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FY2004 Financial Results Q&A Summary

[Test and Measurement Business Q&A]
  Q1: Does Anritsu project that growth will be faster overseas than in Japan in the test and measurement business during fiscal 2005, particularly in Europe?
  A1: Yes. We plan on growth overseas. Mark Evans of the United States will head the Measurement Business Group. We expect growth in Europe for signaling testers for third-generation (3G) development and protocol test systems (PTS). We are working to strengthen our global responsiveness in ways such as integrating the Mobile Business Unit of European Measurement Division with the Wireless Measurement Division in Japan. Moreover, sales of measuring instruments for 3G infrastructure development and IP testers should continue to expand in Europe.
  Q2: How is Anritsu approaching large handset manufacturers who has close relationships with Cingular, which will be the first to put 3G and 3.5G into service in the United States?
  A2: We have solid relationships in 3G handset development with handset manufacturers, including 3.5 generation (HSPDA*1). Also, our production testers for 3G handsets are currently being evaluated for possible use by them.
  Q3: What is the status of 3G licenses in China?
  A3: We anticipate that 3G licenses will be issued by the end of 2005, but that is still not clear. Anritsu is strengthening its relationship with the China Academy of Telecommunication Research (CATR), a certification body to which we have delivered a conformance test system.
  Q4: Why will operating income growth be lower than sales growth for test and measurement equipment?
  A4: Downward pressure on prices is strong in the mobile handset manufacturing market, particularly in Asia, and we have incorporated the risk of lower prices in our projections.
  Q5: Will WiMAX*2 and wireless LAN, which rival 3G, present serious business opportunities?
  A5: Wireless IP telephony has the same potential for expansion as 3G. We see large business opportunities in areas such as integrating digital broadcasting and mobile and the expansion of IP networks.
[Businesses Other than Test and Measurement Q&A]
  Q6: Will the goal of 10 billion Yen in sales in the Information and Communications business be challenging?
  A6: We will improve the earnings capabilities of this business by moving forward with personnel and organizational reforms. We created a specialized sales department in April 2005 for PureFlow, our new Internet bandwidth controller. In the video monitoring systems business, we are increasing private-sector sales through means including the formation of alliances with large corporations. While we project an operating loss of 500 million Yen for fiscal 2005, we will do our best to break even in this business.
[Financial Position Q&A]
  Q7: Why does Anritsu project lower taxes for fiscal 2005?
  A7: We will begin making consolidated tax payments in fiscal 2005 in Japan, and we project tax payments will decrease because we will use benefit from operating loss carryforward from fiscal 2002, a year in which we recorded a significant loss.
  Q8: What is the status of revisions to the medium-term management plan?
  A8: Every fiscal year we prepare a rolling three-year medium-term plan that includes the current fiscal year. We are currently at the final stage of that process. Senior management changes are scheduled to take place at the general meeting of shareholders in June. We intend to announce the plan from the new management team during the presentation of first-quarter results in July.

*1

High-Speed Download Packet Access (HSDPA): this standard for high-speed data communication is more than 10 times faster than 3G.

 

*2

World Interoperability for Microwave Access (WiMAX): the standard for fixed wireless communication recognized by the IEEE.

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