china mobile 1

8/4/2019 China Mobile 1

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2010-2015 Strategy SummaryAugust 19, 2010


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Now the #1 cellular carrier in the world by

revenue, by subscribers, and by profit

We have grown to 554 million subscribers

70%of Chinese domestic market

Our Company


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Recent Success

0

200

400

600

0

100,000

200,000

300,000

400,000

500,000

2005 2006 2007 2008 2009

Revenue (RMB million) # of Subscribers (million)

86% 5 YR

Revenue

Growth

112% 5 YR

Subscriber

Growth

2009 Financials C. Mobile C. Telecom C. Unicom

Market Cap (RMB billion) 1,479.6 269.6 218.4

Revenue (RMB million) 452,103 208,219 153,950

Employees 145,954 312,520 216,830

Operating Margin 33.5% 11.6% 5.3%


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Government

97% population coverage

Size and excess capital

Chinese economic growth

Increasing Churn Rate1.5% in 2005 3.3% in 2009

Falling ARPU

985 in 2005 866 in 2009 (RMB)

Government

Increased competition

Market saturation

New RisksStrengths3


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Strategic Priorities

Expand Customer Base

Increase ARPU

Decrease Churn


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Decrease Churn

Increase Customer

Satisfaction

Retention Offers

Revamp Care IVR/

Routing

Enhance handset

offerings

Care Staffing andTraining



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Increase Profitability (ARPU)

Up-Sell

Convert customers

to higher revenue

voice plans

Promote value

added services

MMS

Cross-Sell

Promote data plan

adoption for voice

users

Promote mobile

data products



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Domestic Market

Penetrate remaining 500M

potential customers

Targeting of rural market

Targeting of youthful, tech

savvy users



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Domestic Growth Strategy

0

554mm791mm

1.3B

Current Market Share

Total Market

Potential Market

Expand into untapped market potential

Rural

Middle Class

Youth

Faster Network

266 Smartphones under 100RPM ($146)

Pricing

Decrease Churn

Retention Offers

Revamp Care IVR/routing

Care Staffing and Training

Increase ARPUMobile Banking

Enhance App Platform

Smartphone and Mobile Broadband

Potential Market (509+mm) Competitor Market Share (237mm Subs)

Current Market Share (554 Subs)Chinese Wireless Competitive Landscape


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Enter a new

developing market

Global Market

OptimizationDomestic Market

Penetrate remaining 500

potential customers

Targeting of rural market

Targeting of youthful,

tech savvy users



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Operation: Africa

Objective: To enter Africa via either a joint or

independent venture

Why?

High growth potential (37.5% penetration)

Low competition

Competitive Advantages:

Management expertise in prepaid market

excess capital

37.5 %

Wireless

Market

Penetration


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Operation: Africa

Explored potential joint venture with local entity

Was unable to reach satisfactory capital expense / revenue

sharing terms

Determined more economic opportunity through

independent market entry

Anticipate approx. 10B capital expenditures over the next three years

of untapped market = $20.9 billion annually

China has achieved success in other industries entering the

African market (i.e Healthcare, Construction, etc.)

Limited competition results in broader spectrum availability


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Questions?


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Appendix


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Appendix A

2005 2006 2007 2008 2009

Operating revenue (RMB million) 243,041 295,358 356,959 411,810 452,103

# of Subscribers (million) 247 301 369 457 522

EBITDA (RMB million) 133,338 159,574 194,003 216,267 229,023

EBITDA margin 54.90% 54.00% 54.30% 52.50% 50.70%

Profit attributable to shareholders (RMB million) 53,549 66,026 87,062 112,627 115,166

Profit attributable to shareholders margin 271.00% 22.40% 24.40% 27.30% 25.50%

Basic EPS (RMB) 0.45 3.32 4.35 5.62 5.74

Avg. Revenue per User (RMB) 985 981 966 901 866

Avg. Churn Rate 1.9% 2.7% 2.6% 2.7% 3.3%


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Appendix B

0

200

400

600

800

1000

1200

0

200,000

400,000

600,000

800,000

1,000,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

SubBase(millions)

Revenue(M

illionRPM)

Revenue (RMB mill ion) # of Subscribers (mill ion)

Grow ARPU

Through Innovation

Continue To Expand

Subscriber Base


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Append. C - NPV Of Africa Entry

If we capture of the African Market, we have a massive ROI opportunity, evendiscounted to today.

2010 2011 2012 2013 2014 2015

Initial Capex (60,000,000) - - - - -Subs - 31,250,000 62,500,000 93,750,000 125,000,000 156,250,000

ARPU 800 800 800 800 800 800

Revenue - 25,000,000,000 50,000,000,000 75,000,000,000 100,000,000,000 125,000,000,000

Interest Rate 18.80% 18.80% 18.80% 18.80% 18.80% 18.80%

NPV (60,000,000) 21,043,771,044 35,427,223,979 44,731,343,408 50,203,527,955 52,823,577,394

Sum of NPV 204,169,443,781


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Appendix D - Financials

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