II. eaccess and EMOBILE Business Combination & FY3/2011 Outlook Page 14

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1 eaccess Limited Results for Fiscal Year Ended 3/2010 (4/2009 ~ 3/2010) May 12 th, 2010

2 I. FY3/2010 Full Year Financial Results Page 3 II. eaccess and EMOBILE Business Combination & FY3/2011 Outlook Page 14 III. Operational lresults Page 29 IV. Appendix Page 38 2

3 I. FY3/2010 Full Year Financial Results Page 3 II. eaccess and EMOBILE Business Combination & FY3/2011 Outlook Page 14 III. Operational lresults Page 29 IV. Appendix Page 38 3

4 eaccess FY3/2010 Financial Results 4

5 FY3/2010 Consolidated Result Highlights Record-high in operating profit Turned positive net income for the first time in 3 years Significant improvement in net FCF Achieved 30% ROE 5

6 Consolidated Financial Results Achieved record-high operating profit (up 14.6% YoY) Turned positive net income for the first time in 3 years (billion yen) FY3/2008 FY3/2009 FY3/2010 Diff. (%) Revenue % 1% Operating profit % EM Accounting losses * na Recurring profit (losses) na Net income (losses) na EBITDA % Capex % Depreciation % Note 1: Including 1.52 billion yen EMOBILE one-time non-cash terminal write down, of which 0.59 billion yen is reflected in EMOBILE accounting losses. Based on EMOBILE FY3/2010 annual inventory review, this one-time cost is recognized as terminal cost which is added back to EMOBILE EBITDA. Note 2: eaccess consolidated ACCA from 9/1/2008 and fully merged with ACCA on 6/25/

7 Consolidated Cash Flow Results A sharp increase in consolidated operating & net free cash flows thanks to a 10.6% increase in EBITDA and 31.2% reduction in capex (billion yen) FY3/2008 FY3/2009 FY3/2010 Diff. (%) EBITDA % Capex % Operating FCF Interest (net of interest income) % % Tax Dividend (net of div. income) % + 0.3% NtFCF Net % 57.1% Note 1: eaccess consolidated ACCA from 9/1/2008 and fully merged with ACCA on 6/25/

8 Consolidated Balance Sheets Decline in net debt as a result of the increase in net free cash flow Leverage ratio (net debt/ebitda) improved to 1.1x as of 3/2010 3/2008 3/2009 (billion yen) 3/2010 Cash & cash deposit Debt Net debt Shareholders equity Minority interest Net assets Total assets Net debt/net assets ratio 1.9x 2.8x 2.2x Net debt/ebitda ratio 2.4x 1.5x 1.1x Note 1: eaccess consolidated ACCA from 9/1/2008 and fully merged with ACCA on 6/25/

9 EMOBILE FY3/2010 Financial Results 9

10 EMOBILE Financial Highlights Achieved 2.35 million subscribers Top-line revenue nearly doubled Turned annual positive EBITDA 10

11 EMOBILE Financial Results Top-line revenue nearly doubled YoY in FY3/2010 Turned annual positive EBITDA (3 rd year since the service launch) (billion yen) FY3/2008 FY3/2009 FY3/2010 Diff. Revenue Operating profit (losses) * Recurring profit (losses) Net income (losses) EBITDA * EBITDA margin % % 16.0% na Capex Depreciation Note 1: Due to annual inventory review, a one-time non-cash inventory write-down of 1.52 billion yen was recognized and recorded in terminal cost, which is added back to EBITDA 11

12 EMOBILE Free Cash Flow Results Increase in capex in FY3/2010 was the result of the delay in subway coverage construction in FY3/2009 Shrinking negative e operating free cash flow (billion yen) FY3/2008 FY3/2009 FY3/2010 Diff. EBITDA Capex Operating FCF Interest Tax Net FCF Note 1: Operating FCF = EBITDA Capex Note 2: Due to annual inventory review, a non-cash inventory write-down of 1.52 billion yen was recognized and recorded in terminal cost, which is added back to EBITDA 12

13 EMOBILE Balance Sheets Increase in net debt due to expected negative cash flow Maintained reasonable liquidity with a cash position of 49 billion yen as of 3/2010 (billion yen) 3/2008 3/2009 3/2010 Cash & cash deposit Debt Net debt Shareholders equity Net assets Total assets

14 I. FY3/2010 Full Year Financial Results Page 3 II. eaccess and EMOBILE Business Combination & FY3/2011 Outlook Page 14 III. Operational lresults Page 29 IV. Appendix Page 39 14

15 Summary of Business Combination eaccess issues new shares to exchange with EMOBILE shares for 100% EMOBILE consolidation from 7/1/2010 Share exchange ratio TtlN Total No. of Outstanding Share after combination 1 : 1.45 (For 1 share of EMOBILE to exchange for 1.45 eaccess shares) Total no. of eaccess outstanding shares (pro-forma) after the EMOBILE Third Party Allotment (TPA) and the share exchange is expected to be approx million Weighted average number for FY3/2011 is expected to be 3.05 million Other Major Terms EMOBILE to complete a TPA financing before the Business Combination Pay a special dividend of 1,800 yen per share to eaccess shareholders as of 6/30/2010 if the Business Combination is approved at the annual shareholders meeting Schedule (plan) eaccess general shareholders meeting: 6/24/2010 Completion of the Business Combination: 7/1/2010 Note 1: Assuming no appraisal remedies are exercised. 15

16 EMOBILE Third Party Allotment (TPA) Proposal To strengthen EMOBILE capital structure to deleverage EMOBILE Proposed Structure Pro-forma of EMOBILE Financial Impact (billion yen) Results 3/2010 Pro-forma after 45bn TPA Total amount 45 billion yen (eaccess: 17 billion yen) Cash & cash deposit Debt EMOBILE share price Schedule (plan) 110,000 yen To be completed by 6/2010 before the Business Combination Net debt Net assets s EBITDA (FY3/2011) Net debt/net assets ratio x x Net debt/ebitda ratio 4.5x 3.5x Note 1: Assuming no appraisal remedies are exercised. 16

17 A New Leader in Japan s Broadband Market To create Japan's first fixed mobile convergence broadband operator Japan s largest wholesale ADSL operator Serve over 30 major ISPs with around 2.29 million subscribers Steady free cash flow Secure approximately 68,000 km backbone trunk line Leader in Japan s mobile broadband data market Acquired over 2.35 million subscribers in 3 years High top-line revenue growth Network covers over 90% population nationwide and all major underground 17

18 Synergy from the Business Combination Expect operational and financial synergies to improve both top-line growth and cost structure FMC service Sharing distribution channels Integration of back offices Labor Re-allocation Branding Indoor: eaccess fixed-line broadband Outdoor: EMOBILE mobile data card eaccess sales team EMOBILE Sales team After service Call centre Network maintenance Administrative After service Call centre Network maintenance Administrative Subscriber growth Improve cost structure Enhance consumer Revenue growth Increase capex efficiency brand recognition 18

19 Fixed and Mobile Data Customer Base Mobile Subscribers: 2.41M ADSL subscribers: 2.29 M AOL subscribers: 0. 13M FY3/2011 Combined Estimates Revenue: approx. 190 billion yen EBITDA: approx. 60 billion yen Total: over 5 million subscribers Note 1: Based on the latest results and company estimate. Note 2: Assuming that eaccess and EMOBILE business combination becomes effective from 7/1/

20 FY3/2011 Financial Forecasts Pro-Forma After The Business Combination 20

21 FY3/2011 Financial Forecasts Highlights Adopt reverse acquisition accounting from 2Q FY3/2011 Reflect EMOBILE s growth in financials Increase in both top-line revenue & EBITDA 21

22 Accounting Consolidation Method Apply reverse acquisition accounting based on accounting rules from 2Q FY3/2011 Share-exchange exchange (consolidation) Date 1Q 7/1 2Q 3Q 4Q 3/2010 6/2010 9/ /2010 Consolidated eaccess 1Q+ EMOBILE * eaccess owns 38.3% 3% of EMOBILE shares on a voting-right basis 1Q Equity method until the completion of the Business Combination 3/2011 Annual Forecast 2Q 3Q 4Q EMOBILE 1Q~2Q + eaccess 2Q EMOBILE 1Q~3Q + eaccess 2Q~3Q EMOBILE 1Q~4Q + eaccess 2Q~4Q Stand-alone Annual Forecast 1Q 2Q 3Q 4Q eaccess 1Q eaccess 1Q ~ 2Q eaccess 1Q ~ 3Q eaccess 1Q ~ 4Q 22

23 Consolidated Financial Forecast for FY3/2011 Under new accounting treatment, consolidated forecasts include 9-month (7/2010-3/2011) eaccess & 12-month EMOBILE figures (billion yen) eaccess 9 months EMOBILE + + Elimination 12 months + Goodwill Amortization = Consolidated Revenue Operating profit Recurring profit Net income EBITDA Capex Depreciation Note 1: Assuming that eaccess and EMOBILE business combination becomes effective from 7/1/2010. Note 2: Amortization period for goodwill is assumed over 10 years. Note 3: Goodwill will not be amortized after the change in accounting rules in Japan currently expected to be around 3/

24 Consolidated Cash Flow Forecast for FY3/2011 Consolidated cash flow forecast include 9-month (7/2010 3/2011) eaccess & 12-month EMOBILE figures (billion yen) eaccess 9 months EMOBILE + 12 months + Elimination = Consolidated EBITDA Capex Operating FCF Interest (net of interest income) Tax Dividend (net of div. income) Net FCF Note 1: Assuming eaccess and EMOBILE business combination becomes effective from 7/1/2010. Note 2: Based on the latest dividend forecast. 24

25 Pro-forma of FY3/2010 Consolidated Balance Sheet Balance Sheet consolidation to start from 7/2010. Expect goodwill to be around 10 billion yen. (billion yen) eaccess stand-alonealone 3/2010 EMOBILE 3/2010 EMOBILE 45 billion TPA eaccess Investment in *5 EMOBILE Goodwill *2 *3 *4 = Pro-forma of Consolidated 3/2010 Cash & cash deposit Dbt Debt Net debt Shareholders h equity Net assets Ttl Total assets Note 1: Assuming that eaccess and EMOBILE business combination become effective from 7/1/2010. Note 2: Goodwill amount may change based on the eaccess share price at 6/30/2010. Note 3: Amortization i period for goodwill is assumed over 10 years. Note 4: Goodwill may not be amortized after the change in accounting rules in Japan currently expected to be around 3/2012. Note 5: eaccess investment in EMOBILE includes 50 billion yen invested in 2006, and 17 billion yen planned to be invested in 6/

26 Consolidated Revenue Trend Expect top-line revenue to increase to over 2.3X in FY3/2011 compared with FY3/2010 eaccess standalone consolidated revenue (billion yen) over 2.3X Revenue FY3/2008 FY3/2009 FY3/2010 FY3/2011(E) Note 1: Assuming eaccess and EMOBILE business combination becomes effective from 7/1/

27 Consolidated Profit Trends Expect EBITDA to increase to over 2.3X and net income to increase to over 2X in FY3/2011 thanks to the Business Combination (billion yen) ( EBITDA 単位 : 億円 ) & Operating Profit EBITDA EBITDA: 2.3X Operating Profit Operating Profit: over 30% (billion yen) Recurring & Net Profit (losses) Recurring profit (losses) X Net income over 2X Net income (losses) FY3/2008 FY3/2009 FY3/2010 FY3/2011(E) FY3/2008 FY3/2009 FY3/2010 FY3/2011(E) Note 1: Assuming eaccess and EMOBILE business combination becomes effective from 7/1/

28 Shareholders Returns Dividend policy Preserve cash for high growth Reduce leverage to enhance equity value (Dividend per share, yen) (Dividend payout ratio eaccess parent basis) 3, % 2,500 2,000 2,300 yen 2,300 yen 2,400 yen 2,400 yen 53.8% 1, % 39.3% 1, % 35.1% yen 1, Dividend Yield 0 00% 0.0% 600 yen 3/2008 3/2009 3/2010 3/2011(E) 3.75% *1 3.62% *1 3.52% *1 3.38% *2 Note 1 Based on the March end stock price of each fiscal year. Note 2: Based on the share price of May 11, 2010 of 71,100 yen. Note 3 Based on the financial forecasts announced on May 12, % Special dividend of 1,800 yen per share to shareholders as of 6/30/ % Normal quarterly dividend of 200 yen per share starting from 2Q FY3/

29 I. FY3/2010 Full Year Financial Results Page 3 II. eaccess and EMOBILE Business Combination & FY3/2011 Outlook Page 14 III. Operational lresults Page 29 IV. Appendix Page 38 29

30 Operational Forecasts for FY3/2011 Expect to achieve combined sub base of 5 million Aim to maintain i ARPU & churn rates Continue to explore potentials for FMC service 30

31 Group Subscriber Base (ADSL & EMOBILE combined ) Constantly increasing broadband subscriber base Aiming to achieve over 5 million combined subscriber base by 3/2011 (Thousand subscribers) 6,000 Total EMOBILE over 5 million 5,000 eaccess ADS L 4,637 4,000 EMOBILE service launch 3,968 3,000 1,928 2,337 1,410 2,352 3,200 2, ,000 1,918 1,925 2,558 2,285 1, /2007 3/2008 3/2009 3/2010 3/2011(E) Note 1: Source ( TCA and company data) 31

32 eaccess Group Key Operational Parameters Expect ADSL ARPU & churn to maintain at similar levels Plan to enhance EMOBILE ARPU by introducing more value-added added options FY3/2008 Results Consolidated ADSL Index FY3/2009 FY3/2010 Forecast FY3/2011 Subscriber # 1,843,000 2,557,000 2,285,000 approx. 1,900,000 ADSL ARPU (yen) 2,058 2,011 2,011 2,015 approx. 1, % approx. 1.89% churn rate 1.88% % 11,000 approx. 8,000 SAC (yen) 12,000 11,000 9,000 Subscriber # 411,500 1,410,200 2,351,800 approx. 3,200,000 EMOBILE ARPU (yen) churn rate 4, % 3, % 3,340 approx. 3, % approx.1.40% SAC (yen) (y ) -- 30,000 25,000 25,000-30,000 Note 1: ACCA was consolidated from 9/1/2008. Subscribers, ARPU and churn rate include ACCA consumer and corporate subscribers from 9/1/2008. Note 2: SAC stands for per subscriber acquisition cost. 32

33 EMOBILE Area Coverage Coverage of subway stations is nearly in completion. Focus on capacity strengthen and speed upgrade in FY3/2011 Shinetu 3/2010 Outdoor 82.4% Hokkaido 3/2010 Outdoor 86.0% Subway 95.7% Okinawa 3/2010 Outdoor 91.7% Hk Hokuriku 3/2010 Outdoor 85.0% Chugoku 3/2010 Outdoor 76.8% Subway 100.0% Kyusyu 3/2010 Outdoor 86.2% Subway 85.3% Nationwide 3/2010 Outdoor 91.0% Subway 97.1% Tohoku 3/2010 Outdoor 78.8% Subway 100.0% Kanto 3/2010 Outdoor 98.6% Subway 97.3% Tokai 3/2010 Outdoor 94.0% Subway 100.0% Kinki 3/2010 Outdoor 95.4% Subway 97.3% Shikoku k 3/2010 Outdoor 71.7% 33

34 Growth of Mobile Broadband Market Expect migration as well as new subscribers from market expansion Netbook/Laptop Portable/Personal Devices (Game console, Digital music player, etc) Digital Devices/ (Tablet PC, ereader, Digital Photo Frame, etc.) M2M (Car Navigation, Digital Signage, etc.) ~ 34

35 Business Opportunities with Pocket Wifi Notebook/Netbook/Data Card Portable devices Wider Product Bundling Mid 30s-40s businessmen Wider Customer Base 20s-30s, female, gamers etc PC/Mobile Corners Wider Sales Channels AV/Game Corners 35

36 Mobile Technology Roadmap Competitive mobile broadband speed up roadmap Downlink speed Over 100Mbps Launch in Fall Mbps LTE Launched in July Mbps DC-HSPA+ (64QAM+MIMO) 21Mbps DC-HSPA 7.2Mbps HSPA+ 3.6Mbps HSPA

37 Fixed-line Mobile Convergence (FMC) Strategy ~ Indoor Price Competition Indoor Affordable fixed-line Broadband services FMC Fixed-line & Mobile bundling Broadband Services Indoor Indoor ADSL Only Technology Development High-speed Mobile Services Outdoor Moving Outdoor Moving 37

38 I. FY3/2010 Full Year Financial Results Page 3 II. eaccess and EMOBILE Business Combination & FY3/2011 Outlook Page 14 III. Operational lresults Page 29 IV. Appendix Page 39 38

39 FY3/2010 Full-year Results (Segment Info.) FY3/2010 (4/2009-3/2010) (billion yen) Network Business *1 Device Business EMOBILE etc. Consolidated Revenue Operating Profit Recurring Profit Net Income EBITDA CAPEX 3.96 Depreciation Note 1 : Network business : ADSL Business, Retail Business, Backbone Business and MVNO Business. Note 2 : eaccess consolidated ACCA from 9/1/2008 and fully merged with ACCA on 6/25/

40 Disclaimer This presentation has been prepared by eaccess Ltd. ( the Company ). This presentation contains forward-looking statements, which are subject to risks, uncertainties, and assumptions. This presentation is being presented solely for your information i and is subject to change without ih notice. No representation or warranty, expressed or implied, is made and no reliance should be placed on the accuracy, actuality, fairness, or completeness of the information presented. The Company accept no liability whatsoever for any losses arising from any information contained in the presentation. This presentation does not constitute an offer or invitation to purchase or subscribe for any shares of the Company, and no part of this presentation shall hll form the basis of or be relied upon in connection with any contract or commitment. 40