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*****For immediate use September 3, 2003

New Findings On Asia Pacific Enterprise Telephony Markets

- Minimal growth but Asia Pacific enterprise telephony market remains fundamentally strong -
- NEC emerges as market leader in PBX, KTS & WPBX -




Singapore, 3 September 2003 - Frost & Sullivan's recent report - Asia Pacific Enterprise Telephony Market, has revealed that although telephone telephony vendors are experiencing minimal growth for the past year, with revenues of US$2.05 billion in 2002, the industry is set to experience an explosive market growth as IP (Internet Protocol) technology becomes mainstream.

"Overall slowdown in the global economy and increased pressure to reduce cost have caused many enterprises to delay their spending decisions," said Mr Manoj Menon, Director of Frost & Sullivan (Asia Pacific). "But this is not to say there are no opportunities out there. Markets such as Australia, China, India and South Korea are seeing encouraging business growth despite the challenges in Asia Pacific."

"The industry is in a state of transition from circuit-switch to IP technology, and revenue growth has been dismal for the last few years. The situation is set to change dramatically with the value of the Asia Pacific telephony market expected to hit an excess of US$2.34 billion by 2005."

"The voice equipment industry will gradually migrate towards IP and more open systems, which will become the main industry driving force. Furthermore, it is also expected that more innovative IP convergence applications will emerge to complement this shift in technology. Companies with strong brand name recognition, such as NEC, have already positioned themselves strongly to capture more market share in the enterprise telephony industry."

Frost & Sullivan has revealed NEC as the overall leader in the Asia Pacific enterprise telephony market, with a market revenue share of 26.2 percent. The company has emerged as the largest PBX (Private Branch Exchange) and WPBX (Wireless Private Branch Exchange) player in Asia Pacific, capturing 26.6 percent of the PBX revenue market in 2002, worth US$1.42 billion in 2001, and 69.5 percent of the WPBX market (worth US$37.66 million); making them the clear winner of Frost & Sullivan's Market Engineering Award - Leadership for Asia Pacific Enterprise Telephony Market - for the second consecutive year.

"Our technology and development, and our sales strategy which focus on our customers' needs and protecting their investments have enabled us to be the leading voice and equipment vendor since 1999. We have demonstrated our ability to grow in a maturing market by implementing a unique sales strategy coupled with technological innovations and leadership, further strengthening our position in the market," said Mr Riaki Tanaka, General Manager of 2nd Enterprise Communications Solutions Division, NEC Corporation.

Moving forward into the future of converged telecommunications tools, NEC is launching its Dterm Series i family of next generation IP phone sets. The comprehensive range of IP terminals are compatible with both the NEAX2000IPS and NEAX2400IPX to provide the full reliability and functionality that are expected from traditional enterprise telephony solutions.

"NEC has always focused on delivering the best telephony solutions to meet the customer's business operations," explained Mr Tanaka. "Our new Dterm Series i family is a natural progression as our telephony solutions evolve toward an IP world without losing any of the reliability and feature sets that enterprises depend upon."

Included in the display is the futuristic INASET(TM), an IP telephony appliance that converges both voice and data communications. Featuring a large color display, Java support and a web browser, INASET also provides the full telephony feature set of Dterm telephones. In addition to INASET, NEC is also showcasing both its newly-designed eight- and sixteen-button Dterm IP phones, and its Dterm SoftPhone SP-30 for individuals who wish to integrate a fully-featured voice communications IP terminal on their desktop or laptop. Also featured is the award winning IPS-DMR, designed as an IP Remote PIM offering for NEC's NEAX 2000 IPS product family, offering feature transparency for remote location networking over IP while providing a robust survivability solution.


About Frost & Sullivan
Frost & Sullivan (www.frost.com) is an international growth consulting company that monitors various high growth technology markets including the Enterprise Telephony market for market trends, market measurements and strategies. Headquartered in Silicon Valley, Frost & Sullivan has a worldwide presence, with offices in the United States, Europe and Asia (www.asiapacific.frost.com). Using our Market Engineering methodology, our global team of analysts and consultants track over 200 key industries.

About NEC Corporation
NEC 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 approximately $40 billion in the fiscal year ended March 2003. For additional information, please visit the NEC home page at: http://www.nec.com.

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For more information, please contact:

Francis Huan
Marketing Specialist
Frost & Sullivan
DID: (65) 6391 0961
Email: francis.huan@frost.com
Shawn Tan
NEC Business Coordination Centre (Singapore) Pte Ltd
DID: (65) 6416 9571
Email: shawn_tan@bccs.nec.com.sg
Akiko Shikimori
NEC Corporation
DID: (81) 3 3798 6511
Email: a-shikimori@ay.jp.nec.com
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