Both companies to focus on Software as a Service and the creation of an ecosystem to encourage new SaaS application development.

TOKYO — June 27, 2007 — KDDI Corporation and Microsoft Co., Ltd. today announced that they have reached an agreement to jointly develop and provide applications using a Software as a Service (SaaS) delivery model for corporate users. The companies will also create an ecosystem to provide extensive support to independent software vendor (ISV) partners and spur the development of new service-enabled applications to drive momentum for new SaaS applications. The companies will embark on joint marketing activities to cultivate the adoption of SaaS among ISVs in Japan. They will also jointly educate the corporate market on the benefits of the SaaS model.

Under the agreement, KDDI will use Microsoft® Connected Services Framework as a foundation for providing services to customers. The first SaaS application will be built on Microsoft Solution for Hosted Messaging and Collaboration, a carrier-grade platform that offers enterprise-class e-mail and document-sharing services to corporate customers. Subscription is a monthly fee-based model, covering mobile and fixed-line communications and the SaaS application. The service will create a seamless work environment by allowing corporate customers to access their data on a PC in the office or on a mobile phone when they are on the go. This initiative is a demonstration of a service-delivered solution that combines services, software and hardware to provide a seamless user experience.

A support program will be available to software vendors and corporate solution partners to ensure that they have access to resources to enable them to collaborate as well as to develop and market their SaaS applications.

About KDDI Corporation

KDDI is a diversified telecommunication operator formed by the merger of DDI, KDD and IDO in 2000, and is the only domestic company that provides both mobile communication service and broadband service. The number of subscribers to the mobile phone services under the au and TU-KA brands is over 27 million.*

The KDDI group companies have turnover of 3,335 billion yen.

At KDDI, aggressive improvement of communications environment in preparation for the coming ubiquitous network society is underway and KDDI is aiming to become a “ubiquitous solution company” which provides high value-added solutions.