KDDI Merges Four Subsidiaries

TOKYO -- KDDI has announced the impending merger of four subsidiaries to form KDDI Network & Solutions Inc., to strengthen management efficiency and improve response times for corporate customers requiring broad and comprehensive solutions. The new company is expected to become a pillar of the corporate fixed communications business for the KDDI group.

K-Solutions Inc., KCOM Corporation, OSI Plus Corporation, and KDDI Msat, Inc. will be merged into the new company on October 1, 2004, to strengthen the KDDI Group base and enable greater corporate-wide deployment in the communications service market where the Group expects an intensification of competition in the future.

Outline of KDDI Network & Solutions Inc.

Capital: 3,380 million yen
Ownership: KDDI 100%
Sales: 98 billion yen (anticipated through FY04, ending 03/2005)
Operating income*: 2.5 billion yen (anticipated through FY04, ending 03/2005)
Number of employees**: 456
Business: Sale of communication services, consulting
Providing network solutions
Designing, development, manufacture, sale, operation and maintenance of telecommunications systems and information and communications networks
Address: Bunkyo-ku, Tokyo
* Aggregation of anticipated FY2004 sales of the four present companies
** Aggregation of employees through 07/2004 of the four present companies

KDDI Corp.