discount on handset, to customers in exchange for points that we grant customers based on the usage of cellular and other services and record “Accrued liabilities for point programs” relating to the points that customers earn. In determining the accrued liabilities for point programs, DOCOMO estimates such factors as the point utilization rate reflecting the forfeitures by, among other things, cancellation of subscription.

Employees’ retirement benefit plans—

DOCOMO recognizes the funded status of its defined benefit plans, measured as the difference between the plan assets at fair value and the benefit obligation, in the consolidated balance sheets. Changes in the funded status are recognized as changes in comprehensive income during the fiscal period in which such changes occur.

Pension benefits earned during the year as well as interest on projected benefit obligations are accrued currently. Net losses in excess of 10% of the greater of the projected benefit obligation or the fair value of plan assets and prior service cost due to the changes of benefit plans, both of which are included in “Accumulated other comprehensive income (loss)”, are amortized to earnings over the expected average remaining service period of employees on a straight-line basis.

NTT DOCOMO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Revenue recognition—

DOCOMO primarily generates revenues from two sources—wireless services and equipment sales. These revenue sources are separate and distinct earnings processes. Wireless service is sold to the subscriber directly or through third-party resellers who act as agents, while equipment, including handsets, are sold principally to agent resellers.

DOCOMO sets its wireless services rates in accordance with the Japanese Telecommunications Business Act and government guidelines, which currently allow wireless telecommunications operators to set their own tariffs without government approval. Wireless service revenues primarily consist of basic monthly charges, airtime charges and fees for activation.

~~F-15~~

~~NTT DOCOMO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

Basic monthly charges and airtime charges are recognized as revenues at the time the service is provided to the subscribers. DOCOMO’s monthly billing plans for cellular (FOMA and mova) services generally include a certain amount of allowances (free minutesand/or packets), and the used amount of the allowances is subtracted from total usage in calculating the airtime revenue from a subscriber for the month. DOCOMO offers a billing arrangement called “Nikagetsu Kurikoshi” (2 month carry-over), in which the unused allowances are automatically carried over for up to the following two months. In addition, DOCOMO offers an arrangement which enables the unused allowances that were carried over for the two months to be automatically used to cover the airtimeand/or packet ~~fees~~charges exceeding the allowances of the other subscriptions in the “Family Discount” group, a discount billing arrangement for families. Out of the unused allowance in a month, DOCOMO defers the revenues based on the portion which is estimated to be used in the following two months. As for the portion which is estimated to expire, DOCOMO recognizes the revenue attributable to such portion of allowances ratably as the remaining allowances are utilized, in addition to the revenue recognized when subscribers make calls or utilize data transmissions.

Equipment sales are recognized as revenues when equipment is accepted by agent resellers and all inventory risk is transferred from DOCOMO. Certain commissions paid to agent resellers are recognized as a reduction of revenue upon delivery of the equipment to such agent resellers.

DOCOMO enables subscribers to select installment payments for the purchase of the handset over a period of 12 or 24 months. When installment payments are selected, under agreements entered into among DOCOMO, subscribers and agent resellers, DOCOMO provides financing by providing funds for the purchase of the handset by the subscribers. DOCOMO then includes current installments for the receivable for the purchased handset with basic monthly charges and airtime charges for the installment payment term. This is a separate contract from the wireless services contract between DOCOMO and the subscriber or the handset purchase agreement between the agent reseller and the subscriber, and cash collection from the subscriber is the recovery of the cash payment. Therefore, cash collection from subscribers for the purchased handsets does not have an impact on DOCOMO’s revenue.

Non-recurring upfront fees such as activation fees are deferred and recognized as revenues over the estimated average period of the subscription for each service. The related direct costs are also deferred to the extent of the related upfront fee amount and are amortized over the same period.

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Deferred revenue and deferred charges as of March 31, ~~2009~~2010 and ~~2010~~2011 were as follows:

Millions of yen
2009 2010

Current deferred revenue ¥ 104,287 ¥ 84,848
Long-term deferred revenue 72,542 71,085
Current deferred charges 16,606 12,657
Long-term deferred charges 72,542 71,085


	Millions of yen
	2010		2011
Current deferred revenue	¥	84,848	¥	81,219
Long-term deferred revenue		71,085		72,214
Current deferred charges		12,657		11,481
Long-term deferred charges		71,085		72,214

Current deferred revenue is included in “Other current liabilities” in the consolidated balance sheets.

Selling, general and administrative expenses—

Selling, general and administrative expenses primarily include commissions paid to sales agents, expenses associated with point programs, advertising expenses, as well as other expenses such as payroll and related benefit costs of personnel not directly involved in the service operations and maintenance process. Commissions paid to sales agents represent the largest portion of selling, general and administrative expenses.

~~F-16~~

~~NTT DOCOMO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

Income taxes—

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

DOCOMO determines whether it is more likely than not that a tax position will be sustained and, if any, DOCOMO determines the amount of tax benefit to recognize in the financial statements. DOCOMO has elected to classify interest and penalties related to unrecognized tax benefits, if and when required, as part of income tax expense in the consolidated statements of income and comprehensive income.

Earnings per share attributable to NTT DOCOMO, INC.—

Basic earnings per share attributable to NTT DOCOMO, INC. include no dilution and are computed by dividing income available to common shareholders by the weighted average number of shares of common stock outstanding for the period. Diluted earnings per share attributable to NTT DOCOMO, INC. assume the dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock.

DOCOMO did not issue dilutive securities during the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010,~~2011, and therefore there is no difference between basic and diluted earnings per share attributable to NTT DOCOMO, INC.

Foreign currency translation—

All asset and liability accounts of foreign subsidiaries and affiliates are translated into Japanese yen at appropriate year-end current rates and all income and expense accounts are translated at rates that approximate those rates prevailing at the time of the transactions. The accompanying translation adjustments are included in “Accumulated other comprehensive income (loss).”.

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Foreign currency receivables and payables of DOCOMO are translated at appropriate year-end current rates and the accompanying translation gains or losses are included in earnings currently.

The effects of exchange rate fluctuations from the initial transaction date to the settlement date are recorded as exchange gain or loss, which are included in “Other income (expense)” in the accompanying consolidated statements of income and comprehensive income.


~~(3)~~	~~Reclassifications~~

(3) Reclassifications

Certain reclassifications are made to the prior years’ consolidated financial statements to conform to the presentation used for the year ended March 31, ~~2010.~~

~~F-17~~

2011.

(4) The Great East Japan Earthquake

The Great East Japan Earthquake and the subsequent tsunami on March 11, 2011, damaged some of DOCOMO’s base station facilities located in certain areas of Tohoku region, and caused the temporary disruption of cellular services. For the fiscal year ended March 31, 2011, ¥7,123 million was recognized in selling, general and administrative expenses as a result of this disaster, pertaining to write-downs of damaged facilities and equipment (¥3,583 million), personnel and other expenses incurred in response to the disaster (¥3,540 million). Most of these expenses were recognized in the mobile phone business segment.

In addition, DOCOMO management also considered the following as a result of this disaster:
Impairment of long-lived assets, other than goodwill—
After the damaged assets were written-down or written-off, DOCOMO management considered whether this event indicated that the revised carrying amounts of property, plant and equipment and intangible assets may not be recoverable. DOCOMO management determined that no impairment losses on property, plant and equipment and intangible assets were necessary as a result of this event.
Impairment of goodwill—
The potential impact of March 11, 2011 events on the fair value of DOCOMO’s domestic mobile phone reporting unit was considered as part of DOCOMO’s annual goodwill impairment review of this reporting unit on March 31, 2011. DOCOMO management determined that no goodwill impairment existed at March 31, 2011.
Collectability of accounts receivable—
DOCOMO has not experienced any significant change in the trend of payment delays or bad debts of its customers after the earthquake, although DOCOMO offered relief programs including an extension of payment deadlines on phone bills and refunds of the basic monthly fees and other charges to certain customers in the disaster-stricken area. The impact of these relief programs was immaterial.
Realization of deferred tax assets—
The potential impact of March 11, 2011 events on DOCOMO’s estimates of future taxable income were considered as part of DOCOMO’s evaluation of the realizability of its deferred tax assets at March 31, 2011. DOCOMO management determined that no valuation allowance was necessary as a result of this event at March 31, 2011.

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL ~~STATEMENTS –~~ STATEMENTS—(Continued)


3.	~~Cash and cash equivalents:~~

3. Cash and cash equivalents:

“Cash and cash equivalents” as of March 31, ~~2009~~2010 and ~~2010~~2011 comprised the following:

Millions of yen
2009 2010

Cash ¥ 349,564 ¥ 277,715
Certificates of deposit 160,000 40,000
Bailment for consumption 60,000 20,000
Other 29,984 20,000

Total ¥ 599,548 ¥ 357,715


	Millions of yen
	2010		2011
Cash	¥	277,715	¥	305,574
Certificates of deposit		40,000		210,000
Commercial paper		20,000		199,977
Bailment for consumption		20,000		50,000

Total	¥	357,715	¥	765,551

The aggregate amount of commercial paper as of March 31, 2010 and 2011 was ¥39,990 million and ¥259,972 million, respectively and ¥19,990 million and ¥59,995 million was recorded in “Short-term investments” in the consolidated balance sheet as they have original maturities of longer than 3 months at the date of purchase and remaining maturities of 1 year or less at the end of fiscal year in addition to the amounts in “Cash and cash equivalents,” which is stated above. Commercial paper is classified as held-to-maturity securities and their amortized amounts approximate their fair value.

Information regarding “Bailment for consumption” is disclosed in Note 13.


4.	~~Inventories:~~

4. Inventories:

“Inventories” as of March 31, ~~2009~~2010 and ~~2010~~2011 comprised the following:

Millions of yen
2009 2010

Telecommunications equipment to be sold ¥ 121,315 ¥ 137,145
Materials and supplies 239 995
Other 1,652 3,137

Total ¥ 123,206 ¥ 141,277


5.	~~Investments in affiliates:~~

   Millions of yen
   2010    2011
Telecommunications equipment to be sold
   ¥   137,145       ¥   141,106
Materials and supplies
   995       2,560
Other
   3,137       2,691

Total
   ¥ 141,277       ¥ 146,357

5. Investments in affiliates:

Sumitomo Mitsui Card Co., Ltd.—

As of March 31, ~~2009~~2010 and ~~2010,~~2011, DOCOMO held 34% of the outstanding common shares of Sumitomo Mitsui Card Co., Ltd. (“Sumitomo Mitsui Card”). DOCOMO entered into an agreement with Sumitomo Mitsui Card, Sumitomo Mitsui Financial Group, Inc. and Sumitomo Mitsui Banking Corporation to jointly promote the credit transaction services which use mobile phones compatible with “Osaifu-Keitai” (wallet-phone) service.

Philippine Long Distance Telephone Company—

As of March 31, ~~2009~~2010 and ~~2010,~~2011, DOCOMO held approximately 14% of the outstanding common shares of Philippine Long Distance Telephone Company (“PLDT”), a telecommunication operator in the Philippines. PLDT is a public company listed on the Philippine Stock Exchange and the New York Stock Exchange.

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

On March 14, 2006, DOCOMO acquired approximately 7% of PLDT’s outstanding common shares for ¥52,213 million from NTT Communications Corporation (“NTT Com”), a subsidiary of ~~NTT and accounted for the investment under the cost method.~~NTT. From March 2007 to February 2008, DOCOMO acquired approximately an additional 7% common equity interest for ¥98,943 million in the market. Together with the PLDT common shares continued to be held by NTT Com, on a consolidated basis NTT held approximately 21% of the total outstanding common shares of PLDT.

~~F-18~~

~~NTT DOCOMO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

In accordance with an agreement entered into on January 31, 2006 between PLDT and its major shareholders, including NTT Com and DOCOMO, DOCOMO has the right to exercise the entire 21% voting rights associated with the ownership interest collectively held by DOCOMO and NTT Com. As DOCOMO obtained the ability to exercise significant influence over PLDT, DOCOMO has accounted for the investment by applying the equity method from the date of the initial acquisition of PLDT shares. The prior period financial statements have not been retroactively adjusted to reflect the application of the equity method from the date of the initial investments because the impact on results of operations and net equity of DOCOMO is not material to the prior or current period financial statements presented.

DOCOMO determined the fair value of tangible, intangible and other assets and liabilities of PLDT with the assistance of an independent third party appraiser in order to recognize and account for DOCOMO’s share of identifiable intangible assets and embedded goodwill of its equity investment ~~in equity~~ in PLDT. During the year ended March 31, 2009, upon the completion of the evaluation, adjustments to reflect the earnings impact of the final allocation of the investment in PLDT were charged to equity in net income (loss) of affiliates. As a result, “Equity in net income (losses) of affiliates, net of applicable taxes” in the consolidated ~~statements~~statement of income and comprehensive income for the year ended March 31, 2009 decreased by ¥4,817 million and “Investments in affiliates” in consolidated balance ~~sheets~~sheet as of March 31, 2009 decreased by ¥8,137 million.

DOCOMO’s carrying amount of its investment in PLDT was ~~¥109,042~~¥105,944 million and ~~¥105,944~~¥95,859 million as of March 31, ~~2009~~2010 and ~~2010,~~2011, respectively. The aggregate market price of the PLDT shares owned by DOCOMO was ~~¥119,801~~¥134,088 million and ~~¥134,088~~¥119,749 million as of March 31, ~~2009~~2010 and ~~2010,~~2011, respectively.

Tata Teleservices Limited—

As of March 31, ~~2009~~2010 and ~~2010,~~2011, DOCOMO held approximately 26% of the outstanding common shares of Tata Teleservices Limited (“TTSL”)~~, which were acquired for ¥252,321 million.~~

On November 12, 2008, DOCOMO entered into a capital alliance with TTSL and Tata Sons Limited, the parent company of TTSL. On March 25, 2009, DOCOMO acquired ~~the~~TTSL’s outstanding common shares ~~of TTSL~~for ¥252,321 million pursuant to the capital alliance and accounted for the investment by applying the equity method.

DOCOMO determined the fair value of tangible, intangible and other assets and liabilities of TTSL with the assistance of an independent third party appraiser in order to recognize and account for DOCOMO’s share of identifiable intangible assets and embedded goodwill of its equity investment ~~in equity~~ in TTSL. During the year ended March 31, 2010, upon the completion of the evaluation, adjustments to reflect the earnings impact of the final allocation of the investment in TTSL were charged to equity in net income (loss) of affiliates. As a result, “Equity in net income (losses) of affiliates, net of applicable taxes” in the consolidated ~~statements~~statement of income and comprehensive income for the year ended March 31, 2010 decreased by ¥2,788 million and “Investments in affiliates” in the consolidated balance ~~sheets~~sheet as of March 31, 2010 decreased by ¥4,710 million.

DOCOMO made additional investments totaling ¥14,424 million in response to a rights offering that TTSL commenced in March and May, 2011. TTSL is expected to use the capital increase to strengthen the quality of the 3G network in India’s market. As a result of its participation in the rights offering, DOCOMO’s equity interest in TTSL slightly increased to approximately 27%.
NTT DOCOMO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Impairment—

DOCOMO evaluates the recoverability of the carrying value of its investments in affiliates including those mentioned above when there are indications that a decline in value below carrying amount may be other than temporary. As a result of such evaluations, DOCOMO recorded impairment charges for other-than-temporary declines during the ~~years~~year ended March 31, ~~2008 and~~ 2009. The impairments did not have a material impact on DOCOMO’s results of operations or financial position. The impairment charges are included in “Equity in net income (losses) of affiliates, net of applicable taxes” in the accompanying statements of income and comprehensive income. DOCOMO has determined that the estimated fair values of each of its investments in affiliates as of March 31, 2010 and 2011 are not less than the related carrying values on an individual basis.

~~F-19~~

~~NTT DOCOMO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

All of the equity method investees, except for PLDT, are privately held companies as of March 31, ~~2010.~~

2011.

DOCOMO’s cumulative share of the earnings or losses of affiliates, less amounts distributed by affiliates as dividends, was ~~¥8,469 million,~~ ¥10,346 million, ¥11,967 million and ~~¥11,967~~¥14,531 million, as of March 31, ~~2008,~~ 2009, 2010 and ~~2010,~~2011, respectively. Dividends received from affiliates were ~~¥15,349 million,~~ ¥15,500 million, ¥12,854 million and ~~¥12,854~~¥12,757 million for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010,~~2011, respectively. DOCOMO does not have significant business transactions with its affiliates.

The total carrying value of DOCOMO’s “Investments in affiliates” in the accompanying consolidated balance sheets as of March 31, ~~2009~~2010 and ~~2010~~2011 was greater by ~~¥210,600~~¥421,132 million and ~~¥421,132~~¥382,037 million, respectively, than its aggregate underlying equity in net assets of such affiliates as of the date of the most recent available financial statements of the investees. The difference mainly consisted of goodwill and amortizable intangible assets. ~~The difference as of March 31, 2009 does not include the effect of the investment in TTSL, which was made on March 25, 2009.~~


6.	~~Marketable securities and other investments:~~

6. Marketable securities and other investments:

“Marketable securities and other investments” as of March 31, ~~2009~~2010 and ~~2010~~2011 were as follows:

Millions of yen
2009 2010

Marketable securities:
Available-for-sale ¥ 112,967 ¥ 136,631
Other investments 28,582 14,395

Sub-total ¥ 141,549 ¥ 151,026
Less: Available-for-sale securities classified as “Short-term investments” (5 ) —

Marketable securities and other investments (Non-current) ¥ 141,544 ¥ 151,026


	Millions of yen
	2010		2011
Marketable securities:
Available-for-sale	¥	136,631	¥	117,763
Other investments		14,395		10,375

Marketable securities and other investments (Non-current)	¥	151,026	¥	128,138

Maturities of debt securities classified as available-for-sale as of March 31, ~~2009~~2010 and ~~2010~~2011 were as follows:

Millions of yen Millions of yen
2009 2010
Carrying
Fair
Carrying
Fair

amount value amount value

Due within 1 year ¥ 5 ¥ 5 ¥ — ¥ —
Due after 1 year through 5 years — — 4 4
Due after 5 years through 10 years — — — —
Due after 10 years — — — —

Total ¥ 5 ¥ 5 ¥ 4 ¥ 4

~~F-20~~


	Millions of yen				Millions of yen
	2010				2011
	Carrying amount		Fair value		Carrying amount		Fair value
Due within 1 year	¥	—	¥	—	¥	—	¥	—
Due after 1 year through 5 years		4		4		4		4
Due after 5 years through 10 years		—		—		—		—
Due after 10 years		—		—		—		—

Total	¥	4	¥	4	¥	4	¥	4

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL ~~STATEMENTS –~~ STATEMENTS—(Continued)

The aggregate cost, gross unrealized holding gains and losses and fair value by type of available-for-sale securities as of March 31, ~~2009~~2010 and ~~2010~~2011 were as follows:

Millions of yen
2009
Cost / Amortized
Gross unrealized
Gross unrealized

cost holding gains holding losses Fair value

Available-for-sale:
Equity securities ¥ 118,509 ¥ 1,352 ¥ 6,899 ¥ 112,962
Debt securities 5 0 — 5

Millions of yen
2010
Cost / Amortized
Gross unrealized
Gross unrealized

cost holding gains holding losses Fair value

Available-for-sale:
Equity securities ¥ 121,308 ¥ 20,257 ¥ 4,938 ¥ 136,627
Debt securities 4 — 0 4


	Millions of yen
	2010
	Cost / Amortized cost		Gross unrealized holding gains		Gross unrealized holding losses		Fair value
Available-for-sale:
Equity securities	¥	121,308	¥	20,257	¥	4,938	¥	136,627
Debt securities		4		—		0		4

	Millions of yen
	2011
	Cost / Amortized cost		Gross unrealized holding gains		Gross unrealized holding losses		Fair value
Available-for-sale:
Equity securities	¥	109,199	¥	10,663	¥	2,103	¥	117,759
Debt securities		4		0		—		4

The proceeds and gross realized gains (losses) from the sale of available-for-sale securities and other investments for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010~~2011 were as follows:

Millions of yen
2008 2009 2010

Proceeds ¥ 896 ¥ 660 ¥ 71,640
Gross realized gains 748 377 5,627
Gross realized losses (2 ) (267 ) (4,934 )


	Millions of yen
	2009			2010			2011
Proceeds	¥	660		¥	71,640		¥	3,585
Gross realized gains		377			5,627			475
Gross realized losses		(267	)		(4,934	)		(22	)

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Gross unrealized holding losses on and fair value of available-for-sale securities and cost method investments included in other investments as of March 31, ~~2009~~2010 and ~~2010,~~2011, aggregated by investment category and length of time during which individual securities were in a continuous unrealized loss position were as follows:

Millions of yen
2009
Less than
12 months

12 months or longer Total
Gross unrealized
Gross unrealized
Gross unrealized

Fair value holding losses Fair value holding losses Fair value holding losses

Available-for-sale:
Equity securities ¥ 62,405 ¥ 6,899 ¥ — ¥ — ¥ 62,405 ¥ 6,899
Cost method investments 438 1,398 35 68 473 1,466

Millions of yen
2010
Less than
12 months

12 months or longer Total
Gross unrealized
Gross unrealized
Gross unrealized

Fair value holding losses Fair value holding losses Fair value holding losses

Available-for-sale:
Equity securities ¥ 18,156 ¥ 2,302 ¥ 19,835 ¥ 2,636 ¥ 37,991 ¥ 4,938
Debt securities 4 0 — — 4 0
Cost method investments — — 276 1,309 276 1,309

~~F-21~~


	Millions of yen
	2010
	Less than 12 months				12 months or longer				Total
	Fair value		Gross unrealized holding losses		Fair value		Gross unrealized holding losses		Fair value		Gross unrealized holding losses
Available-for-sale:
Equity securities	¥	18,156	¥	2,302	¥	19,835	¥	2,636	¥	37,991	¥	4,938
Debt securities		4		0		—		—		4		0
Cost method investments		—		—		276		1,309		276		1,309

	Millions of yen
	2011
	Less than 12 months				12 months or longer				Total
	Fair value		Gross unrealized holding losses		Fair value		Gross unrealized holding losses		Fair value		Gross unrealized holding losses
Available-for-sale:
Equity securities	¥	4,781	¥	874	¥	10,351	¥	1,229	¥	15,132	¥	2,103
Debt securities		—		—		—		—		—		—
Cost method investments		42		66		104		218		146		284

~~NTT DOCOMO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

Other investments include long-term investments in various privately held companies.

For long-term investments in various privately held companies for which there are no quoted market prices, a reasonable estimate of fair value could not be made without incurring excessive costs. Accordingly, DOCOMO believes that it is not practicable to disclose estimated fair values of these cost method investments. Unless DOCOMO identifies events or changes in circumstances that may have had a significant adverse effect on the fair value of these investments, the fair value of such cost method investments are not estimated.

The aggregate carrying amount of cost method investments included in other investments and the aggregate carrying amount of investments whose fair values were not evaluated for impairment as of March 31, ~~2009~~2010 and ~~2010~~2011 were as follows:

Millions of yen
2009 2010

Cost method investments included in other investments ¥ 28,538 ¥ 14,351
Including: Investments whose fair values were not evaluated for impairment 25,709 9,918


	Millions of yen
	2010		2011
Cost method investments included in other investments	¥	14,351	¥	10,341
Including: Investments whose fair values were not evaluated for impairment		9,918		9,714

The amount of other-than-temporary impairment of marketable securities and other investments is disclosed in Note 12.

DOCOMO held approximately 11% of the outstanding common shares of KT Freetel Co., Ltd. (“KTF”) as of March 31, 2009, with the initial acquisition cost of ¥65,602 million. On January 20, 2009, DOCOMO agreed

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

with KT Corporation (“KT”) that DOCOMO would exchange 40% of its KTF shareholding for KT common shares and the remaining 60% for KT exchangeable bonds in connection with the proposed merger between KT and KTF. Therefore, DOCOMO determined that the decline in value of KTF shares was other than temporary and recognized ¥26,313 million of impairment loss on the investment in KTF shares based on its fair value as of March 31, 2009. The loss is recorded in other income (expense) under the line item “Other, net” in the consolidated statement of income and comprehensive income for the year ended March 31, 2009.

The exchange of KTF shares for KT exchangeable bonds and for KT common shares was carried out on May 27, 2009 and June 1, 2009, respectively. KT exchangeable bonds were acquired for ¥20,821 million and DOCOMO recognized ¥2,753 million of realized loss. KT common shares were acquired for ¥15,023 million and DOCOMO recognized ¥692 million of realized loss. The exchange of KT exchangeable bonds for KT ADRs was carried out on December 14, 2009. KT ADRs were acquired for ¥26,326 million and DOCOMO recognized ¥5,477 million of realized gain. These amounts are included in the table of proceeds and gross realized gains (losses) from the sale of available-for-sale securities and other investments for the year ended March 31, 2010 which is presented above.


7.	~~Goodwill and other intangible assets:~~

7. Goodwill and other intangible assets:

Goodwill—

The majority of DOCOMO’s goodwill was recognized when DOCOMO purchased all the remaining noncontrolling interests in its eight regional subsidiaries through share exchanges and made these subsidiaries wholly owned in November 2002.

~~F-22~~

~~NTT DOCOMO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

The changes in the carrying amount of goodwill by business segment for the years ended March 31, ~~2009~~2010 and ~~2010~~2011 were as follows:

Millions of yen
2009
Mobile phone
Miscellaneous

business businesses Consolidated

Balance at beginning of year ¥ 139,890 ¥ 18,999 ¥ 158,889
Goodwill acquired during the year 18 102 120
Goodwill decreased during the year (0 ) (344 ) (344 )
Foreign currency translation adjustment (1,293 ) (2,987 ) (4,280 )

Balance at end of year ¥ 138,615 ¥ 15,770 ¥ 154,385

Millions of yen
2010
Mobile phone
Miscellaneous

business businesses Consolidated

Balance at beginning of year ¥ 138,615 ¥ 15,770 ¥ 154,385
Goodwill acquired during the year — 43,456 43,456
Goodwill increased during the year — 345 345
Foreign currency translation adjustment 60 190 250

Balance at end of year ¥ 138,675 ¥ 59,761 ¥ 198,436


	Millions of yen
	2010
	Mobile phone business			Miscellaneous businesses			Consolidated
Balance at beginning of year	¥	138,597		¥	15,788		¥	154,385
Goodwill acquired during the year		3,426			40,030			43,456
Foreign currency translation adjustment		60			190			250
Other		—			345			345

Balance at end of year	¥	142,083		¥	56,353		¥	198,436


	Millions of yen
	2011
	Mobile phone business			Miscellaneous businesses			Consolidated
Balance at beginning of year	¥	142,083		¥	56,353		¥	198,436
Goodwill acquired during the year		10,852			—			10,852
Foreign currency translation adjustment		(1,219	)		(1,901	)		(3,120	)
Other		(509	)		(86	)		(595	)

Balance at end of year	¥	151,207		¥	54,366		¥	205,573

Information regarding operating segments is discussed in Note 14.

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The main ~~component~~components of goodwill acquired during the ~~year~~years ended March 31, 2010 ~~was~~and 2011 were ¥40,030 million associated with the acquisition of 51.0% shares of OAK LAWN MARKETING, ~~INC.~~

INC and ¥10,852 million associated with the additional acquisition of 65.0% shares of PacketVideo Corporation, respectively.

Other intangible assets—

Other intangible assets, as of March 31, ~~2009~~2010 and ~~2010~~2011 comprised the following:

Millions of yen
2009
Gross carrying
Accumulated
Net carrying

amount amortization amount

Amortizable intangible assets:
Software for telecommunications network ¥ 691,124 ¥ 464,579 ¥ 226,545
Internal-use software 939,103 673,258 265,845
Software acquired to be used in the manufacture of handsets 124,954 58,273 66,681
Customer related assets 50,949 50,949 —
Rights to use telecommunications facilities of wireline operators 20,820 9,604 11,216
Other 11,649 3,208 8,441

Total amortizable intangible assets ¥ 1,838,599 ¥ 1,259,871 ¥ 578,728

~~F-23~~


	Millions of yen
	2010
	Gross carrying amount		Accumulated amortization		Net carrying amount
Amortizable intangible assets:
Software for telecommunications network	¥	783,874	¥	540,767	¥	243,107
Internal-use software		1,014,142		740,675		273,467
Software acquired to be used in manufacture of handsets		158,738		77,877		80,861
Rights to use telecommunications facilities of wireline operators		18,193		6,380		11,813
Other		21,844		6,123		15,721

Total amortizable intangible assets	¥	1,996,791	¥	1,371,822	¥	624,969

Unamortizable intangible assets:
Trademarks and trade names					¥	3,722

Total unamortizable intangible assets					¥	3,722

Total					¥	628,691


	Millions of yen
	2011
	Gross carrying amount		Accumulated amortization		Net carrying amount
Amortizable intangible assets:
Software for telecommunications network	¥	824,404	¥	565,166	¥	259,238
Internal-use software		1,092,442		816,389		276,053
Software acquired to be used in manufacture of handsets		190,722		96,107		94,615
Rights to use telecommunications facilities of wireline operators		19,052		7,126		11,926
Other		37,624		11,181		26,443

Total amortizable intangible assets	¥	2,164,244	¥	1,495,969	¥	668,275

Unamortizable intangible assets:
Trademarks and trade names					¥	3,981

Total unamortizable intangible assets					¥	3,981

Total					¥	672,256

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL ~~STATEMENTS –~~ STATEMENTS—(Continued)

Millions of yen
2010
Gross carrying
Accumulated
Net carrying

amount amortization amount

Amortizable intangible assets:
Software for telecommunications network ¥ 783,874 ¥ 540,767 ¥ 243,107
Internal-use software 1,014,142 740,675 273,467
Software acquired to be used in the manufacture of handsets 158,738 77,877 80,861
Rights to use telecommunications facilities of wireline operators 18,193 6,380 11,813
Other 21,844 6,123 15,721

Total amortizable intangible assets ¥ 1,996,791 ¥ 1,371,822 ¥ 624,969

Unamortizable intangible assets:
Trademarks and trade names ¥ 3,722

Total unamortizable intangible assets ¥ 3,722

Total ¥ 628,691

The amount of amortizable intangible assets acquired during the year ended March 31, ~~2010~~2011 was ~~¥235,273~~¥250,949 million, the main components of which were software for telecommunications network in the amount of ~~¥95,638~~¥104,669 million and internal-use software in the amount of ~~¥94,651~~¥98,825 million. The weighted-average amortization period of such software for telecommunications network and internal-use software is 5.0 years and 4.8 years, respectively. Amortization of intangible assets for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010~~2011 was ~~¥197,324 million,~~ ¥189,678 million, ¥187,393 million and ~~¥187,393~~¥204,090 million, respectively. Estimated amortization of existing intangible assets for fiscal years ending March 31, ~~2011,~~ 2012, 2013, 2014, 2015 and ~~2015~~2016 is ~~¥191,361~~¥204,187 million, ~~¥144,658~~¥159,294 million, ~~¥102,016~~¥125,546 million, ~~¥68,438~~¥90,710 million, and ~~¥35,196~~¥41,488 million, respectively. The weighted-average amortization period of the intangible assets acquired during the year ended March 31, ~~2010~~2011 is ~~5.1~~5.0 years.

The amount of unamortizable intangible assets acquired during the year ended March 31, ~~2010~~2011 was ~~¥3,722~~¥259 million, the component of which was trademarks and trade names. ~~DOCOMO did not hold unamortizable intangible assets as of March 31, 2009.~~


8.	~~Other assets:~~

8. Other assets:

“Other assets” as of March 31, ~~2009~~2010 and ~~2010~~2011 comprised the following:

Millions of yen
2009 2010

Deposits ¥ 81,557 ¥ 79,151
Deferred customer activation costs 72,542 71,085
Installment receivables for handsets (Non-current) 96,799 85,753
Allowance for doubtful accounts (1,350 ) (4,047 )
Other 23,892 25,969

Total ¥ 273,440 ¥ 257,911

~~F-24~~


	Millions of yen
	2010			2011
Deposits	¥	79,151		¥	59,615
Deferred customer activation costs		71,085			72,214
Installment receivables for handsets (Non-current).		85,753			75,391
Allowance for doubtful accounts		(4,047	)		(1,118	)
Long-term bailment for consumption to a related party		—			20,000
Other		25,969			23,817

Total	¥	257,911		¥	249,919

Information regarding “Long-term bailment for consumption to a related party” is disclosed in Note 13.

9. Short-term borrowings and long-term debt:

~~NTT DOCOMO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~


9.	~~Short-term borrowings and long-term debt:~~

Short-term borrowings, excluding the current portion of long-term debt as of March 31, ~~2009~~2010 and ~~2010~~2011 were as follows:

Millions of yen
2009 2010

Short-term borrowings denominated in Euro:
Unsecured short-term loans from financial institutions ¥ — ¥ 78
(Year ended March 31, 2010 — weighted-average interest of 7.6% per annum)

Total short-term borrowings ¥ — ¥ 78


	Millions of yen
	2010		2011
Short-term borrowings denominated in Euro:
Unsecured short-term loans from financial institutions	¥	78	¥	276
(Year ended March 31, 2010—weighted-average interest rate per annum: 7.6%)
(Year ended March 31, 2011—weighted-average variable rate per annum: 5.3% as of March 31, 2011)

Total short-term borrowings	¥	78	¥	276

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Long-term debt as of March 31, ~~2009~~2010 and ~~2010~~2011 were as follows:

Millions of yen
2009 2010

Debt denominated in Japanese Yen:
Unsecured corporate bonds ¥ 572,233 ¥ 572,097
(Year ended March 31, 2009 — interest rates per annum : 1.0%-2.0%, due : years ending March 31,2011-2019)

(Year ended March 31, 2010 — interest rates per annum : 1.0%-2.0%, due : years ending March 31,2011-2019)

Unsecured indebtedness to financial institutions 67,000 38,000
(Year ended March 31, 2009 — interest rates per annum : 1.0%-1.5%, due : years ending March 31,2010-2013)

(Year ended March 31, 2010 — interest rates per annum : 1.3%-1.5%, due : years ending March 31,2011-2013)

Debt denominated in Euro:
Unsecured indebtedness to financial institutions — 172
(Year ended March 31, 2010 — variable rate per annum : 4.6% as of March 31, 2010, due : year ending March 31, 2012)

Sub-total ¥ 639,233 ¥ 610,269
Less: Current portion (29,000 ) (180,716 )

Total long-term debt ¥ 610,233 ¥ 429,553

~~DOCOMO issued ¥240,000 million unsecured corporate bonds in total during the year ended March 31, 2009.~~


	Millions of yen
	2010			2011
Debt denominated in Japanese Yen:
Unsecured corporate bonds	¥	572,097		¥	407,032
(Year ended March 31, 2010—interest rates per annum: 1.0%-2.0%, due: years ending March 31, 2011-2019)
(Year ended March 31, 2011—interest rates per annum: 1.0%-2.0%, due: years ending March 31, 2012-2019)
Unsecured indebtedness to financial institutions		38,000			21,000
(Year ended March 31, 2010—interest rates per annum: 1.3%-1.5%, due: years ending March 31, 2011-2013)
(Year ended March 31, 2011—interest rates per annum: 1.3%-1.5%, due: years ending March 31, 2012-2013)
Debt denominated in Euro:
Unsecured indebtedness to financial institutions		172			70
(Year ended March 31, 2010—variable rate per annum: 4.6% as of March 31, 2010, due: year ending March 31, 2012)
(Year ended March 31, 2011—variable rate per annum: 2.4% as of March 31, 2011, due: year ending March 31, 2012)

Sub-total	¥	610,269		¥	428,102
Less: Current portion		(180,716	)		(173,102	)

Total long-term debt	¥	429,553		¥	255,000

Interest rates on DOCOMO’s borrowings are mainly fixed. DOCOMO uses interest rate swap transactions, under which DOCOMO receives fixed rate interest payments and pays floating rate interest payments, to hedge the changes in fair value of certain debt as a part of its asset-liability management (ALM). Information relating to interest rate swap contracts is disclosed in Note 19. Interest costs related specifically to short-term borrowings and long-term debt for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010~~2011 totaled ~~¥5,882 million,~~ ¥7,187 million, ¥7,441 million and ~~¥7,441~~¥6,709 million, respectively. “Interest expense” in the consolidated statements of income and comprehensive income excludes the amounts of capitalized interest.

~~F-25~~

~~NTT DOCOMO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

The aggregate amounts of annual maturities of long-term debt as of March 31, ~~2010,~~2011, were as follows:

Millions of

Year ending March 31, yen

2011 ¥ 180,716
2012 174,553
2013 75,000
2014 70,000
2015 —
Thereafter 110,000

Total ¥ 610,269


~~10.~~	~~Equity:~~


Year ending March 31,	Millions of yen
2012	¥	173,102
2013		75,000
2014		70,000
2015		—
2016		—
Thereafter		110,000

Total	¥	428,102

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

10. Equity:

Effective May 1, 2006, the Corporate Law of Japan provides that (i) dividends of earnings require approval at a general meeting of shareholders, (ii) interim cash dividends can be distributed upon the approval of the board of directors, if the articles of incorporation provide for such interim cash dividends and (iii) an amount equal to at least 10% of decrease in retained earnings by dividends payment be appropriated from retained earnings to a legal reserve up to 25% of capital stock. The legal reserve is available for distribution upon approval of the shareholders.

The distributable amount available for the payments of dividends to shareholders as of March 31, ~~2010~~2011 was ~~¥3,213,669~~¥3,474,726 million and was included in “Additional paid-in capital” and “Retained earnings”.

In the general meeting of shareholders held on June ~~18, 2010,~~17, 2011, the shareholders approved cash dividends of ~~¥108,175~~¥107,816 million or ¥2,600 per share, payable to shareholders recorded as of March 31, ~~2010,~~2011, which were declared by the board of directors on April 28, ~~2010.~~

2011.

In order to improve capital efficiency and to implement flexible capital policies in accordance with the business environment, DOCOMO acquires treasury stock.

With regard to the acquisition of treasury stock, the Corporate Law of Japan provides that (i) it can be done according to the resolution of the general meeting of shareholders, and (ii) the acquisition of treasury stock through open market transactions can be done according to the resolution of the board of directors if the articles of incorporation contain such a provision. The provision is stipulated in DOCOMO’s articles of incorporation.

Issued shares and treasury stock—

DOCOMO acquired treasury stock at the request of dissenting shareholders, made pursuant to paragraph (1) of Article 797 of the Corporate Law of Japan, against the merger under which its eight regional subsidiaries were dissolved and merged into DOCOMO as of July 1, 2008.

~~F-26~~

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL ~~STATEMENTS –~~ STATEMENTS—(Continued)

The changes in the number of issued shares and treasury stock for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010~~2011 were as follows, where fractional shares are rounded off:

Number of
Number of

issued shares treasury stock

As of March 31, 2007 45,880,000 2,286,356

Acquisition of treasury stock based on the resolution by the general meeting of shareholders — 965,666
Acquisition of fractional shares — 51
Retirement of treasury stock (1,010,000 ) (1,010,000 )

As of March 31, 2008 44,870,000 2,242,073

Acquisition of treasury stock based on the resolution by the general meeting of shareholders — 856,405
Acquisition of treasury stock at the request of dissenting shareholders against the merger — 11,711
Acquisition of fractional shares — 4
Retirement of treasury stock (920,000 ) (920,000 )

As of March 31, 2009 43,950,000 2,190,193

Acquisition of treasury stock based on the resolution of the board of directors
— 154,065
Retirement of treasury stock
(160,000 ) (160,000 )

As of March 31, 2010
43,790,000 2,184,258


	Number of issued shares			Number of treasury stock
As of March 31, 2008		44,870,000			2,242,073

Acquisition of treasury stock based on the resolution by the general meeting of shareholders		—			856,405
Acquisition of treasury stock at the request of dissenting shareholders against the merger		—			11,711
Acquisition of fractional shares		—			4
Retirement of treasury stock		(920,000	)		(920,000	)

As of March 31, 2009		43,950,000			2,190,193

Acquisition of treasury stock based on the resolution of the board of directors		—			154,065
Retirement of treasury stock		(160,000	)		(160,000	)

As of March 31, 2010		43,790,000			2,184,258

Acquisition of treasury stock based on the resolution of the board of directors		—			138,141
Retirement of treasury stock		(140,000	)		(140,000	)

As of March 31, 2011		43,650,000			2,182,399

Effective August 1, 2008, DOCOMO abolished the fractional share system.

DOCOMO has not issued shares other than shares of its common stock.

The general ~~meetings~~meeting of shareholders approved stock repurchase plans as follows:

Approved maximum
Approved maximum

number of treasury stock
budget for share

Date of the general
to be repurchased
repurchase

meeting of shareholders Term of repurchase (Shares) (Millions of yen)

June 20, 2006 June 20, 2006 - June 19, 2007 1,400,000 ¥ 250,000
June 19, 2007 June 20, 2007 - June 19, 2008 1,000,000 200,000
June 20, 2008 June 21, 2008 - June 20, 2009 900,000 150,000

~~The meeting of the board of directors approved stock repurchase plans as follows:~~

Approved maximum
Approved maximum

number of treasury stock
budget for share

Date of the meeting of the
to be repurchased
repurchase

board of directors Term of repurchase (Shares) (Millions of yen)

November 9, 2009
November 10, 2009 - November 30, 2009 160,000 ¥ 20,000


Date of the general meeting of shareholders	Term of repurchase	Approved maximum number of treasury stock to be repurchased (Shares)		Approved maximum budget for share repurchase (Millions of yen)
June 19, 2007	June 20, 2007 – June 19, 2008		1,000,000	¥	200,000
June 20, 2008	June 21, 2008 – June 20, 2009		900,000		150,000
The meeting of the board of directors approved stock repurchase plans as follows:
Date of the meeting of the board of directors	Term of repurchase	Approved maximum number of treasury stock to be repurchased (Shares)		Approved maximum budget for share repurchase (Millions of yen)
November 9, 2009	November 10, 2009 – November 30, 2009		160,000	¥	20,000
December 17, 2010	December 20, 2010 – January 28, 2011		160,000		20,000

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The aggregate number and price of shares repurchased for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010~~2011 were as follows:

Year ended March 31, Shares Millions of yen

2008 965,717 ¥ 173,002
2009 868,120 136,846
2010
154,065 20,000

~~F-27~~


Year ended March 31,	Shares		Millions of yen
2009		868,120	¥	136,846
2010		154,065		20,000
2011		138,141		20,000

~~NTT DOCOMO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

Based on the resolution of the board of directors, DOCOMO retired its own shares held as treasury stock as shown in the following table. The share retirement resulted in a decrease of “Additional paid-in capital” in the same amount as the aggregate purchase price. There were no changes in the number of authorized shares.

Millions of

Date of the board of directors Shares yen

March 28, 2008 1,010,000 ¥ 187,387
March 26, 2009 920,000 163,526
March 26, 2010
160,000 27,936

Date of the board of directors
   Shares    Millions of yen
March 26, 2009
   920,000       ¥   163,526
March 26, 2010
   160,000       27,936
March 28, 2011
   140,000       24,195

Accumulated other comprehensive income (loss):

Changes in accumulated other comprehensive income (loss), net of applicable taxes, were as follows:

Millions of yen
Unrealized holding
Change in fair

gains (losses) on
value
Foreign currency
Accumulated other

available-for-sale
of derivative
translation
Pension liability
comprehensive

securities instruments adjustment adjustment income (loss)

As of March 31, 2007 ¥ 13,829 ¥ (58 ) ¥ 7,427 ¥ (8,324 ) ¥ 12,874
2008 change (16,331 ) 133 7,172 (3,438 ) (12,464 )

As of March 31, 2008 ¥ (2,502 ) ¥ 75 ¥ 14,599 ¥ (11,762 ) ¥ 410
2009 change (1,610 ) (125 ) (47,586 ) (16,778 ) (66,099 )

As of March 31, 2009 ¥ (4,112 ) ¥ (50 ) ¥ (32,987 ) ¥ (28,540 ) ¥ (65,689 )
2010 change
15,096 (63 ) 5,852 7,425 28,310

As of March 31, 2010
¥ 10,984 ¥ (113 ) ¥ (27,135 ) ¥ (21,115 ) ¥ (37,379 )


	Millions of yen
	Unrealized holding gains (losses) on available-for-sale securities			Change in fair value of derivative instruments			Foreign currency translation adjustment			Pension liability adjustment			Accumulated other comprehensive income (loss)
As of March 31, 2008	¥	(2,502	)	¥	75		¥	14,599		¥	(11,762	)	¥	410
2009 change		(1,610	)		(125	)		(47,586	)		(16,778	)		(66,099	)

As of March 31, 2009	¥	(4,112	)	¥	(50	)	¥	(32,987	)	¥	(28,540	)	¥	(65,689	)
2010 change		15,096			(63	)		5,852			7,425			28,310

As of March 31, 2010	¥	10,984		¥	(113	)	¥	(27,135	)	¥	(21,115	)	¥	(37,379	)
2011 change		(5,293	)		4			(27,854	)		(6,433	)		(39,576	)

As of March 31, 2011	¥	5,691		¥	(109	)	¥	(54,989	)	¥	(27,548	)	¥	(76,955	)

The amount of taxes applied to the items in “Accumulated other comprehensive income (loss)” is described in Note 16.


~~11.~~	~~Research and development expenses and advertising expenses:~~

11. Research and development expenses and advertising expenses:

Research and development expenses—

Research and development costs are charged to expense as incurred. Research and development expenses are included primarily in “Selling, general and administrative” expenses and amounted to ~~¥100,035 million,~~ ¥100,793 million, ¥109,916 million and ~~¥109,916~~¥109,108 million for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010,~~2011, respectively.

Advertising expenses—

Advertising costs are charged to expense as incurred. Advertising expenses are included in “Selling, general and administrative” expenses and amounted to ~~¥55,357 million,~~ ¥54,986 million, ¥54,114 million and ~~¥54,114~~¥54,984 million for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010,~~2011, respectively.

~~F-28~~

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL ~~STATEMENTS –~~ STATEMENTS—(Continued)


~~12.~~	~~Other income (expense):~~

12. Other income (expense):

Other income (expense) included in “Other, net” in the consolidated statements of income and comprehensive income for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010~~2011 comprised the following:

Millions of yen
2008 2009 2010

Net realized gains (losses) on investments in affiliates ¥ 333 ¥ — ¥ (26 )
Net realized gains on marketable securities and other investments 746 110 693
Other-than-temporary impairment of marketable securities and other investments
(11,418 ) (57,812 ) (4,007 )
Foreign exchange gains (losses), net (1,609 ) (851 ) (615 )
Rental revenue received 2,256 2,144 2,524
Dividends income 3,310 2,951 4,652
Penalties and compensation for damages 2,193 4,161 2,204
Other, net (1,366 ) 1,267 259

Total ¥ (5,555 ) ¥ (48,030 ) ¥ 5,684


~~13.~~	~~Related party transactions:~~


	Millions of yen
	2009			2010			2011
Net realized gains (losses) on dispositions of investments in affiliates	¥	—		¥	(26	)	¥	95
Net realized gains on dispositions of marketable securities and other investments		110			693			453
Other-than-temporary impairment loss on marketable securities and other investments		(57,812	)		(4,007	)		(13,424	)
Foreign exchange gains (losses), net		(851	)		(615	)		(1,575	)
Rental revenue received		2,144			2,524			1,804
Dividends income		2,951			4,652			4,819
Penalties and compensation for damages		4,161			2,204			1,605
Other, net		1,267			259			449

Total	¥	(48,030	)	¥	5,684		¥	(5,774	)

13. Related party transactions:

As previously described, DOCOMO is majority-owned by NTT, which is a holding company for more than ~~600~~700 companies comprising the NTT group.

DOCOMO has entered into a number of different types of transactions with NTT, its subsidiaries and its affiliated companies in the ordinary course of business. DOCOMO’s transactions with NTT group companies include purchases of wireline telecommunications services (i.e. for DOCOMO’s offices and operations facilities) based on actual usage, leasing of various telecommunications facilities and sales of DOCOMO’s various wireless ~~communications~~telecommunications services. During the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010,~~2011, DOCOMO purchased capital equipment from NTT group companies in the amount of ~~¥78,112 million,~~ ¥70,840 million, ~~and~~ ¥72,928 million ~~respectively.~~

¥76,214 million, respectively.

DOCOMO has entered into contracts of bailment of cash for consumption with NTT FINANCE CORPORATION (“NTT FINANCE”) for cash management purposes. NTT and its subsidiaries collectively own 99.3% of the voting interests in NTT FINANCE, of which DOCOMO owned 2.9% as of March 31, ~~2010.~~2011. Accordingly, NTT FINANCE is a related party of DOCOMO. Under the terms of the contracts, excess cash generated at DOCOMO are bailed to NTT FINANCE and NTT FINANCE manages the funds on behalf of DOCOMO. DOCOMO can withdraw the funds upon its demand and receives relevant interests from NTT FINANCE. The funds are accounted for as “Cash and cash ~~equivalents”~~equivalents,” “Short-term investments,” or ~~“Short-term investments”~~“Other assets” depending on the initial contract periods.

The balance of bailment was ¥60,000 million as of March 31, 2009. The assets related to the contracts were recorded as “Cash and cash equivalents” in the consolidated balance sheet as of March 31, 2009. The contracts had remaining terms to maturity ranging up to 1 month with an average interest rate of 0.5% per annum as of March 31, 2009.

The balance of bailment was ¥110,000 million as of March 31, 2010. The assets related to the contracts were recorded as “Cash and cash equivalents” of ¥20,000 million and “Short-term investments” of ¥90,000 million in the

~~F-29~~

~~NTT DOCOMO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

consolidated balance sheet as of March 31, 2010. The contracts had remaining terms to maturity ranging up to 4 months with an average interest rate of 0.3% per annum as of March 31, 2010.

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The balance of bailment was ¥70,000 million as of March 31, 2011. The assets related to the contracts were recorded as “Cash and cash equivalents” of ¥50,000 million and “Other assets” of ¥20,000 million in the consolidated balance sheet as of March 31, 2011. The contracts had remaining terms to maturity ranging up to 2 years and 9 months with an average interest rate of 0.3% per annum as of March 31, 2011.

The average balance of the contracts of bailment expired during the year ended March 31, ~~2008,~~ 2009, 2010 and ~~2010~~2011 was ~~¥51,243 million,~~ ¥48,778 million, ¥15,616 million and ~~¥15,616~~¥82,959 million, respectively. The recorded amounts of interest income derived from the contracts were ~~¥388 million,~~ ¥270 million, ¥75 million and ~~¥75~~¥171 million for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010,~~2011, respectively.


~~14.~~	~~Segment reporting:~~

~~The operating segments reported below are those for which segment-specific financial information is available.~~

14. Segment reporting:

DOCOMO’s management uses ~~this~~the following segment financial information to make decisions on the allocation of management resources and to evaluate business performance. Accounting policies used to determine segment profit or loss and segment assets are consistent with those used to prepare the consolidated financial statements in accordance with ~~U.S.GAAP.~~

U.S. GAAP.

DOCOMO has two operating segments. The mobile phone business segment includes Xi services, FOMA services, mova services, packet communications services, satellite mobile communications services, international services and the equipment sales related to these services. The miscellaneous businesses segment includes home shopping services provided primarily through TV media, high-speed internet connection for hotel facilities, advertisement services, development, sales and maintenance of IT systems, credit services and other miscellaneous services, which in the aggregate are not significant in amount. DOCOMO terminated its PHS services on January 7, 2008. Therefore, “PHS business”, which was presented separately in the past, has been reclassified into “Miscellaneous businesses” in the tables below. DOCOMO plans to terminate mova services on March 31, 2012. The “Corporate” column in the tables below is not an operating segment but is included to reflect the recorded amounts of common assets which are not allocated to any operating segment.

DOCOMO identifies its reportable segments based on the nature of services included, as well as the characteristics of the telecommunications networks used to provide those services. DOCOMO’s management monitors and evaluates the performance of its segments based on the information derived from DOCOMO’s management reports.

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Assets by segment are not included in the management reports, however, they are included herein only for the purpose of disclosure. Depreciation and amortization is shown separately, as well as included as part of operating expenses. Corporate assets primarily include cash, ~~deposits,~~ securities ~~loans~~ and investments in affiliates. DOCOMO allocates amounts of asset and related depreciation and amortization to common assets, such as buildings for telecommunications purposes and common facilities, on a systematic and rational basis based on the proportionate amount of network assets of each segment. Capital expenditures in the “Corporate” column include ~~expenditures in “Miscellaneous businesses” and~~ certain expenditures related to the buildings for telecommunications purposes and common facilities, which are not allocated to each segment.

~~F-30~~


	Millions of yen
Year ended March 31, 2009	Mobile phone business		Miscellaneous businesses			Corporate		Consolidated
Operating revenues	¥	4,381,254	¥	66,726		¥	—	¥	4,447,980
Operating expenses		3,525,967		91,054			—		3,617,021

Operating income (loss)	¥	855,287	¥	(24,328	)	¥	—	¥	830,959

Other income (expense)								¥	(50,486	)

Income before income taxes and equity in net income (losses) of affiliates								¥	780,473

Other significant non-cash item:
Point program expense	¥	111,062	¥	3,663		¥	—	¥	114,725

Total assets	¥	4,960,000	¥	139,617		¥	1,388,603	¥	6,488,220

Depreciation and amortization	¥	796,807	¥	7,352		¥	—	¥	804,159

Capital expenditures	¥	601,307	¥	—		¥	136,299	¥	737,606


	Millions of yen
Year ended March 31, 2010	Mobile phone business		Miscellaneous businesses			Corporate		Consolidated
Operating revenues	¥	4,167,704	¥	116,700		¥	—	¥	4,284,404
Operating expenses		3,322,064		128,095			—		3,450,159

Operating income (loss)	¥	845,640	¥	(11,395	)	¥	—	¥	834,245

Other income (expense)								¥	1,912

Income before income taxes and equity in net income (losses) of affiliates								¥	836,157

Other significant non-cash item:
Point program expense	¥	134,954	¥	7,266		¥	—	¥	142,220

Total assets	¥	4,949,025	¥	259,283		¥	1,548,467	¥	6,756,775

Depreciation and amortization	¥	691,851	¥	9,295		¥	—	¥	701,146

Capital expenditures	¥	556,829	¥	—		¥	129,679	¥	686,508

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL ~~STATEMENTS –~~ STATEMENTS—(Continued)

Millions of yen
Mobile phone
Miscellaneous

Year ended March 31, 2008 business businesses Corporate Consolidated

Operating revenues ¥ 4,647,132 ¥ 64,695 ¥ — ¥ 4,711,827
Operating expenses 3,788,943 114,572 — 3,903,515

Operating income (loss) ¥ 858,189 ¥ (49,877 ) ¥ — ¥ 808,312

Other income (expense) ¥ (7,624 )

Income before income taxes and equity in net income (losses) of affiliates ¥ 800,688

Other significant non-cash item:
Point program expense ¥ 83,314 ¥ 1,028 ¥ — ¥ 84,342

Total assets ¥ 4,838,663 ¥ 100,332 ¥ 1,271,839 ¥ 6,210,834

Depreciation and amortization ¥ 767,481 ¥ 8,944 ¥ — ¥ 776,425

Capital expenditures ¥ 623,975 ¥ — ¥ 134,768 ¥ 758,743

Millions of yen
Mobile phone
Miscellaneous

Year ended March 31, 2009 business businesses Corporate Consolidated

Operating revenues ¥ 4,381,254 ¥ 66,726 ¥ — ¥ 4,447,980
Operating expenses 3,525,967 91,054 — 3,617,021

Operating income (loss) ¥ 855,287 ¥ (24,328 ) ¥ — ¥ 830,959

Other income (expense) ¥ (50,486 )

Income before income taxes and equity in net income (losses) of affiliates ¥ 780,473

Other significant non-cash item:
Point program expense ¥ 111,062 ¥ 3,663 ¥ — ¥ 114,725

Total assets ¥ 4,960,000 ¥ 139,617 ¥ 1,388,603 ¥ 6,488,220

Depreciation and amortization ¥ 796,807 ¥ 7,352 ¥ — ¥ 804,159

Capital expenditures ¥ 601,307 ¥ — ¥ 136,299 ¥ 737,606

~~F-31~~


	Millions of yen
Year ended March 31, 2011	Mobile phone business		Miscellaneous businesses			Corporate		Consolidated
Operating revenues	¥	4,090,659	¥	133,614		¥	—	¥	4,224,273
Operating expenses		3,233,925		145,619			—		3,379,544

Operating income (loss)	¥	856,734	¥	(12,005	)	¥	—	¥	844,729

Other income (expense)								¥	(9,391	)

Income before income taxes and equity in net income (losses) of affiliates								¥	835,338

Other significant non-cash item:
Point program expense	¥	118,576	¥	8,271		¥	—	¥	126,847

Total assets	¥	4,843,925	¥	286,338		¥	1,661,330	¥	6,791,593

Depreciation and amortization	¥	682,029	¥	11,034		¥	—	¥	693,063

Capital expenditures	¥	520,770	¥	4,759		¥	142,947	¥	668,476

~~NTT DOCOMO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

Millions of yen
Mobile phone
Miscellaneous

Year ended March 31, 2010 business businesses Corporate Consolidated

Operating revenues ¥ 4,167,704 ¥ 116,700 ¥ — ¥ 4,284,404
Operating expenses 3,322,064 128,095 — 3,450,159

Operating income (loss) ¥ 845,640 ¥ (11,395 ) ¥ — ¥ 834,245

Other income (expense) ¥ 1,912

Income before income taxes and equity in net income (losses) of affiliates ¥ 836,157

Other significant non-cash item:
Point program expense ¥ 134,954 ¥ 7,266 ¥ — ¥ 142,220

Total assets ¥ 4,949,025 ¥ 259,283 ¥ 1,548,467 ¥ 6,756,775

Depreciation and amortization ¥ 691,851 ¥ 9,295 ¥ — ¥ 701,146

Capital expenditures ¥ 556,829 ¥ — ¥ 129,679 ¥ 686,508

DOCOMO does not disclose geographical information, since the amounts of operating revenues generated and long-lived assets owned outside Japan are immaterial.

There were no sales and operating revenue from transactions with a single external customer amounting to 10% or more of DOCOMO’s revenues for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010.~~

2011.

Revenues from external customers for each similar product and service were as follows:

Millions of yen
Year ended March 31, 2008 2009 2010

Operating Revenues :

Wireless services ¥ 4,165,234 ¥ 3,841,082 ¥ 3,776,909
Cellular services revenues 4,018,988 3,661,283 3,499,452
— Voice revenues 2,645,096 2,149,617 1,910,499
Including: FOMA services 2,084,263 1,877,835 1,785,518
— Packet communications revenues 1,373,892 1,511,666 1,588,953
Including: FOMA services 1,254,648 1,449,440 1,558,284
Other revenues 146,246 179,799 277,457
Equipment sales 546,593 606,898 507,495

Total operating revenues ¥ 4,711,827 ¥ 4,447,980 ¥ 4,284,404

~~F-32~~


	Millions of yen
Year ended March 31,	2009		2010		2011
Operating Revenues:
Wireless services	¥	3,841,082	¥	3,776,909	¥	3,746,869
Cellular services revenues		3,661,283		3,499,452		3,407,145
—Voice revenues		2,149,617		1,910,499		1,712,218
Including: FOMA services		1,877,835		1,785,518		1,658,863
—Packet communications revenues		1,511,666		1,588,953		1,694,927
Including: FOMA services		1,449,440		1,558,284		1,679,840
Other revenues		179,799		277,457		339,724
Equipment sales		606,898		507,495		477,404

Total operating revenues	¥	4,447,980	¥	4,284,404	¥	4,224,273

15. Employees’ retirement benefits:

~~NTT DOCOMO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~


~~15.~~	~~Employees’ retirement benefits:~~

Severance payments and contract-type corporate pension plan—

Employees whose services with DOCOMO are terminated are normally entitled to lump-sum severance or retirement payments and pension benefits based on internal labor regulations. The amounts are determined by a combination of factors such as the employee’s salary eligibility, length of service and other conditions. The pension benefit is covered by the non-contributory defined benefit pension plans (“Defined benefit pension plans”) sponsored by DOCOMO.

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table presents reconciliations and changes in the Defined benefit pension plans’ projected benefit obligations and fair value of plan assets for the years ended March 31, ~~2009~~2010 and ~~2010.~~2011. DOCOMO uses a measurement date of March 31 for its Defined benefit pension plans.

Millions of yen
2009 2010

Change in benefit obligations:
Projected benefit obligation, beginning of year ¥ 182,228 ¥ 186,177
Service cost 9,216 9,204
Interest cost 4,058 3,979
Actuarial (gain) loss 914 592
Transfer of liability from defined benefit pension plans of the NTT group 245 215
Other — 151
Benefit payments (10,484 ) (9,950 )

Projected benefit obligation, end of year ¥ 186,177 ¥ 190,368
Change in fair value of plan assets:
Fair value of plan assets, beginning of year ¥ 79,544 ¥ 67,040
Actual return on plan assets (13,106 ) 9,864
Employer contributions 2,676 2,680
Transfer of plan assets from defined benefit pension plans of the NTT group 57 49
Benefit payments (2,131 ) (2,563 )

Fair value of plan assets, end of year ¥ 67,040 ¥ 77,070
At March 31:
Funded status ¥ (119,137 ) ¥ (113,298 )


	Millions of yen
	2010			2011
Change in benefit obligations:
Projected benefit obligation, beginning of year	¥	186,177		¥	190,368
Service cost		9,204			9,244
Interest cost		3,979			3,894
Actuarial (gain) loss		592			1,586
Transfer of liability from defined benefit pension plans of the NTT group		215			328
Other		151			7
Benefit payments		(9,950	)		(9,363	)

Projected benefit obligation, end of year	¥	190,368		¥	196,064

Change in fair value of plan assets:
Fair value of plan assets, beginning of year	¥	67,040		¥	77,070
Actual return on plan assets		9,864			(1,407	)
Employer contributions		2,680			5,053
Transfer of plan assets from defined benefit pension plans of the NTT group		49			77
Benefit payments		(2,563	)		(2,980	)

Fair value of plan assets, end of year	¥	77,070		¥	77,813

At March 31:
Funded status	¥	(113,298	)	¥	(118,251	)

The amounts recognized in DOCOMO’s consolidated balance sheets as of March 31, ~~2009~~2010 and ~~2010~~2011 were as follows:

Millions of yen
2009 2010

Liability for employees’ retirement benefits ¥ (119,155 ) ¥ (113,332 )
Prepaid pension cost 18 34

Net amount recognized ¥ (119,137 ) ¥ (113,298 )

~~F-33~~


	Millions of yen
	2010			2011
Liability for employees’ retirement benefits	¥	(113,332	)	¥	(118,290	)
Prepaid pension cost		34			39

Net amount recognized	¥	(113,298	)	¥	(118,251	)

~~NTT DOCOMO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

Prepaid pension cost is included in “Other assets” in the consolidated balance sheets.

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Items recognized in “Accumulated other comprehensive income (loss)” as of March 31, ~~2009~~2010 and ~~2010~~2011 were as follows:

Millions of yen
2009 2010

Actuarial gains (losses), net ¥ (48,865 ) ¥ (39,052 )
Prior service cost 16,425 14,518
Transition obligation (1,185 ) (1,060 )

Total ¥ (33,625 ) ¥ (25,594 )


	Millions of yen
	2010			2011
Actuarial gains (losses), net	¥	(39,052	)	¥	(42,262	)
Prior service cost		14,518			12,611
Transition obligation		(1,060	)		(935	)

Total	¥	(25,594	)	¥	(30,586	)

The accumulated benefit obligation for the Defined benefit pension plans was ~~¥180,214~~¥184,555 million and ~~¥184,555~~¥190,067 million as of March 31, ~~2009~~2010 and ~~2010,~~2011, respectively.

The projected benefit obligation, the accumulated benefit obligation and the fair value of plan assets in the pension plans with the projected or accumulated benefit obligation in excess of the plan assets as of March 31, ~~2009~~2010 and ~~2010~~2011 were as follows:

Millions of yen
2009 2010

Plans with projected benefit obligation in excess of plan assets:
Projected benefit obligation ¥ 186,169 ¥ 190,346
Fair value of plan assets 67,014 77,014
Plans with accumulated benefit obligation in excess of plan assets:
Accumulated benefit obligation ¥ 180,207 ¥ 184,532
Fair value of plan assets 67,014 77,014


	Millions of yen
	2010		2011
Plans with projected benefit obligation in excess of plan assets:
Projected benefit obligation	¥	190,346	¥	196,025
Fair value of plan assets		77,014		77,735
Plans with accumulated benefit obligation in excess of plan assets:
Accumulated benefit obligation	¥	184,532	¥	190,028
Fair value of plan assets		77,014		77,735

The net periodic pension cost for the Defined benefit pension plans for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010~~2011 comprised the following:

Millions of yen
2008 2009 2010

Service cost ¥ 9,521 ¥ 9,216 ¥ 9,204
Interest cost on projected benefit obligation 3,889 4,058 3,979
Expected return on plan assets (2,144 ) (2,116 ) (1,649 )
Amortization of prior service cost (1,907 ) (1,907 ) (1,907 )
Amortization of actuarial gains and losses 834 1,192 2,190
Amortization of transition obligation 127 127 125

Net periodic pension cost ¥ 10,320 ¥ 10,570 ¥ 11,942

~~F-34~~


	Millions of yen
	2009			2010			2011
Service cost	¥	9,216		¥	9,204		¥	9,244
Interest cost on projected benefit obligation		4,058			3,979			3,894
Expected return on plan assets		(2,116	)		(1,649	)		(1,714	)
Amortization of prior service cost		(1,907	)		(1,907	)		(1,907	)
Amortization of actuarial gains and losses		1,192			2,190			1,497
Amortization of transition obligation		127			125			125

Net periodic pension cost	¥	10,570		¥	11,942		¥	11,139

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL ~~STATEMENTS –~~ STATEMENTS—(Continued)

Other changes in plan assets and benefit obligations of the Defined benefit pension plans recognized in “Accumulated other comprehensive income (loss)” for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010~~2011 comprised the following:

Millions of yen
2008 2009 2010

Other changes in plan assets and benefit obligations recognized in “Accumulated other comprehensive income (loss)”:
Actuarial (gains) losses arising during period, net ¥ 6,018 ¥ 16,136 ¥ (7,623 )
Amortization of prior service cost 1,907 1,907 1,907
Amortization of actuarial gains and losses (834 ) (1,192 ) (2,190 )
Amortization of transition obligation (127 ) (127 ) (125 )

Total recognized in “Accumulated other comprehensive income (loss)” ¥ 6,964 ¥ 16,724 ¥ (8,031 )

Total recognized in net periodic pension cost and “Accumulated other comprehensive income (loss)” ¥ 17,284 ¥ 27,294 ¥ 3,911


	Millions of yen
	2009			2010			2011
Other changes in plan assets and benefit obligations recognized in “Accumulated other comprehensive income (loss)”:
Actuarial (gains) losses arising during period, net	¥	16,136		¥	(7,623	)	¥	4,707
Amortization of prior service cost		1,907			1,907			1,907
Amortization of actuarial gains and losses		(1,192	)		(2,190	)		(1,497	)
Amortization of transition obligation		(127	)		(125	)		(125	)

Total recognized in “Accumulated other comprehensive income (loss)”	¥	16,724		¥	(8,031	)	¥	4,992

Total recognized in net periodic pension cost and “Accumulated other comprehensive income (loss)” was ¥27,294 million, ¥3,911 million and ¥16,131 million for the years ended March 31, 2009, 2010 and 2011, respectively.

The amount of actuarial losses, ~~unrecognized~~ transition obligation and prior service cost, which are expected to be amortized and reclassified from “Accumulated other comprehensive income (loss)” to net pension cost during the year ending March 31, ~~2011~~2012 is ~~¥1,497~~¥1,644 million, ¥125 million and ¥(1,907) million, respectively.

The assumptions used in determination of the pension plans’ projected benefit obligations as of March 31, ~~2009~~2010 and ~~2010~~2011 were as follows:

2009 2010

Discount rate 2.2 % 2.1 %
Long-term rate of salary increases 2.2 2.2


	2010			2011
Discount rate		2.1	%		2.0	%
Long-term rate of salary increases		2.2			2.9

The assumptions used in determination of the net periodic pension cost for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010~~2011 were as follows:

2008 2009 2010

Discount rate 2.2 % 2.3 % 2.2 %
Long-term rate of salary increases 2.1 2.2 2.2
Expected long-term rate of return on plan assets 2.5 2.5 2.5


	2009			2010			2011
Discount rate		2.3	%		2.2	%		2.1	%
Long-term rate of salary increases		2.2			2.2			2.2
Expected long-term rate of return on plan assets		2.5			2.5			2.3

In determining the expected long-term rate of return on plan assets, DOCOMO considers the current and projected asset allocations, as well as expected long-term investment returns and risks for each category of the plan assets based on analysis of historical results.

~~F-35~~

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL ~~STATEMENTS –~~ STATEMENTS—(Continued)

The following table presents the fair values of DOCOMO’s pension plan assets as of March 31, ~~2010.~~2010 and 2011. Descriptions of fair value hierarchy and the inputs used in measuring fair value are presented in Note 18.

Millions of yen
2010
Total Level 1 Level 2 Level 3

Cash and cash equivalents ¥ 443 ¥ 443 ¥ — ¥ —
Debt securities
Japanese government bonds/local government bonds 21,332 19,273 2,059 —
Domestic corporate bonds 7,147 — 7,147 —
Foreign government bonds 6,518 6,043 475 —
Foreign corporate bonds 381 21 308 52
Equity securities
Domestic stocks 19,610 19,346 264 —
Foreign stocks 9,916 9,916 — —
Securities investment trust beneficiary certificates
Domestic debt securities 755 — 755 —
Domestic equity securities 1,244 — 1,244 —
Foreign debt securities 366 — 366 —
Foreign equity securities 861 — 861 —
Life insurance company general accounts 6,715 — 6,715 —
Others 1,782 (0 ) (0 ) 1,782

Total ¥ 77,070 ¥ 55,042 ¥ 20,194 ¥ 1,834


	Millions of yen
	2010
	Total		Level 1			Level 2			Level 3
Cash and cash equivalents	¥	443	¥	443		¥	—		¥	—
Debt securities
Japanese government bonds/local government bonds		21,332		19,273			2,059			—
Domestic corporate bonds		7,147		—			7,147			—
Foreign government bonds		6,518		6,043			475			—
Foreign corporate bonds		381		21			308			52
Equity securities
Domestic stocks		19,610		19,346			264			—
Foreign stocks		9,916		9,916			—			—
Securities investment trust beneficiary certificates
Domestic debt securities		755		—			755			—
Domestic equity securities		1,244		—			1,244			—
Foreign debt securities		366		—			366			—
Foreign equity securities		861		—			861			—
Life insurance company general accounts		6,715		—			6,715			—
Other		1,782		(0	)		(0	)		1,782

Total	¥	77,070	¥	55,042		¥	20,194		¥	1,834


	Millions of yen
	2011
	Total		Level 1			Level 2			Level 3
Cash and cash equivalents	¥	866	¥	866		¥	—		¥	—
Debt securities
Japanese government bonds/local government bonds		21,852		20,258			1,594			—
Domestic corporate bonds		8,023		—			8,023			—
Foreign government bonds		9,556		9,067			489			—
Foreign corporate bonds		455		89			354			12
Equity securities
Domestic stocks		16,873		16,849			24			—
Foreign stocks		7,515		7,515			—			—
Securities investment trust beneficiary certificates
Domestic debt securities		966		—			966			—
Domestic equity securities		997		—			997			—
Foreign debt securities		632		—			632			—
Foreign equity securities		583		—			583			—
Life insurance company general accounts		7,528		—			7,528			—
Other		1,967		(0	)		(2	)		1,969

Total	¥	77,813	¥	54,644		¥	21,188		¥	1,981

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Cash and cash equivalents

Cash and cash equivalents include foreign currency deposits and call loans, and are all classified as Level 1.

Debt securities

Debt securities include Japanese government bonds and local government bonds, domestic corporate bonds, foreign government bonds and foreign corporate bonds. If active market prices are available, fair value is measured by quoted prices for identical assets in active markets, which is classified as Level 1. If active market prices are not available, fair value is measured by inputs derived principally from observable market data provided by financial institutions, which is classified as Level 2. Fair value measured by inputs derived from unobservable data is classified as Level 3.

Equity securities

Equity securities include domestic stocks and foreign stocks. If active market prices are available, fair value is measured by quoted prices for identical assets in active markets, which is classified as Level 1. If active market prices are not available, fair value is measured by inputs derived principally from observable market data provided by financial institutions, which is classified as Level 2.

Securities investment trust beneficiary certificates

Securities investment trust beneficiary certificates include bond investment trusts and foreign stock investment trusts. Fair values of securities investment trust beneficiary certificates are measured by inputs derived principally from observable market data provided by financial institutions. Therefore, they are classified as Level 2.

~~F-36~~

~~NTT DOCOMO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

Life insurance company general accounts

Life insurance company general accounts are the financial assets which guarantee an expected rate of return and a principal and they are all classified as Level 2.

~~Others~~

~~Others include~~

Other

Other includes fund of hedge funds and pension investment trust beneficiary rights. Fair value measured by inputs derived from unobservable data provided by financial institutions is classified as Level 3.

Level 3 reconciliation is not disclosed, since the amounts in Level 3 are immaterial.

The Defined benefit pension plans’ policy toward plan asset management is formulated with the ultimate objective of ensuring the steady disbursement of pension benefits in future periods. The long-term objective of asset management, therefore, is to secure the total profits deemed necessary to ensure the financial soundness of the plan assets. To achieve this, DOCOMO selects various investments and takes into consideration their expected returns and risks and the correlation among the investments. DOCOMO then sets a target allocation ratio for the plan assets and endeavors to maintain that ratio. The target ratio is formulated from a mid- to long-term perspective and reviewed annually. In the event that the investment environment changes dramatically, DOCOMO will review the asset allocation as necessary. The target ratio in March ~~2010~~2011 was: domestic bonds, ~~40.0%~~41.5%; domestic stocks, ~~25.0%~~23.0%; foreign bonds, ~~10.0%~~15.0%; foreign stocks, ~~15.0%~~10.0%; and life insurance company general accounts, ~~10.0%~~10.5%. As securities investment trust beneficiary certificates are established for each asset, they are allocated among domestic bonds, domestic stocks, foreign bonds and foreign stocks.

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of March 31, ~~2009~~2010 and ~~2010,~~2011, securities owned by the Defined benefit pension plans as its plan ~~asset~~assets included the stock of NTT and the NTT group companies listed in Japan including DOCOMO in the amount of ~~¥498~~¥543 million ~~(0.8%~~(0.7% of total plan assets) and ~~¥543~~¥515 million (0.7% of total plan assets), respectively.

~~DOCOMO’s pension plan assets do not have a concentration of material risks, including market risks and credit risks.~~

Occasionally, employees of the NTT group companies transfer to DOCOMO. Upon such transfer, the NTT group companies transfer the relevant vested pension obligation for each employee along with a corresponding amount of plan assets and cash. Therefore, the difference between the pension obligation and related plan assets transferred from the NTT group companies to DOCOMO, included in the above table which presents reconciliations of the changes in the Defined benefit pension plans’ projected benefit obligations and fair value of plan assets, represents cash paid by the NTT group companies to DOCOMO, which has not been invested in plan assets.

DOCOMO expects to contribute ~~¥3,289~~¥5,140 million to the Defined benefit pension plans in the year ending March 31, ~~2011.~~

~~F-37~~

2012.

~~NTT DOCOMO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

The benefit payments, which reflect expected future service under the Defined benefit pension plans, are expected to be as follows:

Year ending March 31, Millions of yen

2011 ¥ 11,364
2012 10,966
2013 11,653
2014 11,827
2015 11,607
2016-2020 69,666

Year ending March 31,
   Millions of yen
2012
   ¥   10,630
2013
   11,069
2014
   11,639
2015
   11,873
2016
   13,083
2017-2021
   68,081

Social welfare pension scheme and NTT Kigyou-Nenkin-Kikin (NTT Corporate Defined Benefit Pension Plan)—

DOCOMO participates in the national welfare pension plan (“National Plan”) and a contributory defined benefit pension plan sponsored by the NTT group (NTT Kigyou-Nenkin-Kikin or NTT Corporate Defined Benefit Pension Plan, “NTT CDBP”). The National Plan is a government-regulated social welfare pension plan under the Japanese Employees’ Pension Insurance Act and both NTT group and its employees provide contributions to such plan every year. The National Plan is considered a multi-employer plan and contributions to such plan are recognized as expenses. The total amount of contributions by DOCOMO was ~~¥13,369 million,~~ ¥13,627 million, ¥14,425 million and ~~¥14,425~~¥14,703 million for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010,~~2011, respectively.

Both NTT group, including DOCOMO, and its employees provide contributions to the NTT CDBP to supplement the pension benefits to which the employees are entitled under the National Plan. The NTT CDBP is regulated under the Defined-Benefit Corporate Pension Act. The NTT CDBP is considered a defined benefit pension plan. The participation by DOCOMO and its subsidiaries in the NTT CDBP is accounted for as a single employer plan. The number of DOCOMO’s employees covered by the NTT CDBP as of March 31, ~~2009~~2010 and ~~2010~~2011 represented approximately ~~10.6%~~10.8% and ~~10.8%~~11.0% of the total members.

In February 2008, the NTT CDBP transferred the remaining substitutional obligation and related plan assets, determined pursuant to the government formula, of the pension fund to the government agency. DOCOMO accounted for the entire transfer process as a single settlement event upon completion of the transfer. The net amount of actuarial gains and losses proportionate to the substitutional portion immediately prior to the transfer, which was ¥3,892 million, and the excess of projected benefit obligation over the accumulated benefit obligation, which was ¥4,395 million, were netted and recognized as settlement gain of ¥503 million from the transaction. The net of the obligation settled and the assets transferred to the government was recognized as a gain on subsidy from the government of ¥24,199 million. As a result of recording the settlement gain and governmental subsidy as reduction of “Selling, general and administrative”, the aggregate amount of ¥24,702 million was recognized as decrease in operating expenses in the consolidated statements of income and comprehensive income for the year ended March 31, 2008. A “Decrease in liability for employees’ retirement benefits” of ¥19,002 million recognized in the consolidated statements of cash flows for the year ended March 31, 2008 was net of a decrease of ¥24,702 million in liability for employees’ retirement benefits due to gain on transfer of substitutional portion and an increase of ¥5,700 million in liability for employees’ retirement benefits which was derived from other factors.

~~F-38~~

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL ~~STATEMENTS –~~ STATEMENTS—(Continued)

The following table presents reconciliations and changes in the NTT CDBP’s projected benefit obligation and fair value of plan assets for the years ended March 31, ~~2009~~2010 and ~~2010.~~2011. The amount in the table is based on actuarial computations which covered only DOCOMO employees’ participation in the NTT CDBP. The funded status was recognized as “Liability for employees’ retirement benefits” in the consolidated balance sheets as of March 31, ~~2009~~2010 and ~~2010.~~

Millions of yen
2009 2010

Change in benefit obligations:
Projected benefit obligation, beginning of year ¥ 78,285 ¥ 83,473
Service cost 3,132 3,216
Interest cost 1,790 1,798
Actuarial (gain) loss 2,111 2,160
Internal adjustment due to transfer of employees within the NTT group (715 ) (734 )
Benefit payments (1,130 ) (1,199 )

Projected benefit obligation, end of year ¥ 83,473 ¥ 88,714
Change in fair value of plan assets:
Fair value of plan assets, beginning of year ¥ 64,309 ¥ 56,302
Actual return on plan assets (7,535 ) 7,783
Employer contributions 816 800
Employee contributions 416 411
Internal adjustment due to transfer of employees within the NTT group (574 ) (498 )
Benefit payments (1,130 ) (1,199 )

Fair value of plan assets, end of year ¥ 56,302 ¥ 63,599
At March 31:
Funded status ¥ (27,171 ) ¥ (25,115 )

2011.


	Millions of yen
	2010			2011
Change in benefit obligations:
Projected benefit obligation, beginning of year	¥	83,473		¥	88,714
Service cost		3,216			3,256
Interest cost		1,798			1,849
Actuarial (gain) loss		2,160			4,527
Internal adjustment due to transfer of employees within the NTT group		(734	)		(445	)
Benefit payments		(1,199	)		(1,485	)

Projected benefit obligation, end of year	¥	88,714		¥	96,416

Change in fair value of plan assets:
Fair value of plan assets, beginning of year	¥	56,302		¥	63,599
Actual return on plan assets		7,783			(930	)
Employer contributions		800			803
Employee contributions		411			413
Internal adjustment due to transfer of employees within the NTT group		(498	)		(341	)
Benefit payments		(1,199	)		(1,485	)

Fair value of plan assets, end of year	¥	63,599		¥	62,059

At March 31:
Funded status	¥	(25,115	)	¥	(34,357	)

Items recognized in “Accumulated other comprehensive income (loss)” as of March 31, ~~2009~~2010 and ~~2010~~2011 were as follows:

Millions of yen
2009 2010

Actuarial gains (losses), net ¥ (16,383 ) ¥ (11,288 )
Prior service cost 1,783 1,426

Total ¥ (14,600 ) ¥ (9,862 )


	Millions of yen
	2010			2011
Actuarial gains (losses), net	¥	(11,288	)	¥	(18,002	)
Prior service cost		1,426			1,069

Total	¥	(9,862	)	¥	(16,933	)

The accumulated benefit obligation for the NTT CDBP regarding DOCOMO employees was ~~¥66,585~~¥71,285 million and ~~¥71,285~~¥76,553 million at March 31, ~~2009~~2010 and ~~2010,~~2011, respectively.

~~F-39~~

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL ~~STATEMENTS –~~ STATEMENTS—(Continued)

Millions of yen
2009 2010

Plans with projected benefit obligation in excess of plan assets:
Projected benefit obligation ¥ 83,473 ¥ 88,714
Fair value of plan assets 56,302 63,599
Plans with accumulated benefit obligation in excess of plan assets:
Accumulated benefit obligation ¥ 66,559 ¥ 71,243
Fair value of plan assets 56,276 63,554


	Millions of yen
	2010		2011
Plans with projected benefit obligation in excess of plan assets:
Projected benefit obligation	¥	88,714	¥	96,416
Fair value of plan assets		63,599		62,059
Plans with accumulated benefit obligation in excess of plan assets:
Accumulated benefit obligation	¥	71,243	¥	76,497
Fair value of plan assets		63,554		61,997

The net periodic pension cost for the NTT CDBP regarding DOCOMO employees for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010~~2011 comprised the following:

Millions of yen
2008 2009 2010

Service cost ¥ 3,244 ¥ 3,132 ¥ 3,216
Interest cost on projected benefit obligation 2,872 1,790 1,798
Expected return on plan assets (2,339 ) (1,613 ) (1,402 )
Amortization of prior service cost (357 ) (357 ) (357 )
Amortization of actuarial gains and losses 16 97 874
Contribution from employees (452 ) (416 ) (411 )

Net periodic pension cost ¥ 2,984 ¥ 2,633 ¥ 3,718

Gain on transfer of substitutional portion of pension liabilities (24,702 ) — —
Total ¥ (21,718 ) ¥ 2,633 ¥ 3,718


	Millions of yen
	2009			2010			2011
Service cost	¥	3,132		¥	3,216		¥	3,256
Interest cost on projected benefit obligation		1,790			1,798			1,849
Expected return on plan assets		(1,613	)		(1,402	)		(1,583	)
Amortization of prior service cost		(357	)		(357	)		(357	)
Amortization of actuarial gains and losses		97			874			326
Contribution from employees		(416	)		(411	)		(413	)

Net periodic pension cost	¥	2,633		¥	3,718		¥	3,078

Other changes in plan assets and benefit obligations of the NTT CDBP regarding DOCOMO employees recognized in “Accumulated other comprehensive income (loss)” for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010~~2011 comprised the following:

Millions of yen
2008 2009 2010

Other changes in plan assets and benefit obligations recognized in “Accumulated other comprehensive income (loss)”:
Actuarial (gains) losses arising during period, net ¥ 3,049 ¥ 11,259 ¥ (4,221 )
Amortization of prior service cost 357 357 357
Amortization of actuarial gains and losses (16 ) (97 ) (874 )
Reclassification of actuarial gains and losses due to transfer of the substitutional portion to the government (3,892 ) — —

Total recognized in “Accumulated other comprehensive income (loss)” ¥ (502 ) ¥ 11,519 ¥ (4,738 )

Total recognized in net periodic pension cost, gain on transfer of substitutional portion of pension liabilities and “Accumulated other comprehensive income (loss)” ¥ (22,220 ) ¥ 14,152 ¥ (1,020 )

~~F-40~~


	Millions of yen
	2009			2010			2011
Other changes in plan assets and benefit obligations recognized in “Accumulated other comprehensive income (loss)”:
Actuarial (gains) losses arising during period, net	¥	11,259		¥	(4,221	)	¥	7,040
Amortization of prior service cost		357			357			357
Amortization of actuarial gains and losses		(97	)		(874	)		(326	)

Total recognized in “Accumulated other comprehensive income (loss)”	¥	11,519		¥	(4,738	)	¥	7,071

Total recognized in net periodic pension cost and “Accumulated other comprehensive income (loss)” was ¥14,152 million, ¥(1,020) million and ¥10,149 million for the years ended March 31, 2009, 2010 and 2011, respectively.

~~NTT DOCOMO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

The amount of actuarial losses and prior service cost, which are expected to be amortized and reclassified from “Accumulated other comprehensive income (loss)” to net periodic pension cost during the year ending March 31, ~~2011~~2012 is ~~¥326~~¥1,024 million and ¥(357) million, respectively.

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The assumptions used in determining the NTT CDBP’s projected benefit obligations, based on actuarial computations which covered only DOCOMO employees’ participation in the NTT CDBP, as of March 31, ~~2009~~2010 and ~~2010~~2011 were as follows:

2009 2010

Discount rate 2.2 % 2.1 %
Long-term rate of salary increases 2.6 3.4


	2010			2011
Discount rate		2.1	%		2.0	%
Long-term rate of salary increases		3.4			3.3

The assumptions used in determining the net periodic pension cost, based on actuarial computations which covered only DOCOMO employees’ participation in the NTT CDBP, for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010~~2011 were as follows:

2008 2009 2010

Discount rate 2.2 % 2.3 % 2.2 %
Long-term rate of salary increases 2.6 2.6 2.6
Expected long-term rate of return on plan assets 2.5 2.5 2.5


	2009			2010			2011
Discount rate		2.3	%		2.2	%		2.1	%
Long-term rate of salary increases		2.6			2.6			3.4
Expected long-term rate of return on plan assets		2.5			2.5			2.5

In determining the expected long-term rate of return on plan assets, the NTT CDBP considers the current and projected asset allocations, as well as expected long-term investment returns and risks for each category of the plan assets based on analysis of historical results.

~~F-41~~

~~NTT DOCOMO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

The following table presents the fair values of NTT CDBP’s pension plan assets as of March 31, ~~2010.~~2010 and 2011. Descriptions of fair value hierarchy and the inputs used in measuring fair value are presented in Note 18.


	Millions of yen
	2010
	Total		Level 1		Level 2			Level 3
Cash and cash equivalents	¥	93	¥	93	¥	—		¥	—
Debt securities
Japanese government bonds/local government bonds		16,669		14,985		1,684			—
Domestic corporate bonds		16,732		—		16,732			—
Foreign government bonds		3,846		3,523		323			—
Foreign corporate bonds		198		18		102			78
Equity securities
Domestic stocks		12,304		12,135		169			—
Foreign stocks		5,853		5,853		0			0
Securities investment trust beneficiary certificates
Domestic debt securities		1,490		—		1,490			—
Domestic equity securities		1,019		—		1,019			—
Foreign debt securities		595		—		595			—
Foreign equity securities		648		—		648			—
Life insurance company general accounts		3,656		—		3,656			—
Other		496		—		(0	)		496

Total	¥	63,599	¥	36,607	¥	26,418		¥	574

Millions of yen
2010
Total Level 1 Level 2 Level 3

Cash and cash equivalents ¥ 93 ¥ 93 ¥ — ¥ —
Debt securities
Japanese government bonds/local government bonds 16,669 14,985 1,684 —
Domestic corporate bonds 16,732 — 16,732 —
Foreign government bonds 3,846 3,523 323 —
Foreign corporate bonds 198 18 102 78
Equity securities
Domestic stocks 12,304 12,135 169 —
Foreign stocks 5,853 5,853 0 0
Securities investment trust beneficiary certificates
Domestic debt securities 1,490 — 1,490 —
Domestic equity securities 1,019 — 1,019 —
Foreign debt securities 595 — 595 —
Foreign equity securities 648 — 648 —
Life insurance company general accounts 3,656 — 3,656 —
Others 496 — (0 ) 496

Total ¥ 63,599 ¥ 36,607 ¥ 26,418 ¥ 574

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)


	Millions of yen
	2011
	Total			Level 1			Level 2		Level 3
Cash and cash equivalents	¥	(246	)	¥	(246	)	¥	—	¥	—
Debt securities
Japanese government bonds/local government bonds		10,459			9,301			1,158		—
Domestic corporate bonds		15,507			—			15,507		—
Foreign government bonds		4,991			4,731			260		—
Foreign corporate bonds		163			22			141		—
Equity securities
Domestic stocks		14,849			14,809			40		—
Foreign stocks		8,574			8,574			—		—
Securities investment trust beneficiary certificates
Domestic debt securities		814			—			814		—
Domestic equity securities		1,545			—			1,545		—
Foreign debt securities		581			—			581		—
Foreign equity securities		667			—			667		—
Life insurance company general accounts		3,745			—			3,745		—
Other		410			—			0		410

Total	¥	62,059		¥	37,191		¥	24,458	¥	410

Cash and cash equivalents

Cash and cash equivalents include foreign currency deposits and call loans, and are all classified as Level 1.

Debt securities

Equity securities

Securities investment trust beneficiary certificates

~~F-42~~

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL ~~STATEMENTS –~~ STATEMENTS—(Continued)

Life insurance company general accounts

Life insurance company general accounts are the financial assets which guarantee an expected rate of return and a principal and they are all classified as Level 2.

~~Others~~

~~Others include~~

Other

Other includes loans to employees and lease receivables. Fair value measured by inputs derived from unobservable data provided by financial institutions is classified as Level 3.

Level 3 reconciliation is not disclosed, since the amounts in Level 3 are immaterial.

The NTT CDBP’s policy toward plan asset management is formulated with the ultimate objective of ensuring the steady disbursement of pension benefits in future periods. The long-term objective of asset management, therefore, is to secure the total profits deemed necessary to ensure the financial soundness of the plan assets. To achieve this, the NTT CDBP selects various investments and takes into consideration their expected returns and risks and the correlation among the investments. The NTT CDBP then sets a target allocation ratio for the plan assets and endeavors to maintain that ratio. The target ratio is formulated from a mid- to long-term perspective and reviewed annually. In the event that the investment environment changes dramatically, the NTT CDBP will review the asset allocation as necessary. The weighted average target ratio in March ~~2010~~2011 was: domestic bonds, ~~57.9%~~44.3%; domestic stocks, ~~18.3%~~25.0%; foreign bonds, ~~7.8%~~10.0%; foreign stocks, ~~10.5%~~15.0%; and life insurance company general accounts, ~~5.5%~~5.7%. As securities investment trust beneficiary certificates are established for each asset, they are allocated among domestic bonds, domestic stocks, foreign bonds and foreign stocks.

As of March 31, ~~2009~~2010 and ~~2010,~~2011, domestic stock owned by the NTT CDBP as its plan ~~asset~~assets included common stock of NTT and the NTT group companies listed in Japan including DOCOMO in the amount of ~~¥4,739~~¥5,375 million (0.6% of total plan assets) and ~~¥5,375~~¥6,974 million ~~(0.6%~~(0.8% of total plan assets), respectively.

~~NTT Group’s pension plan assets do not have a concentration of material risks, including market risks and credit risks.~~

DOCOMO expects to contribute ~~¥790~~¥786 million to the NTT CDBP in the year ending March 31, ~~2011.~~

2012.

The benefit payments, which reflect expected future service under the NTT CDBP, based on actuarial computations which covered only DOCOMO employees are expected to be as follows:

Year ending March 31, Millions of yen

2011 ¥ 1,347
2012 1,693
2013 1,872
2014 2,056
2015 2,218
2016-2020 13,007

~~F-43~~


Year ending March 31,	Millions of yen
2012	¥	1,519
2013		1,881
2014		2,063
2015		2,226
2016		2,381
2017-2021		13,474

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL ~~STATEMENTS –~~ STATEMENTS—(Continued)


~~16.~~	~~Income taxes:~~

16. Income taxes:

Total income taxes for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010~~2011 comprised the following:

Millions of yen
2008 2009 2010

Income from continuing operations before equity in net income (losses) of affiliates ¥322,955 ¥308,400 ¥338,197
Equity in net income (losses) of affiliates 9,257 (567 ) (1,270 )
Other comprehensive income (loss):
Unrealized holding gains (losses) onavailable-for-sale securities
(11,668 ) (20,875 ) 9,109
Less: Reclassification of realized gains and losses included in net income 299 19,786 1,335
Change in fair value of derivative instruments (363 ) (3 ) (43 )
Less: Reclassification of realized gains and losses included in net income 455 (84 ) —
Foreign currency translation adjustment 6,634 (20,991 ) 3,082
Less: Reclassification of realized gains and losses included in net income (88 ) (7 ) (24 )
Pension liability adjustment:
Actuarial gains (losses) arising during period, net (3,513 ) (11,229 ) 4,702
Less: Amortization of prior service cost (926 ) (923 ) (923 )
Less: Amortization of actuarial gains and losses 348 550 1,280
Less: Amortization of transition obligation 52 56 55
Less: Reclassification of actuarial gains and losses due to transfer of the substitutional portion to the government 1,660 — —

Total income taxes ¥325,102 ¥274,113 ¥355,500


	Millions of yen
	2009			2010			2011
Income from continuing operations before equity in net income (losses) of affiliates	¥	308,400		¥	338,197		¥	337,837
Equity in net income (losses) of affiliates		(567	)		(1,270	)		(5,031	)
Other comprehensive income (loss):
Unrealized holding gains (losses) on available-for-sale securities		(20,875	)		9,109			(8,509	)
Less: Reclassification of realized gains and losses included in net income		19,786			1,335			4,827
Change in fair value of derivative instruments		(3	)		(43	)		2
Less: Reclassification of realized gains and losses included in net income		(84	)		—			—
Foreign currency translation adjustment		(20,991	)		3,082			(12,523	)
Less: Reclassification of realized gains and losses included in net income		(7	)		(24	)		245
Pension liability adjustment:
Actuarial gains (losses) arising during period, net		(11,229	)		4,702			(4,388	)
Prior service cost arising during period, net		—			—			33
Less: Amortization of prior service cost		(923	)		(923	)		(928	)
Less: Amortization of actuarial gains and losses		550			1,280			788
Less: Amortization of transition obligation		56			55			61

Total income taxes	¥	274,113		¥	355,500		¥	312,414

Substantially all income or loss before income taxes and income tax ~~expenses or benefits~~expense (benefit) are domestic.

For the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010,~~2011, DOCOMO and its domestic subsidiaries were subject to a National Corporate Tax of 30%, a Corporate Inhabitant Tax of approximately 6% and a deductible Corporate Enterprise Tax and Special Local Corporate Tax of approximately 8%. The rate of the Corporate Inhabitant Tax and Corporate Enterprise Tax differs depending on the municipality.

The aggregate statutory income tax ~~rate~~rates for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010 was 40.9%,~~2011 were 40.8% ~~and 40.8%, respectively.~~. The effective income tax rate for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010~~2011 was ~~40.3%~~39.5%, ~~39.5%~~40.4% and 40.4%, respectively.

~~F-44~~

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL ~~STATEMENTS –~~ STATEMENTS—(Continued)

Reconciliation of the difference of the effective income tax rate and the statutory income tax rate of DOCOMO is as follows:

2008 2009 2010

Statutory income tax rate 40.9 % 40.8 % 40.8 %
Expenses not deductible for tax purposes 0.3 0.2 0.1
IT infrastructure tax incentive and tax credit for special tax treatment such as R&D investment tax incentive (0.8 ) (0.8 ) (0.8 )
Tax refund of interest and penalties previously paid — (0.8 ) —
Other (0.1 ) 0.1 0.3

Effective income tax rate 40.3 % 39.5 % 40.4 %


	2009			2010			2011
Statutory income tax rate		40.8	%		40.8	%		40.8	%
Expenses not deductible for tax purposes		0.2			0.1			0.1
Tax credit for special tax treatment		(0.8	)		(0.8	)		(0.8	)
Tax refund of interest and penalties previously paid		(0.8	)		—			—
Other		0.1			0.3			0.3

Effective income tax rate		39.5	%		40.4	%		40.4	%

Deferred income taxes result from temporary differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. Significant components of deferred tax assets and liabilities as of March 31, ~~2009~~2010 and ~~2010~~2011 were as follows:

Millions of yen
2009 2010

Deferred tax assets:
Accrued liabilities for loyalty programs ¥ 72,073 ¥ 110,700
Property, plant and equipment and intangible assets principally due to differences in depreciation and amortization 84,816 94,530
Liability for employees’ retirement benefits 59,019 55,876
Deferred revenues regarding “Nikagetsu Kurikoshi”
(2 month carry-over) 35,774 29,451
Accrued enterprise tax 16,796 13,903
Compensated absences 12,809 12,758
Marketable securities and other investments 21,164 11,535
Foreign currency translation adjustment 14,324 11,266
Investments in affiliates 3,207 9,574
Inventories 4,239 8,989
Accrued bonus 7,059 7,287
Accrued commissions to agent resellers 4,502 4,600
Unrealized holding losses onavailable-for-sale securities
2,835 —
Other 16,886 18,267

Total deferred tax assets ¥ 355,503 ¥ 388,736

Deferred tax liabilities:
Unrealized holding gains onavailable-for-sale securities
¥ — ¥ 7,610
Identifiable intangible assets — 4,135
Property, plant and equipment due to differences in capitalized interest 2,818 3,066
Other 1,419 753

Total deferred tax liabilities ¥ 4,237 ¥ 15,564

Net deferred tax assets ¥ 351,266 ¥ 373,172

~~F-45~~


	Millions of yen
	2010			2011
Deferred tax assets:
Accrued liabilities for loyalty programs	¥	110,700		¥	116,137
Property, plant and equipment and intangible assets principally due to differences in depreciation and amortization		91,105			93,924
Liability for employees’ retirement benefits		55,881			61,191
Deferred revenues regarding “Nikagetsu Kurikoshi” (2-month carry-over)		29,451			28,453
Foreign currency translation adjustment		11,266			23,543
Investments in affiliates		9,574			19,342
Marketable securities and other investments		11,694			15,322
Compensated absences		12,758			12,730
Accrued enterprise tax		13,903			12,513
Accrued bonus		7,287			7,377
Asset retirement obligations		3,670			6,373
Inventories		8,989			4,409
Accrued commissions to agent resellers		4,600			4,355
Other		19,115			23,491

Sub-total deferred tax assets	¥	389,993		¥	429,160
Less: Valuation allowance		(1,257	)		(2,338	)

Total deferred tax assets	¥	388,736		¥	426,822

Deferred tax liabilities:
Identifiable intangible assets	¥	4,135		¥	5,503
Unrealized holding gains on available-for-sale securities		7,610			3,927
Property, plant and equipment due to differences in capitalized interest		3,066			2,358
Other		753			1,650

Total deferred tax liabilities	¥	15,564		¥	13,438

Net deferred tax assets	¥	373,172		¥	413,384

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL ~~STATEMENTS –~~ STATEMENTS—(Continued)

The components of net deferred tax assets included in the consolidated balance sheets as of March 31, ~~2009~~2010 and ~~2010~~2011 were as follows:

Millions of yen
2009 2010

Deferred tax assets (Current assets) ¥ 102,903 ¥ 100,545
Deferred tax assets (Non-current investments and other assets) 248,896 274,048
Other current liabilities (92 ) —
Other long-term liabilities (441 ) (1,421 )

Total ¥ 351,266 ¥ 373,172


	Millions of yen
	2010			2011
Deferred tax assets (Current assets)	¥	100,545		¥	83,609
Deferred tax assets (Non-current investments and other assets)		274,048			331,633
Other current liabilities		—			—
Other long-term liabilities		(1,421	)		(1,858	)

Total	¥	373,172		¥	413,384

As of and for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010,~~2011, DOCOMO had no material unrecognized tax benefits which would favorably affect the effective income tax rate in future periods and does not believe that there will be any significant increases or decreases within the next 12 months. The total amounts of interest and penalties related to unrecognized tax benefits for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010~~2011 are immaterial.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences and tax loss carry-forwards become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Management believes that it is more likely than not all of the deferred tax assets, less valuation allowances, will be realized, however, that assessment could change in the near term if estimates of future taxable income during the carry-forward period are reduced.

DOCOMO mainly files income tax returns in Japan. DOCOMO is no longer subject to regular income tax examination by the tax authority before the year ended March 31, ~~2009.~~

2010.

Other taxes—

The consumption tax rate for all taxable goods and services, with minor exceptions, is 5%. Consumption tax payable or receivable is determined based on consumption taxes levied on operating revenues offset by consumption taxes directly incurred by DOCOMO when purchasing goods and services.

~~F-46~~

17. Commitments and contingencies:

~~NTT DOCOMO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~


~~17.~~	~~Commitments and contingencies:~~

Leases—

DOCOMO leases certain facilities and equipment ~~in the normal course of business~~ under capital leases or operating leases.

Assets covered under capital leases at March 31, ~~2009~~2010 and ~~2010~~2011 were as follows:

Millions of yen
Class of property 2009 2010

Tools, furniture and fixtures ¥ 11,860 ¥ 11,269
Software 503 411

Sub-total 12,363 11,680
Less: Accumulated depreciation and amortization (8,174 ) (8,033 )

Total ¥ 4,189 ¥ 3,647

~~Tools, furniture and fixtures are classified as part of property, plant and equipment, while software is classified as part of intangible assets.~~


	Millions of yen
Class of property	2010			2011
Machinery, vessels and tools	¥	11,269		¥	13,360
Less: Accumulated depreciation and amortization		(7,777	)		(8,802	)

Total	¥	3,492		¥	4,558

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Future minimum lease payments by year under capital leases together with the present value of the net minimum lease payments as of March 31, ~~2010~~2011 were as follows:

Millions of

Year ending March 31, yen

2011 ¥ 3,098
2012 2,064
2013 1,317
2014 791
2015 285
Thereafter 66

Total minimum lease payments 7,621
Less: Amount representing interest (440 )

Present value of net minimum lease payments 7,181
Less: Amounts representing estimated executory costs (957 )

Net minimum lease payments 6,224
Less: Current obligation (2,512 )

Long-term capital lease obligations ¥ 3,712


Year ending March 31,	Millions of yen
2012	¥	4,355
2013		2,246
2014		1,229
2015		682
2016		255
Thereafter		37

Total minimum lease payments		8,804
Less: Amount representing interest		(464	)

Present value of net minimum lease payments		8,340
Less: Amounts representing estimated executory costs		(1,043	)

Net minimum lease payments		7,297
Less: Current obligation		(3,663	)

Long-term capital lease obligations	¥	3,634

The above obligations are classified as part of other current and long-term liabilities as appropriate.

~~F-47~~

~~NTT DOCOMO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

The minimum ~~rental~~rent payments required under operating leases that have initial or remaining non-cancellable lease terms in excess of one year as of March 31, ~~2010~~2011 were as follows:

Millions of

Year ending March 31, yen

2011 ¥ 2,958
2012 2,440
2013 1,832
2014 1,530
2015 1,482
Thereafter 11,390

Total minimum future rentals ¥ 21,632


Year ending March 31,	Millions of yen
2012	¥	2,874
2013		2,144
2014		1,780
2015		1,642
2016		1,592
Thereafter		10,015

Total minimum rent payments	¥	20,047

Total ~~rental~~rent expense for all operating leases except those with terms of 1 month or less that were not renewed for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010~~2011 were as follows:

Millions of yen
2008 2009 2010

Minimum rentals ¥ 70,673 ¥ 67,954 ¥ 68,673

   Millions of yen
   2009    2010    2011
Rent expense
   ¥   67,954       ¥   68,673       ¥   62,666

Litigation—

DOCOMO is involved in litigation and claims arising in the ordinary course of ~~March 31, 2010,~~business and at least quarterly reviews them. DOCOMO ~~had~~believes that no litigation or claims outstanding, pending or threatened against which in the opinion of management would have a materially adverse effect on its results of operations or financial position.

NTT DOCOMO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Purchase commitments—

DOCOMO has entered into various contracts for the purchase of property, plant and equipment, inventories (primarily handsets) and services. Commitments outstanding as of March 31, ~~2010~~2011 were ~~¥26,659~~¥28,890 million (of which ~~¥2,758~~¥4,222 million are with related parties) for property, plant and equipment, ~~¥50,371~~¥23,827 million (of which none are with related parties) for inventories and ~~¥46,614~~¥22,117 million (of which ~~¥2,188~~¥387 million are with related parties) for the other purchase commitments.

Loan commitments—

DOCOMO conducts the cash advance service accompanying credit business. Total outstanding credit lines regarding loan commitments of the cash advance service as of March 31, ~~2009~~2010 and ~~2010~~2011 were ~~¥61,132~~¥93,049 million and ~~¥93,049~~¥105,030 million, respectively.

Credit lines are not necessarily executed to the maximum amount because these contracts contain a clause to lower the credit lines if there are reasonable grounds.

Guarantees—

DOCOMO enters into agreements in the normal course of business that provide guarantees for counterparties. These counterparties include subscribers, related parties, foreign wireless telecommunications service providers and other business partners.

~~F-48~~

~~NTT DOCOMO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

DOCOMO provides subscribers with guarantees for product defects of cellular phone handsets sold by DOCOMO, but DOCOMO is provided with similar guarantees by the handset vendors and no liabilities were recognized for these guarantees.

Though the guarantees or indemnifications provided in transactions other than those with the subscribers are different in each contract, the likelihood of almost all of the performance of these guarantees or indemnifications are remote and amount of payments DOCOMO could be claimed for is not specified in almost all of the contracts. Historically, DOCOMO has not made any significant guarantee or indemnification payments under such agreements. DOCOMO estimates the fair value of the obligations related to these agreements is not significant. Accordingly, no liabilities were recognized for these obligations.


~~18.~~	~~Fair value measurements:~~

18. Fair value measurements:

Fair value is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date”. ~~U.S.GAAP~~U.S. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value according to observability. The inputs are described as follows:


	~~Level 1 —~~	~~quoted prices in active markets for identical assets or liabilities~~
	~~Level 2 —~~	~~inputs other than quoted prices included within Level 1 that are observable for the asset or liability~~
	~~Level 3 —~~	~~unobservable inputs for the asset or liability~~

Level 1—quoted prices in active markets for identical assets or liabilities

Level 2—inputs other than quoted prices included within Level 1 that are observable for the asset or liability

Level 3—unobservable inputs for the asset or liability

DOCOMO also distinguishes assets and liabilities measured at fair value every period on a recurring basis from those measured on a nonrecurring basis under specific situation (for example, impaired assets).


~~(1)~~	~~Assets and liabilities measured at fair value on a recurring basis~~

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(1) Assets and liabilities measured at fair value on a recurring basis

DOCOMO’s assets and liabilities measured at fair value on a recurring basis includeavailable-for-sale securities and derivatives.

DOCOMO’s assets and liabilities that were measured at fair value on a recurring basis at March 31, ~~2009~~2010 and ~~2010~~2011 were as follows:


	Millions of yen
	2009								Millions of yen
	Total		Level 1		Level 2		Level 3		2010
	Total		Level 1		Level 2		Level 3
Assets:
Available-for-sale securities
Equity securities (domestic)	¥	47,998	¥	47,998	¥	—	¥	—	¥	53,029	¥	53,029	¥	—	¥	—
Equity securities (foreign)		64,964		64,964		—		—		83,598		83,598		—		—
Debt securities (foreign)		5		5		—		—		4		4		—		—

Totalavailable-for-sale securities		112,967		112,967		—		—		136,631		136,631		—		—

Derivatives
Interest rate swap agreements		3,433		—		3,433		—		3,297		—		3,297		—

Total derivatives		3,433		—		3,433		—		3,297		—		3,297		—

Total assets	¥	116,400	¥	112,967	¥	3,433	¥	—	¥	139,928	¥	136,631	¥	3,297	¥	—

Liabilities:
Derivatives
Foreign exchange forward contracts									¥	108	¥	—	¥	108	¥	—
Foreign currency option contracts										1,552		—		1,552		—

Total derivatives										1,660		—		1,660		—

Total liabilities									¥	1,660	¥	—	¥	1,660	¥	—

~~F-49~~

~~NTT DOCOMO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

There were no significant transfers between Level 1 and Level 2.

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)


	Millions of yen
	2011
	Total		Level 1		Level 2		Level 3
Assets:
Available-for-sale securities
Equity securities (domestic)	¥	46,631	¥	46,631	¥	—	¥	—
Equity securities (foreign)		71,128		71,128		—		—
Debt securities (foreign)		4		4		—		—

Total available-for-sale securities		117,763		117,763		—		—

Derivatives
Interest rate swap agreements		1,232		—		1,232		—

Total derivatives		1,232		—		1,232		—

Total assets	¥	118,995	¥	117,763	¥	1,232	¥	—

Liabilities:
Derivatives
Foreign exchange forward contracts	¥	154	¥	—	¥	154	¥	—
Foreign currency option contracts		1,859		—		1,859		—

Total derivatives		2,013		—		2,013		—

Total liabilities	¥	2,013	¥	—	¥	2,013	¥	—

Millions of yen
2010
Total Level 1 Level 2 Level 3

Assets:
Available-for-sale securities

Equity securities (domestic) ¥ 53,029 ¥ 53,029 ¥ — ¥ —
Equity securities (foreign) 83,598 83,598 — —
Debt securities (foreign) 4 4 — —

Totalavailable-for-sale securities
136,631 136,631 — —

Derivatives
Interest rate swap agreements 3,297 — 3,297 —

Total derivatives 3,297 — 3,297 —

Total assets ¥ 139,928 ¥ 136,631 ¥ 3,297 ¥ —

Liabilities:
Derivatives
Foreign exchange forward contracts ¥ 108 ¥ — ¥ 108 ¥ —
Foreign currency option contracts 1,552 — 1,552 —

Total derivatives 1,660 — 1,660 —

Total liabilities ¥ 1,660 ¥ — ¥ 1,660 ¥ —

There were no significant transfers between Level 1 and Level 2.

Available-for-sale securities

Available-for-sale securities include marketable equity securities and debt securities, which are valued using quoted prices in active markets for identical assets. Therefore, these securities are classified as Level 1.

Derivatives

Derivative instruments are interest rate swap agreements, foreign exchange forward contracts and foreign currency option contracts, which are measured using valuation provided by financial institutions based on observable market data. Therefore, these derivatives are classified as Level 2. DOCOMO periodically validates the valuation of such derivatives using observable market data, such as interest rates.


~~(2)~~	~~Assets and liabilities measured at fair value on a nonrecurring basis~~

(2) Assets and liabilities measured at fair value on a nonrecurring basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis and are not included in the table above. Changes of fair value in such assets and liabilities typically result from impairments.

DOCOMO may be required to measure fair value of long-lived assets, equity securities whose fair values are not readily determinable, and other assets or liabilities on a nonrecurring basis.

~~F-50~~

~~NTT DOCOMO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

DOCOMO omitted the disclosure about assets and liabilities measured on a nonrecurring basis because of its immateriality.


~~19.~~	~~Financial instruments:~~


~~(1)~~	~~Risk management~~

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

19. Financial instruments:

(1) Risk management

The fair values ~~for~~of DOCOMO’s assets and liabilities and DOCOMO’s cash flows may be negatively impacted by fluctuations in interest rates and foreign exchange rates. To manage these risks, DOCOMO uses derivative instruments such as interest rate swap agreements, ~~currency swap contracts,~~ foreign exchange forward contracts, non-deliverable forward contracts (NDF) and foreign currency option contracts as needed. The financial instruments are executed with creditworthy financial institutions and DOCOMO’s management believes that there is little risk of default by these counterparties. DOCOMO sets and follows internal regulations that establish conditions to enter into derivative contracts and procedures of approving and monitoring such contracts.


~~(2)~~	~~Fair value of financial instruments~~

(2) Fair value of financial instruments

Financial instruments—

Carrying amounts of “Cash and cash equivalents”, “Short-term investments”, “Accounts receivable”, “Credit card receivables”, “Accounts payable, trade” and certain other financial instruments approximate their fair values except the items separately referred to below.

Long-term debt including current portion—

The fair value of long-term debt including current portion is estimated based on the discounted amounts of future cash flows using DOCOMO’s current incremental borrowings rates for similar liabilities.

The carrying amount and the estimated fair value of long-term debt including current portion as of March 31, ~~2009~~2010 and ~~2010~~2011 were as follows:

Millions of yen
2009 2010
Carrying
Carrying

amount Fair value amount Fair value

¥ 639,233 ¥ 645,504 ¥ 610,269 ¥ 621,966

Millions of yen
2010 2011
Carrying
        amount
                 Fair value
Carrying
        amount                            Fair value
¥  610,269    ¥   621,966    ¥   428,102    ¥   438,483

Derivative instruments—

(i) Fair value hedge

DOCOMO uses interest rate swap transactions, under which DOCOMO receives fixed rate interest payments and pays floating rate interest payments, to hedge the changes in fair value of certain debt as a part of its asset-liability management (ALM).

DOCOMO designated these derivatives as fair value hedges utilizing the short-cut method, which permits an assumption of no ineffectiveness if the key terms of these derivatives and those of certain hedged debt are identical.

~~F-51~~

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL ~~STATEMENTS –~~ STATEMENTS—(Continued)

The contract amount and fair value of the interest rate swap agreement as of March 31, ~~2009~~2010 and ~~2010~~2011 were as follows:

Contract Term
Millions of yen
(in the year
Weighted average rate per annum 2009
ended/ending
Receive
Pay
Contract
Fair
March 31,) fixed floating Amount value

2004-2012 1.5 % 1.0 % ¥ 235,800 ¥ 3,433

Contract Term
Millions of yen
(in the year
Weighted average rate per annum 2010
ended/ending
Receive
Pay
Contract
Fair
March 31,) fixed floating Amount value

2004-2012 1.5 % 0.7 % ¥ 235,800 ¥ 3,297


							Millions of yen
Contract Term (in the year ended/ending March 31,)	Weighted average rate per annum						2010
Contract Term (in the year ended/ending March 31,)	Receive fixed			Pay floating			Contract Amount		Fair value
2004-2012		1.5	%		0.7	%	¥	235,800	¥	3,297

Contract Term (in the year ended/ending March 31,)							Millions of yen
	Weighted average rate per annum						2011
	Receive fixed			Pay floating			Contract Amount		Fair value
2004-2012		1.6	%		0.7	%	¥	165,800	¥	1,232

The interest rate swap agreements have remaining terms to maturity ranging from ~~1 year~~6 months to ~~1 year and~~ 9 months.

(ii) ~~Cash flow hedge~~

From February 2005 to March 2008, DOCOMO entered into a currency swap contract to hedge currency exchange risk associated with the principal and interest payments of the $100 million unsecured corporate bonds. As this currency swap contract qualified as a cash flow hedge instrument for accounting purposes and all the essential terms of the currency swap and those of the hedged item are identical, there was no ineffective portion to the hedge. The gain or loss from the fluctuation in the fair value of the swap transaction was recorded as “Accumulated other comprehensive income (loss)”. The amount recorded as “Accumulated other comprehensive income (loss)” was reclassified as gain or loss when the offsetting gain or loss derived from the hedged item was recorded in the accompanying consolidated statements of income and comprehensive income.

~~In March 2008, DOCOMO redeemed the $100 million unsecured corporate bonds hedged by the contract. DOCOMO did not hold any currency swap contracts from March 31, 2008 to March 31, 2010.~~

~~(iii)~~ Derivatives not designated as hedging instruments

DOCOMO had foreign exchange forward contracts and foreign currency option contracts to hedge currency exchange risk associated with foreign currency assets and liabilities. DOCOMO did not designate such derivative instruments as hedging instruments.

The contract amounts as of March 31, ~~2009~~2010 and ~~2010~~2011 were as follows:

Millions of yen
Instruments 2009 2010

Foreign exchange risk management
Foreign exchange forward contracts ¥ — ¥ 4,478
Foreign currency option contracts — 21,285

Total ¥ — ¥ 25,763

~~F-52~~


	Millions of yen
Instruments	2010		2011
Foreign exchange risk management
Foreign exchange forward contracts Foreign currency option contracts	¥	4,478 21,285	¥	4,296 15,143

Total	¥	25,763	¥	19,439

~~NTT DOCOMO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

~~(iv)~~(iii) The effect on the consolidated balance sheets

The locations and ~~carrying amounts~~fair values of the derivative instruments as of March 31, ~~2009~~2010 and ~~2010,~~2011, recorded in the accompanying consolidated balance sheets, were as follows:

Asset derivatives

Millions of yen
Instruments Locations 2009 2010

Derivatives designated as hedging instruments
Interest rate swap agreements Prepaid expenses and other current assets ¥ — ¥ 630
Other assets 3,433 2,667

Total ¥ 3,433 ¥ 3,297

Locations
   Millions of yen
Instruments
          2010            2011
Derivatives designated as hedging instruments

Interest rate swap agreements
   Prepaid expenses and other current assets    ¥       630       ¥   1,232
   Other assets    2,667       —

Total
      ¥ 3,297       ¥ 1,232

NTT DOCOMO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Liability derivatives

Millions of yen
Instruments Locations 2009 2010

Derivatives not designated as hedging instruments
Foreign exchange forward contracts Other current liabilities ¥ — ¥ 108
Foreign currency option contracts Other current liabilities — 404
Other long-term liabilities — 1,148

Total ¥ — ¥ 1,660


	Locations	Millions of yen
Instruments	Locations	2010		2011
Derivatives not designated as hedging instruments
Foreign exchange forward contracts	Other current liabilities	¥	108	¥	154
Foreign currency option contracts	Other current liabilities		404		724
	Other long-term liabilities		1,148		1,135

Total		¥	1,660	¥	2,013

The fair values of derivative instruments were measured using valuation provided by financial institutions based on observable market data and represent the amount that DOCOMO could have settled with the counterparties to terminate the contracts outstanding as of March 31, ~~2009~~2010 and ~~2010.~~


~~(v)~~	~~The effect on the consolidated statements of income and comprehensive income~~

2011.

(iv) The effect on the consolidated statements of income and comprehensive income

The locations and gain (loss) amounts of the derivative instruments for the years ended March 31, ~~2008,~~ 2009, 2010 and ~~2010,~~2011, recognized in the accompanying consolidated statements of income and comprehensive income, were as follows:

Amount of gain (loss) recognized in income

on derivative
Millions of yen
Instruments Locations 2008 2009 2010

Derivatives in fair value hedging relationships
Interest rate swap agreements Other, net* ¥ 2,653 ¥ (78 ) ¥ (136 )

Total ¥ 2,653 ¥ (78 ) ¥ (136 )

~~F-53~~


			Amount of gain (loss) recognized in income on derivative
			Millions of yen
Instruments	Locations		2009			2010			2011
Derivatives in fair value hedging relationships
Interest rate swap agreements		Other, net^*	¥	(78	)	¥	(136	)	¥	(2,065	)

Total			¥	(78	)	¥	(136	)	¥	(2,065	)


			Amount of gain (loss) recognized in income on derivative
			Millions of yen
Instruments	Locations		2009			2010			2011
Derivatives not designated as hedging instruments
Foreign exchange forward contracts		Other, net^*	¥	(1,090	)	¥	67		¥	(517	)
Non-deliverable forward contracts (NDF)		Other, net^*		(4,050	)		16			71
Foreign currency option contracts		Other, net^*		—			(565	)		(1,059	)

Total			¥	(5,140	)	¥	(482	)	¥	(1,505	)

~~NTT DOCOMO, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)~~

Amount of gain (loss) reclassified from

Accumulated

other comprehensive income

(loss) into income
Millions of yen
Instruments Locations 2008 2009 2010

Derivatives in cash flow hedging relationships
Currency swap contract Interest expense ¥ 348 ¥ — ¥ —
Other, net* (1,462 ) — —

Total ¥ (1,114 ) ¥ — ¥ —

Amount of gain (loss) recognized in income

on derivative
Millions of yen
Instruments Locations 2008 2009 2010

Derivatives not designated as hedging instruments
Foreign exchange forward contracts Other, net* ¥ 18 ¥ (1,090 ) ¥ 67
Non-deliverable forward contracts (NDF) Other, net* (13 ) (4,050 ) 16
Foreign currency option contracts Other, net* (110 ) — (565 )

Total ¥ (105 ) ¥ (5,140 ) ¥ (482 )


*		“Other, net” was included in “Other income (expense)”.


~~(vi)~~	~~Contingent features in derivatives~~

NTT DOCOMO, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(v) Contingent features in derivatives

As of March 31, ~~2010,~~2011, DOCOMO had no derivative instruments with credit-risk-related contingent features.

Other—

Information regarding “Investments in affiliates” and “Marketable securities and other investments” is disclosed in Notes 5 and 6, respectively.


~~(3)~~	~~Concentrations of risk~~

20. Financing receivables:

DOCOMO has financing receivables including installment receivables and credit card receivables. Installment receivables arise from providing funds for the subscribers’ handset purchase from agent resellers. Credit card receivables arise from usage of credit services by the customers. These receivables generally do not bear interest.

DOCOMO appropriately extends credit to customers upon these transactions and manages credit risks. When entering into installment payment or credit card contracts, DOCOMO performs credit check and manage the credit exposure thereafter by monitoring payment delays. The amounts per transaction for handset purchases and credit card usage are generally low and the billing cycle is also short, generally one month. Therefore, DOCOMO is able to maintain accurate past due information on a timely basis. Most of its customers utilize automated payment system to make cash payments, which mitigates the risk of uncollected receivables significantly. Despite a downturn in the economy in recent years, historical losses have not been significant. Due to the nature of the business and its effective credit control system, DOCOMO believes that a credit risk in its business is low.

Allowance for doubtful accounts is computed based on historical bad debt experience and the estimated uncollectible amount based on the analysis of certain individual accounts, including claims in bankruptcy. When it is determined that there is little possibility of collection based on the debtor’s solvency, such receivables are written off. Since DOCOMO appropriately extends credits, manages credit risks and writes off uncollectible receivables, the amount of past due receivables is not significant.

Financing receivables and related allowance for doubtful accounts as of March 31, 2010, DOCOMO did not have any significant concentration of business transacted with an individual counterparty or groups of counterparties that could, if suddenly eliminated, severely impact its results of operations.

~~F-54~~

2011 were as follows:


	Millions of yen
	2011
	Installment receivables		Credit card receivables		Other		Total
Allowance for doubtful accounts:
Ending balance at March 31, 2011	¥	4,504	¥	3,085	¥	231	¥	7,820

Ending balance: collectively evaluated for impairment		4,504		3,085		43		7,632
Ending balance: individually evaluated for impairment		—		—		188		188
Financing receivables:
Ending balance at March 31, 2011	¥	303,124	¥	160,446	¥	7,463	¥	471,033

Ending balance: collectively evaluated for impairment		303,124		160,446		7,275		470,845
Ending balance: individually evaluated for impairment		—		—		188		188

~~Schedule Of Valuation And Qualifying Accounts Disclosure~~

NTT DOCOMO, INC. AND SUBSIDIARIES

FINANCIAL STATEMENT SCHEDULE

YEARS ENDED MARCH 31, ~~2008,~~ 2009, 2010 and ~~2010~~2011

SCHEDULE ~~II —~~ II—VALUATION AND QUALIFYING ACCOUNTS

Millions of yen
Balance at

Beginning of
Balance at End

Year Additions Deductions* of Year

2008

Allowance for doubtful accounts ¥ 13,178 ¥ 12,107 ¥ (8,784 ) ¥ 16,501
2009

Allowance for doubtful accounts ¥ 16,501 ¥ 9,898 ¥ (9,977 ) ¥ 16,422
2010

Allowance for doubtful accounts ¥ 16,422 ¥ 13,990 ¥ (10,732 ) ¥ 19,680


*		~~Amounts written off.~~

~~F-55~~


	Millions of yen
	Balance at beginning of year		Charged to expenses		Deductions*			Balance at end of year
2009
Allowance for doubtful accounts	¥	16,501	¥	9,898	¥	(9,977	)	¥	16,422
2010
Allowance for doubtful accounts	¥	16,422	¥	13,990	¥	(10,732	)	¥	19,680
2011
Allowance for doubtful accounts	¥	19,680	¥	13,745	¥	(14,286	)	¥	19,139
* Amounts written off.

	Millions of yen
	Balance at beginning of year		Charged to expenses		Deductions			Balance at end of year
2009
Valuation allowance for deferred tax assets	¥	348	¥	103	¥	(0	)	¥	451
2010
Valuation allowance for deferred tax assets	¥	451	¥	806	¥	(0	)	¥	1,257
2011
Valuation allowance for deferred tax assets	¥	1,257	¥	1,090	¥	(9	)	¥	2,338

SIGNATURE

The registrant hereby certifies that it meets all of the requirements for filing onForm 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

NTT DOCOMO, INC.


By	By	/s/ RYUJI YAMADA
		Ryuji Yamada
		President and Chief Executive Officer

~~Ryuji Yamada~~

~~President and Chief Executive Officer~~

Date: June ~~24, 2010~~

23, 2011

¨		~~For the fiscal year ended March 31, 2010~~
OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

OR
o ¨		SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
		~~Date of event requiring this shell company report~~


Japan
~~Japan~~		Sanno Park Tower 11-1, Nagata-cho 2-chome Chiyoda-ku, Tokyo 100-6150 Japan
(Jurisdiction of incorporation or organization)		(Address of principal executive offices)


Title of each class		Name of each exchange on which registered

Common StockStock^		New York Stock Exchange


Fiscal Year Ended March 31,	High		Low		Average*		Period-end

2006		120.93		104.41		113.15		117.48
2007		121.81		110.07		116.92		117.56
2008		124.09		96.88		114.31		99.85
2009		110.48		87.80		100.62		99.15
2010		100.71		86.12		92.93		93.40
Calendar Year 2009

December		93.08		86.62		89.95		93.08
Calendar Year 2010

January		93.31		89.41		91.10		90.38
February		91.94		88.84		90.14		88.84
March		93.40		88.43		90.72		93.40
April		94.51		92.03		93.45		94.24
May		94.68		89.89		91.97		90.81
June (through June 11, 2010)		92.33		91.04		91.68		91.72

¨
o		REGISTRATION STATEMENT PURSUANT TO SECTION 12(B) OR (G) OF THE SECURITIES EXCHANGE ACT OF 1934

OR
þ x		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934


~~Large accelerated filer~~ þ	~~Accelerated filer~~ o	~~Non-accelerated filer~~ o


*		Not for trading, but only in connection with the listing of the American Depositary Shares.


		Page

~~PART I~~
~~Item 1.~~	PART I

Item 1.	Identity of Directors, Senior Management and Advisers		23

Item 2.	Offer Statistics and Expected Timetable		23

Item 3.	Key Information		23

Item 4.	Information on the Company		1215

Item 4A.	Unresolved Staff Comments		5144

Item 5.	Operating and Financial Review and Prospects		5144

Item 6.	Directors, Senior Management and Employees		7874

Item 7.	Major Shareholders and Related Party Transactions		9184

Item 8.	Financial Information		9285

Item 9.	The Offer and Listing		9386

Item 10.	Additional Information		9588

Item 11.	Quantitative and Qualitative Disclosures about Market Risk		~~107~~100

Item 12.	Description of Securities Other Than Equity Securities		~~109~~102

~~PART II~~
~~Item 13.~~	PART II
Item 13.	Defaults, Dividend Arrearages and Delinquencies		~~109~~104

Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds		~~109~~104

Item 15.	Controls and Procedures		~~109~~104

Item 16A.	Audit Committee Financial Expert		~~110~~104

Item 16B.	Code of Ethics		~~110~~105

Item 16C.	Principal Accountant Fees and Services		~~110~~105

Item 16D.	Exemptions from the Listing Standards for Audit Committees		~~111~~106

Item 16E.	Purchases of Equity Securities by Issuer and Affiliated Purchasers		~~112~~107

Item 16F.	Change in Registrant’s Certifying Accountant		~~113~~107

Item 16G.	Corporate Governance		~~113~~107

Item 17.	Financial Statements		~~114~~109

Item 18.	Financial Statements		~~114~~109

Item 19.	Exhibits		~~115~~109
~~EX-1.1 Articles of Incorporation of the registrant (English translation)~~
~~EX-1.2 Share Handling Regulations of the registrant (English translation)~~
~~EX-1.3 Regulations of the Board of Directors of the registrant (English translation)~~
~~EX-12.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~
~~EX-12.2 Certificatin of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~
~~EX-13.1 Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350~~
~~EX-13.2 Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350~~
~~EX-101 INSTANCE DOCUMENT~~
~~EX-101 SCHEMA DOCUMENT~~
~~EX-101 CALCULATION LINKBASE DOCUMENT~~
~~EX-101 LABELS LINKBASE DOCUMENT~~
~~EX-101 PRESENTATION LINKBASE DOCUMENT~~
~~EX-101 DEFINITION LINKBASE DOCUMENT~~


1.	Changes in the business environment in the telecommunications industry, such as intensifying competition from other service providers, businesses or other technologies caused by Mobile Number Portability, new market entrants and other factors, or the expansion of the areas of competition could limit our acquisition of new subscriptions and retention of existing subscriptions, or may lead to diminishing ARPU or an increase in our costs and expenses.

2.	Current and new services, usage patterns, and sales schemes introduced by our corporate group may not develop as planned, which could affect our financial condition and limit our growth.

3.	The introduction or change of various laws or regulations or the application of such laws and regulations to our corporate group could restrict our business operations, which may adversely affect our financial condition and results of operations.

4.	Limitations in the amount of frequency spectrum or facilities made available to us could negatively affect our ability to maintain and improve our service quality and level of customer satisfaction.

5.	Other mobile service providers in the world may not adopt the technologies that are compatible with those used by our corporate group’s mobile communications system on a continual basis, which could affect our ability to sufficiently offer international services.

B.
B.	Capitalization and Indebtedness

D.
D.	Risk Factors

6.	Our domestic and international investments, alliances and collaborations may not produce the returns or provide the opportunities we expect.

8.	Social problems that could be caused by misuse ~~or misunderstanding~~ of our products and services may adversely affect our credibility or corporate image.

9.	Inadequate handling of confidential business information including personal information by our corporate group, contractors and others, may adversely affect our credibility or corporate image.

A.
~~Item 1.~~Selected Financial Data	*~~Identity of Directors, Senior Management and Advisers~~*


~~Item 2.~~	*~~Offer Statistics and Expected Timetable~~*


	As of and for the year ended March 31,
	2006			2007			2008			2009			2010
				(in millions, except per share data)

Income Statement Data
Operating revenues:
Wireless services	¥	4,295,856		¥	4,314,140		¥	4,165,234		¥	3,841,082		¥	3,776,909
Equipment sales		470,016			473,953			546,593			606,898			507,495

Total		4,765,872			4,788,093			4,711,827			4,447,980			4,284,404
Operating expenses		3,933,233			4,014,569			3,903,515			3,617,021			3,450,159

Operating income		832,639			773,524			808,312			830,959			834,245
Other income (expense)⁽¹⁾		119,664			(581	)		(7,624	)		(50,486	)		1,912

Income before income taxes and equity in net income (losses) of affiliates		952,303			772,943			800,688			780,473			836,157
Income taxes		341,382			313,679			322,955			308,400			338,197

Income before equity in net income (losses) of affiliates		610,921			459,264			477,733			472,073			497,960
Equity in net income (losses) of affiliates, net of applicable taxes⁽²⁾⁽³⁾		(364	)		(1,941	)		13,553			(672	)		(852	)
Net Income		610,557			457,323			491,286			471,401			497,108
Less: Net (income) loss attributable to noncontrolling interests		(76	)		(45	)		(84	)		472			(2,327	)

Net income attributable to NTT DOCOMO, INC.	¥	610,481		¥	457,278		¥	491,202		¥	471,873		¥	494,781


	Millions of yen, except per share data
	As of and for the year ended March 31,
	2007			2008			2009			2010			2011
Income Statement Data
Operating revenues:
Wireless services	¥	4,314,140		¥	4,165,234		¥	3,841,082		¥	3,776,909		¥	3,746,869
Equipment sales		473,953			546,593			606,898			507,495			477,404

Total		4,788,093			4,711,827			4,447,980			4,284,404			4,224,273
Operating expenses		4,014,569			3,903,515			3,617,021			3,450,159			3,379,544

Operating income		773,524			808,312			830,959			834,245			844,729
Other income (expense)		(581	)		(7,624	)		(50,486	)		1,912			(9,391	)

Income before income taxes and equity in net income (losses) of affiliates		772,943			800,688			780,473			836,157			835,338
Income taxes		313,679			322,955			308,400			338,197			337,837

Income before equity in net income (losses) of affiliates		459,264			477,733			472,073			497,960			497,501
Equity in net income (losses) of affiliates, net of applicable taxes ⁽¹⁾⁽²⁾		(1,941	)		13,553			(672	)		(852	)		(5,508	)
Net Income		457,323			491,286			471,401			497,108			491,993
Less: Net (income) loss attributable to noncontrolling interests		(45	)		(84	)		472			(2,327	)		(1,508	)

Net income attributable to NTT DOCOMO, INC.	¥	457,278		¥	491,202		¥	471,873		¥	494,781		¥	490,485

Per Share Data
Basic and diluted earnings per share attributable to NTT DOCOMO, INC.	¥	10,396		¥	11,391		¥	11,172		¥	11,864		¥	11,797
Dividends declared and paid per share	¥	4,000		¥	4,400		¥	4,800		¥	5,000		¥	5,200
Dividends declared and paid per share ⁽³⁾	$	34.03		$	44.07		$	48.41		$	53.53		$	62.83
Weighted average common shares Outstanding—Basic and Diluted (shares)		43,985,082			43,120,586			42,238,715			41,705,738			41,576,859
Balance Sheet Data
Working capital⁽⁴⁾	¥	568,988		¥	533,465		¥	679,293		¥	872,816		¥	1,032,131
Total property, plant and equipment, net		2,900,653			2,834,607			2,691,485			2,607,590			2,523,319
Total assets		6,116,215			6,210,834			6,488,220			6,756,775			6,791,593
Total debt⁽⁵⁾		602,965			478,464			639,233			610,347			428,378
Total liabilities		1,953,748			1,933,050			2,144,912			2,094,329			1,913,999
Common stock		949,680			949,680			949,680			949,680			949,680
Total NTT DOCOMO, INC. shareholders’ equity		4,161,303			4,276,496			4,341,585			4,635,877			4,850,436
Total Equity		4,162,467			4,277,784			4,343,308			4,662,446			4,877,594
Other Financial Data
Depreciation and amortization expenses and loss on sale or disposal of property, plant and equipment		801,046			830,784			847,463			733,881			720,999
Net cash provided by operating activities		980,598			1,560,140			1,173,677			1,182,818			1,287,037
Net cash used in investing activities		(947,651	)		(758,849	)		(1,030,983	)		(1,163,926	)		(455,370	)
Net cash used in financing activities		(531,481	)		(497,475	)		(182,441	)		(260,945	)		(421,969	)
Margins (percent of operating revenues):
Operating income margin		16.2	%		17.2	%		18.7	%		19.5	%		20.0	%
Net income margin		9.6	%		10.4	%		10.6	%		11.5	%		11.6	%


(1)		~~Includes an aggregate gain on the sales of Hutchison 3G UK Holdings Limited and KPN-Mobile N.V. shares of ¥101,992 million for the year ended March 31, 2006.~~

~~(2)~~		Includes impairment of investments in affiliates. See Note 5 of Notes to Consolidated Financial Statements.


~~(3)~~	(2)	Net of deferred taxes of ~~¥(1,653) million,~~ ¥850 million, ¥(9,257) million, ¥567 million, ¥1,271 million and ~~¥1,271~~¥5,032 million in the years ended March 31, ~~2006,~~ 2007, 2008, 2009, 2010 and ~~2010,~~2011, respectively.


~~(4)~~	(3)	The dividends per share were translated into U.S. dollars at the relevant record date.


~~(5)~~	(4)	Working capital was computed by subtracting total current liabilities from total current assets.


~~(6)~~	(5)	Total debt includes total short-term debt (including commercial paper and current portion of long-term debt) and long-term debt.


Fiscal Year ended March 31,	High		Low		Average^*		Period-end
2007		121.81		110.07		116.92		117.56
2008		124.09		96.88		114.31		99.85
2009		110.48		87.80		100.62		99.15
2010		100.71		86.12		92.93		93.40
2011		94.68		78.74		85.71		82.76

Calendar Year 2010
December		84.23		81.67		83.34		81.67

Calendar Year 2011
January		83.36		81.56		82.63		81.97
February		83.79		81.48		82.54		81.94
March		82.98		78.74		81.65		82.76
April		85.26		81.31		83.18		81.31
May		82.12		80.12		81.13		81.29
June (through June 9, 2011)		80.98		79.87		80.36		80.07


*		For fiscal years, calculated from the average of the exchange rates on the last day of each month during the period. For calendar year months, calculated based on the average of daily closing exchange rates.

^*
*	Abbreviation of Mobile Virtual Network Operator. A business that borrows the wireless communication infrastructure of other companies to provide services.


	•	We will be able to find the partners and content providers needed to provide the new services and forms of usage we are introducing and persuade a sufficient number of vendors and other establishments to install i-mode FeliCa readers;

	•	~~We will be able to provide planned new services and forms of usage as scheduled and keep costs needed for the deployment and expansion of such services within budget;~~

	•	~~The services and installment sales and other methods we offer and plan to offer will be attractive to current and potential subscribers and there will be sufficient demand for such services;~~


	•	Manufacturers and content providers will steadily create and offer products including handsets for our 3G system and handsets and programming for our 3G i-mode services at appropriate prices and on a timely basis;

	•	~~Our current and future data communication services including i-mode and other services will be attractive to existing and potential subscribers and achieve continued or new growth;~~

	•	Demand in the market for mobile handset functionality will be as we envision and as a result our handset procurement costs will be reduced, which will enable us to offer our handsets at appropriate prices; and

	•	We will be able to commence services with improved data communication speed enabled by HSDPAHSDPA^, HSUPAHSUPA^* and LTELTE^** technology as planned.

^*
*		Abbreviation of High Speed Downlink Packet Access. A technology for high-speed packet data transmission from base station to handset based on Wideband Code Division Multiple Access, or W-CDMA.


^**		Abbreviation of High Speed Uplink Packet Access. A technology for high-speed packet data transmission from handset to base station based on W-CDMA.


^***		Abbreviation of Long Term Evolution. A mobile communications protocol with specifications formulated by the 3rd Generation Partnership Project.