UBS Warburg Global Technology Conference Mr. Ding Donghua,, Chief Financial Officer of CMHK February 19, 2001

Transcription

1 UBS Warburg Global Technology Conference Mr. Ding Donghua,, Chief Financial Officer of CMHK February 19,

2 China (Hong Kong) Ltd History of Development Business Strategy Latest Development 1

3 History of Development 2

4 Operations Coverage Beijing Hebei Henan Liaoning Tianjin Shandong Jiangsu Shanghai Zhejiang Fujian Guangxi Hainan Guangdong 3

5 Ownership Structure China Communications Corporation 100% Public Shareholders China (HK) Group Ltd Ltd 75.58% China (HK) Ltd 24.42% 100% Shenzhen Company 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Guangdong Guangdong Zhejiang Zhejiang Jiangsu Jiangsu Fujian Fujian Henan Henan Hainan Hainan Beijing Beijing Shanghai Shanghai Tianjin Tianjin Hebei Hebei Liaoning Liaoning Shandong Shandong Guangxi Guangxi 4

6 Our Growth and Market Leadership Subscriber Growth Market Share* (mm) CAGR CAGR = 114% 114% 15.6 CMHK 83% Others 17% Nov 2000 * Market share as of June 30, 2000 in our service area 5

7 Strong Financial Performance Revenue Growth EBITDA Growth US$ (mm) CAGR = 58% 3,182 1,871 4,666 2,046 71% 3, CAGR = 63% 53% 988 EBITDA (US$ mm) Margin 49% 1,554 56% 2,609 76% 58% 2,031 1, H H

8 Much Larger Revenue and EBITDA Base Revenue* EBITDA* 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 US$ (mm) % 3,490 CMHK *For the six months ended June 30, ,387 1,897 Pro Forma Combined US$ (mm) 3,500 3,000 2,500 2,000 1,500 1, % 2,031 CMHK 3,052 1,021 Pro Forma Combined 7

9 High Growth Market Leaders Subscriber Growth Sub ( mm) Penetration CAGR = 65% % % % % Revenue Growth Revenue (US$ mm) CAGR = 43% 1,567 2,278 3,186 33% 1,897 EBITDA Growth EBITDA (US$ mm) EBITDA Margin (%) CAGR = 43% % 1,016 45% 50% 1,609 46% 1,021 54% H H H

10 Significantly Increased Covered Population Population Under Coverage (mm) June Post-Acquisition Pro Forma 9

11 Dec 31, 1998 Pre-acquisition Enhanced Market Position % of Nationwide Cellular Subscribers CMHK 20.5% 1998 Acquisition Dec 31, 1998 CMHK 26.1% 2000 Acquisition (As of June 30) CMHK mm* 1999 Acquisition June 30, 1999 CMHK 36.1% Targets Combined mm* mm June 30, 2000 CMHK 55.9% % Increase 63% 2000 Acquisition * September 20, 2000: CMHK 23.9mm and targets 15.4mm 10

12 The second largest mobile operator Subscribers (mm) 60 in the world Sprint PCS China Unicom 11.7 AT&T 13.5 SK Telecom SBC TIM Verizon NTT DoCoMo * Data as at June 30, 2000 ** CMHK had 42.8 mm subscribers by the end of November, * China (HK) 59.0 Vodafone 11

13 Business Strategy 12

14 Business Strategy Core Business Opportunities in the Broader Telecom Market in China Further Acquisition Opportunities 13

15 Growing Core Business Broadening subscriber base and capturing market penetration Focus on high quality subscribers Integrate our operations and gain efficiency and synergy Nurture human capital 14

16 Integration and Synergies Integration Plan Unify operating procedures Centralize reporting and financial control Enhanced Synergies Enhanced volume cost savings and negotiation position Introduce Performance based evaluation standards Sharing of R&D, new service development and settlement Integrate Management Central marketing and consistent branding Management resources and expertise sharing 15

17 New Revenue Streams in Broader Telecom Market in China Moving up the value chain Commerce Solution Info Service Center Portal WAP GPRS 3G CMNet Internet Access VoIP SMS Voice Wireless Portal E-Commerce and Content Aggregation Wireless Internet Access/ Broadband Services IP Based Voice and Data Services Core Communications Services 16

18 Pioneering 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 17

19 Future Acquisition Possibilities In remaining 18 regions in mainland China, as of June 30, % of national population 3% penetration 16.7 mm China subscribers* Subscriber CAGR 75% (97 99) * more than 20 mm as of November 20,

20 Latest Development 19

21 Rapid Growth Total Subscribers (Thousand) 42792* Contract Subscribers Pre-paid Card Users * 13 subsidiaries combined figures 20

22 New Product Initiatives SMS-based services achieved considerable scale Substantial growth in IP long-distance services Continuous development of WAP services Significant progress in GPRS mobile communications technology experiment 21

23 Strategic Alliance with Vodafone Far 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 22

24 Strategic Alliance for R&D of Wireless Data Services CMHK & HP formed strategic alliance for R&D of wireless data services To strengthen co-operation in R&D of wireless data services between CMHK and HP To broaden CMHK s ARPU base and stimulate its subscriber growth To expand room for wireless data technology development 23

25 Main Content of Tariff Adjustment ( I ) Reduction in digital transmission lines leasing fees Reduction in international and Hong Kong, Macau and Taiwan long-distance calling charges Reduction in domestic long-distance calling charges 24

26 Main Content of Tariff Adjustments ( II ) Cancellation of surcharges in telecommunications services Notice relating to other charges 25

27 Implementation of Calling Party Pays System? Calling Party Pays will not be implemented within two years Overall objective of telecommunications tariff adjustments: better development of telecommunications industry bringing tariff in line with international standard Transparency of tariff policy will be further enhanced Operators will have more autonomy in determining tariff structure 26

28 China (Hong Kong) Limited A World-Class Global Wireless Multimedia Services Provider 27

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