Tokyo and Moscow, July 12th, 2005 -- NEC Corporation today announced that it has established a sales & marketing subsidiary in Russia, Closed Joint Stock Company NEC Infocommunications (hereafter "NEC Infocom"), which has commenced operations this month.

Investment in information and communication technologies ("ICT") in Russia was effectively frozen when the Russian financial crisis struck in 1998. However, investment resumed slowly from about 2000, and now the formerly primitive ICT infrastructure standards of Russia are rapidly advancing. Russia has now also entered a period of explosive growth in mobile phone use, marking the advent of an enormous, unexploited mobile phone market. This, combined with progress in the switchover to broadband over backbone among major cities and access networks, is also driving enterprise ICT investment.

Until recently, NEC has managed its Russian business out of three management bases: the Moscow Representative(liaison) Office, the Radio Technical Center (a technical support center engaged in engineering, maintenance and technical support etc. in the field of wireless equipment, mainly Pasolink, and Closed Joint Stock Company NEC Neva Communications Systems (a joint venture company engaged in the manufacture and sale of public switching systems; investment ratio: NEC 45%,Telecominvest Production 35%, Sumitomo Corporation 10%, Mitsui & Co., Ltd., 10%; hereafter "NEC Neva").

In anticipation of full-fledged growth of the Russian ICT market, NEC decided to merge its Moscow Representative Office with the Radio Technical Center to establish NEC Infocom in Moscow, a new company that will operate in collaboration with NEC Neva. NEC Infocom functions as a core for NEC's local solutions offerings and will fully utilize NEC's presence and know-how in the Russian telecommunications market, supplying public switching systems, optical transmission systems, backbone microwaves, and Pasolink ,etc. It also boasts strong relations, accumulated over its long business history in Russia, with Russian telecom operators.

NEC Infocom has strong capabilities in both sales and system engineering ("SE"), enabling it to provide customer with ideal solutions. In contrast, NEC Neva, which manufactures public switching systems, will further reinforce its non-hardware business in areas such as maintenance, technical support, and systems integration ("SI") in order to switchover to being a total professional engineering company.

As the mobile market expands, NEC Infocom will aim at full-fledged participation in 3G mobile infrastructure projects, scheduled for commercialization in 2006, in cooperation with NEC Neva. Based on its success last year in offering mobile value-added service solutions for Mobile TeleSystems , such as Ringback Melody (RBM) system and i-mode platform, NEC Infocom , together with NEC Neva will strengthen its capabilities and reinforce local structures corresponding to a wide range of business, not only on the hardware basis but also non-hardware, such as network planning, optimization, software, maintenance/technical support, etc. NEC Infocom becomes a provider of the latest mobile solutions by coordinating with the total professional engineering services offered by NEC Neva.

Mr. Mikhail Zaskalet has been appointed as General Director of the new company. Mr. Zaskalet has earned a reputation for achieving outstanding results during his years of experience in highly strategic management, and also boasts many important connections in the Russian telecommunications field.

In the future, NEC plans to expand its presence in Russia by positioning itself as a full-fledged participant in this large mobile handset market, as well in the fields of broadcasting, IT Solutions, and enterprise networks. In the process of revealing its total integrated IT/network solutions capabilities, NEC will contribute to the development and creation of a ubiquitous networked society in Russia, maintaining closer-than-ever contact with all of its customers.

About NEC's Business Development in Russia
NEC has been involved in business in Russia for over 30 years, and has contributed to the deployment of most of its telecommunications infrastructure such as public switching systems, over 30,000 km of optical transmission systems, and over 9,000 km of microwave systems including Trans-Siberian-Line networks, Satellite communication systems, and enterprise communication systems. In particular, NEC has supplied over 12,000 sets of its microwave system, Pasolink, as part of a Mobile Infrastructure System to Russian Mobile Operators, contributing to the enhancement of mobile services. It has also pursued technology transfer to local joint venture partners. NEC Neva Communications System, a public switching system manufacturing facility, was the first high-tech alliance between a Japanese and Russian company. NEC has also transferred optical transmission technology to EZAN, Experimental Factory of Russian Science Academy.

About NEC's Global Mobile Business
NEC is a total solution provider for 3G and mobile Internet. It has been involved in every first-stage rollout of 3G systems worldwide. It is also responsible for developing the first 3G handsets for the world's first 3G networks. NEC has competence in the mobile Internet field with its mobile infrastructure system, mobile application platform and its impressive portfolio of contents. Its mobile handsets are known for their prominent technologies including large color screens, built-in cameras and other functions that make them ideal for use in the mobile Internet. In global 3G/mobile multimedia, NEC aims to take strong initiative to create and obtain a leading position in the market.

Outline and Description of the Business of the New Firm

1. Name: (English) Closed Joint Stock Company NEC Infocommunications

2. Date of Establishment: June 9, 2005 (start of operation: July, 1)

3. Place of Business Operation: Moscow, Russian Republic

4. Capital and Investor and Investment Composition:

(1) Capital: 14 million rubles (53 million yen)
(2) Investor and Investment Composition: NEC 90%, NEC Europe10%

5. Description of Business:

(1) Sales, engineering, installation, and maintenance of fixed and movable communications systems, etc.
(2) Sales, engineering, installation and maintenance of other communications- and IT- related systems
(3) Mobile handset sales support

6. Employees: 50 at the time of establishment

Media Contact:
Akiko Shikimori,
NEC Corporation
Tel: +81337986511
a-shikimori@ay.jp.nec.com