【正文】 h。 Analyst reports。 industry interviews Before After CT breakup MOST RECENT BREAKUP OF CHINA TELECOM TO LEAD TO A LANDSCAPE OF 5 OPERATORS COMPETING ACROSS BOTH MOBILE AND FIXED Licenses Licenses ? Announcement on November 26 to merge Jitong with China Net and China Tele Northern unit ? Competition will increase as merged tele giants obtain licenses for prehensive tele operations, including – Fixedline phone – Mobile phone – Interrelated services ? Original plan to merge China Mobile with Jitong and China Uni with China Rail, met with strong dissent from the capital markets who saw this as an affront to China Mobile and China Uni’s governance as publicly held panies ? Mobile ? Mobile ? Fixed ? Mobile (GSMR) ? Fixed ? Fixed ? Fixed ? Fixed GROUP China Tele North China Tele South ? Mobile ? Fixed ? Mobile ? Fixed ? Mobile ? Fixed ? Mobile ? Fixed China Rail China Rail ? Mobile ? Fixed Have license 02 PD China Mobile Teles Service Industry 16 PROFILES OF CURRENT AND LIKELY FUTURE PLAYERS China assets Mobile strategy Current partnerships License prospects* Still to be decided ?~96 million mobile subscribers ?~30 million mobile subscribers ?Services covering over 180 cities ?Largest national tele work covering 2,000 cities ?First operator to introduce inter access cards, and announced online shopping card to be launched in 2022 ?Inter backbone covering 17 major cities ?Started IP phone services in January 2022 ?2nd largest work in China。 McKinsey analysis Century Mobile Jitong Foreign JV Entrants New telcos Who they are Basis for entry Obstacles ? Consortium of 10 enterprises who have joined together to try to set up mobile enterprise ? Set up in 1994 to develop data munication services ? Potential JVs involving foreign panies ? New players expanding into tele ? Some government contacts ? Originally considered takeover of Great Wall’s assets ? Owns 70% of VoIP market ? Government has indicated desire to see multiple operations with multiple service offerings ? Government may be pressured to show market progress and WTO benefits ? Foreign operators and entities eager to invest ? Desire to enter wireless given opportunities and convergence of technologies ? Great Wall assets moved to China Uni ? No current discussion regarding mobile services observed ? Low capability to utilize mobile spectrum if allocated ? WTO agreements do not require that new tele licenses be issued to new entrants ? Nationwide presence of foreign investment not possible for initial 3 years under WTO ? MII will likely limit the influence of other ministries on their turf (., blocking SARFT entry into Inter) 02 PD China Mobile Teles Service Industry 18 EXISTING AND POTENTIAL MOBILE OPERATORS HOLD BROAD BUT DIFFERENT COMPETITIVE POSITIONINGS AND SERVICE OFFERINGS Basic services China Mobile China Uni China Tele China Net ? Mobile voice service ? Mobile data service ? IP ? Multimedia service ? ? ? ? ? ? ? Mobile voice service ? Mobile data service ? IP ? Multimedia service ? Local call ? DLD ? IDD ? Paging ? ? ? ? ? IP ? Multimedia service ? Local call ? DLD ? IDD ? ? Web hosting ? Network element lease and sale ? ? ? IP ? ? ? ? IDD ? ? Web hosting ? Lease and sale of bandwidth Valueadded services ? Fax ?Voice mail ? Caller ID ? Call waiting ? SMS ? VPN/VPDN ? IDC ? ? ? ? ? Fax ? Voice mail ? Caller ID ? Call waiting ? SMS ? VPN ? ? ? ? ? ? Fax ? Voice VAS ? Caller ID ? ? ? VPN ? IDC ? ISDN/DDN ? EDI ? ISP ? Email ? ? ? ? ? ? ? ? Data munication ? Public multimedia services Source: MII。D technical expertise, standard and protocol development etc. ? Wireless data Ramp。s rapidly expanding work and higherquality CDMA connection will increase CMHK39。S DESPITE A LARGER PROPORTION OF PREPAID CUSTOMERS Blended ARPU US$/month CMHK China Uni (listed) 2022 2022 CAGR Percent 5 Prepaid vs. postpaid ARPU parison USD/month CAGR Percent 5 2 7 . 11 2 . 37 . 71 0 . 62022 2022 0 CMHK China Uni (listed) 1 4 Prepaid subscribers as percentage of total subscribers Percent CAGR Percent 19* 2022 2022 CMHK 。 Company annual report 02 PD China Mobile Teles Service Industry 25 Comments ? Decreasing trend due to –Increased petition and lower tariffs –Increased mix of lowvalue prepaid users –Deepening peration which increases lowvalue usership ? China Mobile39。T owns 25% of Shanghai Symphony Telemunications ? MOU in fixed line, mobile phone and fastdata transmission areas for client panies ? MOU signed in 1998 to cooperate in technology and business opportunities ? Joint venture providing endtoend data munication service for MNCs set up in 1999 ? Partners bought 12% of China Net for $324 million in private placement ? Strategic alliance to provide safe, efficient data transmission for Singapore panies with subsidiaries, partners in China ? Service agreement to codevelop VPN offerings Operator* 02 PD China Mobile Teles Service Industry 21 IN MOBILE TELECOM SERVICE MARKET, CHINA MOBILE WILL LIKELY REMAIN THE DOMINANT OPERATOR IN BOTH REVENUE… 100%= 1998 1999 2022 2022E 2022E 2022E China Uni China Mobile 66707579828894971218212224242022E 2022E 3 6 3 7 10 Other