Summit Hong Kong Sep Copyright Telefon AB LM Ericsson All rights reserved
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1 Summit Hong Kong 22 - Sep
2 Mats H Olsson President & Country Manager, Ericsson China
3 A long-term committed partner for China
4 China telecom industry From a big telecom market to a leading industry giant Number 1 in: Mobile subscribers/largest operator Fixed line subscribers/largest operator Largest growth potential Currently number 2 in: CDMA network by number of subscriptions Internet access by number of users A world center for telecom industry in manufacturing, R&D and supply 4
5 Drivers for growth Continued strong economic development Still low telecom penetration Mobile penetration ( 23.7% ) Fixed penetration ( 23.0%; and 35.5% for cities) Broadband (1.5%) Focus on new services for diversity New mobile licenses and increased competition Village Phone project 5
6 China mobile market: continued strong subscription growth 400,00 By end of July, mobile subscriptions reached 310 M ,00 Mobile Subscribers (Msub) 300,00 250,00 200,00 150,00 100, ,00 0,00 0,64 1,57 3,43 6, Source: Telecom Research Institute of MII Contains forward looking statements 6
7 China s telecom revenue by year ,4 371, ,9 0 BRMB F 05F 06F 07F 08F Source: MII It is a strongly growing market Contains forward looking statements 7
8 Telecom revenue by services 1H % 6,42% 0,03% Source: MII Mobile Long-distance Fixed local Data 18.8% 42.6% The others 1H 2004 telecom revenue: RMB253.6 billion YOY growth by services: Mobile: 13.8%; Fixed local:11.3%; data: 29.5% Long-distance:14.5%; Mobile SMS: 71%, 99.6 billion Data growth doubles the average telecom growth 8
9 China Mobile case: Mobile data user and traffic rapid growth K subs Acc. active GPRS user Acc. MMS user Dec-02 Dec-03 Mar-04 Jun-04 GPRS users reached > 10M, growth >400% y-o-y MMS users reached 5M, increasing 1600% y-o-y 9
10 Data communication in the spotlight Faster than average telecom growth: 29.5% versus 13.8% Strong mobile data development >10% of China Mobile s total revenue 1H 2004 SMS Number of SMS will increase from 18 billion in 2001 to 550 billion in RMB/SMS to send MMS: One billion MMS 2004 expected by China Mobile ~10 million active GPRS users Four million CDMA 1X data users 10
11 Data communication in the spotlight Faster than average telecom growth: 29.5% versus 13.8% Fixed broadband grows End of July, fixed broadband access subscriptions totals M Grows at 8% per month 11
12 Mobile gaming from Game Download: Single Player; Multi-Player Network games Java Game WAP Game 12
13 Java game from DigiRed Mobile Olympics: Simulation on mobile! Swimming Seven games launched: Shooting, Flying Disc, Swimming, Jump, Archery, Yacht, Discus, Diving Users play the games by the general sports rules, very easy to learn! 13
14 MMS Picture Download from Olympic champion show 14
15 Information and News from Domestic/global news, social news,sports news.. Infotainment: auto, movie, golf club 15
16 Applications in Hong Kong from Daily Express receive a host of infotainment and entertainment content Weather Sports News Financial News Home Watch connects video mobile phone to homesecurity camera through the Internet 16
17 Applications in Hong Kong from CSL One2Free Zone -> Video World Latest infotainment video clips on 6 video channels Traffic (I-cable) Finance (I-cable) Weather (I-cable) News (I-cable) Movie MV Zone DIY Video Clips Create own video clips and send to friends 17
18 Market trends in China A continuous long-term growth market Continued strong mobile subscription growth, fierce operator competition New mobile licenses/3g expected in mid Non-voice services rapidly growing Strong Internet growth Broadband access fast-growing Strong growth of GPRS and CDMA 1X users POTS still growing 18
19 Our leading position >35% GSM market share; >40% market share in GPRS Largest mobile supplier to China Mobile Major supplier to China Unicom for both GSM and CDMA/CDMA2000 1X networks 15% market share held for CDMA 19
20 Our leading position Significant supplier to both China Telecom and China NetCom A leading supplier in IP Core Router market: > 20% Selected partner to China Telecom for both national NGN trial and Service Network 20
21 Our leading position Leveraging on our strong Services base, we are extending our leading position into new Services areas such as Managed Services and Systems Integration 21
22 Our presence in China Century long in-country presence (112 years) Contributed many milestones to the history and the development of China s telecom industry Long-term committed and powerful establishment, ready for future challenges Proven good corporate citizen 22
23 Our 10 largest markets Share of total sales Year 1900 United Kingdom 50% Denmark 10% Russia 7% Australia 7% Sweden 5% Germany 3% Finland 3% Norway 3% Holland 2% China 2% Year 2003 United States 14% China 9% Italy 7% Sweden 5% Spain 4% Saudi Arabia 3% Japan 3% United Kingdom 3% Mexico 3% Australia 3% 23
24 Ericsson in China Shanghai 1892 Shanghai 1900 Stockholm 1906 Beijing
25 Establishments across the country 3,000 employees, 15% in R&D 26 offices 10 joint ventures Five wholly-owned companies Ericsson China Research & Development Institute Training centers in Beijing, Shanghai, Guangzhou and Hong Kong Ericsson China Academy in Beijing 25
26 China A key hub for Ericsson worldwide Already a global supply hub GSM/WCDMA supply to China and global markets Global supply center for CDMA Being the cornerstone of global R&D activities Strong local R&D and technology establishments across the country Locally developed products for both China and global markets 26
27 A good partner of the society Supporting education Helping environment protection Disaster-relief programs 27
28 Going forward Maintain Ericsson s leading position in China market Continuous focus on end to end solutions and services for our customers: Mobile data solutions and applications for high-end users Expander Solutions for low-end market and rural areas Professional services to amplify operators catering for consumers needs Further committed to China: A strong, well-established local organization A world-class base in China for R&D, sourcing and supply for both global and local markets 28
29 Summit Hong Kong 22 - Sep
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