【正文】 ? Guangdong? Guangxi**? Hainan? Hebei**? Henan? Jiangsu? Liaoning**? Shandong**? Shanghai**? Tianjin**? ZhejiangUni (HK) Provinces? Anhui? Beijing? Fujian? Guangdong? Hebei? Hubei? Jiangsu? Liaoning? Shandong? Shanghai? Tianjin? Zhejiang4128Listedpany24CHURN IS ALREADY SIGNIFICANT WITH BOTH OPERATORS AND WILL CONTINUE TO INCREASE DRIVEN BY INCREASING COMPETITION WITH IMPACT GREATEST ON CHINA MOBILEPercentChinaMobileHKChinaUniComments? ChinaMobile39。sbroaderworkcoverageleadsinitiallytofarlowerchurnratethanforChinaUni? ChinaUni39。srapidlyexpandingworkandhigherqualityCDMAconnectionwillincreaseCMHK39。schurngoingforward? Intensifyingpetitioncausesbothsetsofchurnratestorise? Asworksbeesimilar,customersappreciatelowerChinaUnipriceSource:Analystreport。Companyannualreport 25Comments? Decreasingtrenddueto– Increasedpetitionandlowertariffs– Increasedmixoflowvalueprepaidusers– Deepeningperationwhichincreaseslowvalueusership? ChinaMobile39。sARPUhigherdueto– HigherpricesthanChinaUni– GreaterconcentrationofhighendusersbecauseofbreadthofcoverageandmarketpresenceCHINA MOBILE ENJOYS GREATER ARPU, ALTHOUGH LISTED COMPANIES FOR BOTH OPERATORS GENERATE GREATER ARPU THAN UNLISTEDCMHKUni(listed)CM(unlisted)Uni(unlisted)US$/monthSource:DeutscheBank。McKinseyanalysis26*100%=millionsubscribersin2022andmillionin2022**100%=millionsubscribersin2022andmillionin2022Source:GoldmanSachs。ManStanley。Teamanalysis6CHINA MOBILE39。S ARPU EXCEEDS CHINA UNICOM39。S DESPITE A LARGER PROPORTION OF PREPAID CUSTOMERSBlended ARPUUS$/monthCMHKChinaUni(listed)2022 2022CAGRPercent5Prepaid vs. postpaid ARPU parisonUSD/monthCAGRPercent52022 20220CMHKChinaUni(listed)14Prepaid subscribers as percentage of total subscribersPercentCAGRPercent19*2022 2022CMHKChinaUni(listed)43**WA? ChinaMobile’sARPUexceedsChinaUni39。sdespitealargerproportionofprepaidcustomersduetoafarhigherpostpaidARPU? ChinaMobile39。shigherpostpaidARPUisduetoitshighendcustomerbaseandsuperiormarketingaswellasChinaUni39。slowertariffschargedPrepaidPostpaidBlended27Share priceHK$SHARE PRICES FOR BOTH OPERATORS HAVE DETERIORATED IN 2022 PRIMARILY DUE TO PRICING PRESSURESCMHK China UniChinaMobileannouncesnewlowertariffpackagesSharepricetookahitonfearsthattariffcutsandspendingonanewCDMAworkwilleatintoearningsMIIannouncescancellationofregistrationfeeMarket capitalizationUS$billions Source:HongKongstockexchange。DataStream28NONETHELESS, BOTH OPERATORS STILL ENJOY HEALTHY EBITDA AND RETURN ON ASSETS, DRIVEN BY LOWER COST BASES, ESPECIALLY COMPARED TO CHINA TELECOMUS$Billions,2022Player*** RevenuePercent of revenue Percent of revenue CMHKChinaUni(listed)ChinaTeleEBITDAN/ANet profitROAPercentN/A*TotalChinaMobilerevenuebillion**TotalChinaUni(Listed+unlisted)mobilerevenueisUS$billion。listedportioncontributesbillion(balancepagingandfixedline)***NetandRailfinancialsN/ASource:JPMan 29KEY MESSAGES3. Wireless data services are expected to grow quickly in China to a market of potentially over US$4 billion by 2022, used by 43% of all mobile users. Interest from consumer surveys have been high and operators and other players are actively building services in the market. While early WAP services have failed to catch on, SMS has grown exponentially with up to 20 billion SMS messages estimated for 2022. The early adopters will be mobile professionals and modern youth, who will require services and devices tailored to their needs. 30RESULTS OF A CHINESE WIRELESS SURVEY (2022) INDICATED STRONG INTEREST IN MOBILE DATA SERVICES*InterusernumberissignificantlyhigherthanIntersubscriptionnumber,becauseofthesharingInteraccessamongusersSource:Mobileusersurvey,2022VeryinterestedInterestedNotinterestedNeutralVerydisinterestedKey sample characteristics? Interviewof100randomlychosenrespondentsinShanghai,BeijingandGuangzhou,representingagoodcrosssectionofdifferenttypesofmobileusers– 68%ofrespondentsexpressinterestinreceivingdataservices– 20%ofrespondentsarefixedlineinterusers*– MedianInterusageof30hours/month– MedianmobilebillofRMB300/month31CONSUMERS HAVE GREATEST INTEREST IN EMAIL AND MOBILE VASSource:Mobileusersurvey,2022InterestedNeutralNotinterestedEmail InterbrowsingNews/sports/EntertainmentStockquotesCitymapFlight/trainscheduleandreservationYellowpagesPercentageofrespondentsInterest in content delivered over mobile? Forcontent,Chineseconsumersshowgreatestinterestin,flight/trainschedulingandreservation,andnews? Fortransaction,mobileVASandmbankingarethemostpopularmmerceapplicationsforChineseconsumersMobileVAS(billing,location,etc.)MobilebankingInteractivegamesPercentageofrespondentsInterest in transactions delivered over mobile32CHINA’S WIRELESS DATA SERVICES EXPECTED TO GROW QUICKLYSource:IDCreport。Literatureresearch。McKinseyanalysisESTIMATEVoiceonlyDataandvoiceNumber of mobile subscribersMillions,Percent438714515516117620719725321830005E04E03E02E01E39。0039。9943%26%15%9%4%Revenue from wireless dataUS$billions05E04E03E02E01E171 data service ARPU/month/actual user US$LowcaseHighcase155CAGR33HANDSET AND PDA MANUFACTURERS WILL FURTHER DRIVE MOBILE DATASource:IDC。CCID。SINOMR。Gartner。Interviews。CahnersInStatGroup。literaturesearch。TeamanalysisNumber of handset units soldMillions2022 2022E 2022E 2022E 2022E 2022E23% 30% 45%63%86%90% Number of PDA units soldMillions2022 2022E 2022E 2022E 2022E 2022E2% 2% 11% 31% 56% 82% Number o