2010-2015 Strategy Summary

August 19, 2010

and by profit • We have grown to 554 million subscribers – 70% of Chinese domestic market . by subscribers.Our Company • Now the #1 cellular carrier in the world – by revenue.

Unicom 1. Mobile C.830 Operating Margin 33.950 216. Telecom C.000 0 2005 2006 2007 2008 2009 Revenue (RMB million) 2009 Financials Market Cap (RMB billion) Revenue (RMB million) Employees # of Subscribers (million) 600 400 200 0 • 86% 5 YR Revenue Growth • 112% 5 YR Subscriber Growth C.000 200.000 100.3% .Recent Success 500.479.520 218.000 400.6% 5.5% 11.6 208.954 269.219 312.4 153.103 145.6 452.000 300.

3% in 2009 • Falling ARPU 985 in 2005 866 in 2009 (RMB) • Government • Increased competition • Market saturation .Strengths • Government • 97% population coverage • Size and excess capital • Chinese economic growth New Risks 3 • Increasing Churn Rate 1.5% in 2005 3.

Strategic Priorities Decrease Churn Increase ARPU Expand Customer Base .

Strategic Priorities Decrease Churn Increase Customer Satisfaction Retention Offers Revamp Care IVR/ Routing Enhance handset offerings Care Staffing and Training .

Strategic Priorities Increase Profitability (ARPU) Up-Sell Cross-Sell Convert customers to higher revenue voice plans Promote value added services MMS Promote data plan adoption for voice users Promote mobile data products .

Strategic Priorities Expand Customer Base Domestic Market Penetrate remaining 500M potential customers Targeting of rural market Targeting of youthful. tech savvy users .

3B Current Market Share (554 Subs) •Decrease Churn •Retention Offers •Revamp Care IVR/routing •Care Staffing and Training •Increase ARPU •Mobile Banking •Enhance App Platform •Smartphone and Mobile Broadband 791mm 554mm Potential Market Total Market Current Market Share 0 .Domestic Growth Strategy Potential Market (509+mm) • Expand into untapped market potential • Rural • Middle Class • Youth Competitor Market Share (237mm Subs) • Faster Network • 266 Smartphones under 100RPM ($146) • Pricing Chinese Wireless Competitive Landscape 1.

tech savvy users Enter a new developing market .Strategic Priorities Expand Customer Base Domestic Market Global Market Optimization Penetrate remaining 500 potential customers Targeting of rural market Targeting of youthful.

Operation: Africa Objective: To enter Africa via either a joint or independent venture Why? • High growth potential (37.5% • Low competition • Competitive Advantages: penetration) 37.5 % Wireless Market Penetration – Management expertise in prepaid market – excess capital .

Operation: Africa • Explored potential joint venture with local entity • Was unable to reach satisfactory capital expense / revenue sharing terms • Determined more economic opportunity through independent market entry – Anticipate approx.9 billion annually • China has achieved success in other industries entering the African market (i.) • Limited competition results in broader spectrum availability .e Healthcare. etc. 10B capital expenditures over the next three years – ¼ of untapped market = $20. Construction.

Questions? .

Appendix .

3% .50% 5.026 22.Appendix A 2005 Operating revenue (RMB million) # of Subscribers (million) EBITDA (RMB million) EBITDA margin Profit attributable to shareholders (RMB million) Profit attributable to shareholders margin Basic EPS (RMB) Avg.267 52.40% 4.35 966 2.166 25.7% 2007 356.45 985 1.74 866 3.549 271.6% 2008 411.70% 115.003 54.50% 112.90% 53.023 50.00% 66.30% 5.7% 2009 452.40% 3. Churn Rate 243.338 54.30% 87.627 27.103 522 229.810 457 216.062 24. Revenue per User (RMB) Avg.62 901 2.00% 0.041 247 133.9% 2006 295.959 369 194.358 301 159.574 54.32 981 2.

000.Appendix B 1.000 Revenue (Million RPM) Grow ARPU Through Innovation Continue To Expand Subscriber Base 0 .000 200 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Revenue (RMB million) # of Subscribers (million) Sub Base (millions) 800.000 600 400.000 400 200.000 1200 1000 800 600.

000.408 50.000 62.500.000.80% 18.203.000.80% 18.577.80% 44.000.80% 18.000.000 50.000.043. we have a massive ROI opportunity.000) 204.000) 800 18.223.80% (60.000.000.527.80% 21.044 35.000.000.169.000.250.000 800 800 800 75.000.979 2013 2014 2015 93.443.000 125.000 800 800 25.731.000 100.000 125.000.000 156.823.343.781 2011 2012 31. Initial Capex Subs ARPU Revenue Interest Rate NPV Sum of NPV 2010 (60.955 52.427.NPV Of Africa Entry If we capture ¼ of the African Market. even discounted to today.394 .Append. C .750.000 18.000 18.250.771.

Appendix D .Financials .

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