【正文】 vest ? 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。 Literature search 02 PD China Mobile Teles Service Industry 17 OTHER PLAYERS UNLIKELY TO ATTAIN MOBILE LICENSES Source: Goldman Sachs。 none to be awarded in 2022 Source: Piper Jaffrey。T ?Japan Tele ?British Tele ?News Corporation ?Goldman Sachs ?SingTel ?None Existing Existing Current players China Mobile China Uni Likely future players China Tele China Net China Rail * Government likely to grant 2 licenses。 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。 EIU Pyramid。 Gartner。 therefore the threshold ine will drop from USD 1,815 (*12/%) for 2022 to USD 1,772 for 2022 (*12/%) 2022 Addressable market: 35% Addressable population: 460 mn persons 2022 Addressable market: 27% Addressable population: 345 mn persons Percent of population 02 PD China Mobile Teles Service Industry 10 MOBILE SUBSCRIBER PENETRATION OF LESS THAN 7% IN 2022, LEAVES SIGNIFICANT ROOM FOR GROWTH Source: JP Man。 Analyst reports。 。 McKinsey analysis Net subscriber* additions Millions 1997 1998 1999 2022 2022 2022E 2022E 2022E 2022E – 108 47 133 9 8 47 1 1 Annual growth Percent 1 2 3 7 9 12 13 15 16 Peration Percent Low case High case Low – 108 47 103 9 22 5 1 3 High Low High 1 2 3 7 9 12 16 19 23 02 PD China Mobile Teles Service Industry 9 0% 5% 10% 15% 20% 25% CHINA’S SUBSCRIBER BASE OF 218 MILLION IMPLIES A 47% PENETRATION OF AN ADDRESSABLE MARKET OF 460 MILLION BY 2022 * Low case, subs after inactive and multisimcard reduction Source: JP Man。 percent Western Europe US South and Latin Japan and Asia Pacific China** Rest of world* CAGR 19972022 percent 29 18 45 28 47 45 2022E 2022E 2022E 2022E 1,850 02 PD China Mobile Teles Service Industry 8 3 8 . 82 0 . 4 2 0 . 7 2 1 . 0CHINA’S MOBILE MARKET IS PROJECTED TO GROW SIGNIFICANTLY * 0205 forecast are subs after inactive and multisimcard reduction Source: IDC report。 Merrill Lynch。 Gartner 2022。 MII。 MII EXTRAORDINARY SUBSCRIBER GROWTH IS THE PRIMARY DRIVER OF REVENUE EVOLUTION, MORE THAN MAKING UP FOR LARGE DECLINES IN ARPU DUE TO STIFF COMPETITION 13 12 12 1215212936497 . 6 8 . 41 1 . 81 6 . 22 1 . 12 7 . 93 2 . 03 4 . 53 8 . 497 98 99 00 01 02E 03E 04E 05EMobile revenues* $ Billions Number of subscribers – low case Millions CAGR 30% CAGR 16% CAGR 83%