China Telecom Terminal Value Chain Annual Conference 2014

21 Jan 2014

"China Telecom Terminal Value Chain Annual Conference 2014", co-organized by China Telecom and various value chain partners, was held in Beijing on 16 January 2014. More than 1,000 participants from the value chain, including local and overseas, joined the conference. Mr. Wang Xiaochu, Chairman of China Telecom addressed the conference that the Company would capitalize on the opportunities arising from 4G to transform and innovate, strengthen open collaboration and accelerate the scale expansion of subscriber base, aiming to sell 100 million units of e-Surfing terminals in 2014.

Over the past 5 years, e-Surfing terminal value chain saw very encouraging progress and maturity. Benefitting from the close collaboration and the concerted effort of the value chain partners, the Company's mobile subscriber base has continued to expand. By the end of November 2013, the number of mobile subscribers reached 185 million, 6 times of the mobile subscriber base in 2008; number of 3G subscribers exceeded 100 million and China Telecom's share of the mobile subscriber market increased from 4.5% in 2008 to 15.1% in November 2013. The market size of e-Surfing terminals expanded substantially and 330 new models were introduced in 2013, of which most of them were smartphones, supporting the achievement of the full year target of selling 80 million e-Surfing terminals and driving mobile terminal market share from 5% in 2008 to 21.5% in 2013. Out of the e-Surfing terminals sold, the share of smartphones increased from 1.4% in 2008 to 80.4% in 2013. In 2013, the number of partners in the upper stream of e-Surfing terminal value chain exceeded 500 and the co-operative points-of-sale reached 140,000.

e-Surfing 4G Internet handsets are set to support multi-standards, enabling our subscribers to experience the superior 3G and 4G networks, to watch video in good quality every moment, to browse website with rich content smoothly and speedily, and to deploy various social network tools to communicates effectively. e-Surfing 4G Internet handsets are going to support Near Field Communication (NFC)-based mobile wallet, allowing more convenient use of mobile applications for payment, transfer and shopping and making daily life smarter and easier. Riding on the tremendous advantages of e-Surfing terminals and the words of good mouth for our Internet handsets in the 3G era, China Telecom has well prepared to deliver superior e-Surfing 4G services for customers, continuously demonstrating leadership in mobile Internet era.

In 4G era, China Telecom will further deepen and open for collaboration with value chain partners, achieving win-win solutions for the industry. In 2014, e-Surfing terminal value chain targets to introduce 270 new models of 3G terminals, 90 new models of 4G terminals and drives the sale of e-Surfing terminals to reach 100 million units in volume, of which 36 million units being 4G terminals. In 2014, China Telecom will adopt various innovative channel initiatives, including channel collaboration, channel exchange, channel subvention and sales incentives, to accelerate the development and cooperation among physical channel, direct sale channel and electronic channel. With a view to offering more attractive mobile applications, China Telecom will focus on driving the key products, including NFC-based payment, YiChat, "e-Surfing School", "Smart Home", "Smart Enterprise" and "Smart Merchant"

Mr. Wang Xiaochu, Chairman of China Telecom added that China Telecom will adopt diversified approaches to further strengthen open cooperation with added effort in the area of e-Surfing terminal development and mobile virtual network operation. China Telecom will work closely with the value chain partners to capture the opportunities arising from 4G, driving vitality through transformation and innovation, consolidating resources through open cooperation and promoting healthy industry growth through enhancing quality and efficiency. The Company is committed to building out faster, more stable and superior networks, offering richer and more compelling applications and providing customers with better and greater variety of e-Surfing terminals, jointly creating a better future.