1. 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. 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. 3 Growth in Global Telecom Markets Growth in ICTs, 1998-2009 Source: ITU World Telecommunication/ICT Indicators Database International Telecommunication Union – April 2010

4. Mobile broadband overtook fixed broadband in 2008 & growing fast Source: ITU World Telecommunication/ICT Indicators Database. International Telecommunication Union – April 2010 4

5. Strong growth in mobile & 3G 5 bn total cellular subscribers, 1 bn mobile broadband subscribers in 2010. 6.5 bn total cellular mobile subscribers, of which 43% 3G in 2014. Source: ITU (left); Morgan Stanley, Ovum (right). International Telecommunication Union – April 2010

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

7. 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).

8. Uses of a regular smartphone: Contacts, email & 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

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

10. 10 Chinese use of the Internet International Telecommunication Union – April 2010 Fixed-line subscribers at 313.69m (-26.7m in 2009) 747.4 m mobile subscribers (+106m in 2009 - MIIT) 771.3 bn SMS messages, up +10.2% in 2009. 384 m Internet users by end 2009, up +50% in 2009 103.2 m broadband Internet users up +20.4m in 2009 233m access Internet over handheld devices by end 2009 – double the figure for 2008 due to 3G in 2009. Telecom industry generated revenues of CNY 2.6 tn, up 14.4%.

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

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

13. 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).

14. 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 2009 - China Unicom: 2.7 m WCDMA Dec 2009 - 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 50- 80m subscribers by 2010 & 100m subscribers with 160,000 base stations by 2011. International Telecommunication Union – April 2010

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

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

17. 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

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