Thank you for joining us at NTT IR Day 2022. We're very grateful for this very large turnout. Thank you for joining us. My name is Nakayama. I'm the Head of Finance and Accounting at NTT Holding Company. Today's program is as follows. This is the program for the day. We will be completing the session at about 5:30 PM Japan time. We hope that you'll stay with us until the very end. Now, today's proceedings will be available on an on-demand basis. We appreciate your understanding. The contents of this presentation will be provided on an on-demand basis at a later date. Let us go on with the program. First, I'd like to invite opening remarks from Mr. Hiroi Takashi, Senior Executive Vice President of the company. Mr. Hiroi, the floor is yours. Could we have your opening remarks, please?
Good afternoon, ladies and gentlemen. My name is Hiroi of NTT Holding Company. First and foremost, thank you so much for joining us at NTT IR Day 2022 out of your busy schedule. Thank you so much for setting aside your time for us. Now, I have come back to NTT Holding Company after two-year tenure at NTT DOCOMO. I'm very honored to be able to to work with the members of this community once again. I'm looking forward to this exchange. Now, it's been two or three months since I returned to NTT Holding Company, and I've had the chance to have discussions with many of you in the meantime. If I could just share with you some of the impressions as a result of the exchanges that I've had with the investor community in the past two or three months.
First of all, it seems that all of you have a sense of security as well as a sense of insecurity about our company. What are the source of insecurities, uncertainties about the company? What is this new president going to do? That is the, one of the sources for this uncertainty. In the days under Mr. Unoura, we made domestic market and domestic business more profitable. We introduced cost reduction. We also introduced wholesale fiber business as well under Mr. Unoura as the president. As far as the finance side is concerned, we began to strengthen shareholder return, and we've been able to meet the expectations of the investors. Our business portfolio is now expanding overseas, and we're breaking out from dependence on domestic business, and we've been able to realize increase in scale. Now, under Mr.
Sawada's tenure on the domestic front, NTT DOCOMO became a 100% wholly owned subsidiary firm of NTT Holding Company. This was a very big decision, and we implemented and acted upon it. Outside Japan, we expanded not only on increase in scale, we also began to focus on profit, and now they are beginning to produce results. In the R&D field, IOWN and sustainability-related initiatives have been fortified. What is going to take place under Mr. Shimada's leadership? What type of corporate actions are awaiting under Mr. Shimada? I think that is probably one of the expectations that you have. Now, having said all this, going forward, what is going to happen to our global business? I'm sure you're all wondering. Now that NTT DOCOMO is a wholly owned subsidiary firm, what is going to happen?
What is the effect in relation to smart life business and other businesses as a result of this new structure? When will IOWN become profitable? I'm sure that there are many questions on your part, and we have received various inputs from your side. Also, we have rising commodity prices, and we have issues related to resources and decoupling taking place. The situation is becoming very difficult and challenging. Under those new challenging circumstances, how do we intend to realize growth of our business over the next two or three years? This is something that we need to demonstrate to you and communicate to you in a very straightforward manner. As far as we're concerned, we intend to maintain communication with all of you. We want to make sure that we heighten our engagement with your community.
We hope that you won't have to have various questions about our business. We have to make sure that we have good relationships, so that you'll be convinced about the viability of our business activities. That being the case, I do hope that you will continue to render your support and your understanding about our activities at NTT Holding Company. Today, we'll be focusing on data center business. Regardless of domestic or global, data center business is a very important part of our strategy. We'd like to introduce to you about part of this very important strategy for our company. I do hope that today's presentation will be of great reference to you. With that, I would like to conclude my opening remarks.
Thank you very much for joining us today. Good day. Thank you very much. We now like to go on to the presentation. First, we want to like to talk about growth strategy of NTT Global Data Centers. From NTT Limited, we have with us Mr. Sharad Sanghi. We also have with us Mr. Yasuo Suzuki, and also from NTT Global Data Centers Americas, we also have with us Mr. Douglas Adams as our speakers. They will be joining us. The floor is yours.
Thank you. Please go ahead with your presentation.
Thank you, Nakayama-san. It is indeed an honor for me to represent the data center division of NTT Limited, along with my colleagues, Yasuo Suzuki-san and Doug Adams-san. I will start the presentation. Just take the pointer, sorry. NTT's global data center business continues to grow and expand at a rapid rate with aggressive investments to build new data centers around the globe. What Suzuki-san will present later is the details of this growth, but the industry's cumulative accumulated growth rate is 11.8%, and we are growing at almost double that. That's huge. Even the capacity that we build, we book more than the build capacity over the last three years. That's a very aggressive growth.
We are funding this growth through a combination of internal capital, external third-party capital, you will meet one of our investors later today, which is Tokyo Century. We are also looking to grow more aggressively in markets where we're not present, potentially by looking at M&A in the future. Our footprint is in over 20 countries, in 93 cities, and we have over 141 data centers today. We have several data centers under construction. The total capacity that we have is over 1 gigawatt and almost 700 MW under construction today. We have a lot of synergy with NTT Data and NTT Communications, and this synergy will help us leverage the digital backbone that we build using our data centers as the core and also our global network backbone.
For every colocation contract, we also have the opportunity to upsell our clients with system integration, with managed services, which includes security services, with application services now with NTT DATA coming in together. For every colocation dollar, we can have several dollars for our enterprise clients upsell this with the synergy that NTT Group offers. Honestly, that's very unique. There is nobody else that can offer end-to-end IT services like the NTT Group can. One of the key elements of data center business across the world is stickiness. What happens is that clients are very sticky. It's very difficult once a client sets up his infrastructure in our data centers for them to look at moving.
This stickiness results in recurring revenue and contracts that last for several years, thereby our profitability increases every year because the stickiness of the clients. The data center business is highly stable, sticky, and profitable, and this increases year over year, and we expect this trend to continue in the foreseeable future. At the core of our data center build across the world is sustainability. NTT Group has already announced that our data center business will be carbon neutral by the year 2030. Towards that, we are using a lot of renewable energy in our data centers. We've signed PPAs in Europe. We've also set up captive solar and hybrid wind solar plants in India.
We also believe that, you know, by the end of 2022, we'll be close to almost, Suzuki-san will elaborate, but almost 40% of our energy will be through renewable energy. The design and innovation that we do in our data centers also helps in improving energy efficiency and making our data centers more sustainable. We've done a lot of innovation in cooling. We've used DCLC and liquid immersion cooling, for example, in some of our data centers, which helps reduce the power usage efficiency. We've used other cooling techniques as well that really makes our power usage efficiency in our data centers among the best in the industry.
That helps in reducing the carbon footprint and also the benefit of that is also shared with our clients. Also the modular design that you will see later when Doug-san presents gives us flexibility to be able to cater to needs not only of our hyperscale clients, but also enterprise clients. This also helps us to roll out data centers faster. It also helps us to target tier two cities. You will hear Suzuki-san talking about the Edge strategy as part of his growth strategy. This modular design helps us to roll out faster in some of the smaller markets as well. With that, I would like to hand over to Suzuki-san. He will present about our growth strategy, and followed by that, Doug-san will present a case study of the U...
American market, along with the modular design as talked about, and also a case study of a collaboration with NTT DATA. Thank you. Suzuki-san, over to you.
Thank you, Sharad Sanghi.
Thank you very much. Thank you for joining us today. My name is Suzuki, responsible for data center service at NTT Limited. Today, I'll be talking about the growth strategy for NTT Global Data Centers. These are the contents I'll be covering. I'll be talking about the data center market dynamics, GDC footprint, GDC financial snapshot, strategy and priorities, data center-centric GDM, expansion, sustainability, and new business update, and collaboration with NTT Limited and NTT Data. Mr. Doug Adams will be taking part in the very end of this presentation just to highlight the case study in the United States. Look, let me now talk about the current market trends. This is the size of the market. From 2019 up until 2026, CAGR will reach 11.5%, so they're showing a very major growth.
Now, one noteworthy point is as follows. In 2022, we began the so-called COVID-19. Generally speaking, there was a slump in the economy, but as far as the data center is concerned, and also in our data center business, we continued to enjoy growth even under COVID. Why is that? Because within the COVID-19, the work style reform took place, and also we saw further progress in digital transformation. As a result, the cloud service providers, large wholesale clients, and enterprise customers, their demand for outsourcing began to increase as a result. That being the case, we have seen very robust growth in the demand for data center business. That is the situation that we have found ourselves in. That is the backdrop. What about our market share? This shows NTT GDC position in the marketplace.
As far as the revenue share is concerned, as far as the colocation revenue is concerned. If we categorize overseas businesses, NTT is third following Equinix and Digital Realty among those operators that are active in the global market. We are number three. The other side, we will show you the share by the revenue where Gartner shows global IDC MarketScape vendor assessment. This is a very well-known company, and this is an assessment of the vendor's capability. Again, we're also number three following Equinix and Digital Realty in the vendor assessment as well. Now, let us move on to the GDC footprint. NTT Group's data center footprint is in more than 20 countries, 93 sites, and 141 buildings. In the case of data centers, on MW basis, we often talk about capacity.
We have more than 1,000 MW IT power in our data centers, and as Sharad Sanghi earlier mentioned, we have 702 MW under plan. We'll start services soon. Where are our locations? These data center operators have tier one cities, that is accumulation of data centers in the various countries. We have been taking other location strategies to cover these major places. As a result, we are now able to provide services globally and also incorporating local and regional demands of customers. Now, financial snapshot. Data center finance. From 2018 to 2022, in 2018, we had $1 billion, and FY 2022, $2 billion. Over five years, we doubled our growth, which is 20.8% CAGR. Earlier, I talked about 11.5% global average growth.
In comparison, NTT Group's data center business has been growing much faster, you can see. In this, as I mentioned earlier, 2020 onwards, since the start of COVID, our sales have been very strong. CapEx-wise, in 2018, $0.7 billion. In 2022, $1.5 billion. If you look at 2020 onwards, if you look at the yellow part, $1.2 billion in the graph. This is the constructed capacity, but we were selling 6% more in booking capacity compared to the inventory. Our sales was greater, therefore, we could not completely cater to customers' demands. In FY 2021, by incorporating external capital, by using third-party external capital, we have been able to increase our investment. Still, our booking capacity has been increasing more than what we invested in.
FY 2022, together with external capital, $2.5 billion in total. Compared to 2020, this is more than double the CapEx. Booking capacity grew even more than that. This year, our outlook is 40% booking capacity more than the constructed capacity. Compared to our CapEx, booking is way more. Today, we are not able to spend enough in CapEx. Why are we selling as much? This comes from our differentiation strategy. If you look at these metrics, comparison with competition from company A to D, they are companies that actually exist. If you look at the vertical axis, they are the data center users often used services.
Looking at this table, you can see that only NTT Group is able to provide everything from top to bottom, all of the areas, and we call this provision of full stack services. We provide full stack services. This may seem seemingly only effective for enterprise customers. However, this enterprise-grade service provision is also possible to wholesale customers. This means cloud operators and large-scale wholesale customers. From their perspective, full service wholesale provider-wise, we are also receiving very high credit. Hyperscalers and very large-scale business orders, we are able to connect to. Now, to strengthen our competitiveness, what are we specifically doing? We have four pillars. We are working on these four priorities. They are full stack IT solutions from colocation services, managed services to application layers. We provide all the services as full stack.
Our data center users, out of the users, so for instance, AWS and Microsoft Azure, they also need connectivity to public cloud, therefore connectivity to such cloud services. Globally common contracts and customers portals. For example, if customer applies in the U.S., the customer would be able to use global services. In other words, we have one-stop service, one voice to customers. We have also service standardization and technology automation and adoption and creative process innovation. As I mentioned, we are using external capital to invest and increase investment. By 2030, not only are we going to increase investment, but we will respond to the need of the society and customers to achieve 100% renewable energy. As Sharad also mentioned earlier, so far we have been covering the major Tier 1 cities. That has been our strategy.
On top of that, we are now going to also cover Tier 2 cities or the edge cities. We will be considering coverage of edge markets. Then finally, about the engagements, not only are we increasing customer satisfaction, but also by investing in our employees, partners. In the end, we also want to further increase customer experience. This is what we are working on. Now the strength of the full stack services. Here at the bottom, you can see the digital backbone. This is the infrastructure part, data center, network service. These infrastructure part services. Starting from there, connectivity, managed services, application services and consulting services. We connect to these other services. Sharad earlier mentioned sticky. The data center users, they also invest their own facilities in the data centers as well. Therefore, they use for a long time.
If there is a five-year data center colocation order on us, in addition to connectivity, there will be further needs for managed application and consulting services. We can provide various proposals, and using the data center as a leverage, we can lead to selling other services. This is the full stack service strategy. Starting from October, NTT DATA and NTT Communications together will be selling together in and out of Japan. Now, data centers. Data centers is in the big building where the server rooms of companies are much bigger, and there is a lot of importance in connectivity. The strength of our company is globally, we have data centers across the world, but we also have a lot of subsea cables. If you look at the Japan and U.S. to the right-hand side dotted area, we are going to soon start up a new cable, JUNO.
In Asia, APRICOT, the green line, and to the left you can see MIST. Then the yellow data center has these subsea cables directly interconnected, which means when the customers go out globally there, from there will be lowest latency. This will be of the benefit to the cloud operators and enterprise customers who use cloud operators, and also ISPs and content customers who require the least latency. Synergy with subsea cable is one strength for our differentiation. Now growth expansion strategy. Basically, by region, we capture the needs of the region to expand, and here are the four strategies. For Americas, broaden key metro footprint and capture demand. EMEA, double down in FLAP, or Germany, the main market where we have strength, and increase investment in tier two markets as well. India, sustained investment required to capitalize on market opportunity.
APAC, Japan, and various markets have various characteristics. In line with the market characteristics, we will accelerate the investment strategy. Japan is one of the major markets, and to capture the strong demand, we intend to accelerate investment in Japan. The bottom boxes, you can see organic growth. We have built over a long time our operational know-hows, and we will be expanding our own data centers and development on our own. For data center expansion, location is very important. How to obtain land beforehand is very important, and electricity related to land is important to secure. Therefore, keeping these aspects in mind, we want to achieve long-term growth. As presence-wise, where we don't have enough coverage for such places, as an option to move into new markets, we will consider possible M&As as well. This is the global data centers list, the recent data centers.
Specifically, FY 2022, 11 locations of data center service launch is scheduled. From FY 2023-2025, 14 locations as shown on this page. This page shows already approved for construction data centers that are listed. As we have more approvals, the number of data centers will increase even more on top of this page. Today, we have made this press release as well, that is Japan Expansion Strategy. As a part of Japan Expansion Strategy in Osaka, in Keihanna region. In Osaka, we have data center demand within Osaka City and in Northern Osaka, Ibaraki City. These are the clusters of data centers, and Keihanna is at the next potential area of promise. There is the MIC certified project for data centers.
Aiming for the third quarter of 2025, we intend to complete construction of our data center. Currently, this is within the premise of the NTT R&D facility. Within this premise, we intend to build a 3 MW data center. 30 MW means in Ibaraki City in 2019, we completed construction of a data center, and this has maximum 30 MW. Equivalent maximum capacity, scale, comparable scale of data center will be constructed here in Keihanna region as well. We are intent upon use of third-party capital to accelerate investment. Later, we will hear about India from Tokyo Century. In the suburbs and central Mumbai, we have been developing data centers. With Ho Chi Minh City of Vietnam, the local SI operator, with QD.TEK, we are forming joint venture to construct a data center.
U.S./Europe is our largest market. In 2022 in April, with Macquarie Asset Management, we decided to grow a partnership. We will be considering joint ventures and other collaborative arrangements with this company going forward as a result of this agreement. Next, let me now talk about sustainability-related efforts. In 2030, or by 2030, we will be aiming for 100% renewable usage. That is what we are aiming for in 2020, in 2030. This is the roadmap. How specifically are we going to achieve this? There are some concrete initiatives. There are seven workstreams as we are aiming to achieve the medium-term plan. It's not just about renewable, renewables. We have to also focus on sustainability. Usage of water has to be sustainable and limiting any potential waste.
We have to address sustainability as efforts, and we now have a special group that handles this. In 2031, the percent on a global basis, it reached 28.8%. Renewable energy usage ratio reached 28.8%. For this year, we are aiming for 38.7%, so we see steady increase in the energy usage ratio for renewables, as you can see from this chart. I would like to show you a question. I would like to conclude my presentation at this juncture and focus on the examples in the United States. Invite my colleague, Doug Adams, to talk about the United States at this juncture.
Konnichiwa. Again, my name is Doug Adams, and I'm the CEO of the NTT Global Data Centers Americas data center business. I'd like to start by talking about my fellow GDC region heads, Florian Winkler in Europe, Sharad Sanghi in India, and Kimura-san in Asia. They all run an amazing business, and they're equally as prepared and have equal accomplishments to we have in the U.S.. I'm honored that that Shimada-san asked me to present kind of a case study of what we're doing in the U.S. and how we're experiencing hypergrowth and how we've enabled that hypergrowth. I do want to start by saying that my fellow counterparts in the rest of the world also have amazing businesses and have grown equally and show tremendous profitability. With that, let me start by giving a quick overview of the United States. Today, we're in seven markets.
We have Chicago, Illinois, Hillsboro, Oregon, Sacramento, California, Santa Clara, California. We're in Phoenix, Arizona, and Dallas, Texas, and Ashburn, Virginia. Within those seven campuses, we have 13 operating data centers. We're building another seven, by the way. We've booked 99 MW year-to-date. 99 MW is enough power to power 99,000 homes, so very large bookings year-to-date. We have 299 MW of operational IT load within our data center platform, 480 clients, a little over 500 employees, $680 million worth of CapEx we're deploying this year alone, about $4.1 billion in flight with what we're constructing, and we've got a pipeline of over 750 MW. It's a very large business that we've grown in the United States.
One of the ways we've grown that business is through our, what we call our flexible modular design. I'm gonna show a video at the end how that works. It's one of the innovations that we've done that allow us to increase quality, increase speed to market, increase flexibility, and also reduce cost. In essence, what we do is we have a centralized factory in the middle of the United States that's an outsourced factory. We produce electrical and mechanical modules within that factory, and then we fungibly ship them to where our sales demand is in our different data centers. That flexibility allows us to build very quickly at a super high quality and very affordably. Again, at the end, I'm gonna show a quick video of exactly how that works.
Within the U.S. we've taken the global strategy of our data center group, and we've modified it a little bit to meet the demands of the U.S. market. This is the strategy that we implemented over the last five years. We started five years ago by retooling our team. We brought in a team of seasoned data center professionals that have worked within many companies across the globe. I'll show you those companies in a few minutes, and I'll talk about a few of those team members. That was the first step, bringing in the right people, because you had to have the right people to grow a platform at the speed that we have. We retooled our product. We took our product that was more retail-focused, and we focused it towards enterprise companies and hyperscale companies.
We actually changed the design. We changed our supply chain. We implemented vendor-managed inventory so that even in difficult times like right now with supply chain, we're able to continually build and supply our data centers with infrastructure. We also went to new markets. When NTT bought our company nine years ago, we had two markets. We're now in seven markets. That made a big difference for the growth that we're experiencing. Then we created very, very durable relationships with our customers, especially in hyperscaler and enterprise. You see in the center, we implemented the value of NTT, which is really the managed services and the resources that NTT can bring to our customers. This is the base strategy that's allowed us to grow over the last five years at the rates we have. I'm gonna talk about a few of these components individually.
The first one I'll talk to is people. We have an absolutely amazing team at NTT GDC Americas. I'm not gonna talk about everybody, but I'll talk about a few people. Ben Stewart, been in our industry for over 20 years. He actually has a PhD, and he heads our operations, and he does an amazing job. Joe Goldsmith. Joe was one of the early pioneering salespeople at Digital Realty many, many years ago. He actually was head of sales for a company called Colo.com, which was one of the pioneers in our industry, and has very deep relationships within the industry. Brittany Miller is our head of construction and design. She actually has a degree in construction. She's one of only 15% of female executives in the construction industry, and she had 20+ years of experience in purchasing and in construction with Intel, with Microsoft. Great heritage.
The last person I'll talk about is Denise Hannan, who's responsible for our legal and our HR. 27 years of experience. The point I'm making is we have a team of seasoned professionals that have a great degree of vertical expertise. In fact, over 150 years of experience for the combined team. I'm one of the founders of the original company NTT bought. I've got 23 years of experience with the company. The people make a very large difference. To Shimada-san's point about how we're gonna transform the company. We're gonna do that through creating a better client experience by concentrating on the people. When you start with people that have a lot of experience in the industry, that becomes easy. I'll talk for a moment about our differentiation, 'cause I think this is a very key piece.
If you look at GDC, I believe that we're very unique and differentiated to the industry. It starts with the fact that we have a global platform. There are very few companies that are truly global in our industry. We're one of them. You take that global platform of data centers, and on top of it, you add the NTT networking, which is second to none in the world. On top of that, you add our managed services. Combine that with our three client segments. The first one is hyperscaler. Hyperscaler clients buy very large quantities of infrastructure for a very long time, long periods. What that does for us is that allows us to operate at very large economies of scale.
The fact that they will purchase half a building at a time, a full building at a time, allows us the buying power and economies of scale to have reduced cost, which is very important to attracting enterprise customers and retail customers. Again, enterprise customers and retail customers not only expect a global platform, but they get value from our managed services and from our network. It becomes a virtuous cycle. You have a global data center platform. We've got cloud customers with on-ramps to the clouds. That brings in enterprise and retail clients because of managed services and the networking. It's a very special differentiation that our competitors cannot enjoy, and it's part of the reason we're growing so fast. Speaking of that growth, this chart has several segments. The top right shows that we have a very diversified client base.
We're not just concentrating on one client. The part on the bottom shows that we have 0.3% of churn in our customer base. That means that we're taking very good care of our clients. Our voice of the customer, which we do regularly with our customer, shows over 60% customer satisfaction, and that's on a one to 10 scale using voice of the customer techniques. Anything above 50 is world-class, a very good score. On the bottom left, you can see our revenue growth. 2016, we were at $131 million. 2022, we'll finish the year at $430 million. Very strong revenue growth. What's driving that revenue growth, of course, is the bookings.
If you look at the top left chart, and you see the gray shaded area, that's the sand chart. The gray shaded area is our inventory level by year. You'll notice in 2017 through 2019, we were booking on average about 15 MW a year. We implemented our strategy during that time period, and in 2020 was the first year we really saw the results of that strategy of concentrating on the people, changing the design, creating durable relationships with the hyperscale customers. You can see in 2020, we increased to 40 MW of bookings. That's the blue bar, by the way, the blue bar.
2021, you'll notice that blue bar goes above our inventory for the first time in the history of the company. We booked 108 MW, record year for GDC. In 2022, we will book over 200 MW, and you can see that we're booking unbuilt complete buildings to get above our actual sustainable inventory level. That's hypergrowth, and that comes from focusing on a very well-thought-through, well-implemented strategy. We're now getting 77%-73% year-over-year bookings over the last five years. Very strong growth from concentrating, I think, on a very strong strategy. I talked earlier about that strategy and that centerpiece of the strategy, which was really the NTT relationships that we have and how we're not just bringing to our customers the value of data centers.
We're bringing the value of our customers on-ramps to the clouds as well as managed services and connectivity. This slide's a great slide. What it depicts is on the left-hand side in green, you can see the pieces of the equation that the data center brought to what we call a multi-tower sale within NTT. This was a sale that was led by NTT Data. They took primary on this. The customer wanted an end-to-end full stack solution. Our data center competitors cannot do that because they don't have the resources of our brother and sister companies like NTT Data. NTT Data brought us to the table, and they said, "We want you to do the data center pieces.
We want NTT Limited to do the network piece, and we'll handle the compute, the storage, the disaster recovery, the information security, and the transition services." We were able to create. This is an actual example, and I can't tell you the customer name, unfortunately, because our customers are very secret about, you know, that they're in our data centers. This is an actual example of a solution that we implemented this year with a customer. The actual solution looked like this. It was a disaster recovery solution. They used their primary existing data centers. They moved into our data centers. They used the public cloud for connectivity, which was managed by NTT Limited, and NTT Data provided all the data security and the solutions around that. This brings value to our customers, and it's unique and it's differentiated and our competitors cannot do it.
This is what NTT brings to the table in global data centers. It's a great example and super profitable, and it's actually a very large TCV opportunity. Another example, real quick. This is data center to data center. I talked earlier about my counterparts within NTT running the different regions, and the relationship we enjoy and that they all have equally impressive feats in the revenue that they're generating and the growth that they're generating. This is a customer called Island that was a customer in the U.S., and they wanted to enjoy our global footprint and expand into EMEA. It's a relatively small opportunity, 250 kW, excuse me.
They went into London, and they were so pleased with the solution and the service and our ability to work together as a global platform that they actually asked us to do a case study with them and did a press release around it. This is that company, Island. With that, I'm gonna go back to the fungible modular design strategy I talked about earlier, 'cause I think it's important that you understand some of the innovation that's occurred within Global Data Centers and the way that we build our facilities. Again, we have a centralized factory. We build modules of electrical and mechanical. By the way, that's the expensive part of a data center, is the electrical and mechanical pieces.
While we're doing that, we build the data center in whatever market it is, and then we merge the two of them together, and it is a very efficient, cost-effective way of doing it. I'll start the video. What are the benefits of building data centers through a modular construction approach? Modular construction enables us to offer customers lower prices, shorter time frames, customizable spaces. We achieve those results by standardizing materials and efficiently managing our supply chain. Our supply chain starts with modules that are manufactured at off-site factories. At the same time that the data center core and shell are constructed at the site. With this modular approach, data centers can be constructed in nine months, while incremental capacity can be brought on in four months. Although many materials are standardized, there's still room for customization.
Just-in-time commissioning enables customers to choose their specific power and cooling requirements. To sum up, by using this modular construction approach, we can deliver new data centers to customers in any market at the cost, schedule, and design that they want. I'll end by saying, if you look at Shimada-san's three primary objectives, increasing the client experience with increasing the employee experience, sustainability being carbon neutral by 2030, and by transforming from a digital communication company to a digital service company, I think the data center division is a perfect example by working with our brother and sister companies of creating that transformation. Again, the message for the U.S. is growth and profitability. Thank you very much for your time. I think from here we start Q&A.
Thank you very much. We would now like to take questions from the audience. We'll first take questions from those of you in the audience, and then we'll also take questions from people who connected online, and then come back to questions to people on the site later on. If you're here in the audience, please raise your hand. Wait for the microphone to be brought over to you, and state your name and affiliation before you ask your question. If you have any questions, may I ask you to raise your hands, please? Thank you. Thank you. Let's start with this gentleman. Thank you very much. My name is Satoru Kikuchi from SMBC Nikko Securities. I have two questions. Page eleven. I'd like to ask about page eleven. There are a lot of questions about what's written on page eleven.
I would like to ask 2 questions on page 11. Page 11, please. It's about the GDC financial snapshot page. With regard to profit, there is no indicator about your profitability. But what about EBITDA or OP? Maybe EBITDA is a better indicator. How do you see the growth rate for EBITDA? What is the growth rate for EBITDA right now? How profitable are you right now or against the asset? What is the profitability versus asset, and how is it growing? In the case of NTT Limited, when we take a look at NTT Limited PL, a very simplified information is available in NTT IR information. We know that the revenue for data centers are increasing, and it looks that it is going to grow further down the road. Now, there is OP information.
This contains a lot of cost, I'm sure. OP doesn't seem to be growing all that much. Now, is data center business really profitable? Is the profit for data center business growing? Do you have any quantitative numbers that you're able to share with us? We want some quantitative information about the growth in the profit for data center business. Thank you. Thank you. Suzuki here. With regard to data center business profit level is concerned, I'm afraid we are not disclosing official numbers with regard to profit per se of data center. But there's one benchmark. Let's say our competition, such as, let's say, the two top competitors. These two top...
If you compare with the top two competitors, we are actually, our profitability is very much in line with the profitability of the other, the top two players in the marketplace. With regard to the growth. In line with the growth in the revenue, I believe our profitability is also enjoying very strong growth. That is all I can say. Thank you. Okay, thank you. That's fine. What about. Well, you're going to be increasing investment right now, if you want to finance investment through cash flow, that could be very burdensome. Your profitability with regard to P&L is on, in line with your competition. What about return on assets? What about ROI, ROIC? What is the future of your numbers? What is the future of your company? With regard to ROIC, again, we cannot share with you concrete numbers.
Please understand. We do not disclose those numbers. It is true that with regard to CapEx, we have done a very large-scale CapEx. That is true. Now, this applies to the cash flow. This also applies to the burden on the PL. Yes, there is some pressure on the cash flow as well as on PL. Now, having said all this, we mentioned that our bookings and the sales of data center is very strong. Ordinarily, in the case of data centers, when services are launched, and this applies to any other operator, including ourselves, but when the services are launched, in the next 35 years, they try to fulfill the space. That's the plan for various businesses. That is the general plan. But in actuality, the recent situation is this.
Even before the completion of the construction of the data centers, we're able to have clients knocking on our doors. We have use of clients on day one. As far as usage is concerned, it's improving significantly. As far as profitability is concerned with regard to the speed of return, the speed of collecting the return, yes, investment is increasing, but also our pace of recoupment of investment is also fast. I think it is in line. Thank you very much. My second question, if I could turn to my second question. This was in Doug's presentation. Two questions. Let me see. Please. I'll ask in Japanese. It's on page 32. Now, the bookings this year enjoyed strong growth. This also enjoyed strong growth in previous year as well.
You're growing at tenfold, at twentyfold in certain cases. Was there any special factor? Was it due to a special client? Did you have, like, one-off large client bookings? Was that the driver for this growth? Or you received bookings from a very large number of clients all at once, suddenly. Compared to three or four years ago. That's why you're growing at tenfold, twentyfold compared to three or four years ago. Can you talk about the driver behind this very strong growth? Thank you very much.
That's a very good question. Thank you. It was driven mostly by a few select set of customers that had a lot of demand. As I spoke earlier, we retooled the company over the last five years to be very enterprise and very hyperscale-centric. Most of that demand was from large enterprise companies and large hyperscale companies. Did that answer your question?
Thank you very much. Okay, I understand. My second question. Thank you very much, by the way. Second question. This is on page 33. You talked about partnership with NTT Data. Now, you mentioned the supply cannot keep up with the demand. I'm afraid that maybe you have no capacity. Even if you have data partnership with NTT Data, maybe you have no capacity to offer because you're fully booked. That's my concern. That's my first point. Also secondly, this type of partnership with NTT Data, what about the staff and people with experience that are involved in the partnership?
NTT, do you have a team of people that can actually fully engage in this type of partnership on both sides? Now, of course, we understand having maybe it's a good idea to partner with two different companies. But is there capacity and sufficient talent to be able to really implement this partnership? Even now, I'm sure you already mentioned that you're already involved in negotiations and offerings with concrete clients.
When will these services be launched? Is it going to start next year, for example? Will this new services based on partnership be available this year or next year? Can you talk about the outlook, concrete outlook for your partnership with NTT DATA? Thank you very much.
Another very good question, thank you. I'll start with the first part of the question, which had to do with inventory. Remember, we're a global platform. It's not just the United States. The United States, we have less inventory than we do in other parts of the world. We do always have some level of inventory because we always have customers that are leaving or doing something different. There always is a small level of inventory that is available. Most of these fully managed opportunities that we're talking about, the beauty of them is that they don't take large pieces of inventory. What they do is they have advanced managed services and full stack services. It's usually not. We're not talking about MW. We're not talking about even half a MW. We're usually talking about racks.
We can almost always find space within our existing data center footprint to accommodate opportunities like this. As far as staff is concerned, the second part of the question, we do have dedicated people on our team that work directly with our brother and sister companies, NTT Limited and NTT Data. Remember, these full stack opportunities are driven by their staff. We're a part of the equation, but they're almost always primary on these opportunities 'cause we're very, very good at data center services. They're very good at implementing complex solutions, and so they're very well-staffed in these areas. I have people on my staff that work jointly with them. In the U.S., it's two dedicated resources, and then they've got part-time resources beneath them. We've never outstripped those resources.
We land partnership opportunities with our brother and sister companies on a very regular basis. In most instances, they're very profitable because of that full stack mentality. Hopefully, I answered your question. Renato.
Thank you very much. Thank you very much. The next question, the person in the very front row, please. Nomura Securities, Masuno speaking. I also have several questions. Firstly, the profit part, page eleven, the drawing. The members here need to put together a forecast. Setting aside the current, the contract time period, how long? In the case of hyperscaler, maybe 10 years, and then extension, 10 years, 20 years. CapEx depreciation time period, building and servers, maybe servers, four to five years. The building, I would say 20 years for depreciation. Then the breakeven should be shorter than three to five years. Is that truly the case? Can you reach breakeven before three to five years? I want to hear the profit mechanism of your business. Currently 1,000 MW and then 700 MW upcoming, which means 70% increase in capacity.
The 70%, how long will it take to convert into sales? You will be constructing in years, but so profitability and growth, these two questions I have for you. I would like to respond to your questions. Thank you for your questions. Two to three years may not necessarily mean the payback. I could have misled you. The customer's contract in itself is different from country to country. It is true that the customer's contracts tend to be long. Depending on the country, enterprise customers shortest three-year contract and renewal every three years, or a five-year contract. The contract time period is different from country to country. As Doug explained earlier, the churn. When the renewal timing comes, how much churn is there actually there? In the case of U.S., only several companies in a year.
Once CapEx is made, and because of customers' business reasons, if there is the need to exit, that is a different story. Usually, there is a very long-lasting use of our data center, more than 10 years by one customer. We have many such cases. Inclusive of the full stack services, we will continue to sell and market. The 700 MW part. The 700 MW construction is ongoing. This may be some of a repetition, but under the recent situation, 700 MW data center, once it is built, in many regions and in many data centers, there are such as anchor tenants. We have customers already available, and once we can start business, our customers will immediately start using our services.
In terms of turning into profits, we can have profit in single year basis or turn into profit in the following year. We are able to turn into profits pretty early. This is the case of the business. Allow me to confirm. Hyperscalers. They can sign a contract initially 10 years or not? Will they sign a contract for 10 years initially? Depends on the region, but yes, you're right. Basically, 10 years or longer contract. More than 10 years, and then every five years, renewal option, for example. Or in other regions, every five years renewal of options. There are different patterns. You're right, 10 years is the most common pattern. Yes. And then extension would be another 10 years. First and second year, you talked about possibly turning into profits, but then you said turning to breakeven into three to five years was misleading.
This is confusing. I was confusing with cash flow breakeven. Breakeven-wise, within two to three years, almost all data centers turn into profits. You mean on operating profit basis? Yes. Operating profit basis turn into profits. Operating profit in two to three years. Next question, Japan. You are going to accelerate investments in Japan. Currently in Chiba, Equinix and Digital Realty, looking at their investments, there is so much excess of supply and such strong competition. You are avoiding Tokyo, and you said, like, in Osaka and this time you are escaping to Kansai. I think this seems to be the right strategy, but do you intend again to invest in Chiba? By accelerate, do you intend to invest in places like Chiba? Not only hyperscalers, but large scale clients, diversification of location is necessary. Chiba is. I think what you mean by Chiba is Inzai region.
In Inzai area, there are several hundred MW of supply coming and continuing. In this case, in the case of a hyperscaler, if there is more than a certain scale, there is too much concentration in one location. They surely have needs to diversify their locations. That can be in Tsukuba and other locations to diversify into. Therefore, whether NTT will invest in Inzai or not, as of now, as you say, there is already a lot of supply. Thus, instead of Inzai, in NTT in Japan, network connectivity and fiber assets, we are at a strong advantage. In other words, in the U.S. or India, if there is a new market to be created, this is going to be quite challenging if we wanted to create a new market ourselves. In the case of NTT, we have a lot of fiber assets.
We want to use this advantage and create market ourselves. This is the possibility we are thinking of. I understand. Thank you very much. That was clear.
Yes.
I will go to the gentleman in the third row.
Thank you very much. Ishida from Tokai Tokyo Research Center. I wanted to ask about the data center. You mentioned that the bookings for data center are increasing, but what is the substance or the contents of this data? What is the contents? Is it someone like Netflix? Are we talking about Netflix type of data? What type of data is the core of this growth? What is the core of the data right now? Going forward, what will happen? Do you believe the real-time type of data will be increasing down the road? If that is the case, the customers of your data center business and the customer allocation may change depending on the change in the substance of the data that you handle. Now, right now in the United States, how do you see the characteristics of the customer profile?
When you take a look at the data process, you mentioned that you're number 3 globally, but is there any concentration among customers? Do you have customers in the growth sector? That's my first question.
We have customers across all different verticals. Where we're seeing the most growth is what you would expect. It's in cloud computing, it's in AI, it's in analytics, blockchain, things of that nature. IoT, all of those usual suspects is where we're getting much of our business from, I think, globally. We also, at NTT, have a very strong reputation for operating very high-quality data centers. So we get a lot of financial business. We get a lot of government business, especially in the U.S. I would say we have a very well-diversified portfolio of clients as one of our strengths, from a concentration standpoint. As you start to move down and you look at individual regions, of course, there's going to be greater concentration. When you look at it globally, we have a very well-diversified portfolio.
It is the usual suspects in those growth areas that we're getting, especially in cloud, as everyone's digitizing and moving to the cloud. Did that answer your question?
Thank you. If that's the case, when you talk about cloud, with the ADAS, I think in the United States, it's a car-centric society. Ford and GM are working together with the government. You're involved in Las Vegas project, but will that demand increase going forward, do you think? Do you believe that type of workload, that type of booking will increase in the United States as well?
We're already having conversations a bit with car manufacturers about autonomous driving. As you know, we have a smart city project in Las Vegas, which has spurred a bunch of other conversations with other cities. If you think just in our short lives, going back 10 years, the amount of data we used to access on our cell phone was just basically text messaging. Now, I can access movies. I can watch Netflix on a plane or connect to just about anywhere. All of that content is really what's driving the explosive growth of the data center industry.
Yes, I'm a very strong believer that the autonomous driving and IoT that you're seeing in cities will be deployed across heavy swaths of the globe. A lot of that starts in the U.S. because U.S. is where the data center industry started, so we're seeing a lot of that activity now. I think you're seeing some of that in Europe as well. That is the primary driver.
Thank you very much. My second question. You talked of a hyperscaler. Now, in the past, companies like Intel, they created CPU. Intel cornered the market with CPU. Now recent days, hyperscalers can on their own make their own development. The added value of semiconductors are now being absorbed by the hyperscalers and the cloud service operators. In the case of NTT Group, what is your prospects? You mentioned that you're doing this at a very early phase. You mentioned that you're doing work very quickly. Now, supply chain for semiconductors are problematic. Are you going to be developing your semiconductors on your own? Can you talk about the semiconductors and the supply chain issue? I know the past few years have been difficult for your supply chain.
What are the prospects for NTT when it comes to this particular question? Yes, you mentioned supply chain, especially semiconductor supply chain. Yes, you're right. The delivery period has become very prolonged with regard to semiconductors, and that has had implications. What is the impact on data center business? As you pointed out, with regard to data center construction, yes, we need to procure a lot of components and materials. It is true that there's a risk that the delivery period could be prolonged, and that this could lead to delays in the construction. That is a risk. As was mentioned by Adams earlier, we take the modular approach. First of all, data centers, when they begin construction, they do UPS and also the air conditioning design, battery design.
You actually make procurement with each of vendors for each of these materials. In the case of modular approach, what happens is that in advance, you have to secure materials beforehand. While procuring materials beforehand, you make sure that you flexibly assign those materials where needed. You have a very flexible approach with regard to modular approach. You talked about the prolonged supply chain. We have envisioned the prolonged supply chain. With this as an assumption, we have to take methods to mitigate any impact from the pressure on the supply chain. We're taking all sorts of measures against this backdrop. You talked about semiconductor supply chain pressure. Is that affecting the performance? No, that is not the case in our company.
Also, with regard to delivery to the customers and with regard to the launch of the data centers, we've not had any significant delays up until now. The case about Intel is separate, but we've never had such major delays in the d-
I'd like to expand just a little bit on this, because supply chain, everyone knows, is a global issue that affects all industries. We were very fortunate in a few years ago, we started a process of locking down our designs and standardizing our designs. Each region across the globe has a very standardized, repeatable design. What that does for us is it allows us to assign primary, secondary, tertiary suppliers to each element of the data center. Then we create framework agreements that are long-term, three to five -year in nature with our supply chain providers. Then we use what's called vendor managed inventory, VMI, to make sure that we have a continuous supply. I like to say that we manage our infrastructure by maniacally managing the supply chain.
We are very mature and prescribed in how we manage our supply chain. To date, we've had some small delays, but if a manufacturer can't come through with their framework agreement, we just switch to our secondary or tertiary manufacturer, and we work across the globe to also ensure that we have harmony across the equipment that we use. You can't use the same equipment in all areas of the globe because there's difference in voltage between Europe and the U.S. and things like that. We've got our supply chain down pretty well, and that's a benefit of being such a large company. It's also a benefit of having hyperscalers within our business ecosystem, because the hyperscalers allow us to build at this very large scale that the smart small providers cannot build at.
They're not able to lock up the supply chain like we can. Hopefully, that answers your question with a little bit more detail about the construction side.
Thank you. Point of clarification with regard to semiconductor. What about the CPU design? The hyperscalers using CPU design. Does NTT intend to design its CPU? Because this is the core, right? NTT cannot or will not do CPU internally. Is that the case? Is that the thinking of NTT? Well, right now, on this matter, of course, we are involved in a lot of R&D. But with regard to making this into business? Well, maybe going forward in the future. In relation to the IOWN concept, maybe white box type of possibility might be there. But with regard to data center business, as a data center business group, we're not aware of such a plan. Thank you. Thank you very much.
Thank you. Thank you for all the questions. We have been receiving many, but in the interest of time, many apologies, but we would like to stop questions and answers for now. We would like to conclude the session about the data center now. Thank you very much. Please allow us some time, about five minutes, to prepare for the next session. We will resume at 4:20 PM. Thank you.
Thank you very much. Thank you. As it is time, we'd like to resume this session. Next session, we'll be focusing on business collaboration with NTT and Tokyo Century. We'll be inviting President and CEO and Representative Director, Mr. Koichi Baba, to take the floor. Mr. Baba, please.
Good afternoon. Thank you for your kind introduction. My name is Baba of Tokyo Century. We hope that you will be patient for a little while longer and stay with us for session two. Thank you so much for joining us online as well as on-site, despite your busy schedule. We really appreciate your interest. Furthermore, I would like to thank NTT Holding Company and their team for hosting this event. Thank you for giving us this very valuable opportunity. This is indeed a great honor for me, and I'm very appreciative of this wonderful opportunity.
Now today, as the title indicates, I would like to focus on business collaboration with NTT and Tokyo Century. Afterwards, I hope to take questions from the floor. While the time might be limited, I look forward to this opportunity. Thank you for joining me. Now please be mindful that I should be adding honorifics to the companies, but I will not be using the honorifics to the companies. I hope that you will understand. First, allow me to introduce a little bit about our own company. This might not be a very familiar company to many of you, so I would like to very briefly introduce to you about our overview. In 2009, we started out as Century Tokyo Leasing Corporation. In 2016, we dropped the lease, and we rebrand ourselves as Tokyo Century Corporation.
We want to go beyond financial finance. We want to go beyond this sector. As far as the other outline is concerned, I believe this is self-explanatory. Our major shareholders are ITOCHU Corporation, Chuo Nittochi, and NTT. Now, our business segments operating segments are four. Equipment leasing is the main business. We have approximately 25,000 companies that are clients. We have strength in IT equipment leasing. With regard to domestic market, we have auto leasing and car rental services for the corporate sector, and we offer a full line of services. The red mark that is familiar to you, in the case of Nippon Rent-A-Car, used to be a subsidiary firm in the past. The third area is specialty financing. This relates to aviation, shipping, renewable energy, real estate, and principal investment.
These require specialty in financing activities. As for international business, we have provisions where specialized services meet the 50 companies. We offer IT leasing, and we also provide auto leasing in the field of international business. This is some of the financial highlights that we want to indicate to you. As we show you ordinary income and capitalization up until now. In 2009, after the merger, our performance has continued to expand. From next year, the new fourth medium-term management plan will start. With collaboration with NTT, we want to expand our business segments and seek to expand our business as a whole as a result of this alliance. Capital business alliance with NTT. This was spurred by capital alliance. Let me talk about the capital alliance.
In February 2020, we felt that this alliance would actually enhance our enterprise value. NTT acquired 10% stake in Tokyo Century, became the third-largest shareholder, and that led to capital alliance. Now, let me go back in time with regard to collaboration with NTT. This shows you the past steps. The first step, the first collaboration began 15 years ago, back in 2005, when we were involved in auto leasing. We actually merged our respective auto leasing business. With regard to collaboration, the first collaboration was auto leasing, and the fourth collaboration was data center. Let me talk about the first up until the fourth collaboration for your reference. As we have the fifth collaboration, which is real estate, we've already begun actual concrete joint cases. We want to further expand collaboration in this area furthermore.
We want to expand our further collaboration. We hope that we'll be able to have sixth, seventh collaboration going forward. We want to. This will be co-creative. We want to accelerate co-creative businesses. Let me talk about the first collaboration in relation to auto leasing. Nippon Car Solutions. I want to talk about NCS or Nippon Car Solutions performance. Shareholding ratio is NTT 40.5%, and TC has 59.55%. Ever since the company started in 2005, we have expanded our performance. In 2013, in October, we had the merger between Tokyo Auto Leasing. Our ordinary income was JPY 2 billion in 2005, but this actually increased manyfold up to JPY 14.3 billion in fiscal year 2021.
With regard to EV-related efforts, let me talk about EV as well. Now NCS is promoting carbon neutrality by expanding EV services. Even before carbon neutrality became the keyword, they were much involved in providing electric charging in the face of disasters. We are top class in terms of the handling of the EV cards. The left-hand slide shows NTT Group's EV100 initiative and what we're doing to support this. This is indicated. With regard to buying power to purchase EVs in large quantity and high-quality service support, because of telematics offered by our work with NTT COMWARE, we also offer consulting. We offer total solutions. This, I believe, is the strength of NCS Auto Leasing. With regard to EV business, you need batteries, you need charging facilities. How do you manage that?
That is very important in managing this type of business. It's possible to have secondary usage for EVs, EV batteries that have come to the cycle, so we can actually sell them. We can also have profitability as a result of recycling. In shifting to the EV, we have companies that have strengthened assessment of batteries. Also, we were able to have venture companies that have the technology to draw out battery power. We're beginning to strengthen our business, which focus on the social aspects. NCS can offer full lineup of services. We believe that we want to strongly support NTT Group's target of being 100% renewables by 2030. Now let me talk about NTT Group's EV pursuit. We have 800 locations, local governments, that are announcing decarbonization.
We're offering EV packages to those local governments that are leaders in decarbonization. By offering charging facilities and also by managing maintenance, we're working with construction companies that have close relationships with NTT. We believe that we'll be able to collaborate renewables with various group companies, which means that the users will be able to support the realization of carbon-neutral goals set by various local governments who are our clients. There is very rapid expansion of the marketplace in this sector, so NCS is trying to capture this increase in demand, and we want to support and promote the decarbonization efforts at various local governments. Let me now talk about the second collaboration, NTT TC Lease. Let me talk about this collaboration involving NTT TC Leasing. Now NTL has carved out leasing of international businesses.
NTT has 40% and our company has 50% as shareholders in this company. Please take a look at the right-hand side. We're involved in leasing of communication and IT equipment. We also offer medical equipment and tablets for education. We offer our leasing for these products. We also are involved in shipping and aviation leasing. We have leasing in both domestic and outside Japan as well. Please take a look at the bar graph on the left-hand side. In July of 2020, we began our operation. The segment assets was JPY 1.2 trillion at that time. Also, the residual assets, this is the source of profit for the leasing company, and the growth has been very strong. This is a very important parameter if you want to gauge the growth percentage.
By end of March 2022, the segment asset balance increased to JPY 1.6 trillion. In just one year and a half, about JPY 400 billion increased. On the other hand, recently, with the impact of COVID, the lease company's execution of investments, seen from the Lease Business Industry Association's numbers, if compared to before COVID, continues to be less than 20%. Even under such difficult situations, NTL has one of the largest business scale in Japan and is strongly growing, as you can see. Our company and NTL's collaboration example is following. If you look at the middle of the slide, the balance sheet, ship assets financing for ship owners financing is shown. Senior loan is provided conventionally with banks, and we conducted ship financing with banks.
Now that NTL has abundant financing capabilities and with our arranging abilities, we can partake in senior loans and general loans and provide one-stop solution optimally to customers. Not limited to ship owners, but real estate and other project finance requiring a lot of finance, such schemes can be used for our great advantage. A specific example is collaboration in real estate lease. In Toyama City, where the public local wholesale market is being redeveloped, NTT, TC Leasing, and TC jointly conducted a building lease. NTL's lender function and our company's strength, the real estate arrangement functionality, are combined in realizing this collaboration. Going forward, by using similar schemes, we think we can increase the number of such projects, and there will be upcoming rebuilding and infrastructure improvement demand due to aging of the public facilities going forward. We want to focus on these types of businesses.
These were some of the co-creation examples and use of NTT's capabilities, and we want to grow our business to number one in Japan. Now, third collaboration, environment and energy business. Since October, together with NTT Anode Energy, we have been running large-scale solar power plants, as shown in the pics. We want to further collaborate in the renewable energy business. We established a fund with aiming for JPY 100 billion funding size. Mainly for large secondary solar power assets, we are enlarging our asset scale. We want to continue investment in assets and contribute to renewable energy and sustainable society. Using the example of India, where there will be more demand, I would like to explain about data center business.
In addition to Mumbai 8, which is already up and running, there is a plan to build 13 data centers in NAV2 project. We have cooperation in NAV2, and this will be more than four times equivalent the space of Tokyo Dome. Our additional investment to Indian data centers are planned at JPY tens of billions. Going forward, in Indonesia and in Thailand, our alliance partners, Lippo Group, major conglomerate in Indonesia, and TISCO, integrated financial group in Thailand, in collaboration with them, we want to secure land locations and renewable energy power and using external capital and move into other regions. Together with NTT Group, we are collaborating globally under CSI Leasing. CSI has leasing business in more than 50 countries and also ITAD, IT Asset Disposition service based in the U.S.
In 2016, since becoming our wholly-owned subsidiary with a network expansion and business scale expansion, the profits have been increasing in a double-digit manner. This is a core to our U.S. business. The subsidiary of CSI is EPC. EPC's ITAD service, I would like to talk about in more detail. ITAD service may not sound that familiar, but ITAD stands for IT Asset Disposition services. Refurbish, recycle, including the destruction and processing of IT equipment, are covered here. We are able to provide safe and appropriate services. The left-hand photo shows EPC employee erasing data. Right-hand side is hard disks and memory chips being pulverized and destroyed. You can see the size comparison with the coin to the right. In the right-hand bottom truck, this is dedicated truck for ITAD. Visiting customers, plants, and offices, the truck will visit customers directly.
On site, we will conduct destruction and pulverization of IT equipment and data. With increasing IT usage, the importance of ITAD is growing more and more, and international certification is also a need. We receive ITAD certification globally and ensure quality. When recycling and data erasure are conducted, the right-hand side international certifications are issued to provide peace of mind to customers. Next, here, together with NTT Group and with CSI, this is the image of our overseas operations collaboration. NTT DATA, Inc. Group will provide services inclusive of devices. Plus, if we add CSI's financial functions and asset management and data erasure functions, we will be able to respond to customers' ICT life cycle in a one-stop manner. We provide life cycle management services to customers. We can provide continuous approach to customers. Global companies, for efficiency, have tendency to replace IT equipment companies.
The scheme for the leasing company to bear high lease residual value equipment have economic validation. ICT-related investments are accelerating globally. NTT Group's ability to produce and to connect can be combined with CSI's asset management and consulting abilities. We want to contribute to NTT's global businesses. Finally, NTT and Tokyo Century's collaboration. What kind of future are we aiming for? With collaboration business activities, we want to solve social issues. This is a combination of NTT's corporate philosophy and ours as well. NTT's emphasizing ICT business considerate of sustainability. This would apply to children's tablets, renewable energy, building, power generation facilities, vehicles. Investments into such social infrastructure and management, exit and reuse of these assets will be required. The children who will undertake the future will use tablets on day-to-day basis in schools are carried by NTT TC Lease.
We are working with NTT Group. Together with NTT Solution, under the GIGA School initiative, we have the top share. We are contributing to the education enhancement. For automotive case. Case, C stands for connected, A, autonomous, S, sharing and service, and E, electric, electrification. I think you have been hearing these words for quite a while. With telecommunications, cars are connected with the outer world. Autonomous driving are the future way of cars. NTT has ability to connect, and working with NTT. NCS has expertise in managing. I think the two can become best partners. In our group, we have been developing asset business, and our asset business capabilities will, in NTT's growth area, be able to support the business further.
Together, in collaboration, we can solve social issues to realize sustainable future, and the sustainable future of what we desire. This is my explanation. Thank you very much, and thank you for your attention.
Thank you very much. That was Mr. Baba, the President. We now like to go on to the Q&A session. We'll take questions from people who are here on site, and then we'll be taking questions people who are connected online. Please wait for the microphone to be brought over to you. Please state your name and affiliation before you ask your question. We'll first begin with the people who are here on site. Please raise your hand if you have any questions. Anyone? Yes, we'll go to the gentleman in the front row. Thank you. My name is Masuno from Nomura Securities. We heard about the data center business, and you introduced to us your involvement in India.
You have 77% stake in Mumbai, and in the next project, in Navi Mumbai, you have 50% investment stake or stake in the company or in this business. NTT takes 70%, you're taking 30%. Would actually show the structure. Why is it your company taking 50% or 70%, 75%, your investment ratio and your stake is very large compared to your partners. What are the strength that you have? Well, I suppose you can gain a lot of returns. What is your strategic intention behind your taking of such a large stake in these data center businesses? That's my first question. My second question, NTT TC Leasing has JPY 1.6 trillion balance.
In principle, as we see it, we do see that there's infrastructure growth, strong growth. Can this strong growth be sustained? What would drive the sustained increase or return for your business? That's my second question. Please go ahead.
Yes. Well, thank you for your question, and thank you for your comment. I do appreciate it. The first point. Your question was about the data center business that we're involved in in India. That was your question.
As was covered in the presentation earlier, when it comes to IT equipment, since the past, we were involved in leasing. We were actively involved in the leasing of IT equipment. We felt that we have a certain level of know-how with regard to IT equipment. Now against this backdrop, I talked about the capability of our asset management. We own assets, we manage assets, and we dispose of these assets. That was our mainstay of the business in the first phase. In the IT age, not only IT equipment, but data is contained in these IT equipment. Our business model has changed. It has evolved from IT equipment down to data center business.
I think data center business is a natural extension of our business, and we feel that we should be involved in this business in the future. That is the premise of our business. Now your question about investment. Yes, about the breakdown of the investment between NTT and our company. Bearing in mind NTT's investment policies and intentions, we have continuous dialogue with our partner, and we make a decision. Going forward, I'm sure that there will be many projects. I'll be very happy if there are many questions, many projects rather. We have to bear in mind the investment policy of NTT and then consult them. You know, and in places where we can contribute, we would like to contribute. That is our basic position. Now your second question related to the earlier slide.
In April 2020, when we began the pro forma, we showed you the balance, we showed you the level of assets. Now, co-creation and collaboration really was very successful, and we were able to do this in a very speedy manner. Now, as far as Tokyo Century is concerned, they have their investment policy. NTT TC Leasing has also investment policy. They have independent policies between the two companies, and they have and the credit rating and the examinations are totally separate. What the policy, what the financing will be carried out by these two companies, they will independently make their decision. Against that backdrop, Tokyo Century's risk appetite and risk profile will be studied, and also NTT TC Leasing profile and risk appetite will not be identical.
When demand for customers emerge, I'm sure that these two companies, they will leverage their feature and try to respond to the customers. From our side, we might invite NTT TC Leasing to join in a certain project. Vice versa, it could be true as well. We have day-in, day-out communication with the two companies. We have to continue dialogue about co-creation, and that has been very fruitful, and that has allowed us to grow this far. Now we began with auto leasing in the first place. We began the work in the auto leasing. We have the successful model already in place. That has led well to the second collaboration. This success has really led us to a very good growth track.
Now you see the dotted line image in a few years on the right-hand side of this page. It is our hope that we'll be able to grow the numbers further. Naturally, we have to improve our profit, profitability as well. Make sure that we have to take initiatives so that our absolute level of profit can also grow. Thank you. That is my response. Thank you for your question.
At this point, from remote participants, if there are any questions we would like to accept, the operator will explain how to ask your question. If you are participating remotely and have a question, here is the instruction. If you have a question, after the asterisk, please press one. If your name is called, please state your company name and your name, and then your question. If you want to withdraw your question, please press star two. All right. If you have a question, please press star one. Mitsubishi UFJ Morgan Stanley Securities, Mr. Tanaka, your question please.
This is Tanaka speaking. Can you hear me?
Yes, we hear you. Please go ahead.
I have one question. Collaboration number three, energy and environment business, JPY 100 billion solar. Solar park plant totaling JPY 100 billion, page 14. What is the profitability situation? What is the outlook of profitability? Please explain. This is all for me. Thank you.
Thank you for your question. Thank you for the remote question. Environment and energy business, we have started a fund together. What is the portfolio situation and the profitability outlook? I have received the question. As the earlier slide shows, in the red pins, you can see the actual projects. We will further accelerate, and December last year, we put together the framework and started our efforts. Therefore, as of this stage, there are various pipelines and due diligence are taking place. For example, secondary exit renewable energy projects, if they exist, we want to buy and acquire them. The profitability for the individual projects and areas, they vary. Our stance is in consultation with NTT, we want to have certain profit orientation, and we have been working accordingly.
Under this policy, the red pinned areas, we have a certain profit idea and IRR measures in our mind, which we cannot disclose about. These are the projects, and we want to aim for projects more than our indexes or measures. Solar cell plants are highly popular these days. There is a lot of competition. Sourcing NTT Anode Energy has a lot of track record. We have about 700 MW solar plant development. We have more than like 130 sites. We have track record. Lately, as we have been disclosing the solar cell asset management, we have AMTM company established, and our asset management ability will be our weapon to secure the projects. First of all, the fund is JPY 100 billion, so there is no additional investment planned.
You will be seeing possible projects coming and then be building up. Yes, we intend to build up within this fund. Thank you.
Okay. Are there more questions from those on the floor? We'll take a question from the gentleman in the fourth row.
Thank you very much. My name is Ando from Daiwa Securities. Thank you for this opportunity. You have this collaboration with NTT. You're doing a lot of business with NTT. That was what you introduced today in the course of your presentation. In terms of your assets, how do you take risk for your asset between NTT and yourself and maybe a third party? Is there difference in the risk-taking profile? Can you really work with different risk-taking profile among your different partners? With NTT, how do you divide roles? This might be a very basic question. I would appreciate your sorting out this type of information for us. Thank you for your question. Your first question probably relates to NTT Lease and our company, and other lease companies, and our people in the industry.
What is the difference in the strategies for how we structure our portfolio? You're interested in the differences in how we structure our portfolio. We have JPY 5 trillion in assets right now. If we do apple-to-apple comparison, it's not the same. On apple-to-apple basis, it's not the same between other countries, companies in terms of our portfolio. We only have 30% of our domestic conventional assets, which means that we need to consider how we allocate our assets at Tokyo Century, and we have to allocate our business, our assets among the four major business segments. In the case of NTT TC Leasing, they are very safety-oriented. Very few non-performing loans. They're a company that is involved in very healthy, sound fiscal management.
When it comes to equity mezzanine, the risk-taking. I thought I mentioned the differences in risk profile. Again, risk appetite is different between our companies and them, so there's a difference in the returns that our companies are taking. That is how we're working in this partnership. Now turning to your second question. In the case of NTT TC Leasing and Tokyo Century, how do we divide roles? It's been two years, and I think we know how we do our business. We also are very knowledgeable of our respective portfolios. That being the case, this is what we want to do. For NTT's, we might recommend certain projects that we can recommend to NTT TC Leasing. We have garnered such experience in the past two years.
Based on this know-how, we want to further strengthen our collaboration and our contact with NTT TC Leasing. Now the difference between the third parties, that was one of the questions that you highlighted in your first question. Well, we focus on leasing, then banks, independent operators like ourselves and manufacturers. There are a lot of different players involved in this leasing business. We will bear in mind the features of the respective players, excuse me, and then engage in this business. Thank you very much.
Many apologies, but in the interest of time, we would like to close the questions and answers session. At this point, I invite our president, Mr. Shimada. Mr. Shimada, over to you.
Thank you, Mr. Baba. Thank you for joining us today. No, thank you for your wonderful invitation. Ladies and gentlemen, you have observed this presentation, I'm sure. With Tokyo Century and our company, we've been working together since 2005. We have had very long-standing partnership with this company. Our partnership has gained even greater depth as time went by. It's not just here in Japan, outside Japan, overseas as well. By the way, on October first, NTT DATA, Inc. will be launched. I drove the NTT DATA, Inc. They have their global business. I do hope that we'll be able to gain the support of Tokyo Century, so that we'll be able to gain greater growth going forward. Thank you, Mr. Baba. Mr. Baba, thank you.
We look forward to your continued support and cooperation. No, thank you. Thank you very much. Thank you. That is the end of business collaboration with NTT and Tokyo Century presentation. That's the end of the business collaboration with NTT and Tokyo Century. Mr. Shimada will remain on stage. We need to go on to the final part of this program, where we have a Q&A session, the general Q&A session. We will take questions from all of you. Mr. Shimada, the President and CEO, will be responding to your questions. As is the case, we'll take questions from people on site, and then this will be followed by questions from people who are connected remotely. If you're here on site, please wait for the microphone to be brought over to you before you ask your question.
Please be sure to state your name and affiliation, and then go on to your question when you're designated. Are there any questions? Are there any people with questions? Yes, we will start with this gentleman first, in the first row. Thank you. SMBC Nikko Securities, Kikuchi is my name. Thank you for this opportunity. Mr. Shimada, I think this is the first time that you are involved in this large presentation in front of this investor community. The program kicked off with Mr. Hiroi. Mr. Hiroi talked about some of the changes in the policy to be followed under your leadership. Mr. Shimada, as the President and CEO of NTT Group, how do you intend to lead and guide NTT Group under your tenure? What is your vision?
Can you talk about the vision based on which you intend to lead the group, down the road? You had predecessors that you have very strong predecessors. If you could introduce yourself, please. Thank you very much, Mr. Kikuchi, for that question. Thank you. Yes, I am not a very flamboyant person, so I want to make sure that I do my work in a very steadfast manner. Now, Mr. Hiroi had already taken the floor earlier. As was mentioned, in July, we had the creation of a new Docomo Group, and very soon, we will have under the Dynamic Loop NTT logo, we'll have NTT DATA, Inc. will be launched under this new Dynamic NTT, the Dynamic NTT Loop logo. I suppose business transformation and structural change is one way to bring about change.
We need to produce results as a result of those changes. I want to focus on producing results as a result of introducing these many changes. Now, when I first appointed as the president, I made this clear. We want to be a customer-centric business. We want to create customer-centric business. That is what I made clear. There are a lot of products and services. When you take a look at our products and services overall, are we offering high-quality products and services compared with their competition in all fields? Maybe that is not the case in certain segments. What I say internally within the group is that we should be improving our quality overall. Now, of course, improving our quality will entail costs.
If you leave the quality alone, then you'll be losing in the competition. You'll be losing against your competition. We need quality where we can be successful in our competition. How can we create such maximum level of quality? To do that, we have to spend cost. If we spend the cost, but if we can gain a return out of that, they will be appreciated by the customers. The customers will continue to choose NTT as their partner. I feel that this is the most important part. For right now, I'm concentrating on improving quality. That has been the instruction and guidance given to all the NTT group companies. Now, in order to improve the quality, what needs to be done? The employees have to have the culture and mentality of improving quality.
We have to change the culture so that they'll be focusing on quality first of all. I think the me-mentality of the group up until now is one based on stability. We want to re-emphasize stability. In August this year, NTT was the cause of disruptions, and we caused inconveniences to the society. Of course, we have to prioritize stability of services, but stability alone would not suffice. It's important that customers are able to gain new experiences. We need to inspire these customers. We need to upgrade our capability so that we can inspire our customers. First, we want to nurture and change that mentality and awareness. That is what I'm focused on right now. Now, next fiscal year will be the final year of the current plan. Now, I cannot.
I'm thinking about the timing, but we'll be coming out with a new medium-term management strategy. At this juncture, I do hope that I'll be able to express my vision in a more concrete manner. I hope you'll be patient until then. Thank you very much for your patience in advance. Thank you. My second and last question. Mr. Shimada, you were the CFO, but you're now the President. The balance sheet and the financial situation of your company a couple of years ago and right now is totally different. I think the biggest change is that DOCOMO has become the wholly-owned subsidiary firm of NTT Holding Company. When it comes to shareholder return, what about your policy for shareholder return? How do you intend to carry out your shareholder return policy? Right now, you are taking very bold cash management.
You're doing a lot of overseas businesses with Tokyo Century. I think this was on the major agenda. When it comes to your policy about financial returns and providing shareholder returns, can you talk about this? I suppose you want to know how we intend to use cash in the future, right? That is how I interpret your question. Now, there was a session about Tokyo Century, NTT TC Leasing. This was part of the presentation. But they were involved off-balance-sheet, and they had JPY 1.2 trillion off-balance-sheet assets and lease-level off-balance. So we're doing a lot of off-balance-sheet initiatives based on that. We also implemented NTT DOCOMO as the becoming wholly-owned subsidiary firm.
How we observe the balance sheet is a very critical component of how we carry out business in the future. When we consider the road ahead, what is going to be involved? In the case of data centers, we have such strong appetite among the customers. We have to accumulate assets. That translates into greater returns in this case. In certain cases, we use third parties' cash. If the market growth is very fast, then, of course, we have to increase our own investment. But at the same time, this year, data center, we invested JPY 300 billion, but we only invested JPY 180 billion out of that. JPY 120 billion was from third party.
In the past, it was 145. Last year, it was 135 third-party. We are increasing our own investment. At the same time, in order to catch up with the growth in the marketplace, we do also leverage third-party finance as well, so that we can actually capture the growth in the marketplace. That is what we're doing. We need to invest in data centers, I'm sure. Also, in order to shift to digital business, we might consider certain acquisitions as well. We want to place cash in areas where the business is growing. We need to invest in growth segments. Recently, we carried out a share buyback because the government released some of their NTT shares.
We need to spend cash so that we can spur growth. At the same time, the shareholder return is a very important matter for the management. In the medium-term management strategy, my predecessor, Mr. Sawada, when he created the current strategy plan, he mentioned that in principle, his policy was to continuously increase the return in the dividend as well. He also mentioned we have the track record of flexibly carrying out share buybacks in the past. That is something that I would like to continue. Thank you. Thank you very much. We would like to accept the next question. The person in the second row, please.
Thank you very much for today. Sujima is my name. I have just one question. From us investors' perspective, under the new president, Mr. Shimada, numbers, balance sheet, and PL, out of them, what do you think you want to focus on? Where do you want to change most in? Please give me a hint. Maybe when we look later, we can see what and how the track record has changed. If there are any signs of where the track record is going to change, please let us know.
Mr. Sujima, thank you for your question. Your question is very difficult to answer. Why did we today talk about data centers? This is one tip for you to think about. Third-party cash to be injected. Our data center business and telecommunications business, we have worked to raise ROIC. As a part of that. Using other capital well is one story that we have. When we are truly growing, we ourselves have to invest in. Otherwise, the fruits of the investments will not become ours. If we bring in others' capital, third parties' capital, then the returns will go to the capital investor to pursue growth. If our ability alone may not be sufficient, we also need to use others' capital too, but we have to be involved, we have to participate in order to gain returns. This is the thinking.
Of course, the business portfolio can be varied. The growth area and the growth portfolio and how to think about the asset efficiency, this is one big theme to think about going forward. Thank you.
You are.
Next question, please. The gentleman in the first row, please. Thank you. Masuno, Nomura Securities. Two brief questions. First, in March 2028, what will happen to the role of NTT Holding Company in a couple of years' time? Because in the integrated ICT segment, DOCOMO, by March 2026 will have a synergy of JPY 700 billion. With regard to global business segment, NTT Data has a medium-term plan. That being the case, if we take a look at March 2028, what role will be played by NTT Holding Company? What business sectors are you going to be focused upon? That's my first question. If we assume that the new medium-term plan will be 4-year period, I'm asking what you will be in the very final year of the next medium-term management plan.
Okay. Well, in principle, each group operating company has their own medium-term plan of their own. Naturally, we hope that each group operating company will achieve those plans and targets contained in the plan. If we do come up with a new medium-term plan next year, what about the consistency with other group operating companies' medium-term plans? I think that's the gist of your question. Naturally, we'll be mindful of that. I think it's always okay to review those plans. If you can actually exceed your commitment contained in the plan. Now, DOCOMO, just because DOCOMO's plan is there, we're not going to be bound by DOCOMO's medium-term plan strategy. I hope that's how you understand these plans. I see. I understand. Okay, my second question.
This applies to the ROIC, or return on invested capital. What about, are you going to be focused on ROE? In the case of telecom business, unless investment increases, I think your asset efficiency will increase. You'll be investing in non-telecom sectors? What about net worth ratio? In particular, in the case of shareholder ratio, I think your net worth is going to increase. How can you improve profitability? You mentioned that you're going to continue to increase. How do you strike a balance? I would appreciate your thoughts on this topic. Okay, thank you very much. As you pointed out, Mr. Masuno, with regard to domestic telecommunication business, ROIC is very important for the domestic telecom business. That is very important.
We want to improve the asset efficiency and make sure that we develop our business in this backdrop. Now as for the new business areas, what are our thoughts about the new business areas? That is something that we need to revisit and consider. Of course, in potential growth areas, it is important that I think we should be prepared to take certain leverage in areas where growth potential is high. How do we structure the new management strategy? We really need to consider all these elements. There's a question about the profitability of data center business, and we mentioned that we cannot respond specifically. When we take a look at the consolidated margin, actually operating margin on a group consolidated basis for data center is not that high. It's high-growth gen.
In the case of data center, operating margin is somewhat more challenging in the United States because of intense competition. If you go to places like India and Europe, the operating margin for data center business is very high. We need to take a look at each of the portfolio and make strategic investment and make sure that we gain high return as a result of those investments. That is the strategy which we need to consider. Now right now, we are beginning to shift to that type of management strategy. At this juncture, we do not have a major strategy response when it comes to the major strategy, financial strategy. That is the direction which I would like to pursue.
What about profitability? How do you see the profitability per se?
Well, which particular area are you talking about?
For the company as a whole. I'm asking about the profitability of the company as a whole.
Well, in the domestic business, we have high hopes for the smart life business for DOCOMO. We hope that DOCOMO's smart life business can further brush up and improve their profitability. Also, when it comes to our global business, I mentioned that the data center business profitability is increasing. Clearly, profitability is increasing in this business market segment. I think it's important that we focus on the highly profitable. It's important that we focus on areas where we can improve our margin. In the case of legacy, there is a downward trend, and that is a given. We need to offset that, consider possible acquisitions to offset that. I think that type of business strategy is going to be important going forward.
Okay, thank you very much.
At this point, we would like to receive questions from remote participants. The operator will explain how to ask your question. Those of you participating remotely, we accept your questions. If you have a question, in your phone, after your phone's asterisk or star, please press one. If you are called upon, please state your company name, your name, and your question. To withdraw your question, please press star two. Those of you with a question, please press star one on your phone. There seems to be no question remotely. Finally, from the venue, anyone with a question? All right. Ando-san. Oh, excuse me. Yes, Mr. Ando, please. Please bring the microphone to Mr. Ando. Thank you. Daiwa, Ando speaking. This is a follow-up on the earlier questions and answers, which means, Mr. Shimada, capital versus profitability.
You intend to change the framework somewhat, and you want to grow the growing businesses. This is how I understood. This is how it sounded. This is your new strategy for growth. This will be the thrust of your growth strategy, Mr. Shimada? Or your strengths are, for example, HR and certain areas may be releasing possibilities in such areas of your strength. Do you intend to accelerate growth? Can you explain where you have high hopes for going forward, including various areas and possibilities? Thank you. As you said originally, CX created by EX. As I said so, ultimately, it is the employees who create new customer experiences. It is down to the employees. We need to provide environment for the employees to maximize their potential and realize their potential. We already have several working groups within the group.
For example, in financial area, life cycle area, CX area. In energy, we have been working for the past year, but also energy. We have several cross-group working groups. We have, in fact, put together sub-working groups. What is the member structure there? People in their twenties and early thirties. These are the members. We don't put particular restrictions. If one becomes a certain level of management personnel, how much investment would be necessary or restrictions are brought. We first say, "No restrictions, no limitations," and think in the working group and raise to the executives. This is a new mechanism we have been introducing recently. We are trying new efforts. Some point in time, the output results, maybe we can introduce to you somewhere, maybe within the calendar year might be difficult, but I think there will be an opportunity.
In this sense, we want to enhance employee experience and create new portfolio. This will be important. Globally, we want to conduct this initiative as well. About two weeks ago in Brazil, São Paulo, we had the town hall meeting. We had relatively young people attending too. We received various comments too. Globally, we can have new proposals brought in.
We hope new challenging and exciting ideas are brought in. Of course, there can be initially the need for financial goals that we want to sort out too, but employees with new ideas, new perspectives, generate new products and services. We want to create such an environment. Thank you very much. Thank you. Any other question? Yes, we'll go to the gentleman in the third row, please. From Tokai Tokyo Research Center. I would like to ask two questions. I would like to ask about smart life business. You mentioned that in the context of smart life contents financial business, how do you intend to add value and business expansion of smart life business in relation to these two sectors?
Going forward, you have a new IOWN, and you have to invest and do research based on IOWN concept, I would imagine. Now, Mr. Shimada, you're not from the technol-- you're not an engineer, but you've been working very closely with Mr. Sawada, so you're knowledgeable about science and technology. Can you provide us with an update on the progress of IOWN, and how should we view the roadmap for IOWN in the future? Thank you. Let me start with the latter part of your question and address the question about IOWN. You asked about roadmap for IOWN, so IOWN 1.0. Hopefully around November, we'll be able to talk a little bit about the so-called IOWN 1.0 or plans for IOWN. We are making some preparations. I think we have to have a good product.
Right now it is a vision, it is a concept that we're talking about. Unless we have a product, I don't think we can talk about potential profitability, we can talk about the return without a concrete product. Hopefully something like a strategy of the product can be shown. Of course, we need a long-term vision, but what about the short-term views? What are some of the short-term plans? I hope that on this point I'll be able to talk a little bit come fall this year. I'm afraid I do not have any concrete things that I can talk about at this juncture. Now let me return to the first question. How do I see finance and contents in the context of smart life business?
How do we intend to reinforce contents and finance in the context of Smart Life business going forward? Yes, contents is an area where the competition is very, very intense and harsh. As you are probably familiar, NTT QONOQ, which is a new XR company of NTT, was announced yesterday. Mr. Maruyama, who was the senior executive vice president of Docomo, will be the head of this new XR company. Metaverse, digital twin. Why are we so interested in metaverse? This is an area where new contents are likely to emerge, and I think it is important that we have that capability. In the case of conventional content business, of course, we'll want to make efforts so that we can grow the conventional business as well. At the same time though, it's important that we generate growth in new growth areas.
That effort is very important. Now turning to the finance sector, we have the d払い program, we also have the d Card, and we also have the d POINT program, so that is the basic pillar of our strategy in this finance business. With Mitsubishi UFJ, we will have a new collaboration with Mitsubishi UFJ Bank. Hopefully, we'll be able to launch new products. We want to promote collaboration with other players in the payment business as well. Hopefully we will be able to illustrate and demonstrate concrete products for you eventually. Thank you very much for that. Anyone else? The gentleman in the second row, please.
Thank you. BofA Securities. Kinoshita is my name. Now, to add to the earlier question, financial domain. This expansion strategy going out into financial domain and ROIC and asset aspects that were raised earlier, what are you thinking? Can you explain? For financial, are you going to use alliance and to be off-balance-sheet? Will this continue to be your main principle? How do you intend to go out into the financial area?
Mr. Kinoshita, your question probably intends to ask how large the scale of the business is going to be. Whether you see on the surface or from the back. If there is a certain scale, and if the asset is going to be ours, at some time we have to think about off balancing at a certain stage. If can be handled within our own capabilities, I think we can do on our own. Inasmuch as we can do within our capabilities, we can do on our own. If things go very well and grow, like we did with Tokyo Century, and like we heard from them, there are various partners, and by having various partnerings, we can consider about our own risks. In the financial business, as you are aware, security cost is very expensive.
We need to take these aspects into consideration in order to have proper returns. We should think very carefully. Thank you. Thank you. Well, as time has come to end the session, we would like to conclude the Q&A session at this juncture. So that concludes NTT IR Day 2022. This has ended the program. We look forward to your continued support to NTT going forward. Thank you for your patience, and thank you for staying until the very end. Thank you very much. Thank you very much.