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UBS UBS Warburg Warburg –– ““Global Technology ConferenceGlobal Technology Conference””Mr. Ding Mr. Ding DonghuaDonghua, Chief Financial Officer of CMHK, Chief Financial Officer of CMHK
February 19, 2001February 19, 2001
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China Mobile (Hong Kong) LtdChina Mobile (Hong Kong) Ltd
History of DevelopmentHistory of Development
Business StrategyBusiness Strategy
Latest DevelopmentLatest Development
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History of DevelopmentHistory of Development
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Operations CoverageOperations Coverage
ShandongShandong
GuangxiGuangxi
LiaoningLiaoning
BeijingBeijing
TianjinTianjinHebeiHebei
ShanghaiShanghai
JiangsuJiangsu
GuangdongGuangdong
ZhejiangZhejiangFujianFujian
HainanHainan
HenanHenan
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ZhejiangMobile
ZhejiangZhejiangMobileMobile
Jiangsu Mobile
Jiangsu Jiangsu MobileMobile
Fujian Mobile
Fujian Fujian MobileMobile
Henan Mobile
Henan Henan MobileMobile
HainanMobile
HainanHainanMobileMobile
Beijing Mobile
Beijing Beijing MobileMobile
Shanghai Mobile
Shanghai Shanghai MobileMobile
Tianjin Mobile
Tianjin Tianjin MobileMobile
Hebei MobileHebei Hebei
MobileMobileLiaoning Mobile
Liaoning Liaoning MobileMobile
Shandong Mobile
Shandong Shandong MobileMobile
Guangxi Mobile
Guangxi Guangxi MobileMobile
100%
China Mobile (HK) LtdChina Mobile (HK) Ltd
24.42%
100%
Public ShareholdersPublic ShareholdersPublic Shareholders
100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
GuangdongMobile
GuangdongGuangdongMobileMobile
Ownership StructureOwnership Structure
Shenzhen CompanyShenzhen Shenzhen CompanyCompany
China Mobile (HK) Group LtdChina Mobile (HK) Group LtdChina Mobile (HK) Group Ltd
China Mobile Communications Corporation
China Mobile Communications Corporation
75.58%
100%
100%
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Our Growth and Market LeadershipOur Growth and Market Leadership
* Market share as of June 30, 2000 in our service area
Others17%
CMHK83%
(mm)
Market Share*Market Share*Subscriber GrowthSubscriber Growth
9797--99 99 CAGR = 114%
CAGR = 114%
3.43.46.56.5
15.615.6
42.842.8
1997 1998 1999 Nov 2000
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Strong Financial PerformanceStrong Financial Performance
US$ (mm)
1997 1998 1999
1,871
3,182
4,666
2,046
1997-99 CAGR = 58%
3,490
1H 2000
71%
Revenue GrowthRevenue Growth EBITDA GrowthEBITDA Growth
1997-99 CAGR = 63%
EBITDA (US$ mm)Margin
58%56%53%
1,157
2,0311,554
988
49%
1997 1998 1999 1H 2000
76%2,6092,609
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Much Larger Revenue and EBITDA BaseMuch Larger Revenue and EBITDA Base
**For the six months ended June 30, 2000For the six months ended June 30, 2000
Revenue* EBITDA*
US$ (mm)54
.4%
US$ (mm)
50.3%
3,4901,897
0500
1,0001,5002,0002,5003,0003,5004,0004,5005,0005,500
CMHK Pro FormaCombined
5,3875,387
2,0311,021
0
500
1,000
1,500
2,000
2,500
3,000
3,500
CMHK Pro FormaCombined
3,0523,052
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High Growth Market LeadersHigh Growth Market LeadersSubscriber GrowthSubscriber Growth
3.7
6.5
10.1
13.6
4.2%
2.5%
1.4%
6.1%
1997 1998 1999 1H 2000
1997
-99 C
AGR = 65%
Revenue GrowthRevenue Growth EBITDA GrowthEBITDA Growth
1,897
3,186
2,278
1,567
1997 1998 1999 1H 2000
33%
1997
-99 C
AGR = 43%
Revenue (US$ mm)
787
1,016
1,609
1,021
50%50%
45%
1997 1998 1999 1H 2000
46%
1997
-99 C
AGR = 43%
EBITDA (US$ mm)EBITDA Margin (%)
Sub (’mm)Penetration
54%
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Significantly Increased Covered PopulationSignificantly Increased Covered Population
115188
324
607
0
100
200
300
400
500
600
700
1997 1998 1999 June 30 2000
Post-AcquisitionPro Forma
Population Under Coverage (mm)Population Under Coverage (mm)
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Enhanced Market PositionEnhanced Market Position
19981998AcquisitionAcquisition
CMHKCMHK36.1%36.1%
June 30, 1999June 30, 1999
CMHKCMHK55.9%55.9%
June 30, 2000June 30, 2000
CMHKCMHK20.5%20.5%
Dec 31, 1998Dec 31, 1998PrePre--acquisitionacquisition
% of Nationwide Cellular Subscribers% of Nationwide Cellular Subscribers
19991999AcquisitionAcquisition
20002000AcquisitionAcquisition
CMHKCMHK26.1%26.1%
Dec 31, 1998Dec 31, 1998
2000 Acquisition (As of June 30)
CMHKCMHK 21.64 mm*21.64 mm*
TargetsTargets 13.64 mm*13.64 mm*
CombinedCombined 35.28 mm35.28 mm
% Increase% Increase 63%63%
* September 20, 2000: CMHK 23.9mm and targets 15.4mm
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The second largest mobile operator The second largest mobile operator in the worldin the world
7.4 8.4 11.7 13.5 17.420.0
25.631.6
35.3*59.0
0
10
20
30
40
50
60
SprintPCS
ChinaUnicom
AT&T SKTelecom
SBC TIM Verizon NTTDoCoMo
ChinaMobile(HK)
Vodafone
* Data as at June 30, 2000** CMHK had 42.8 mm subscribers by the end of November, 2000
Subscribers (mm)Subscribers (mm)
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Business StrategyBusiness Strategy
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Business StrategyBusiness Strategy
Core Mobile Core Mobile BusinessBusiness
OpportunitiesOpportunitiesin the Broaderin the Broader
Telecom MarketTelecom Marketin Chinain China
FurtherFurtherAcquisitionAcquisition
OpportunitiesOpportunities
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Growing Core Mobile BusinessGrowing Core Mobile Business
Broadening subscriber base and capturing market penetration
Integrate our operations and gain efficiency and synergy
Focus on high quality subscribers
Nurture human capital
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Integration and SynergiesIntegration and Synergies
Integration PlanUnify operating procedures
Centralize reporting and financial control
Introduce Performance based evaluation standards
Integrate Management
Enhanced SynergiesEnhanced volume cost savings and negotiation position
Sharing of R&D, new service development and settlement
Central marketing and consistent branding
Management resources and expertise sharing
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New Revenue Streams in Broader Telecom Market in ChinaNew Revenue Streams in Broader Telecom Market in ChinaM
ovin
g u p
t he
valu
e c h
ain
• Mobile Commerce Solution• Mobile Info Service Center• Mobile Portal
Wireless Portal Mobile E-Commerce
and Content Aggregation
Wireless Internet Access/Broadband Services
• WAP• GPRS• 3G• CMNet
• Internet Access
• VoIPIP Based Voice
and Data Services
• SMS
• VoiceCore Mobile Communications Services
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Pioneering Mobile Data in ChinaPioneering Mobile Data in China
SMS based services achieving scale
Substantial growth in IP long-distance services
Increasing popularity in WAP services
Significant progress made with experiments in GPRS mobile technology
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Future Acquisition PossibilitiesFuture Acquisition Possibilities
In remaining 18 regionsIn remaining 18 regionsin mainland China, as of in mainland China, as of
June 30, 2000June 30, 2000
52% 52% of national of national populationpopulation
3% penetration3% penetration
16.7 mm China Mobile 16.7 mm China Mobile subscribers*subscribers*
Subscriber CAGR 75% Subscriber CAGR 75% (97 (97 –– 99)99)
* more than 20 mm as of November 20, 2000
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Latest DevelopmentLatest Development
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Total SubscribersTotal Subscribers(Thousand)
19142 19340 19707 19964 20292
339732496 2823 3188 3975 4705
8819
05000
1000015000200002500030000350004000045000
2000.6 2000.7 2000.8 2000.9 2000.10 2000.11
Contract Subscribers Pre-paid Card Users
Rapid GrowthRapid Growth
2163822163
2289523939
24997
* 13 * 13 subsidiaries combined figuressubsidiaries combined figures
42792*
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New Product InitiativesNew Product Initiatives
SMS-based services achieved considerable scale
Continuous development of WAP services
Significant progress in GPRS mobilecommunications technology experiment
Substantial growth in IP long-distance services
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Strategic Alliance with Strategic Alliance with VodafoneVodafoneFar Reaching Cooperation
Sharing of management experience and exchange of human resources
Sharing of operational expertise
Subscriber management
Network operations
Marketing and branding
Exclusive licensing of technology to CMHK in China
Potential creation of joint ventures
Strategic alliance governance structure
Long-term objective with strong personal commitments by respective CEOs and senior leadership
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Strategic Alliance for R&D of Strategic Alliance for R&D of Wireless Data ServicesWireless Data Services
CMHK & HP formed strategic alliance for R&D of wireless data services
To broaden CMHK’s ARPU base andstimulate its subscriber growth
To expand room for wireless data technology development
To strengthen co-operation in R&D of wireless data services between CMHK and HP
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Main Content of Tariff Adjustment Main Content of Tariff Adjustment (( II ))
Reduction in domestic long-distancecalling charges
Reduction in international and Hong Kong, Macau and Taiwan long-distance calling charges
Reduction in digital transmission lines leasing fees
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Main Content of Tariff Adjustments ( Main Content of Tariff Adjustments ( IIII ))
Cancellation of surcharges in telecommunications services
Notice relating to other charges
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ImplementationImplementation of Calling Party Pays System?of Calling Party Pays System?
Transparency of tariff policy will be further enhanced
Operators will have more autonomy in determiningtariff structure
Overall objective of telecommunications tariff adjustments:
better development of telecommunications industrybringing tariff in line with international standard
“ Calling Party Pays” will not be implemented within two years
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China Mobile (Hong Kong) Limited
A WorldA World--ClassClass
Global Wireless MultimediaGlobal Wireless Multimedia
Services ProviderServices Provider
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