Thank you very much for attending today, despite your busy schedule. From here now, we would like to start the briefing on the financial results for the fiscal year ended March 31st, 2024, and financial forecasts for the fiscal year ending March 31st, 2025. I am Hanaki from the IR office and will be serving as the facilitator today. First, I would like to introduce today's attendees: Mr. Shimada, Member of the Board, President/CEO, Mr. Hiroi, Representative Member of the Board, Senior Executive Vice President, Mr. Nakamura, Executive Officer, Head of Finance and Accounting, Mr. Hattori, Executive Officer, Head of Corporate Strategy and Planning, are present here today. Today's briefing session is streamed live. We are planning to stream it on our website at a later date, so we seek your understanding beforehand. As for today's explanation material, please refer to presentation materials that are posted on our company IR website.
On the first page, it shows the points to be noted, so please go through it as well. President and CEO Shimada will explain the outline of the financial results, followed by a Q&A from the floor. Mr. Shimada, please.
Thank you for joining us today. We appreciate your attendance. Allow me to present to you the financial results for fiscal year 2023 and also financial forecasts for fiscal year 2024 at this time. Please turn to page 4 of the material. Operating revenue, operating profit, and profit all increased year-over-year. Operating revenue, operating profit, and profit all reached record high levels. As for operating revenue, well, revenue from electricity business at ENNET dropped by JPY 260 billion, driven by increase in revenue in Integrated ICT Business and Global Solutions Business. Operating revenue increased by JPY 238.4 billion and reached JPY 13,374.6 billion at the end of the day. Now, of the increase in revenue, impact from foreign currency accounted for roughly JPY 200 billion.
As for operating income, there was negative impact from costs related to disaster recovery and security, but cost reduction and streamlining of non-core assets helped to achieve increase of roughly JPY 93.9 billion in operating profit, and the total was JPY 1,922.9 billion. Profit increased JPY 66.4 billion year-over-year due to increase in operating profit and reached JPY 1,279.5 billion. As for EBITDA, increased by JPY 127.9 billion year-over-year, driven by increase in operating profit and reached JPY 3,418.1 billion. As for EPS, we achieved the target, which was the financial target of the previous midterm plan, which ended in fiscal year 2023. So we achieved EPS of JPY 14.8 at the end of the day. Please turn to the following page, page 5, please. This talks about contributing factors by segment.
Let's start from Integrated ICT Business, supported by increase in integrated solution in enterprise business as well as asset impact driven by reorganization and growth in Smart Life Business, focusing on finance and payment. Both revenue and operating profit increased in this market segment. As for Regional Communications segment, there was negative impact from costs related to disaster recovery and security, but cost reduction and streamlining of non-core assets helped to achieve increase in both operating revenue and operating income. Turning to Global Solutions Business segment, operating revenue and operating profit increased driven by increased revenue in public sector finance and enterprise business in Japan. There was increased operating profit based on increased revenue. Also, revenue dropped. Turning to other segment, revenue dropped due to drop in revenue from electricity business at ENNET because they contained electricity procurement due to skyrocketing cost of power.
But operating profit also declined because of the impact of increase of procurement costs compared to the previous year. So that is the situation. Presenting to the other segment, allow me to elaborate a little bit. In fiscal year 2022, profit from sales for electricity expanded due to a jump in the market price. But in fiscal year 2023, the market price dropped, causing loss in sales, which led to operating loss on a year-on-year basis. Please turn to page 7 of the material, please. This shows you fiscal year 2024 results forecast. Fiscal year results forecast. Operating is anticipated. Operating revenue increase year-over-year. Well, operating profit to profit will decrease year-over-year. Well, there is JPY 130 billion negative impact from currency. We are aiming for record operating revenue based on increased revenue in Global Solutions Business.
The guidance for operating profit and EBITDA is negative year-on-year. But if we exclude the one-time factor from the previous year, such as the streamlining of non-core assets, then we are actually in the positive territory as far as operating profit is concerned. We believe that fiscal year 2024 will be a year to evolve various measures toward the midterm plan goals in fiscal year 2027. We will expand the base profit and actively implement various measures to increase operating profit over the medium term. Please turn to the following page. This shows you the contributing factors by segment, starting with Integrated ICT segment. We expect the increase in both operating revenue and operating profit through increase in enterprise business based on the expansion of integrated solutions business.
As for regional communication segment, we accept both operating revenue and operating profit will decline because of the reaction toward the non-core asset streamlining in the previous year, as well as increased disaster recovery cost and the continued drop in voice service and ISP revenue and packet communication revenue. But through selection of business and cost reduction based on improved efficiency, we are aiming to achieve inflection point so that we can indeed achieve growth in revenue and operating profit in the fiscal year 2027. So that is what we are aiming to achieve. As for global solution business segment, there's going to be increase in both revenue and operating profit through growth in revenue driven by robust digitalization demand. As for the other segment, urban solutions revenue increased driven by expanded sales of residential homes.
As a result of the reaction to the strong sales in the previous year, operating revenue will increase, but operating profit will decline in this segment. Please turn to page 9. Page 9, please. Here, we talk about current profit levels and initiatives to reach medium-term targets. We actively streamlined non-core assets to achieve the previous medium-term targets for which fiscal year 2023 was the final year, and we achieved significant profit increase. So that indicates in fiscal year 2023, we were able to achieve the EPS target as well. Although profits are expected to temporarily decline in fiscal year 2024, we're actively working on expanding growth areas and implementing cost structure reforms in order to achieve the new medium-term targets for fiscal year 2027. To be more specific, we will actively maximize return from investment in growth areas.
Also work to strengthen domestic and international enterprise business, leveraging synergy from integration of NTT Ltd., and NTT DATA. We also expect drastic cost structure reforms to take place, and we're aiming to increase EBITDA by 20% in fiscal year 2027 compared to fiscal year 2022. So that is the growth in EBITDA that we're aiming to achieve. Please turn to the following page. I'd like to add one comment on the financial results. As you can see, our balance sheet is expanding, but most of the expansion is in line with the expansion of our finance and data center business, which are characterized as growth areas in our medium-term management strategy.
As these businesses have distinct business and financial features compared to the telecommunication business, which is the main pillar of our existing business, we decided to disclose separately so that this may help our stakeholders in assessing the enterprise value as well as the creditworthiness of our company. As for the data center business assets, liabilities, as well as EBITDA, operating revenue, and operating profit will be disclosed in the supplementary data for the annual results, starting from fiscal year 2023. As with finance business, we are reflecting the balance sheet for Monex and ORIX Credit, which are newly consolidated companies, starting from fiscal year 2023. But as full-year results will be incorporated in the consolidated results, starting from only fiscal year 2024, what we're doing is we're planning to expand disclosure by the end of fiscal year 2024 as far as this segment is concerned.
Please turn to page 11. Here, we talk about shareholder return. At the board today, we resolved to increase year-end dividend per share to JPY 2.6, which represents an increase of JPY 0.1 over the forecast beginning at beginning fiscal year 2023. Annual dividends per share are forecasted to be JPY 5.2, which is an increase of JPY 0.1 from fiscal year 2023. These are resolved at the board. Dividends are expected to increase for the 14th consecutive year as a result of this effort. Let me now turn to topics. From page 13, I will briefly go over them. First of all, I would like to explain about establishing NTT DOCOMO GLOBAL. In the DOCOMO Group, a new company will be established in July to manage and promote global business centrally and flexibly across various businesses.
Within the group companies, NTT Digital, OREX SAI, and some overseas group companies will be transferred and start the expansion of application services such as Web3 and support Open RAN implementation for telecoms globally. Through this, we aim to bring about richer lives and societies for customers around the world. Next page, please. Next, I will say about NTT Precision Medicine's establishment. Precision Medicine is a medical concept to provide optimal disease prevention and medical care that is personalized for each individual. Realizing Precision Medicine requires integrated collection, analysis, and utilization of medical healthcare data such as clinical trial data or medical examination data that is linked to an individual.
Towards this realization, we will integrate assets and resources that are held by each of the companies within NTT Group, establish NTT Precision Medicine, which will conduct from data generation to utilization of data in a one-stop manner and make strenuous efforts in this sub-business by partnering with all the stakeholders. Next, page 15, please. Next, I will explain about newly appointing CCXO and CAIO. In order to strengthen CX, we will newly appoint a Chief Customer Experience Officer at major NTT Group companies. In addition, customer engagement indicators will be reflected in executives' performance-based compensation. Furthermore, in order to promote AI first, we will newly appoint 2 Chief AI Officers, CAIOs. Next is regarding towards achieving net zero in 2040. Fiscal year 2023 actual results for Scope 1 and Scope 2 was 2.42 million tons and steadily progressing in the reduction faster than planned.
In addition, as an interim target towards achieving net zero in fiscal year 2040, we are aiming for 17 million tons or 40% reduction of Scope 1, 2, and 3 in total to be achieved in fiscal year 2030. Next, please. Next page, please. I will explain about initiatives to roll out overseas business for IOWN. We hosted the Upgrade 2024 conference in San Francisco. Towards the implementation of IOWN and other technologies globally, we proposed R&D results and product developments, including distributed edge DC utilizing All-Photonics Network and tsuzumi. And this was reported widely through domestic and international media and had many participations from overseas as well. Next, I will explain the status of the number of shareholders. We report the number of shareholders as of end of March.
As you see on the right side of the chart, it shows the number of shareholders as of the end of March. Historically, the number of shareholders was trending in a slight increase. However, after the announcement of a stock split, there is a continuous increase and has doubled. The proportion of shareholders in their 40s or younger has increased approximately 4 times. The age composition has become more diverse. Next page, please. As for the medium-term management strategy, the progress since this February is as shown here. This concludes my explanation.
Thank you. We'd like to proceed to the Q&A session. As far as questions are concerned, we will take questions from those who are on-site as well as people who are connected remotely. Those who have registered beforehand and who are connected to the web conference system are the people that we are able to take questions from.
For those of you who are on-site, if you have any questions, please raise your hand. I'll wait for the microphone to be brought over to you. For those of you who are connected through the net, please use the raise hand button on the web conference system. If you wish to cancel your question, please push the raise hand button once again. Also, when we designate the questionnaire, we will call upon your name and the affiliation. So if we ask you to unmute your microphone, please unmute your microphone. When you complete your question, please make sure that the mic on your side will be muted until we complete a response. So let's take questions from those of you on the floor. So please raise your hand if you have any questions. If you'd like to go to the gentleman in the front row, please.
Please go ahead with your questions, sir.
Thank you. SMBC Nikko Securities, Kikuchi Satoru. Thank you for this opportunity. I have two questions. Well, actually, maybe three questions. First, the first question is about the streamlining of your non-core assets. You've done a great job over the past 3 months. You've done a great deal. How much sales were you able to earn? And what about the profits from that? And also, you did this over 3 months. Maybe you weren't able to totally complete the streamlining of your assets. And on page 9, I think there was an indication that there's still non-core assets that need to be streamlined. Do you have more non-core assets that are ready to be sold? So can you talk about the further streamlining of non-core assets? So I'm sure that you'll proceed with the streamlining of non-core assets.
But what about streamlining of your core assets going forward? A few years ago, you sold off your base station assets to JTOWER. Well, DOCOMO did. And yesterday, NTT DATA Group, they presented their financial results, and they mentioned that data center REIT would be proceeded. So can you talk about the possibility of further streamlining of your core assets going forward? What about taking your core assets, taking them off the balance sheet? What type of REIT do you envision? If you could cite some concrete cases, I would appreciate that. That's my first question.
All right. Thank you. Allow me to respond to your question. First, with regard to the streamlining of the non-core assets. Well, in principle, this applies to entities to the west. This also applies to entity DOCOMO and communications as well. They're now part they have become integrated.
They're part of the same group, and they've decided to improve efficiency of their assets. So that is where the streamlining of non-core assets really began. Now, if we want to develop in-house throughout NTT Group, then those assets are being transferred to NTT Urban. So the assets that we're talking about this time, these are not assets that would be worthy of development by development operators. So that is why we are selling off those assets to third parties such as JTOWER. So it's not that they're remaining on balance sheet. In fiscal year 2023, inclusive book value, we had roughly JPY 200 billion streamlining of assets. Now, of that amount, I would say maybe JPY 100 billion out of the JPY 200 billion would be the proceeds or would actually be profit. I think that's a rough picture.
Now, when we sell off these assets, we have to, of course, make sure that we retire the property on the assets; we need to take out the property on the assets. So in fiscal year 2023, we did a lot of the streamlining in a single year. That's because we made the full preparation in the preceding couple of years. Now, are we done with the streamlining of these non-core assets? That is not the case. There's still some assets that remain. If there are unrequired assets that emerge, then we'll be happy to streamline those assets at that time. For fiscal year 2024, we believe that a certain level of activities will remain, maybe not on the scale as fiscal year 2023, but some level of streamlining of assets will continue in fiscal year 2024. Now, the wireless relay stations that have been a long-standing challenge for the company.
But with the change in the technologies, these are assets that are no longer required. So I think we need to take a planned approach and make sure that we take them off the assets category. But selling off relay stations in the mountainous areas are not going to be attractive. So we need to combine that with attractive real estate. I think we need creative ideas if we're to sell off those unattractive assets. Now, what about the securitization of other assets? Yesterday, NTT DATA presented the financial results. And I believe they mentioned that they will pursue REIT of data centers by fiscal year 2025. Now, what about fiscal year 2023? Part of the data centers were actually sold off, as a matter of fact.
So combining the finance of third parties and expanding data center, that is a policy which we have mentioned that we want to pursue since the past. But then the interest rates in the U.S. has gone up. So it's very difficult for various funds to work together because of the increase in interest rate. So that opportunity has come down. So in the initial investment, in the initial phase, we were now investing our own money. So as far as fiscal year 2025 is concerned, if we focus on the possibility of REIT, I don't think it'll be on a very large scale. The thing is, but by pursuing REIT, maybe we can find out what other assets will be interested, what is the assessment of the clients. And so that's how we want to start this program.
So if we pursue a massive scale, then this is going to have a downward effect on our profit. So we need to be very careful as we carry out this program. Now, what about the securitization of assets and antennas and base stations? That is something we have been consistently pursuing going forward. We will probably continue to pursue sales because we've completed all the intended asset sales in our program.
All right. Allow me to also add some comments. Mr. Shimada talked about the scale of operations for this fiscal year as for when we sold off non-core assets. There are two types of such asset sales. First is the one being pursued by NTT East and the other being pursued by NTT Urban. They pursued non-core asset streamlining. These assets were sold, and we were able to gain proceeds.
Therefore, NTT Urban, they also handle core assets as well as they're in real estate, but they are beginning to sell off assets where the profitability is not that high. So that is being done in the context of the management decision on the part of NTT Urban. Now, going forward, what about the possibility of REIT? Mr. Shimada has already responded to this question. If we sell off our core assets, then this is going to have a downward effect on our profit. So it's important that we scrutinize the content of the sales. Once we have certain scale, once we're able to actually go beyond the capacity of balance sheet, then we can strategically sell off some of the good assets because bad assets, we cannot sell as REITs. So at the same time, we want to maximize the return. That is the perspective we need to employ.
So I think the ordinary finance type of principle will apply in our decision-making system. Now, technology may be evolving, and copper will have to be migrated. So former core assets can't translate into non-core assets. For those assets, we'll continue to actively pursue sales of those assets.
Thank you very much. My second question is this. So I have two or three questions, but let me turn to my second question on page 10. Page 10, you talk about balance sheet. You mentioned that the data center business is expanding, and you want to offer straightforward disclosure. We appreciate your efforts to provide very clear disclosure. Now, the asset side, the EBITDA side, EBITDA from the asset side, and operating profit. We need more information. We need interest-related costs in relation to the liabilities column as well. Because for shareholders, we need pre-tax type of financials.
We appreciate more straightforward information about liabilities as well. And also, with regard to assets, in 10 years or 20 years' time, I think you'll be able to have a good view of potential profits down the line. So right now, you're showing the EBITDA level. But if you could also share with us your ideas about potential pre-tax profit. If you could present that information as well, we would really appreciate that. That will give us a great sense that will give us a great sense of comfort because then we'll be able to do a calculation based on DCF. So if you could please provide information on pre-tax profit. And also, if you could talk about some of the future potential profits that may emerge from your current assets. That's my second request. So let me turn to my third point.
The second point was not a question but a request. This time, you didn't announce any share buyback. Now, last year, in the first quarter, you made an announcement about the share buyback. Now, I'm sure that you're not going to do anything about the share buyback. But on the other hand, the dividend growth is actually quite small this time. So your principle, if there's been any change in shareholder return policy, does this? That's my third question. Thank you. With regard to my request on the second point, if there's anything you can comment on my second point, I would appreciate it. But I appreciate your response to your first question.
All right. Let me start with your second point. This touches upon our corporate strategy planning purposes. Now, my colleagues on this side of the table are probably concerned.
But right now, I'm not overly concerned about the financial burden at this moment. Well, I'm not concerned. Well, we have about 20% data center business is growing at a CAGR of exceeding 20%. And among the top three companies, we're actually the new entrant. And we're the ones who are making the newest investment among the top three players, which means that our return will be coming out later stage compared to our competition. Now, we have a situation where this business is engaging very strong growth. It's important that we strike it's important that we carve out a very strong position in the marketplace as a result. Right now, we're in the midst of intense competition over our footprint in the marketplace. So it's important that we continue to be a main player in the global data center business.
We need to establish ourselves as a very strong global player in this data center business. Now, of course, financial expenses are more visible right now. That is true. I think for some time, the interest rate is high, but we can expect further downward trend in interest rate going forward. As I mentioned, I think we'll be able to generate return over the long term. That is also very visible. So hopefully, we'll be able to give this we want to make strategic consideration based on these various elements. Now, to what extent can we disclose these factors? That's something that we want to consider if we may. Now, turning to the other point about the shareholder return, our policy about shareholder return has not changed at all fundamentally. We had a 1.25 split in the share, so JPY 0.1 might sound somewhat questionable for you.
But still, we achieved all the financial targets in the midterm plan. So at the end of the period, we also increased our dividend. And of course, in line with our business growth down the line, it's important that we be able to step fast, increase dividend. As far as the EPS is concerned, it's no longer the part of the indicator in the new midterm plan. However, as I mentioned earlier, we want to make sure that there's step-fast growth in EPS as well under the new plan. So that means we are very mindful about the requirement for the shareholder return. Thank you.
If I could also add, now, with regard to your second point about the disclosure, if I could be somewhat specific, we're now in the phase of expanding our investment in data center business.
So that is why there's an increase in the size of our balance sheet. But this is a time-consuming effort before we can recover the cost. Data center is going to be a time-consuming process because we need to buy land beforehand, and then we gain permission from the local community, get power, and then have construction permits. So compared to other types of assets, our data center business is more long-term. So that is why liabilities of PS is high. And also, the high interest rate is going to be a factor. However, down the line, we'll be able to recover the cost because our customers will be increasing. Fortunately, if interest rate were to come down, then that will also have a positive impact as well. So right now, there are negative impacts from these two factors at this moment.
I think we need to be mindful of the phase of the investment required. We need to consult with NTT DATA. Hopefully, we'll be able to talk about the timeline or portfolio at some time. Maybe we can provide a form, but we will offer explanations. We'd like to give that matter consideration. How the shareholder return, Mr. Shimada has already explained. Thank you.
That's all. Thank you. [Foreign language]
Thank you very much. We would like to take the next question, the second row.
This is Tsuruo from Citi Securities. Thank you very much for this opportunity. First question is regarding cost reduction. The cost reduction plan, I believe it's about JPY 10 billion less than the original plan. In this area, you have a solid execution till now. So maybe this isn't an unusual situation. So I want to know the background on this.
I'm sorry that various questions are mixed together. Then the regional telecommunications, it had a dip. You're going to use a cost to expand the growth businesses. So how should we look at the future and what is going to happen to the cost reduction regarding the future from now? Maybe you don't have it now. But in the medium term, what kind of cost reductions are you thinking different from what you have conventionally doing?
I'm sorry, various questions were mixed in this. As you have pointed out, we were slightly shy of JPY 1 trillion by about JPY 10 billion. If we kind of tried or forced ourselves, maybe we could have achieved it. However, we had the earthquake and CSI, and there were security-related matters. So till the very end, how much are we going to provision?
We had some areas we had to have the provision last minute. Of course, if we were able to achieve it, that would have been great. But overall, our understanding is that we have achieved the target that we had. Moving forward, basically, I did talk about we appointed newly two CAIO officers. The one person externally will be responsible to share the AI development externally. The other person will be in charge for the internal development of AI and promoting that. The head of the development technology division also will be the co-CAIO. Where we can replace it by AI, we are going to replace it by AI as much as possible is what we're planning. There will be the investment cost to implement AI, and there will be operation costs for fine-tuning temporarily that is going to incur.
However, in the long term, all those processes will be automated. Therefore, the business processes with AI, we are going to make it flow through. It's not just DOCOMO and not just for the operations side, but it will be customer contact center type of area or as the contact point from the user side. We would like to thoroughly implement what we can. Therefore, FY 2024 will incur the costs for that. So it will be the starting point for the cost to incur. And this is not going to complete in a year. So we would like to continue this effort for a while. So in absolute money amount terms, what this is going to be, we will not know until we actually conduct this. So I would like to refrain from answering that.
Thank you very much. My second question is regarding ROIC, ROIC.
You are in the phase of investment. So I do understand the situation, but the existing ROIC is declining, though the profit is increasing. So for next fiscal year onward, how should I think about the existing ROIC? Of course, this is not included in the medium-term plan, but I am concerned. So I would like to know about this.
First of all, well, DOCOMO in the existing areas, how are we going to look at it is one key point. Well, the asset side, of course. However, the other point is how are we going to build up profit for fiscal year 2024? In terms of customer base, we have a 35% market share. So we need to thoroughly think of how we can retain and maintain this customer base. ARPU itself, the plan shows that it will be declining.
Later on, you can ask President Ii from DOCOMO the same question. However, for myself, irumo, we should have more market promotions for irumo and acquire customers and make that gain as the base for smart business and growth areas. So as for the profit base, we will have to and we need to conduct more marketing activities. There was a mention of a tower before. As much as possible, on the asset side, we would like to downsize it. However, instead of securing profit, it will be even though we need to drop the profit level a bit, my understanding is that we need to have a solid base for future profit generation. We are about to enter a struggling phase for DOCOMO. So the FY 2024 profit maintenance, if they don't have the source turnaround, it will be hard.
So of course, securing profit is important. But how can we have them maintain the current situation and how we can add more initiatives for further expansion? That is where we are right now.
Thank you very much.
Let's go to the next question.
Thank you. My name is Sokonaga from Daiwa Securities. Thank you for this opportunity. I would like to ask two questions. My first question is this: the factors behind the drop in operating revenue, you cited one-time factors. No. So of non-core assets, JPY 100 billion, if we exclude that, I think it seems that there's still a lot to go on operating loss. So can you talk about some of the breakdown involved in the drop in your operating profit at the end of the day and also how the sales of non-core assets play into the picture? Okay. Thank you.
We talked about streamlining of the non-core assets and the process from the sales of that have played into the picture. We had disaster recovery costs pertaining to Noto Peninsula earthquake. Also we had some incident pertaining to some data treatment. We had to make an all-out effort to address this. So these are some of the temporary factors that played in. These are some of the one-time factors that had driven the drop in the operating profit. I see. What about East to West? You expect one-time increase in costs for NTT East to West. Is that what you're saying? You talked about the cost of security incident. Yes. There was some expense that will be referred to this year.
Okay. Thank you. I want to ask you about page 9, EBITDA growth.
You expect a 20% increase over a three-year period as far as your appetite is concerned. What are some of the drivers behind the 20% increase in EBITDA for the next three years? What type of growth? And can you talk about how EBITDA growth will translate into increase in operating profit as well? Thank you.
Let me start with how we think about our growth areas. I think Integrated ICT Business segment are the growth areas naturally. Possibly the global business, Global Solutions Business rather, will also represent a growth area for us. As far as fiscal year 2023 is concerned, we had alliance with Monex. We also carried out acquisition in the finance sector. On the global side, we also carried out small-scale acquisitions. But we're not yet at full operation mode.
In fiscal year 2024, it's important that we generate return from the assets we acquired back in 2023. This will have a full-year impact in the global operation side. We felt that we need to acquire and reinforce our capabilities, especially in North America, especially in the digital service area. For the next year or two, the overall market is likely to be in a downward trend. Many people no longer put risk assets on the market because they're waiting for the market price to increase. That indicates, I think, for the past year or two, the timing of the acquisition is going to turn for the better. That is the expectation that we have. NTT DATA of these companies will also consider growing their profits through these activities.
Thank you. If I could have a follow-up question. Acquisitions.
Do you believe that you will more actively carry out acquisition in the global side?
Not both. But I think the size of the acquisition is likely to be larger outside Japan.
Thank you. That's all for my side.
Thank you very much for responding to my questions.
Thank you very much. We would like to take the next question. Please go ahead.
This is Masuno from Nomura Securities. Thank you. I would like to ask each question. So regional telecommunications segment, it seems it's going to be struggling very much. How are you going to turn it around? Fixed voice is going down. IP voice is going down. The optical broadband is not going to increase. And within that, looking at this year's plan, NTT East, the revenue is going down. And you are probably building up the cost for the future. And the expense as well is accumulating.
So within that situation, what level of profitability is sustainable? And excluding the gains from selling the assets, if you exclude that, it will be at a level that is a year later. But so at which level of profitability are you going to maintain the business?
Honestly speaking, as you have pointed out, the profitability level of NTT East and NTT West to further largely increase it is going to be difficult. However, having said that, in FY 2024, the planned profit level is the bottom is what I think. And from there, we need to increase it. However, increasing it from that level is going to be quite a difficult task. So in order to maintain the level, what needs to be done is something that we need to thoroughly work out. And also, this time, PSTN migration is going to be completed next January.
Up to now, the copper line at the tandem signal transfer switch or core routers, it is changed to optical. But within the prefecture, TS/LS between inter TLS still exists. By removing those, that will lead to improvement of the efficiency of the asset. We also will be able to sell it as well. There are various ways that we still can implement. It's not that we have an estimate that's calculated. As an overall concept, we believe that there's still things that can be done. For cost reduction, there's still things that we can do. We can extend the cost reduction initiatives that we have been doing till now or where it requires human hands, we can replace that with AI technology. Also, conventionally, the businesses that were conducted as a legacy business still exist.
But maybe we need to make a decision to terminate those businesses. Those things will be required. Well, I said legacy type of business. Well, there are some paper media type of businesses. So we would like to think of doing something about it as well.
And if I may add a little bit, the NTT East and NTT West profit level has largely dropped. And we need to turn that around. So there's a revenue side and the cost side. On the revenue side, the FTTH demand projection, we are not getting it right. Trend-wise, it was not that strong. But during COVID-19, it increased. And that part, we actually matched our cost structure. And now, it is not increasing that much in terms of a demand. And within that situation, the cost has increased and the profit went down. And NTT has already explained in their financial results briefing.
We need to implement measures one more time to improve the situation. In order to do that, we need to create the source to do that. They need to conduct even further cost reduction. As Mr. Shimada said, we can implement AI technology and automate some work. We can actually reduce outsourcing. That needs to be done more than what we have been doing. For the bad efficiency businesses, we need to withdraw from those businesses. Also, there's inflation, which is an indirect impact as well. We need to mitigate that impact as well. That also requires further cost reduction. Headcount, we have enjoyed the decline till now and had a positive impact. However, the personal expenses overall is increasing. We are not enjoying that positive impact that we did till now.
Therefore, we need to spend several years on putting more efforts in changing the structure of the cost reduction itself or the cost structure.
Understood. Thank you. My second question is at the Integrated ICT Business segment. This is something that I was planning to ask DOCOMO later on. But this time, you will be creating the consumer-focused company. And you will have a consumer business and the enterprise business. So it was now easy to understand in terms of organization. If that is so, having two companies is strange. So Docomo and communications should merge. NTT Comm should merge and have the consumer and the enterprise business separately. And having two CEOs or presidents may work too. But it's not talking about reorganizing the group. So DOCOMO and Comm were making one and have the consumer and the enterprise business clearly separated may be easier to understand.
So what do you think about that?
Well, that's one way of thinking about this. However, for the foreseeable period, we would like to maintain what it is right now. But of course, we would like to think or consider various options for the future.
And lastly, the role of the holding company. The shareholder return, I just wanted to confirm. There's a share buyback. And the dividend has not changed. And that goes for this fiscal year as well. And also, Holdings have the R&D and LLM. And yesterday, a different company was making the announcement. And they were saying that from NTT, they're going to. There's no mention of us spending JPY 100 billion or JPY 200 billion invested in GPU. I'm not hearing that. So this towards generative AI. Who's going to do it? DOCOMO, holdings? Well, I understand you'll be working on LLM.
But the GPU type of infrastructure investment, this is at the level of several hundred billion JPY. You do not have such thoughts as a holding company?
Regarding GPU, in fact, in order to develop LLM, we did a certain level of procurement of GPUs.
What kind of platform or infrastructure are we going to create?
It's going to require more of a solid societal consensus.
What is that GPU going to be used for?
That itself seems that currently is discussed. And it's still being ambiguous. So there's the social infrastructure discussions. And also, there's discussions regarding cloud. And currently, the cloud itself became the cloud of hyperscalers, basically.
And probably, with the rise of generative AI, will public cloud suffice?
I think there are some of that factor that's occurring in the market.
So how are we going to create the cloud other than the public cloud?
Or the cost is high for download the public cloud. Are some realistic issues that are still arising as well?
So GPU and other technologies, how are that going to be combined? Is that going to be implemented in the industry side? Those are the issues that we need to consider. So creating the GPU infrastructure for the general public, but rather for the industries. Well, if I call it solutions, it may sound small. But it's an industry cloud GPU platform. How are we going to think about that? It's something that will become a discussion for this term. As the country, nation, Japan, METI has a JPY 75 billion subsidy. And SoftBank was saying JPY 20 billion subsidy. So as Japan, there is going to be JPY 100 billion that will be invested in this.
So it seems that in the past, NTT was the company that was working with the Japanese government. Or their NTT was the first ones to make the first move. So as the Japanese government wanting to do such a thing, there's no atmosphere that, "So NTT, let's do it together." So towards the government, what we're saying is that the coding device development for IOWN, we are receiving excuse me, the electronic photonics convergence device subsidies provided by the government for IOWN. So there are cooperative relationships. So in this area, or as the NTT Group, we do have a strategy. So the things that we should do, there are areas that it's better that we make the investment. And there are areas that it's better to receive the support and subsidies from the Japanese government.
So we would like to thoroughly review that and receive the sufficient level of support that we need.
Thank you very much.
Thank you. We're actually beyond. We're actually going beyond the set time. But we'd like to have questions for those of you who are connected online. If you're connected online, if you wish to ask a question.