What are the full-year results and outlook for the Service Assurance field, and what initiatives were undertaken to achieve the second-half target of breaking even?

  Anritsu did not achieve expected results in this field for each of the four quarters of FY2006. However, efforts to secure orders from tier 1 operators are beginning to show results. In FY2007, we project a 20 percent year-on-year increase in sales, and there is significant potential for improvement in the gross margin. In addition to an expected 0.4-0.5 billion yen reduction in fixed costs, we will work to improve the gross margin, thereby achieving our target.
  By securing a large volume of business from major customers and building an earnings base that includes repeat orders, we aim to achieve an operating margin of about 10 percent in the medium to long term.

What is Anritsu's current market share in the Service Assurance field and what are its strengths?

  Service Assurance is a new business field. We foresee intensifying and changing competitive conditions with the acceleration of fixed mobile convergence (FMC) and advances in the next-generation network (NGN). NetTest A/S's share of the market in 2004, the year prior to its acquisition by Anritsu, was 25 percent. Currently, our market share stands at about 20 percent as a result of changes in the market itself as well as changes in the competitive environment caused by new market entrants.
  Anritsu has high-level database management capabilities, and can provide solutions incorporating advanced technologies that it develops ahead of the competition. In addition, our customer-friendly systems have won considerable support.

The outlook for the Test and Measurement Business in FY2007 appears to show a projected decrease in income in areas other than the Service Assurance field. Why is this?

  Profit margins vary depending on the product line. Therefore, income changes as a result of changes in the composition of sales. In FY2007, we are projecting firm growth in sales of handheld measuring instruments, which have a high profit margin. However, in our outlook for the fiscal year we have not figured in the kind of large-scale demand we experienced in the first half of FY2006. This and other factors are behind the projected decrease in income.

There is a gap between FY2007 forecasts and the Mid-Term Business Plan. How likely is it that Anritsu will achieve the Plan targets?

  We are aware of the gap between the outlook for FY2007 and the targets of the Mid-Term Business Plan. In July, we will formally comment on our outlook for achieving the Plan targets.
  We consider further improvements in profit margins to be a major issue in the Test and Measurement business, and are currently considering a recovery plan to achieve our targets.