Tokyo, November 24, 2005 --- NEC Corporation (hereafter NEC,
President: Akinobu Kanasugi), NEC Infrontia Corporation (hereafter
NEC Infrontia, President: Kazunori Kiuchi) and NEC Networks &
System Integration Corporation (hereafter NEC NETS-I,
President:Yukihiko Baba) today announced that NEC Group structure
will be reorganized with respect to its enterprise network
solutions businesses, such as “UNIVERGE,” in order to accelerate
the implementation of its growth strategy. The reorganization is
aimed at enhancing NEC Group’s product development, sales, systems
integration (“SI”) and operation/maintenance provision
capabilities.
NEC resolved at the meeting of its Board of Directors today to
initiate a tender offer for the shares of NEC Infrontia in order to
make it its wholly-owned subsidiary. NEC Infrontia also resolved to
comply with the tender offer at its board meeting today. After NEC
Infrontia becomes a wholly-owned subsidiary of NEC in May 2006, NEC
will consolidate management resources related to the development of
internet protocol (“IP”) telephony systems into NEC Infrontia
around July and create a 1000-strong employee structure to enhance
product development capabilities. In addition, realization of a
broad product lineup, from key telephones for small-scale systems
to IP-PBX and SIP servers for large-scale systems, will be enabled
due to a common development platform. NEC also plans to enhance the
broadband capability of NEC Infrontia’s point of sales (“POS”)
terminals and strengthen collaboration between this business and
its solutions business.
Cooperation between NEC and NEC NETS-I will be maximized in
order to enhance sales and SI capabilities for enterprise network
solutions, and customer response capabilities will be enhanced by
optimizing combined network SI management resources and
distinguishing target markets. Furthermore, by placing
approximately 200 network-related system engineers (“SEs”) and
sales personnel inside its Group companies, NEC will enhance
cultivation of human resources, improved functionality of technical
centers supporting SEs and sales staff and response to increasingly
diversified customer needs.
NEC, NEC NETS-I and NEC Telenetworx, Ltd. (hereafter NEC
Telenetworx, President: Tatsu Fujita) have also agreed to make NEC
Telenetworx a wholly-owned subsidiary of NEC NETS-I through a
stock-for-stock exchange in order to strengthen services for
network outsourcing, operation and maintenance. By centralizing the
service structure through the consolidation of NEC NETS-I and NEC
Telenetworx, NEC Group will strive to expand its range of services,
improve customer satisfaction and increase profitability.
In recent years, the integration of IT systems and networks has
been advancing in information communication systems for
governmental entities and enterprises accompanying the switch over
to IP in the information communication network area and the
increased spread of broadband. Customers are also increasingly
seeking IP-based products, and the need to develop products
incorporating new technology is growing. In addition, the provision
of total solutions realized by the bundling of multiple products is
also being sought after by customers. In response to these needs,
NEC Group will restructure its organization to enable enhanced
Group synergy, strengthening its enterprise network solutions
business.
Outline of the reorganization of NEC Group
structure.
1. Enhancement of hardware/software development capabilities for
IP phone systems
When NEC makes NEC Infrontia its wholly-owned subsidiary in May
2006, it will position it as one of its business units and carry
out integrated business operation. After July, NEC will integrate
its business networks Division, which develops enterprise network
products, with NEC Infrontia, and create a product development
structure comprising of 1000 employees to focus on IP telephony
systems such as UNIVERGE. Positioning NEC Infrontia as the core
company responsible for the development of IP telephony systems,
NEC will strengthen Group hardware and software development
capabilities in order to enhance collaboration between IP
telephones/IT systems and the mobile environment. A common
development platform will enable NEC to offer a wide variety of
products from key telephone systems for small-scale systems to
IP-PBX and SIP servers for large-scale systems. Furthermore, NEC
will continue to promote expansion in the global market, aiming to
acquire a 10% share.
2. Strengthening of enterprise network solutions sales and SI
capabilities
(1) Enhanced collaboration between NEC and NEC NETS-I
Along with promoting collaboration between NEC and NEC NETS-I,
NEC NETS-I will be positioned as a core company in the area of
network SI. Distribution of functions such as sales, sales support
and SI services will be carried out and target markets will be
distinguished, realizing optimal use of resources. NEC will enhance
its capabilities to better respond to the needs of not only large
companies but also those of medium-size and regional markets, and
will continue to advance its technological capabilities toward the
provision of advanced solutions and enhanced project
management.
(2) Transfer of Group company SE and sales personnel to NEC
200 network-related system engineers and sales personnel from
each Group company including NEC Magnus Communications Ltd., NEC
Engineering Ltd. and NEC System Technologies, Ltd. will be
transferred to NEC by April 2006, establishing a personnel
structure with a high level of technological competence in both
voice and data networks and a wealth of expertise and know-how.
This will result in not only the expansion and enhancement of
integrated activities by SE and sales but also the optimization of
technical center functions supporting them. Moreover, NEC will
promote personnel cultivation to enable response to the latest
technological trends as well as the accumulation of technological
know-how.
3. Improvement of network-related outsourcing and operation
maintenance services
The integration of NEC NETS-I, which has competence in voice IP
network technology, and NEC Telenetworx, which has competence in
optical and wireless-related data network technology, will create a
unified service structure for the provision of network-related
outsourcing, operation, maintenance and security services. This
will enable NEC to expand services accommodating the needs of
government and enterprise customers, develop new services and
expand sales of services toward new market cultivation.
Furthermore, NEC will promote mutual cooperation among the
approximately
300 offices and contact centers of both companies, aiming to
improve customer satisfaction and increase profitability through
improved cost efficiency.
* Please see attachments for an outline of each company and the
tender offer.
About NEC Corporation
NEC Corporation (NASDAQ: NIPNY) (FTSE: 6701q.l) is one of the
world's leading providers of Internet, broadband network and
enterprise business solutions dedicated to meeting the specialized
needs of its diverse and global base of customers. Ranked as one of
the world's top patent-producing companies, NEC delivers tailored
solutions in the key fields of computer, networking and electron
devices, by integrating its technical strengths in IT and Networks,
and by providing advanced semiconductor solutions through NEC
Electronics Corporation. The NEC Group employs more than 140,000
people worldwide and had net sales of 4,855 billion yen (approx.
$45.4 billion) in the fiscal year ended March 2005.
For additional information, please visit the NEC home page at:
http://www.nec.com
* Newsroom: http://www.nec.co.jp/press/en/