I would like to take this opportunity to extend our sincere gratitude to our shareholders.
Telepark achieved mobile phone sales of 1.84 million handsets, its best record in the first half year, due to continuous effect brought by the of Mobile Number Portability (MNP) system, which has activated the mobile phone market since its introduction on October 24, 2006.

On September 20, 2007, the Mobile Business Study Group organized by the Ministry of Internal Affairs & Communications (MIC) released the final report based on discussion in the ten-time meetings, which have been held in order to activate Japanese economy and to increase the benefits of users through the growth of new mobile phone business. According to the final report, the role played by sales subsidies is approved as “they have contributed to the expansion of mobile handset market by enabling to offer high-end handsets to users at ‘lower price’ and stimulating demand for higher-end handsets.
The report has also commented “The amount of sales subsides should basically decided by mobile carriers based on their own management judgment”, and added that such subsides should be used for the purpose of increasing the benefits of users through more appropriate communication fees structure and fair competition from the viewpoint of competition policy. And the report has concluded that the separation plan should be introduced as it is necessary to separate communication fees from price of handset as clearly as possible “so that users can recognize the breakdown of their own ARPU (Average Revenue Per User)”.

Along with their recommendations, mobile carriers such as NTT DoCoMo and KDDI have stared to offer the new services taking the separation plan into consideration, and the market for mobile phone sales is entering a new era. In such circumstances, Telepark will fully provide information on the handset price and communication fees as important matters in making purchase contract, and continue to make an effort to improve users’ convenience and transparency in the mobile industry as a whole, in complying with the “Mobile Business Activation Plan” presented by the “Mobile Business Study Group”.

On the other hand, we don’t foresee that the Activation Plan presented in the final report would affect the mobile distribution industry profoundly as mentioned in part of the media coverage. Since mobile distributors fulfil a distributing function for mobile phones, which are necessity article indispensable to people’s daily life, almost exclusively, significance of existence will not change in the future. Furthermore, we don’t think that users will hold same handsets much longer time than before, and that the total market size of mobile distribution market will shrink so drastically considering the future new attractive models as well as price plans that will be continuously introduced together with the market activation.

With the total number of mobile handset including PHS in use in Japan exceeding one trillion, it is said that the mobile business market is shifting from the rapid growth phase to the mature stage. However, in line with saturation of the domestic market, and as the reorganization of mobile distributors accelerates, it is predicted that leading distributors with financial wealth, organizational integrity and access to abundant information will be able to create more competitive edge taking advantage of scale. And with handsets becoming more advanced and price plans becoming more diversified, further detailed explanation on those products and services is also increasingly required. As a result, the role undertaken by specialized distributors with high quality sales staff will become much more important. We intend to fulfil our corporate social responsibility of contributing to more affluent society by focusing on the development of the telecommunications business and taking various measures to flexibly respond to future change in the market conditions.
We look forward to your continued support and understanding.