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NEC Reorganizes Group Structure to Strengthen Its Enterprise Network Solutions Business

***** For immediate use November 24, 2005

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: * Newsroom:


* Please see the following attachments for more details:

NEC Press Contacts:

In Japan
Diane Foley
NEC Corporation

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