1 Globalizing Trend of China’s Mobile Internet Mr. Houlin Zhao Deputy Secretary-General, ITU China Mobile Internet Summit InterContinental Beijing, China 7 April 2010 International Telecommunication Union – April 2010

2 Globalizing Trend of China’s Mobile Internet Globalizing Trend of China’s Mobile Internet 1) Global Telecom Market 2) Chinese Market 3) Chinese Internet 4) Conclusions

3 Growth in Global Telecom Markets Growth in ICTs, Source: ITU World Telecommunication/ICT Indicators Database International Telecommunication Union – April 2010

Mobile broadband overtook fixed broadband in 2008 & growing fast Source: ITU World Telecommunication/ICT Indicators Database. International Telecommunication Union – April

Strong growth in mobile & 3G 5 bn total cellular subscribers, 1 bn mobile broadband subscribers in bn total cellular mobile subscribers, of which 43% 3G in Source: ITU (left); Morgan Stanley, Ovum (right). International Telecommunication Union – April 2010

Growth in countries with 3G networks 6 Source: ITU World Telecommunication Regulatory Database. International Telecommunication Union – April 2010 China in 2009

Where are the 3G subscribers? In 2009, 32% 3G subscribers were located in Asia-Pacific (largest markets Japan & Rep. of Korea). Europe is currently catching up and could overtake Asia-Pacific in 2010, depending what happens in China (3G launched in 2009) & India (3G launch expected in April).

Uses of a regular smartphone: Contacts, & Internet Social networks Banking & money transfers Games, music & entertainment Camera, video & photos E-reader, books & artwork GPS location and mobility patterns = now a social compass! 8 Much, much more than a phone: Now a social compass International Telecommunication Union – April 2010

Surging global mobile data traffic: 66-fold in growth by 2013 International Telecommunication Union – April 2010 Source: Cisco

10 Chinese use of the Internet International Telecommunication Union – April 2010 Fixed-line subscribers at m (-26.7m in 2009) m mobile subscribers (+106m in MIIT) bn SMS messages, up +10.2% in m Internet users by end 2009, up +50% in m broadband Internet users up +20.4m in m access Internet over handheld devices by end 2009 – double the figure for 2008 due to 3G in Telecom industry generated revenues of CNY 2.6 tn, up 14.4%.

11 Chinese profile of ICTs International Telecommunication Union – April 2010 Source: ITU.

12 Chinese use the Internet uniquely International Telecommunication Union – April 2010

13 Chinese-style Internet International Telecommunication Union – April 2010 Strong homegrown content industry e.g. Baidu with > 60% of search market share, Ali Baba, Renren, Kaixin. Mouse navigation & icons preferred to typing. Very active online community of bloggers & homegrown social media (McKinsey) People in large towns spend 70% leisure time online; figure for rural towns more like 50% Consumers often use blogs and consumer reporting in deciding what to buy (McKinsey).

Chinese Mobile Internet Market 233m mobile Internet users, 15m 3G end 2009 All 3 major standards in operation, based on licenses awarded in January 2009: - China Mobile: 5.5 m TD-SCDMA Dec China Unicom: 2.7 m WCDMA Dec China Telecom: 4.81 m CDMA2000 3G covered 238 cities or 70% of China’s cities by end 2009, with 88,000 base stations. Targets – TD-SCDMA projected to reach m subscribers by 2010 & 100m subscribers with 160,000 base stations by International Telecommunication Union – April 2010

15 International Telecommunication Union – April 2010 Source: CNNIC. Chinese Mobile Internet Market

16 How Chinese use the mobile Internet International Telecommunication Union – April 2010

17 Conclusions Conclusions 1) What happens in China will influence 3G outcomes elsewhere in the world. 2) Strong 3G market growth prospects in China. 3) Strong homegrown content – Chinese are not just adopting models from elsewhere; they are creating and driving development of Internet 4) Chinese mobile Internet to be followed closely

Thank you for your attention 18 International Telecommunication Union – April 2010