1. Smart Cloud Strategy in Japan November 2010 Yasu TANIWAKI Division Director, ICT Strategy Division Ministry of Internal Affairs and Communications JAPAN

2. Deployment of Broadband Infrastructure Broadband Super Hi-speed Broadband 90 ％ Government goal FY2010 March E 2008 Status of Broadband Deployment (household coverage estimate within service area) 95.2 ％ (486.3M hhlds) 83.5 ％ (426.8M hhlds) March E 2007 98.3 ％ (508.3M hhlds) 86.5 ％ (447.1M hhlds) 98.8 ％ (522.5M hhlds) 90.1 ％ (476.5M hhlds) March E 2009 Source: Survey by MIC No areas with zero broadband Optical fiber (FTTH) ○Subs: 1,779 ○Operators: 192 Optical fiber (FTTH) ○Subs: 1,779 ○Operators: 192 Wireless (FWA, BWA) ○ Subs: 16.5 ○ Operators: 48 Wireless (FWA, BWA) ○ Subs: 16.5 ○ Operators: 48 Cable Internet ○Subs: 435 ○Operators: 379 Cable Internet ○Subs: 435 ○Operators: 379 DSL ○Subs: 974 ○Operators: 42 DSL ○Subs: 974 ○Operators: 42 Trend of broadband subscriptions (as of end March 2010; unit: 10,000 subs) Total 320.4M subs Source: Quarterly data of subscriptions and share of telecom services published by MIC Expected to be achieved by end FY 2010 Goal achieved 99.1 ％ (523.9M hhlds) 91.6 ％ (484.5M hhlds) March E 2010 1

3. IMT-2000 97.5 % Number of mobile phone subscribers April 2010 Number of subscribers -Mobile phones: Approx. 112,714,800 units -IMT-2000: Approx. 109,914,800 units ～ TCA investigation ～ Changes in the number of mobile phone subscribers (million) (FY) 2001 Start of IMT-2000 service 1996 1998 2000 2002 2004 2010.4 2006 2008 2

4. Infrastructure coverage moving ahead while service lags behind Utilization No. 16 Utilization No. 16 3. Government use: No. 18 (3) Excellence of public services: No. 10 (4) Contribution to efficiency within the administration: No. 23 2. Corporate use: No. 8 1. Personal use: No. 9 (2) Corporate use of internet: No. 8 (1) Personal use of internet: No. 9 Infrastructure (coverage) No. 8 Infrastructure (coverage) No. 8 5. Mobile environment coverage: No. 11 4. Fixed network coverage: No. 7 (9) Mobile broadband penetration: No. 1 (8) Mobile phone penetration: No. 21 (5) Household Internet coverage: No. 5 (6) Fixed broadband coverage: No. 13 (10) Mobile phone fees: No. 21 (7) Fixed broadband fees: No. 6 Infrastructure (upgrading) No. 1 Infrastructure (upgrading) No. 1 8. Accommodation level: No. 1 (15) No. of Internet hosts: No. 11 (16) Ratio of optical fiber: No. 1 7. Stability: No. 4 6. Technology up to date: No. 1 (13) Fixed broadband quality: No. 2 (14) No. of safe servers: No. 14 (11) Highest speed of fixed broadband: No. 1 (12) Ratio of 3G UEs: No. 1 source: MIC “White Paper on Telecommunications, 2010” (2010) ICT Progress Level No. 2 ICT Progress Level No. 2 No. 1: Korea No. 2: Japan No. 3: Denmark No. 4: Sweden No. 5: USA No. 6: Netherlands No. 7: Singapore No. 8: Switzerland No. 9: Finland No. 10: Australia No. 11: Austria No. 12: UK No. 13: Canada No. 14: Germany No. 15: Portugal No. 16: New Zealand No. 17: France No. 18: Belgium No. 19: Spain No. 20: Italy No. 21: Russia No. 22: Brazil No. 23: China No. 24: South Africa No. 25: India No. 1: Korea No. 2: Japan No. 3: Denmark No. 4: Sweden No. 5: USA No. 6: Netherlands No. 7: Singapore No. 8: Switzerland No. 9: Finland No. 10: Australia No. 11: Austria No. 12: UK No. 13: Canada No. 14: Germany No. 15: Portugal No. 16: New Zealand No. 17: France No. 18: Belgium No. 19: Spain No. 20: Italy No. 21: Russia No. 22: Brazil No. 23: China No. 24: South Africa No. 25: India 3

5. Smart Cloud Strategy Making the computer resources users require available as services “when they need them, and in just the right amount” Cloud services (Services that use cloud computing technology) Cloud services (Services that use cloud computing technology) ■ Lagging behind in utilization of ICT in government; medical care; education; agricultural, forestry, and fisheries; etc. ■ Need for full utilization of ICT through diffusion of cloud services ■ Lagging behind in utilization of ICT in government; medical care; education; agricultural, forestry, and fisheries; etc. ■ Need for full utilization of ICT through diffusion of cloud services Delay in utilization of ICT ■ Even when viewed internationally, Japan has the world’s best network (broadband) for use of cloud services. The world’s most advanced network environment Realizing full utilization of ICT through development and diffusion of next-generation cloud services (smart cloud services) that can reach beyond corporate and industrial frameworks to share vast volumes of information and knowledge among all social systems Smart cloud services Utilization Strategy Technology Strategy International Strategy 4

6. Utilization Strategy ■ Promotion of ICT Utilization (examples) ✔ Medical care cloud ✔ Education cloud ✔ Agriculture cloud ■ Advancing social infrastructure (examples) ✔ Smart grid ✔ Green ITS (Intelligent Transportation System) ✔ Management of roads & bridges through IPv6 based sensor networks ■ Vitalization of SMEs & venture companies (examples) ✔ Cross-regional cooperation between SMEs ✔ Improvement of Supply Chain Management through cloud services 5

7. Technology Strategy ■ R&D ✔ Technology for collection, extraction, accumulation and modeling of a vast majority of real-time streaming data and its optimization at times when conditions change ✔ Technology that enhances security and reliability ✔ Technology that promotes “Green ICT” --- Green by ICT : Green cloud data centers --- Green of ICT ■ Standardization ✔ User-centric approach is required. ”Elimination of excessive lock-in” vs “Ensuring service & technology innovation” ✔ Focus should be put on: --- SLA --- Security level --- Interoperability for hybrid cloud services 6

8. International Strategy ■ With the widespread use of cloud services, case storing and processing of data overseas may increase. ■ Issues to be discussed at international fora （ examples ） ✔ Jurisdiction over databases stored in other countries (eg. privacy protection act) ✔ Dispute settlement mechanism ✔ Countermeasures against “harmful” information ✔ Possibility of government intervention with respect to private-sector data ✔ Ownership of IPRs regarding data stored on a cloud data center in other countries ■ Towards consensus building ✔ Cooperation between public and private sectors ✔ ITU, OECD, APEC, and other international fora ✔ Bilateral consultations 7