NEC and Oki Team up to Expand the IP Telephony Market in Japan

"Through this alliance NEC will be able to extend its IP telephony product line-up to customers throughout Japan. We want this partnership with Oki to send a strong message to the Japanese market that we are challenging to establish a new and fast growing IP telephony business and industry," said Kazunori Kiuchi, Associate Senior Vice President at NEC.

"Our alliance with NEC is a direct response to the market needs for the IP telephony solutions, which is rapidly growing along with the expansion of broadband access such as ADSL (Asymmetric Digital Subscriber Line), CATV, and FTTH (Fiber To The Home)," stated Yutaka Asai, President of IP Solutions Company at Oki Electric. "Together, our companies will combine highly complementary sets of core technologies, skills and expertise to provide our customers with superior solutions, and we will contribute to the popularization of IP telephony services. Our target is to make Japanese communications the most advanced through the use of IP telephony."

Both NEC and Oki are leading vendors in the enterprise voice communications market, with a combined market share of approximately 50%*. NEC has strengths in system integration for large-scale voice networks and voice/data integrated networks, and broadband wireless solutions including mobile and wireless LAN. Oki excels in providing VoIP (voice over IP) and CTI (computer telephony integration) solutions for middle and small networks along with system integration of these solutions including call center construction, which require delicate supports matching customer needs.

By combining both companies' technologies and system construction know-how, the two companies intend to provide fully interoperable VoIP systems and establish a collaborative organization that flexibly corresponds to network construction requirements. Through the partnership, the companies aim to expand and activate the IP telephony market.

The partnership agreement covers the following areas:

1. Joint operation of the IPTPC (IP Telephony Promotion Center)
   The partnership will jointly operate and expand the functions of the IPTPC, currently operated by Oki. IPTPC offers various service menus mainly for Oki's VoIP products right now. The menus include the interoperability verification, voice quality evaluation, and IP telephony engineer qualification. Through the collaboration, NEC and Oki intend to enhance these menus, such as the interoperability verification service and the education program allow compatibility with NEC's technology including its broadband wireless solution. This enables potential enterprise customers to have firm supports from both companies and various product selections, as well as to reduce introduction periods and costs.

2. Joint promotion of the interoperability verification and joint development of interface protocol implementation guide
   For the rapid expansion of IP telephony, it is indispensable to establish the interoperability among terminals and gateways provided by different vendors. NEC and Oki will accelerate the interoperability between their products by utilizing the IPTPC. They will work together to develop the interface implementation guide for SIP (session initiation protocol) protocol between their products, and will disclose the guide openly to the industry. The partnership also intends to contribute the interoperability of the IP telephony and its applications, by closely working with the industry standardization organizations in Japan such as the HATS (Promotion Conference of Harmonization of Advanced Telecommunication Systems) and the TTC (Telecommunication Technology Committee).

3. Mutual supply of VoIP-related products
   In order to offer abundant solutions, which flexibly meet customer requirements for IP telephony system construction, NEC and Oki will mutually supply products to one another. Products planned to be mutually supplied are given below:
   • From NEC to Oki:
     - Enterprise IP routers
     - Security software products
   • From Oki to NEC:
     - Gateway products for broadband IP telephony
     - CTI servers for call center

4. Joint development of IT application platform for IP telephony
   Both NEC and Oki currently provide various IT services based upon IP telephony, such as voice mail service and instant messaging service. In order to offer much advanced services to customers, the companies will jointly develop the unified VoIP collaboration architecture, which integrates both companies' IT applications for the next generation enterprise IP network. The new architecture will create the new IP telephony applications and services by introducing multimedia application services converging voice, text and motion pictures.

Notes:

• The market share percentage for enterprise network voice communications market was calculated from the two companies total shipments for PBX, VoIP gateways, IP-PBX, IP telephony system. Data was provided by the Fuji Chimera Research Institute, Inc.
• Names of companies and products are trademarks or registered trademarks of the respective companies.

About NEC Corp.
NEC Corporation (NASDAQ: NIPNY, FTSE: 6701q.l, TSE: 6701) is one of the world's leading providers of broadband and mobile Internet solutions dedicated to meeting the specialized needs of its diverse and global base of customers. Ranked as a Global Fortune 500R company and one of the world's top patent-producing companies, the NEC group delivers tailored solutions in the core technologies and services required in a networked world, ranging from advanced semiconductor solutions, to large-scale mission critical systems, systems integration, and broadband and mobile technologies. The NEC group employs more than 140,000 people worldwide and had net sales of approximately $39 billion in the fiscal year ended March 2002. For additional information, please visit the NEC home page at http://www.nec.com.

About Oki Electric Industry Co., Ltd.
Founded more than a century ago in 1881, Oki Electric Industry Co., Ltd. (TSE: 6703) is Japan's first telecommunications manufacturer, headquartered in Tokyo, Japan. Oki Electric provides customers with top-quality products, technologies and solutions for telecommunications systems, information systems and electronic devices through its corporate vision, "Oki, Network Solutions for a Global Society."