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

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

International Telecommunication Union – April 2010

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 Growth in Global Telecom Markets
Growth in ICTs, 1998-2009

Source: ITU World Telecommunication/ICT Indicators Database

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International Telecommunication Union – April 2010
Mobile broadband overtook fixed broadband
in 2008 & growing fast
Fixed & Mobile Broadband Subscribers
800
688
Millions

Mobile BB subscribers
700
Fixed BB subs
600
473
500 429
403
400 344
276 282
300
210
200 153 154
99 71
100 7 30
-
2003 2004 2005 2006 2007 2008 2009

Source: ITU World Telecommunication/ICT Indicators Database.

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 Strong growth in mobile & 3G

Global Mobile BB Subscribers

Mobile subscribers (total & 3G)
Mobile BB subscribers 3G % mobile 7'000 2007-2014 6'456
6'179
5'842
800 16 6'000 5'567
15 3G Other
700 14 5'024
4'587
600 11 12 5'000
3'909
Millions

500 10 4'000 3'413

8
400 8
300 5.6 6 3'000
3.2
200 1.7 4 2'000
100 0.5 2
- 0 1'000
2003 2004 2005 2006 2007 2008 2009 0
2007 2008 2009 2010 2011 2012 2013 2014

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
 Growth in countries with 3G networks
Global growth in IMT-2000 countries, 2000-2009

140 130
Europe
120
CIS 109 42
100 China
Asia-Pacific 89 38 in
nb countries

80 Arab States 2009

70
Americas 36 21
60 Africa 17
43 33
40 30 14 22
24 12 19
20 9 21 14
2 9 26
1 9 9 18
0 0 4
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Source: ITU World Telecommunication Regulatory Database.

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 Where are the 3G subscribers?
Growth by regions, 2003-9
250 2009 Africa Arab
4% States
Americas 7%
Africa 22%
200 Arab States
Millions

Asia & Pacific

CIS
150
Europe
The Americas Asia &
100 Pacific
32%

50
Europe
34% CIS
-
1%
2003 2004 2005 2006 2007 2008 2009

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).
 Much, much more than a phone:
Now a social compass
• 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!
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Surging global mobile data traffic:
66-fold in growth by 2013

Source: Cisco
International Telecommunication Union – April 2010
 Chinese use of the Internet
• 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%.

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International Telecommunication Union – April 2010
 Chinese profile of ICTs
China's profile of ICT use cf. world, as
% total mobile subscribers, 2009
Total mobile subscribers Total Internet users
Mobile Internet users
100%
90% 69% 2-2.75G
80% mobile users 85% 2-2.75G
70% mobile users
60%
384m Internet
50%
users (51% of 1.78bn
40%
mobile cellular Internet users
30%
subscribers) (39% mobile
20% 31% mobile
10% cellular
Internet users 15%
0% subscribers)
China Chinese World World Internet
Internet users users

Source: ITU. 11
International Telecommunication Union – April 2010
Chinese use the Internet uniquely

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International Telecommunication Union – April 2010
 Chinese-style Internet

• 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).
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International Telecommunication Union – April 2010
 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
 Chinese Mobile Internet Market

Mobile broadband
subscribers %
Proportion of all
250 233 70
Internet users
60
200
155.48 50
117.6
150 40

100 30
20
50
10
0 0
Dec 2008 July 2009 Dec 2009

Source: CNNIC.
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International Telecommunication Union – April 2010
How Chinese use the mobile Internet

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International Telecommunication Union – April 2010
 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

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Thank you for your attention

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