Gtm-skype 2003 Sep

DAIWA DAIWA INSTITUTE OF RESEARCH LTD.

September 2003 (No. of pages: 40)

Global Telecom Monthly This month •

Global: We think the arrival of Skype, a distributed P2P VoIP application from the original founders of KaZaA is something to be scared of, and is probably set to become the biggest story of the year in the sector. We think that it has unique features which will make regulatory challenges more difficult than those posed elsewhere, and that it will benefit from the association with the KaZaA phenomenon and general demographic trends.

•

US: Regulatory pressure on VoIP at state public utility commissions – Lifting of school cellphone bans to be a boon to growth? – Swift uptake for the National Do Not Call Registry.

•

Europe : FT moves to take out orange minorities – Vodafone upgraded to rating 2 from 3 – Supply chain issues at 3 UK – BT Group makes headway with streaming video over GPRS.

•

AsiaPac : China Unicom 1H result comes in below our estimates – Consolidation and horse-trading in Korea and Taiwan – Japan Telecom exits fixed line business – MNP to hit Japan in 2005 – KDDI 1x base tops 10m.

IMPORTANT North America This report was prepared by Daiwa Institute of Research (Hong Kong) Limited (DIR) and distributed by Daiwa Securities America Inc. (DSA). It may not be accurate or complete and should not be relied upon as such. It reflects DIR’s views at the time of its preparation, but it is provided with a time delay and does not reflect events occurring after its preparation, nor does it reflect DSA’s views at any time. Neither DSA nor DIR has any obligation to update this report or to continue to prepare research on this subject. This report is not an offer to sell or the solicitation of any offer to buy securities. Unless this report says otherwise, any recommendation it makes is risky and appropriate only for sophisticated speculative investors able to incur significant losses. Readers should consult their financial advisors to determine whether any such recommendation is consistent with their own investment objectives, financial situation and needs. Additional disclosures required by the New York Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. are provided on the last page of this report.

Global Equity Research

Contents

Regional/subsector investment stance summary P. 3

Global perspective From the people who brought us KaZaA, the first distributed P2P telephony network – Skype. It traverses NATs and firewalls, it's heavily encrypted, and it's free. Brand affiliation, user affinity and demographics seem to be on its side. Watch out voice market................P. 4

News A round-up of global telecoms events over the past month

P. 8

Statistics and valuations Cellular Subs, Cellular Penetration, Cellular ARPU, Broadband Internet Subs, Valuation – Integrated, Valuation – Cellular, Share Price Performance, Corporate Earnings, Earnings Revisions, Rating Revision .................................................. P. 13

Monthly stats P. 31

Forthcoming eve nts P. 37

Appendix Equity relationships among global telcos

P. 38

CONTENTS

2

Global Telecom Monthly

Regional/subsector investment stance summary Wtd. stock recommendations*

Region/segment

Stance

Top picks

Comments/action

Europe Integrated

NEUTRAL

2.84

France Telecom, Earnings momentum remains positive, but Portugal Telecom relative valuations look toppy, and we are growing more concerned about market fragmentation and disruptive influences.

Europe Wireless

OVERWEIGHT

2.53

Vodafone, mmO 2 Newsflow has been good and operating performance sound

US Integrated

WEAK NEUTRAL

3.57

n.a.

Proactive stance towards product bundling and some recent regulatory victories make us marginally more positive, but line loss, cannibalisation and regulatory uncertainty make leave us cautious.

US Wireless

OVERWEIGHT

2.28

AT&T Wireless

Selectively overweight, but we are increasingly concerned over the potential of pure-play wireless operators to stave off bundled product offering from integrated players. So me support may come from consolidation speculation.

AsiaPac Integrated

OVERWEIGHT

1.74

KT Corp, NTT, Telstra, China Telecom

Impressive combination of value and balance sheet strength, though selectivity is essential.

AsiaPac Wireless

OVERWEIGHT

1.56

China Mobile, NTT DoCoMo, KDDI

Balance sheet strength coupled with a mixture of secular growth and success in advanced data services.

Source: DIR estimates *Based on DIR 1 - 5 rating system

I NVESTMENT S TANCE

September 2003

3

16 September 2003 (No. of pages: 4)

Global perspective Let’s telco!

James Enck (44) 20 7597 8455 [email protected]

•

We think the arrival of Skype, a global P2P VoIP solution from the very people who brought us KaZaA, is something to be scared of, and may turn out to be the most significant story in the sector this year.

•

KaZaA itself is the most downloaded application on the web, and appears to be averaging around 400,000 downloads a day. At somewhere around 270m downloads to date (our estimate), it would appear to have a nominal penetration of 27% of internet users globally.

•

KaZaA’s “bad boy” image in the P2P music world translates directly to the voice telephony world, where similar questions are being asked as to why voice services are metered in the 21st Century. Whether Skype has an explicit relationship with KaZaA or not, the association between the two in the minds of loyal KaZaA users is likely to be a powerful marketing tool.

•

The Skype service (and whatever may follow) should ride a broad demographic wave, in which the file-sharing, IM-tapping teens of today expect to slide seamlessly into free voice communication in their adult lives.

•

The Skype service beta version launched on 29th August, and by 10th September boasted 110,000 downloads. At this writing the website counter shows 240,000 downloads only six days later. This is already greater than our estimate of SIP users on all platforms in the US and Europe combined.

GLOBAL P ERSPECTIVE

4

Global Telecom Monthly

I’m a telco, you’re a telco I’m gonna tear your playhouse down

Readers of this product, and particularly our European output, will recall that we have been tracking a number of developments in 2003, related to the issue of disruptive influences in the sector. First and foremost among these has been the slow and steady rise of SIP and IM-based voic e products and their potential to re-order the telecoms “value chain”, driving traditional traffic toward lower revenue/zero revenue services, and introducing a number of new (and in some cases financially powerful) players as quasi-service providers. We’re now going to go out on a limb and say that perhaps the most important story in the telecom sector globally in 2003 broke (for us anyway) on 9th September and has gone largely unnoticed in the wider financial media since. On that day, an obscure IP Telephony newsletter, which we subscribe to, reported that the founders of the global P2P music file-sharing site KaZaA had begun promoting a VoIP service, based on a proprietary standard developed by their new company Skype (www.skype.com).

Regulate this!

What differentiates the Skype service from other VoIP-based services we have witnessed to date is the fact that the technology used to run it is an updated version of the FastTrack technology used to power KaZaA. As such, it avoids central servers, using the nodes joining and leaving the network dynamically to establish routing of traffic. Skype argues this is a more scalable and robust technology, and we leave that argument to the networking experts, but we think this may remove one of the likely regulatory complications to VoIP applications involving central servers (such as SIP services). Use of these servers has, in recent deliberations before the FCC, been one reason for opponents of unregulated VoIP to claim that SIP communications are in fact a mediated service, as they are required to determine the presence of users online and invite them to initiate a call. On this basis, critics have argued that SIP services are not truly point-to-point transactions between two parties, but a service enabled by a third party. Again, we leave this debate to the theoreticians, but at this point it appears that the KaZaA/Skype solution sidesteps this objection. The other apparently new feature here is the ability to traverse firewalls and NATs without any special configuration on the part of the user. It is also highly encrypted, using AES 256, a standard employed by the US government. This will no doubt provoke a heated debate over issues of national security, as arose in the Pulver petition to the FCC earlier this year, when the FBI/DoJ cited security as one reason for why VoIP services should not be free from regulation.

It’s child’s play

In response to the Skype news we fully expect a chorus of “so what” from the incumbents in the voice industry. Though the founders of Skype were associated with the early success of KaZaA, they have sold up and moved on now, and there is no evidence of an explicit relationship between the two (one e-mail newsletter stated that KaZaA had been promoting the Skype service, but we have seen no sign of this in the KaZaA site, at least not the part we can see – perhaps KaZaA users are being targeted directly). Moreover, surely we all appreciate that KaZaA users are merely pimply, discontented teenagers with a penchant for flouting copyright laws, or so we imagine the public rhetoric will run. In fact, we think the whole concept deserves to be taken a bit more seriously than that, for the following three reasons: • Scale and growth – The last reported figures from KaZaA, on 26th May, 2003 showed that downloads of the file-sharing application had surpassed 230.3m worldwide, overtaking ICQ as the most downloaded application on the web. The company had broken the 200m barrier only 11 weeks earlier, on 11th March, implying something like 400,000 downloads per day. This suggests that another 40m or so users may have downloaded the application in the intervening 16 weeks between this writing and the last publicized numbers (KaZaA’s website says 2.6m downloads last week). This works out at something like 5% of humanity having downloaded the application. However, in terms of addressable market, the implications are much more staggering. Nielsen//Netratings estimates a global internet universe (based on home users) of 414m at the end of July, while the ITU estimates total internet users in 2002 at 592m. Even the ITU numbers are likely, in GLOBAL P ERSPECTIVE

September 2003

5

our view, to miss a significant number of users in business and academic/ governmental/institutional settings. Let’s go completely over the top and assume a global audience of 1bn internet users, which is probably a bit high. Then we have an apparent nominal penetration rate for KaZaA of something like 27%! Obviously, we would like to have some audited figures on active users, but we think the inescapable conclusion is that KaZaA has attained a global level of entirely web-based “brand” recognition, which is far beyond anything a new telecom service provider could hope for. Even if the actual relationship between KaZaA and Skype is tenuous or non-existent, we believe that the strength of the KaZaA phenomenon will ensure a blurring between the two services in the mind of the media, and a rapid dissemination of information about Skype among KaZaA users. ITU estimates of global internet users and penetration, 2002 Internet users (m) 7.943 205.658 201.079 166.386 10.500 591.566

Africa Americas Asia Europe Oceania Total

Population penetration (%) 1.00 24.21 5.58 20.79 33.30 9.72

Source: ITU 2002

• Rebel affinity – Skype’s own website contains the following mission statement: “Our vision is to bring communications into the 21st century, challenge the outdated business models and rip-off tactics of legacy telecom companies and to bring global unmetered communications to people all over the world. We will achieve our vision by building a user-driven P2P network leveraging emerging disruptive technologies.” This would be charmingly and laughably dismissable, if the KaZaA P2P file-sharing service created by the very same people had not established such a formidable user base. Arguably, the reason users flocked to KaZaA in the first place was out of a sense that the music industry did not deserve as much of their money has it had received traditionally, and we expect that the same dynamic functions when it comes to voice telephony. It would appear that Skype’s “bad boy” stance, and its association with KaZaA, is already a powerful marketing tool. The beta version of Skype’s VoIP service was only launched on 29th August, and by 10th September the service claimed 110,000 downloads. As at this writing, six days later, the website states 240,000 downloads and counting. If accurate, this already makes Skype larger than all the other SIP-based VoIP platforms in North America and Europe combined, by our estimate, after a little more than two weeks. Skype’s claims of superiority Skype vs. all the rest Skype

Net2Phone

MSN Messenger, ICQ, AIM, Yahoo Messenger

Works with ANY firewall/NAT setup – nothing to configure

ü

r

r

r

Unlimited FREE calls to users of same application

ü

r

ü

Sometimes

«««

«

«

«

Sound quality

Better than phones Worse than phones

Other standard VoIP clients

Worse than phones Worse than phones

Secure and encrypted communications

ü

r

r

r

100% ad-free

ü

r

r

Sometimes

Source: Skype

GLOBAL P ERSPECTIVE

6

Global Telecom Monthly

• Demographics – Pimply and unhappy though many KaZaA users may be, they will grow up eventually. A recent survey from American teen affinity site Angelfire reported that 45% of its c.2,000 teenage survey respondents claimed to use instant messaging to communicate with friends outside school hours, versus only 15% who communicate face-to-face. We believe this familiarity with the IM platform extends almost seamlessly into the voice telephony world, particularly in markets (such as those outside North America) where local/national calls are still metered. In other words, if the kids of today are keenly involved in communicating over “closed” IM systems with friends who are part of the same system, then a “telephony” service functioning on the same principle is an obvious extension to their communications tools, and one which makes the conventional phone service only meaningful if an “outsider” needs to be called, or if the user is mobile. Even in the latter case, we think a service such as this one is likely to end up on a number of portable devices, and is a natural fit with Wi-Fi “ubiquity.” Honey, there’s trouble at the mill

Up to now, we have viewed VoIP as a gradual, but nevertheless serious, accelerator of market fragmentation and a source of added pressure for the telcos. What the new Skype service brings to the party is a large stink bomb, in the form of potential for this phenomenon to accelerate and expand at a rate far greater than that which could be stimulated by a typical start-up’s marketing budget. It is important to remember that, as our example below illustrates using European operators, the fixed voice segment is of unparalleled importance to the ongoing cash flow generation of incumbent players, accounting for around 50% of group EBITDA on average, but consuming only around 30% of group capex. We think valuations in the sector hinge on the level of visibility in forecasting the erosion of this cash flow generation into the longer term, and from this perspective, we think the Skype offering (and whatever may follow it) is akin to a giant meteor hurtling on a collision course towards earth. We will return to our usual, more mundane and conventional coverage next month. PTT fixed line contribution to group EBITDA/consumption of group capex %

(%) 70

%

60

%

50

%

40

%

30

%

20

%

10

%

0 DT

FT

KPN

PT

Fixed EBITDA contribution/group

Swisscom

TI

Telefonica TeliaSonera

Fixed capex consumption/group

Source: DIR estimates based on last reported results

GLOBAL P ERSPECTIVE

September 2003

7

Europe Orange has announced the launch of two new signature handsets: the Motorola MPx200 running Microsoft’s Pocket PC OS and the Handspring Treo 600. Both devices offer an enhanced Orange user experience. O2 Germany will make a soft launch of 3G in November, with a commercial launch in 1Q2004. The licence mandates 25% population coverage by the end of 2003. We reported in the May edition of the Global Telecom Monthly that BT had developed a method of delivering streaming video over GPRS networks. BT is now working with Vemotion, a video hosting group, and is reportedly close to announcing deals with TV broadcasters. Charges will start at 30p for a 20 second clip. Prices aren’t immediately comparable as 3 charges on a per event basis (25p for a comedy clip, 50p for a movie clip or celebrity interview). The technology already works in the UK and the player is available for download. We have yet to test its potential for cannibalising 3G’s current ‘killer app’. 3 has just one handset on sale in the UK and appears to be out of stock of all handsets in Italy. New shipments are not expected until October (or even November according to Vodafone). As of 20th August, Hutchison’s 3G business in Europe reported 470,000 customers and the company maintains a year end target of 2m. Assuming almost no commercial activity during September in Italy and far lower activity in the UK, we estimate that the run rate must rise to 53,000 in the UK and 47,000 in Italy. We doubt that 3 can achieve its year end target no matter what promotions it offers. Please contact us for further details. At the beginning of the year, we wrote that Orange ’s TOP programme, if taken to its logical conclusion, would see the reintegration of Orange into France Telecom. The early publication of detailed 1H results supports the rationale for an FT bid for the Orange minorities: stronger than expected reduction in net debt and the French tax credit. The 12% rise in the share price tow ards the implied offer price would strongly suggest that Orange’s days as an independent company (and our coverage) are numbered. Please contact us for further details. Detailed 1H03 results from TIM followed the release of headline numbers at the end of July. In the 5 weeks since the end of June, TIM added 400,000 new customers in Italy. H3G managed 300,000 additions during this period. With domestic handset sales of 622,000 in July alone as part of the summer campaign, we expect some margin slippage in 3Q from the 53.1% in 1H. Please contact us for further details. We have upgraded Vodafone from 3 to 2. Following 3 month underperformance on succession and competition concerns, we believe that several issues are likely to trigger an improvement in sentiment towards the stock. Please contact us for further details. As if to illustrate Vodafone’s operational focus on its core mobile businesses, closure of its disposal of Japan Telecom – expected in early October – coincides with the launch of Vodafone live! on J-Phone’s W-CDMA network and the completion of J-Phone’s rebranding to Vodafone. Vodafone’s economic interest in J-Phone will remain the same at 69.7%, with 39.7% held directly and Japan Telecom Holdings, in which Vodafone owns 66.7%, holding 45.1%.

NEWS – EUROPE

8

Global Telecom Monthly

US The Dallas Morning News reported new growth momentum for the wireless industry could come from a policy change by educational institutions. During the 1980s-90s almost two dozen states introduced a ban on mobile phones or pagers in the classroom, but on the back of concern about terrorism about half of those states have lifted the ban. Recent research from the Yankee Group shows 30% of parents with children under 18 years already have at least one mobile phone for their kids, with 75% of them footing the bills. The Wall Street Journal also quotes Ms. Doreen Toben, Verizon CFO, saying a recent surge in subscriber growth could be related to the lifting of these bans. CNET reported state governments are moving to regulate VoIP. While InStat / MDR findings shows VoIP subscription is reaching 2.5m in the US, the federal government has yet to regulate the new business. Recently, states such as Alabama, Colorado, Illinois, Michigan, North Carolina, Pennsylvania and Virginia have instructed their public service commissions to consider regulation for VoIP. Michigan PUC had asked Vonage, a major VoIP provider, to apply for a telephone operator license if it wants to continue its service in the state. The FCC also is moving to regulate VoIP as a telecommunication service. The Federal Trade Commission (FTC) announced 41.7m households have applied for the National Do Not Call Registry, a new measure to prevent unwanted telemarketing calls. That accounts for almost 40% of the 104m households that have telephone lines. The Wall Street Journal quoted an FTC official as saying that the commission expects 60m households to register by the end of this year, thereby putting an end to 80% of telemarketing calls. The National Do Not Call Registry will become effective on 1 October, and all telemarketing companies must purchase the list from the FTC. Telemarketers will face tougher regulation starting from next year, when their caller-IDs will no longer be allowed to remain anonymous. The popularity the registry could be a threat to the long distance business, and MCI has revised its projections for FY04 and FY05 to reflect this. Businessweek reported merger talks between BellSouth and AT&T have collapsed because of pricing issues. The magazine said AT&T was insisting on US$25 a share, representing a 15% premium over the current shareprice, while BellSouth considers the current price as fair value. Meanwhile, The Street.com reported that Sprint Corporation has started informal discussions with BellSouth on a possible merger. All the companies involved declined to comment. We believe fair value for AT&T would be US$19.5 a share.

The Oklahoma attorney general has started criminal proceedings against six former executives of MCI. The attorney general said MCI had misled the state regulators and investors with improper information, and the office is suing the company because the decision to use improper information was made by the company, not a member of the board of the company. According to the Oklahoma securities law, any person found guilty could face up to a US$10,000 fine or ten years in prison, and the company could face up to a US$150,000 fine. However, the US Attorney General and SEC, who are investigating MCI, have criticized the move for fear it could get in the way of their investigation.

NEWS – US

September 2003

9

Japan Japan Telecom Holdings announced it will sell its fixed-line business to Ripplewood Holdings for ¥261.3bn, but this had been widely reported since the beginning of the year. The Telecommunications Carriers Association (TCA) said the number of mobile phone subscribers in Japan increased 427,000 to 78.223m in August. Monthly net additions in July and August were higher than the same months a year ago. Although August is seasonally weak, KDDI (au) maintained net additions of around 200,000, regaining the top position only one month after it dropped to the second place behind NTT DoCoMo. High-end models launched by KDDI (au) from late June to mid-July continued selling well. The Nikkei Shinbun reported that mobile number portability (MNP) will be introduced in 2005. According to a survey conducted by the Ministry of Public Management, Home Affairs, Posts and Telecommunications (MPHPT), the number of subscribers willing to port even if they have to pay to do so accounted for around 30% of overall respondents. More than 90% of respondents regarded ¥3,000 as the maximum reasonable charge for porting. Aside from the issue of the cost burden Japan is faced with issues such as the portability of e-mail addresses and the impact on subsidy-driven promotions. NTT raised its FY03 parent net income projection from ¥74bn to ¥251bn, reflecting a ¥190bn extraordinary gain on the sale of a part of its stake in NTT DoCoMo to NTT DoCoMo. NTT also expects an extraordinary gain of ¥49bn on a consolidated basis after the share buyback by NTT DoCoMo. From 19 August through 8 September, NTT DoCoMo bought back 716,558 shares (incl. 698,000 from NTT) at ¥272,000 per share. Usen announced that the number of its broadband subscribers was 148,201 as of end-August. MPHPT announced the number of domestic DSL lines at end-August increased around 340,000 to 8,881,039. The market share of NTT East and West of total subscribers was almost unchanged (37.5% vs. 37.4% in July). Usen and SKY Perfect Communications announced a business alliance. SKY Perfect Communications will broadcast its programmes over Usen’s optical fiber network, while Usen will act as an agency promoting SKY Perfect Communications’ programmes. ¥500m worth of the new shares in UCOM, the subsidiary of Usen providing broadband services over optical fiber, have been placed to SKY Perfect Communications. KDDI (au) announced its cdma2000 1x subscriber base exceeded 10 million on 16 September.

NEWS – JAPAN

10

Global Telecom Monthly

Asia ex-Japan UTStarcom and China Netcom officials denied (AFX-Asia) a recent media report (21st Century Business Herald) which had suggested that China Netcom plans to slow down the expansion of its PAS network in preparation for 3G. China Netcom has reportedly (SCMP) started offering a landline service to residential and corporate users in Shanghai to compete directly with China Telecom. The company launched a telephone service for home and business users in Guangdong Province last month. China Unicom reported a 1H03 net profit of Rmb2,385m, up 11.6% YoY, but 9% below our forecast due mainly to a Rmb557m write-off of paging assets and higherthan-expected selling and marketing expenses and interconnection costs. China Unicom Group, parent of the listed China Unicom, will reportedly (Interfax-China) have invested Rmb70bn in the construction of its nationwide CDMA network by the end of 2004. According to the report, the company will be able to provide CDMA mobile services to 50m subscribers upon completion of the third phase of construction in the first half of 2004. China Telecom denied news reports (Hong Kong Economic Times) that it expects to receive a 3G license by the end of this year. The company also reported a 1H03 net profit of Rmb9.26bn, up 9% YoY and broadly in line with our expectations. China Telecommunications Corp, parent of the listed China Telecom, reportedly (Beijing Morning Post) expects the number of its broadband subscribers to reach 7m by year-end, while China Netcom Group Corp aims to reach 3m. Datang Telecom reportedly (SCMP) said commercial trials of TD-SCDMA technology could begin early next year, adding that the standardisation and development of the technology are progressing on schedule. The company denied giving an estimate of when the trials would be completed as different equipment vendors have different testing schedules. OFTA reported that Hong Kong had a broadband subscriber base of 1.125m and a dialup Internet subscriber base of 1.35m by end-July. OFTA also said it will waive the submission of performance bonds due in October 2003 from the four 3G licensees. This is the second year OFTA has granted the waiver. The four licensees were to pay HK$130m each on 22 October in respect of the 6th and 7th licence year. The waiver does not affect total spectrum utilisation fees to be paid by each licensee. PCCW reported a 1H03 net profit of HK$703m, which was substantially below our and the market’s expectations. The lower-than-expected earnings can be attributed to weaker than anticipated contributions from Reach and from local data services and business e-Solutions. PCCW also reportedly (Bloomberg) said its new pay-TV service, NOW Broadband TV, may break-even in three months. CSL reported a 16% YoY increase in EBITDA to HK$1,614m for the 12 months ended June 2003, although its revenue saw a 5% decline to HK$4,224m. The company has also launched Asia’s first commercial EDGE service and management reportedly (Hong Kong Economic Journal) said it has spent more than HK$100m on the EDGE network and installed 250 EDGE base stations. CSL will first roll out the service in key locations such as main MTR and KCRC routes, business districts, the airport and heavy data traffic areas, which reportedly in total account for 40% of existing GPRS traffic. AIG and Newbridge Capital (Reuters) have signed a contract to take a US$500m 39.6% stake in Hanaro. The deal has to be approved at a shareholders’ meeting scheduled for 21 October at which the LG Group is expected to try to block the transaction. SK Telecom bought W120bn worth of Hanaro commercial paper. Thrunet rejected bids from Hanaro and Dacom on the basis of price. SK Telecom and KT Freetel announced a 50% reduction in caller ID fees to W1,000 per month. We believe SKT currently has around 12m subscribers to this service and KTF around 6m subscribers. LGT is expected to follow suit in due course. TCC announced the appointment of Mr. Hui-Ming Cheng, formerly with Winbond Electronics, as CFO. FarEasTone confirmed that merger talks with KGT are ongoing and are focused on: 1) price, 2) accounting principles, 3) tax benefits and 4) relationships with NTT DoComo. NEWS – ASIA

September 2003

11

StarHub started charging users for its previously free Internet service as of 1 September because declining subscriber numbers have reduced advertising revenue. StarHub is in the final stage of talking to bankers about its 3G funding requirement, which has fallen from a previously estimated S$1bn to S$600m due to declines in equipment prices. Deutsche Telekom is offering its 24.8% stake in Globe Telecom to other parties after Ayala Corp and Singapore Telecom let their exclusive option to purchase the stake expire.

NEWS – ASIA

12

Global Telecom Monthly

Statistics and valuations Cellular subs 2000A

2001A

2002A

2003F

2004F

2005F

2006F

243.7 58

288.8 18

303.2 5

325.0 7

343.2 6

358.0 4

368.7 3

UK % change

40.0 68

44.9 12

49.9 11

53.0 6

56.0 6

58.4 4

60.1 3

France % change

29.7 44

37.0 25

38.6 4

41.0 6

42.5 4

43.0 1

43.6 1

Germany % change

48.1 106

54.2 13

57.0 5

60.5 6

63.3 5

65.4 3

66.7 2

Italy % change

42.1 40

49.9 19

52.9 6

56.2 6

58.8 5

60.7 3

61.9 2

Spain 24.3 % change 62 Source: Mobile Communications/DIR forecasts

28.8 19

33.2 15

35.2 6

36.9 5

38.3 4

39.4 3

109.5 27

128.4 17

140.8 10

155.0 10

156.4 1

157.7 1

159.1 1

Japan (m) Japan % change

58.0 20

67.1 16

73.5 10

79.5 8

84.2 6

87.7 4

n.a. n.a.

Asia (ex-Japan) (m) China % change

85.3 97

144.8 70

206.6 43

251.4 22

284.1 13

316.5 11

350.7 11

Hong Kong % change

5.2 31

5.7 9

6.2 9

6.4 2

6.5 2

6.7 2

6.8 2

Singapore % change

2.4 66

2.9 17

3.2 13

3.5 6

3.6 5

3.7 3

3.9 3

Korea % change

26.8 14

29.0 8

32.4 12

35.0 8

36.8 5

38.5 5

39.8 3

Taiwan % change

17.9 55

21.6 21

23.9 11

25.8 8

26.2 1

26.7 2

27.3 2

Australia % change Source: DIR estimates

10.1 30

12.0 18

13.5 12

14.6 8

14.9 2

15.1 2

15.5 3

2001A

2002A

2003F

2004F

2005F

2006F

74.8 76.4 66.4 65.9 87.2 72.7

78.5 84.9 69.3 69.3 92.3 83.7

84.1 90.2 73.6 73.6 98.0 88.9

88.9 95.2 76.2 77.0 102.6 93.0

92.7 99.3 77.2 79.6 105.9 96.6

95.5 102.3 78.3 81.1 108.1 99.5

Europe (m) Western Europe % change

USA (m) USA % change

Cellular penetration 2000A Europe (%) Western Europe 63.1 UK 68.1 France 53.3 Germany 58.5 Italy 73.4 Spain 61.3 Source: Mobile Communications/DIR forecasts USA (%) USA

39.8

46.2

50.2

54.8

54.8

54.8

54.8

Japan (%) Japan

46.9

53.9

58.6

63.0

66.7

69.4

n.a.

Asia (ex-Japan) (%) China Hong Kong Singapore Korea Taiwan Australia

6.7 78.0 74.8 57.0 80.2 54.1

11.3 84.4 71.2 61.0 96.6 63.4

16.1 91.1 77.9 68.0 106.2 70.5

19.4 92.1 82.4 73.0 114.0 75.4

21.7 93.1 85.6 76.3 115.0 76.0

24.0 94.1 87.6 79.5 117.0 76.5

26.4 95.1 89.5 81.7 119.0 77.5

Source: DIR estimates

STATISTICS & VALUATIONS

September 2003

13

Cellular ARPU GDP* (US$ PPP/capita)

2000A

2001A

2002A

2003F

2004F

2005F

2006F

24,700

37.1 (20) 4 118

32.4 (13) 11 124

34.3 6 14 157

35.9 5 17 169

37.8 5 19 181

39.1 4 20 191

40.2 3 22 200

Orange UK

36,300

45.3 3 -

47.4 5 -

48.4 2 -

55.2 14 -

57.7 5 -

57.5 0

57.4 0

Industry average

2000A

2001A

2002F

2003F

2004F

2005F

2006F

73.7 (1) 10 372

72.2 (2) 18 375

69.2 (4) 22 371

67.5 (2) 23 364

65.9 (2) 25 357

65.2 (1) 27 353

n.a. n.a. n.a. n.a.

2000A

2001A

2002A

2003F

2004F

2005F

2006F

Name of operator

4,300

26.6 (26) 2 178

17.0 (36) 3 127

13.9 (18) 4 99

12.3 (11) 7 87

11.6 (6) 12 81

11.3 (3) 17 79

11.2 (1) 22 80

China Mobile (HK)

Hong Kong % change % non-voice Line yield (US$)

25,000

25.2 (43) 1 55

23.4 (7) 2 10

23.2 (1) 4 74

22.8 (2) 8 93

23.5 3 15 89

25.1 7 21 106

26.4 5 26 119

SmarTone

Singapore % change % non-voice

24,700

44.4 (17) 0

30.3 (32) 0

32.2 6 13

30.8 (4) 18

31.4 2 21

31.5 1 26

31.6 0 28

SingTel

Korea % change % non-voice Line yield (US$)

18,000

33.6 (10) 3 146

34.7 3 7 168

37.1 7 14 213

37.2 0 19 211

39.5 6 24 223

40.0 1 27 226

41.9 5 32 247

SK Telecom

Taiwan % change % non-voice Line yield (US$)

17,200

32.7 (18) 0 120

21.6 (34) 3 114

19.3 (11) 5 112

17.7 (8) 8 99

17.0 (4) 12 102

16.5 (3) 17 99

16.2 (2) 20 99

Far EasTone

Australia % change % non-voice

24,000

26.9 (17) 1

25.8 (4) 4

25.5 (1) 7

26.6 5 10

27.2 2 13

28.8 6 16

30.1 4 18

Telstra

Europe (US$) UK % change % non-voice Line yield (US$) USA (US$) USA % change Line yield (US$)

GDP* (US$ PPP/capita) Japan (US$) Japan % change % non-voice Line yield (US$)

27,200

GDP* (US$ PPP/capita) Asia (ex-Japan) (US$) China % change % non-voice Line yield (US$)

Name of operator

Name of operator NTT DoCoMo

Source: DIR estimates Note: Line yield (EBITDA per sub in US$) is only provided for operators that breakdown EBITDA by business segment. * GDP PPP figures are for 2001 (Source: CIA Worldfactbook)

STATISTICS & VALUATIONS

14

Global Telecom Monthly

Broadband Internet subs 2000A

2001A

2002A

2003F

2004F

2005F

2006F

Europe (m) UK % change

0.0 n.a.

0.3 817

1.4 303

2.6 90

3.5 35

4.1 17

4.6 12

Germany % change

0.7 n.a.

2.5 274

3.4 37

4.2 25

4.8 14

5.2 8

5.7 10

France % change

0.2 249

0.6 271

1.7 178

2.8 66

3.6 29

4.3 19

5.0 16

Netherlands % change

0.2 n.a.

0.5 113

1.1 139

1.7 52

2.1 24

2.5 19

270 8

Western Europe total % change

1.8 n.a.

6.5 272

13.6 108

21.0 55

26.0 24

30.0 15

33.0 10

2000A

2001A

2002F

2003F

2004F

2005F

2006F

7.1 157

12.8 81

19.9 55

26.7 34

43.0 61

75.0 74

102.6 37

USA (m) USA % change

2000A

2001A

2002A

2003F

2004F

2005F

2006F

Japan (m) Japan % change

0.6 323

2.8 347

7.8 175

15.0 92

20.0 33

22.0 10

24.0 9

Asia (ex-Japan) (m) China % change

0.3 n.a.

1.0 232

3.3 244

10.9 226

15.6 43

20.7 33

24.6 18

Hong Kong % change

0.4 692

0.6 59

1.0 59

1.3 27

1.5 19

1.7 16

1.9 12

Singapore % change

0.1 1,986

0.1 85

0.2 70

0.4 67

0.5 35

0.6 23

0.7 15

Korea % change

4.0 402

7.8 94

9.9 26

10.9 10

11.3 4

12.0 6

12.1 1

Taiwan % change

0.2 n.a.

1.1 393

2.1 86

3.0 43

3.9 30

5.1 29

6.3 25

Australia % change

0.1 n.a.

0.2 235

0.4 64

0.7 69

1.1 57

1.6 46

2.2 38

Source: DIR estimates

STATISTICS & VALUATIONS

September 2003

15

Valuation –––––––––––––EV/EBITDA –––––––––––

Company Rating Currency Price Integrated operators AT&T (T US) 4 US$ 22.30 BellSouth (BLS US) 3 US$ 25.57 BT Group (BT/A LN) 3 GBp 188.25 China Telecom (728 HK) 2 HK$ 2.00 Deutsche Telekom (DTE GR) 3 Eur 13.29 France Telecom (FTE FP) 2 Eur 22.38 KPN (KPN NA) 3 Eur 6.66 KT Corp (3020 KS) 1 Won 45,350 NTT (9432 JP) 2 Yen 511,000 PCCW (8 HK) 4 HK$ 4.90 Portugal Telecom (PTC PL) 2 Eur 6.60 Qwest (Q US) 4 US$ 3.92 SBC (SBC US) 4 US$ 23.41 Singapore Telecom (ST SP) 2 S$ 1.63 Sprint (FON US) 4 US$ 14.71 Swisscom (SCMN VX) 3 CHF 397.00 Telecom Italia ordinaries (TIT IM) 4 Eur 2.185 Telecom Italia savers (TITR IM) 3 Eur 1.522 Telefonica (TEF SM) 3 Eur 10.90 Telstra (TLS AU) 2 A$ 4.97 Verizon (VZ US) 3 US$ 35.51 Weighted average Cellular/wireless -centric AT&T Wireless (AWE US) China Mobile (941 HK) China Unicom (762 HK) Far EasTone (4904 TT) Japan Telecom (9434 JP) KDDI (9433 JP) KT Freetel (3239 KS) M1 (M1 SP) mmO 2 (OOM LN) Nextel (NXTL US) NTT DoCoMo (9437 JP) Orange (OGE FP) SK Telecom (1767 KS) SmarTone (315 HK) Sprint PCS (PCS US) Taiwan Cellular (3045 TT) Telefonica Moviles (TEM SM) Vodafone (VOD LN)

1 2 3 3 3 1 3 3 2 3 1 3 3 3 5 3 4 2

Weighted average

US$ HK$ HK$ NT$ Yen Yen Won S$ GBp US$ Yen Eur Won HK$ US$ NT$ Eur GBp

8.73 21.00 5.80 22.20 355,000 648,000 23,150 1.35 59.75 19.49 291,000 9.81 200,000 10.25 5.98 24.60 7.24 124.00

–––––––––––––––EV/sales –––––––––––––

2001

2002

2003

2004

2001

2002

2003

2004

2.1 5.0 5.2 6.0 7.8 9.8 9.0 3.5 5.1 8.9 6.5 4.3 5.3 10.8 4.3 5.3 5.0 5.0 6.5 7.9 5.7

2.4 5.0 4.5 4.7 7.2 9.3 6.6 3.9 3.4 7.3 5.5 5.5 5.6 7.6 3.8 6.1 4.6 4.6 6.7 7.3 5.5

3.2 4.7 4.3 3.9 6.5 6.8 5.5 3.3 3.4 7.3 5.2 5.7 5.7 6.6 3.4 5.9 5.9 5.9 6.6 7.2 5.3

3.2 4.3 4.3 3.5 5.7 5.9 4.9 2.8 3.1 7.0 4.4 5.2 5.5 6.1 2.9 5.7 5.5 5.5 6.0 6.8 4.7

0.7 2.3 1.6 3.0 2.4 2.8 2.6 1.3 1.2 3.0 2.4 1.6 1.9 5.3 1.1 1.6 2.1 2.1 2.7 3.6 2.4

0.7 2.2 1.4 2.4 2.2 3.0 2.4 1.5 1.2 2.9 2.2 1.7 1.9 3.8 1.1 1.8 2.1 2.1 2.8 3.5 2.2

0.8 2.1 1.4 2.1 2.1 2.5 2.1 1.3 1.2 2.8 2.1 1.6 1.8 3.3 1.0 1.8 2.7 2.7 2.8 3.4 2.1

0.8 1.9 1.3 1.9 1.9 2.2 1.9 1.1 1.1 2.6 1.8 1.5 1.7 3.1 0.9 1.6 2.5 2.5 2.5 3.3 1.9

5.9

5.5

5.1

4.6

2.2

2.1

1.9

1.8

8.7 7.1 5.8 5.0 6.9 8.1 5.3 6.2 13.4 16.8 9.3 16.3 4.4 33.5 14.6 5.2 12.0 12.0

8.5 5.9 6.0 4.1 3.7 7.2 5.0 5.7 6.7 9.5 8.3 10.5 3.5 4.2 7.7 7.6 10.2 8.8

6.3 4.7 4.0 4.0 3.5 5.7 4.7 5.2 4.9 7.5 7.9 7.7 2.8 3.1 6.1 6.2 8.3 7.7

5.2 4.1 2.9 3.4 3.3 5.1 4.5 4.8 4.0 6.8 7.3 6.8 2.2 3.4 5.0 5.6 7.5 7.0

2.0 4.3 2.7 1.7 1.3 1.5 1.5 2.4 1.4 4.1 3.4 3.5 2.1 1.0 2.3 2.1 4.8 4.2

2.1 3.5 2.7 1.7 1.1 1.5 1.7 2.2 1.2 3.5 3.2 3.2 1.7 1.0 1.8 2.8 4.2 3.2

1.8 2.8 1.5 1.6 1.0 1.4 1.6 2.0 1.1 2.9 3.1 2.8 1.3 0.8 1.6 2.4 3.7 2.9

1.6 2.4 1.2 1.5 1.0 1.3 1.6 1.9 1.0 2.8 2.9 2.4 1.0 0.8 1.5 2.2 3.3 2.7

10.7

8.2

7.0

6.2

3.5

3.0

2.7

2.5

Source: DIR estimates Note: Share price as of 16 September 2003

STATISTICS & VALUATIONS

16

Global Telecom Monthly

Valuation (cont’d) Company Rating Currency Price Integrated operators AT&T (T US) 4 US$ 22.30 BellSouth (BLS US) 3 US$ 25.57 BT Group (BT/A LN) 3 GBp 188.25 China Telecom (728 HK) 2 HK$ 2.00 Deutsche Telekom (DTE GR) 3 Eur 13.29 France Telecom (FTE FP) 2 Eur 22.38 KPN (KPN NA) 3 Eur 6.66 KT Corp (3020 KS) 1 Won 45,350 NTT (9432 JP) 2 Yen 511,000 PCCW (8 HK) 4 HK$ 4.90 Portugal Telecom (PTC PL) 2 Eur 6.60 Qwest (Q US) 4 US$ 3.92 SBC (SBC US) 4 US$ 23.41 Singapore Telecom (ST SP) 2 S$ 1.63 Sprint (FON US) 4 US$ 14.71 Swisscom (SCMN VX) 3 CHF 397.00 Telecom Italia ordinaries (TIT IM) 4 Eur 2.185 Telecom Italia savers (TITR IM) 3 Eur 1.522 Telefonica (TEF SM) 3 Eur 10.90 Telstra (TLS AU) 2 A$ 4.97 Verizon (VZ US) 3 US$ 35.51 Weighted average Cellular/wireless -centric AT&T Wireless (AWE US) China Mobile (941 HK) China Unicom (762 HK) Far EasTone (4904 TT) Japan Telecom (9434 JP) KDDI (9433 JP) KT Freetel (3239 KS) M1 (M1 SP) mmO 2 (OOM LN) Nextel (NXTL US) NTT DoCoMo (9437 JP) Orange (OGE FP) SK Telecom (1767 KS) SmarTone (315 HK) Sprint PCS (PCS US) Taiwan Cellular (3045 TT) Telefonica Moviles (TEM SM) Vodafone (VOD LN)

1 2 3 3 3 1 3 3 2 3 1 3 3 3 5 3 4 2

Weighted average

US$ HK$ HK$ NT$ Yen Yen Won S$ GBp US$ Yen Eur Won HK$ US$ NT$ Eur GBp

8.73 21.00 5.80 22.20 355,000 648,000 23,150 1.35 59.75 19.49 291,000 9.81 200,000 10.25 5.98 24.60 7.24 124.00

––––––––– EV/Net PP&E ––––––– 2001 2002 2003 2004

––––– Capex/sales (%) ––––– 2001 2002 2003 2004

2.1 2.7 1.6 1.4 2.1 3.6 2.8 1.2 1.2 2.6 2.5 1.1 2.1 4.1 1.1 2.6 3.2 3.2 2.2 3.3 2.2

1.0 2.6 1.6 1.2 2.1 4.1 2.8 1.4 1.2 2.5 2.4 1.1 2.0 3.0 1.0 3.4 3.1 3.1 2.5 3.2 2.0

1.2 2.5 1.7 1.0 2.2 3.2 2.8 1.3 1.2 2.4 2.6 1.4 1.8 2.9 0.9 3.6 4.2 4.2 3.1 3.3 1.9

1.1 2.4 1.7 1.0 2.1 2.9 2.8 1.2 1.1 2.4 2.5 1.5 1.7 2.9 0.8 3.7 4.0 4.0 3.1 3.3 1.9

13.7 20.3 16.8 64.3 20.4 18.8 23.9 24.6 20.8 11.0 23.0 43.4 20.6 40.9 31.3 8.7 21.8 21.8 21.8 16.8 25.9

10.3 13.3 13.0 41.6 12.6 15.9 9.3 19.7 18.1 8.0 20.1 17.7 13.3 16.3 14.4 8.4 15.4 15.4 13.3 15.3 17.7

10.2 11.7 13.8 33.0 12.3 11.9 11.3 22.4 18.0 8.8 12.6 20.2 9.6 15.1 13.2 8.9 15.1 15.1 13.5 13.9 17.6

10.2 11.9 13.6 29.0 12.4 12.2 12.5 19.4 17.6 8.8 14.0 20.9 12.5 14.8 16.2 8.6 15.5 15.5 15.0 15.9 16.8

2.1

2.1

2.1

2.0

20.6

14.2

13.0

13.4

2.4 4.5 1.2 1.5 5.1 2.2 1.9 2.3 1.5 3.5 6.4 5.9 4.6 1.2 2.1 2.0 8.8 6.6

2.2 3.4 1.2 1.4 4.6 2.3 1.8 2.2 1.4 3.3 5.8 5.3 3.4 1.3 1.9 2.4 7.7 5.2

1.8 2.5 0.9 1.3 4.3 2.4 1.8 2.0 1.5 3.3 5.7 4.7 2.7 1.2 1.8 2.1 7.7 4.8

1.7 2.2 0.8 1.4 4.2 2.4 1.8 1.9 1.4 3.1 5.4 4.5 2.2 1.2 1.8 1.9 7.3 4.5

38.2 42.2 106.3 37.9 27.5 13.0 21.0 19.1 29.0 44.5 22.2 19.7 22.8 14.7 38.6 28.4 20.2 18.1

33.9 38.6 46.7 60.5 15.5 8.8 20.5 18.1 16.0 21.4 17.8 20.7 20.5 10.4 22.1 18.4 10.1 17.4

18.5 28.4 29.4 25.1 18.4 12.0 18.2 17.5 25.0 17.9 16.5 15.9 14.8 14.2 16.2 12.4 13.5 15.7

18.2 23.3 23.4 13.5 17.3 11.4 16.6 17.2 22.0 18.1 15.6 13.9 16.5 18.2 12.2 12.4 12.3 15.5

5.5

4.7

4.4

4.1

24.6

20.1

16.7

15.5

Source: DIR estimates Note: Share price as of 16 September 2003

STATISTICS & VALUATIONS

September 2003

17

Valuation (cont’d) Company Rating Currency Price Integrated operators AT&T (T US) 4 US$ 22.30 BellSouth (BLS US) 3 US$ 25.57 BT Group (BT/A LN) 3 GBp 188.25 China Telecom (728 HK) 2 HK$ 2.00 Deutsche Telekom (DTE GR) 3 Eur 13.29 France Telecom (FTE FP) 2 Eur 22.38 KPN (KPN NA) 3 Eur 6.66 KT Corp (3020 KS) 1 Won 45,350 NTT (9432 JP) 2 Yen 511,000 PCCW (8 HK) 4 HK$ 4.90 Portugal Telecom (PTC PL) 2 Eur 6.60 Qwest (Q US) 4 US$ 3.92 SBC (SBC US) 4 US$ 23.41 Singapore Telecom (ST SP) 2 S$ 1.63 Sprint (FON US) 4 US$ 14.71 Swisscom (SCMN VX) 3 CHF 397.00 Telecom Italia ordinaries (TIT IM) 4 Eur 2.185 Telecom Italia savers (TITR IM) 3 Eur 1.522 Telefonica (TEF SM) 3 Eur 10.90 Telstra (TLS AU) 2 A$ 4.97 Verizon (VZ US) 3 US$ 35.51 Weighted average Cellular/wireless -centric AT&T Wireless (AWE US) China Mobile (941 HK) China Unicom (762 HK) Far EasTone (4904 TT) Japan Telecom (9434 JP) KDDI (9433 JP) KT Freetel (3239 KS) M1 (M1 SP) mmO 2 (OOM LN) Nextel (NXTL US) NTT DoCoMo (9437 JP) Orange (OGE FP) SK Telecom (1767 KS) SmarTone (315 HK) Sprint PCS (PCS US) Taiwan Cellular (3045 TT) Telefonica Moviles (TEM SM) Vodafone (VOD LN)

1 2 3 3 3 1 3 3 2 3 1 3 3 3 5 3 4 2

Weighted average

US$ HK$ HK$ NT$ Yen Yen Won S$ GBp US$ Yen Eur Won HK$ US$ NT$ Eur GBp

8.73 21.00 5.80 22.20 355,000 648,000 23,150 1.35 59.75 19.49 291,000 9.81 200,000 10.25 5.98 24.60 7.24 124.00

––––––––– P/OFCF ––––––– 2001 2002 2003 2004

––––––––– PER (x) ––––––– 2001 2002 2003 2004

5.4 13.6 24.2 n.m. n.m. 17.1 n.m. 37.0 n.m. 16.5 24.8 n.m. 22.1 n.m. n.m. 9.3 10.3 10.3 13.5 16.9 20.1

4.7 9.1 9.2 13.1 10.6 16.3 10.6 9.0 6.4 6.8 14.5 5.9 11.8 18.0 6.8 10.4 3.4 3.4 5.5 15.1 9.4

5.3 8.3 7.0 10.0 7.2 8.2 7.3 22.0 7.2 11.7 6.0 n.m. 11.2 29.9 6.4 10.2 4.6 4.6 7.8 14.1 10.5

5.5 7.5 8.0 8.6 6.8 6.4 7.7 10.2 6.6 10.3 5.5 109.2 12.1 28.9 7.3 10.0 4.6 4.6 7.5 14.1 9.1

1.8 19.7 21.3 15.6 n.m. n.m. n.m. 12.4 n.m. 16.3 26.4 n.m. 11.3 16.7 n.m. 5.9 n.m. n.m. 23.9 17.5 246.6

n.m. 36.3 13.2 13.5 n.m. n.m. n.m. 7.4 34.9 n.m. 21.2 n.m. 13.8 20.7 10.8 33.5 n.m. n.m. n.m. 16.4 23.9

8.7 11.7 11.1 12.5 68.8 21.1 18.4 5.5 16.4 17.9 21.3 n.m. 8.5 11.5 5.3 15.3 16.2 16.2 39.5 15.5 15.7

9.6 11.4 10.0 11.0 19.9 13.3 15.0 5.5 14.9 20.3 13.4 n.m. 15.2 14.9 10.2 15.5 34.7 34.7 31.3 14.9 11.6

8.0

9.5

8.4

9.2

8.5

16.4

20.0

12.2

n.m. 64.7 n.m. n.m. n.m. 40.7 n.m. n.m. n.m. n.m. 65.5 n.m. 11.7 n.m. n.m. 19.3 45.6 35.2

n.m. 25.6 n.m. n.m. 8.5 11.4 12.2 9.9 n.m. n.m. 21.2 124.9 9.5 15.9 n.m. n.m. n.m. n.m.

14.3 14.7 n.m. 10.2 10.6 13.0 7.8 9.2 n.m. 17.1 18.0 24.9 6.4 15.8 13.8 7.3 11.6 19.5

12.9 11.4 8.5 4.7 8.1 11.3 6.2 10.9 38.6 14.5 16.1 17.5 6.4 n.m. 4.9 7.2 9.3 16.9

n.m. 14.8 17.3 5.5 n.m. 211.7 8.0 11.0 n.m. n.m. n.m. n.m. 9.4 n.m. n.m. 6.4 34.5 n.m.

n.m. 13.0 16.9 6.4 14.3 47.6 8.3 9.9 n.m. 11.3 68.7 n.m. 7.5 52.4 n.m. 7.4 n.m. n.m.

31.9 12.3 16.1 8.4 17.8 27.7 7.8 9.2 n.m. 19.8 21.9 11.0 6.1 15.2 n.m. 7.2 18.1 n.m.

23.0 11.3 11.5 6.5 17.6 17.0 7.5 8.5 n.m. 17.0 20.3 20.1 5.6 17.8 n.m. 7.0 17.9 n.m.

54.3

31.1

14.3

14.8

68.3

44.8

23.5

28.4

Source: DIR estimates Note: Share price as of 16 September 2003

STATISTICS & VALUATIONS

18

Global Telecom Monthly

Valuation (cont’d) Company Rating Currency Price Integrated operators AT&T (T US) 4 US$ 22.30 BellSouth (BLS US) 3 US$ 25.57 BT Group (BT/A LN) 3 GBp 188.25 China Telecom (728 HK) 2 HK$ 2.00 Deutsche Telekom (DTE GR) 3 Eur 13.29 France Telecom (FTE FP) 2 Eur 22.38 KPN (KPN NA) 3 Eur 6.66 KT Corp (3020 KS) 1 Won 45,350 NTT (9432 JP) 2 Yen 511,000 PCCW (8 HK) 4 HK$ 4.90 Portugal Telecom (PTC PL) 2 Eur 6.60 Qwest (Q US) 4 US$ 3.92 SBC (SBC US) 4 US$ 23.41 Singapore Telecom (ST SP) 2 S$ 1.63 Sprint (FON US) 4 US$ 14.71 Swisscom (SCMN VX) 3 CHF 397.00 Telecom Italia ordinaries (TIT IM) 4 Eur 2.185 Telecom Italia savers (TITR IM) 3 Eur 1.522 Telefonica (TEF SM) 3 Eur 10.90 Telstra (TLS AU) 2 A$ 4.97 Verizon (VZ US) 3 US$ 35.51 Weighted average Cellular/wireless -centric AT&T Wireless (AWE US) China Mobile (941 HK) China Unicom (762 HK) Far EasTone (4904 TT) Japan Telecom (9434 JP) KDDI (9433 JP) KT Freetel (3239 KS) M1 (M1 SP) mmO 2 (OOM L N) Nextel (NXTL US) NTT DoCoMo (9437 JP) Orange (OGE FP) SK Telecom (1767 KS) SmarTone (315 HK) Sprint PCS (PCS US) Taiwan Cellular (3045 TT) Telefonica Moviles (TEM SM) Vodafone (VOD LN)

1 2 3 3 3 1 3 3 2 3 1 3 3 3 5 3 4 2

Weighted average

US$ HK$ HK$ NT$ Yen Yen Won S$ GBp US$ Yen Eur Won HK$ US$ NT$ Eur GBp

8.73 21.00 5.80 22.20 355,000 648,000 23,150 1.35 59.75 19.49 291,000 9.81 200,000 10.25 5.98 24.60 7.24 124.00

–––– EBITDA margin (%)––– 2001 2002 2003 2004

–––––––– Yield (%) –––––––– 2001 2002 2003 2004

31.8 44.8 31.2 49.7 31.4 28.6 29.0 37.3 24.2 33.7 37.1 37.4 36.1 49.5 25.2 31.1 42.8 42.8 41.2 46.0 41.3

28.2 43.8 31.0 52.2 30.3 32.0 36.0 37.4 36.3 40.4 39.9 30.3 33.7 49.8 29.6 30.4 44.7 44.7 41.3 47.9 40.2

25.9 43.8 31.6 53.3 32.6 36.7 39.1 39.1 34.5 37.8 40.0 27.6 31.2 50.5 30.7 29.9 45.5 45.5 42.6 47.5 39.8

24.5 45.2 30.9 53.6 32.7 37.5 39.1 40.0 35.3 37.9 41.4 29.5 30.9 50.8 32.7 28.7 46.7 46.7 42.3 48.8 40.3

3.6 3.0 1.1 0.0 2.8 4.5 0.0 1.6 1.0 0.0 1.5 0.0 4.3 3.4 3.4 2.8 14.4 20.7 0.0 4.4 4.3

3.2 3.1 3.5 0.4 0.0 0.0 0.0 2.0 1.0 0.0 2.4 0.0 4.6 3.4 3.3 3.0 14.4 20.7 2.3 5.4 4.3

3.4 3.5 5.3 3.3 0.0 0.0 0.0 2.4 1.0 0.0 3.2 0.0 5.8 3.4 3.4 3.3 4.4 6.4 3.7 5.2 4.3

3.4 3.6 5.8 3.4 0.0 0.0 3.3 2.8 1.0 0.0 3.7 0.0 6.5 3.4 3.4 3.5 4.5 6.5 3.7 5.6 4.3

33.1

34.3

34.6

35.0

2.5

2.2

2.7

2.9

22.8 60.1 46.0 33.5 18.4 19.2 29.3 38.8 10.1 24.6 36.3 21.4 47.3 3.0 15.6 39.8 39.6 35.2

24.5 60.1 45.8 41.3 30.2 20.5 33.2 39.1 17.6 36.3 38.4 30.1 47.8 23.7 23.9 36.5 40.9 36.9

28.4 58.8 37.4 40.9 29.6 24.4 34.3 38.3 23.2 38.7 38.8 35.5 47.7 25.1 27.1 38.5 43.9 38.3

30.5 58.6 40.9 44.4 29.9 25.0 35.2 39.0 25.5 41.1 39.1 36.1 48.0 24.0 30.6 39.0 43.8 38.5

0.0 0.0 0.0 4.5 0.2 0.3 0.0 5.4 0.0 0.0 0.5 0.0 1.1 0.0 0.0 7.7 0.0 1.2

0.0 1.5 1.6 3.9 0.3 0.3 0.0 6.0 0.0 0.0 0.2 0.0 1.3 0.7 0.0 8.1 2.4 1.4

0.0 1.6 1.7 4.5 0.3 0.4 4.1 5.4 0.0 0.0 0.3 0.0 1.6 4.3 0.0 8.4 2.5 1.6

0.0 1.8 2.4 5.4 0.3 0.4 5.3 5.9 0.0 0.0 0.3 0.0 1.8 3.7 0.0 8.6 2.5 1.8

34.7

37.7

39.2

39.7

0.5

0.9

1.0

1.1

Source: DIR estimates Note: Share price as of 16 September 2003

STATISTICS & VALUATIONS

September 2003

19

Valuation (cont’d) Company Rating Currency Price Integrated operators AT&T (T US) 4 US$ 22.30 BellSouth (BLS US) 3 US$ 25.57 BT Group (BT/A LN) 3 GBp 188.25 China Telecom (728 HK) 2 HK$ 2.00 Deutsche Telekom (DTE GR) 3 Eur 13.29 France Telecom (FTE FP) 2 Eur 22.38 KPN (KPN NA) 3 Eur 6.66 KT Corp (3020 KS) 1 Won 45,350 NTT (9432 JP) 2 Yen 511,000 PCCW (8 HK) 4 HK$ 4.90 Portugal Telecom (PTC PL) 2 Eur 6.60 Qwest (Q US) 4 US$ 3.92 SBC (SBC US) 4 US$ 23.41 Singapore Telecom (ST SP) 2 S$ 1.63 Sprint (FON US) 4 US$ 14.71 Swisscom (SCMN VX) 3 CHF 397.00 Telecom Italia ordinaries (TIT IM) 4 Eur 2.185 Telecom Italia savers (TITR IM) 3 Eur 1.522 Telefonica (TEF SM) 3 Eur 10.90 Telstra (TLS AU) 2 A$ 4.97 Verizon (VZ US) 3 US$ 35.51 Weighted average Cellular/wireless -centric AT&T Wireless (AWE US) China Mobile (941 HK) China Unicom (762 HK) Far EasTone (4904 TT) Japan Telecom (9434 JP) KDDI (9433 JP) KT Freetel (3239 KS) M1 (M1 SP) mmO 2 (OOM LN) Nextel (NXTL US) NTT DoCoMo (9437 JP) Orange (OGE FP) SK Telecom (1767 KS) SmarTone (315 HK) Sprint PCS (PCS US) Taiwan Cellular (3045 TT) Telefonica Moviles (TEM SM) Vodafone (VOD LN)

1 2 3 3 3 1 3 3 2 3 1 3 3 3 5 3 4 2

Weighted average

US$ HK$ HK$ NT$ Yen Yen Won S$ GBp US$ Yen Eur Won HK$ US$ NT$ Eur GBp

8.73 21.00 5.80 22.20 355,000 648,000 23,150 1.35 59.75 19.49 291,000 9.81 200,000 10.25 5.98 24.60 7.24 124.00

–––– Net debt/EBITDA ––––– 2001 2002 2003 2004

–––– Net debt/equity (%) ––– 2001 2002 2003 2004

0.80 1.47 2.38 0.82 4.09 5.15 4.39 1.26 2.05 5.31 2.57 3.36 1.30 2.79 1.22 n.m. 2.70 2.70 2.25 1.19 2.21

0.75 1.19 1.65 0.23 3.76 4.56 2.82 1.71 1.36 4.05 1.80 4.15 1.07 1.90 0.83 0.13 2.38 2.38 2.10 1.02 1.86

1.31 0.89 1.27 n.m. 2.90 2.63 1.90 1.21 1.21 3.83 1.46 4.08 0.75 1.41 0.30 n.m. 2.50 2.50 1.74 0.99 1.75

1.11 0.70 1.20 n.m. 2.31 1.96 1.44 0.84 0.93 3.52 1.02 3.70 0.63 1.20 n.m. n.m. 2.20 2.20 1.39 0.86 1.43

61 110 200 25 116 234 118 65 86 n.m. 121 63 81 87 39 n.m. 103 103 111 40 183

46 82 n.m. 8 122 n.m. 150 108 94 n.m. 103 114 56 65 28 6 88 88 115 35 155

68 58 n.m. n.m. 144 425 130 84 80 n.m. 101 n.m. 33 49 n.m. n.m. 83 83 126 34 148

54 44 192 n.m. 113 107 73 48 60 n.m. 71 n.m. 27 40 n.m. n.m. 100 100 109 31 126

2.19

1.84

1.41

1.11

106

n.m.

105

53

1.1 n.m. 0.1 0.6 3.3 3.0 2.5 1.0 1.4 6.5 0.7 1.9 1.0 n.m. 10.5 0.6 2.7 1.5

2.3 0.2 1.8 0.5 1.6 2.4 2.5 0.9 0.6 3.4 0.4 1.4 0.4 n.m. 5.6 2.4 1.9 1.2

1.2 n.m. 0.9 0.5 1.5 1.7 2.4 0.6 0.6 2.5 0.3 0.3 n.m. n.m. 4.2 1.6 1.2 0.8

0.8 n.m. 0.4 0.3 1.3 1.3 2.3 0.4 0.4 2.1 n.m. n.m. n.m. n.m. 3.4 1.1 0.7 0.4

15 n.m. 2 23 222 193 170 71 0 n.m. 34 30 71 n.m. n.m. 27 142 9

45 12 53 22 203 156 154 52 4 942 20 43 32 n.m. n.m. 84 131 11

28 n.m. 33 19 165 123 143 33 7 284 17 12 n.m. n.m. n.m. 58 136 8

19 n.m. 16 12 132 85 134 22 5 176 n.m. n.m. n.m. n.m. n.m. 35 71 5

1.4

1.1

0.7

0.4

40

37

28

14

Source: DIR estimates Note: Share price as of 16 September 2003

STATISTICS & VALUATIONS

20

Global Telecom Monthly

Share price performance Share Shares Bloomberg price in issue code (16 Sep) (m)

Company

Market cap (US$m)

1 Wk

Relative performance 1-mth 3-mth 12-mth

Absolute performance (US$) 1 Wk 1-mth 3-mth 12-mth

Europe BT Group plc

BT/A LN

1.883

8,670.0

25,906.0 (1.47)

Cable & Wireless

CW/ LN

1.223

2,382.1

4,622.3 (3.77)

Deutsche Telekom

DTE GR

13.29

4,203.1

Equant

62,434.0

(3.88) (10.93)

(8.68)

(0.36)

(2.50)

(2.97) (5.27)

(3.57)

17.11 (17.06)

(2.68)

(2.18)

27.57 (13.97)

2.37

(6.62)

(2.99)

20.46

1.83

(3.62)

10.94

13.76

4.03

EQU FP

7.00

282.1

2,207.1 (4.56)

(2.33)

76.77

(3.95)

0.58

16.04

67.57

EURO SS

43.00

410.2

2,167.4 (0.07)

(5.67) (11.15) (19.16)

n.a.

2.09

(5.72)

12.38

France Telecom

FTE FP

22.38

2,231.7

55,824.4

2.00

(9.55)

5.03 144.89

2.64

(6.86)

KPN

KPN NA

6.66

2,491.0

18,542.7

6.52

2.24

4.00

22.71

5.86

5.58

KPNQwest

KQIP NA

0.12

457.4

61.3

0.92 (10.87) (35.74) 138.34

0.30

mmO2

OOM LN

0.598

8,670.0

8,222.5

1.74

4.94

MOBB BB

40.20

62.5

2,809.0

3.36

OGE FP

9.81

4,814.6

52,790.2

2.71

PTC PL

6.60

1254.3

9,252.6

3.25

Stet Hellas

STHLY US

11.000

83.2

818.8

0.13

1.81

Swisscom

SCMN VX

397.00

66.2

18,914.5 (0.62)

(0.22)

Tele2 AB

TEL2B SS

332.00

125.8

5,130.5

3.36

(1.06)

1.20

TIM IM

4.059

8,434.0

38,262.9

0.26

TIT IM

2.185 10,287.4

Europolitan Vodafone AB

Mobistar Orange Portugal Telecom SGPS SA

Telecom Italia Mobile SpA Telecom Italia S.p.A.

17.15 132.16 20.44

7.67

(7.95) (25.58) 109.13

0.41

29.35

2.89

6.46

9.38

34.17

(1.06)

1.20

67.33

(1.75)

(0.36)

18.55 106.06

11.76

24.29

64.85

3.36

15.09

38.64

56.28

2.55

(0.62)

11.78

3.92

4.63

6.72

1.79

10.88

75.14

0.73

5.78

12.82 106.38

(7.83)

(9.51)

0.32

4.29

(5.78)

67.33

3.51

7.09

7.38 132.62

(2.91)

(5.98) (11.52)

(0.07)

(2.66)

(1.67) (17.40) 0.30 (12.92)

7.48

25,123.7

3.23

(5.64)

(4.09)

(6.71)

2.89

(5.39)

Telecom Italia- RNC

TITR IM

1.522

5,795.9

9,859.7

4.90

(0.87)

n.a.

n.a.

4.56

(0.61)

n.a.

n.a.

Telefonica

TEF SM

10.90

4,955.9

60,377.3

0.31

1.65

3.93

11.03

(0.61)

1.68

12.00

13.45

Telefonica Moviles

TEM SM

7.24

4,330.6

35,043.5 (0.95)

3.11

(2.44)

(2.31)

(1.87)

3.14

TeliaSonera AB

TLSN SS

34.90

4,675.2

20,047.9 (2.03)

(0.84)

(4.00)

6.77

(1.88)

7.32

1.87

48.43

UPC NA

0.10

443.4

49.6 12.13

(3.44)

13.80

41.87

n.a.

(0.28)

31.78

24.48

0.81

(0.20)

(1.73)

28.29

1.95

1.24

7.04

33.07

3,643.6 (1.65)

8.35

1.30

29.40

(2.62)

0.73

10.59

16.70

11.22 (13.89)

UPC Vodafone

VOD LN

Vodafone Panafon

1.240 67,895.1 133,630.4

PANF GA

0.06

543.3

5.14 (0.18)

USA AT&T AT&T Wireless Bellsouth Global Crossing Nextelcommunications

T US

22.30

788.1

0.76

2.06

1.36

6.04

AWE US

8.73

2,713.2

17,573.7

23,686.5 (1.72)

6.90

14.10

47.00

(1.13)

11.07

16.09

73.21

(6.30)

BLS US

25.57

1,847.4

47,237.0

0.23

(2.88)

(5.03)

0.83

0.91

(4.66)

11.90

GBLXQ US

0.023

888.6

20.4

3.92

22.98

7.64 (11.28)

4.55

27.78

9.52

4.55

NXTL US

19.49

999.9

19,487.6 (1.41)

7.13

15.38 101.95

(0.81)

11.31

(1.26) (21.44)

Qwest Communication

Q US

3.92

1,695.4

SBC Communications

SBC US

23.41

3,323.6

Sprint

FON US

14.71

903.2

Sprint PCS

PCS US

5.98

1,034.5

6,186.1

3.38

VZ US

35.51

2,756.3

97,875.7

0.42

WCOEQ US

0.072

2,962.8

213.3 (20.92)

Japan Telecom

9434 JP

355,000

3.2

9,762.5 (1.57)

KDDI

9433 JP

648,000

4.2

NTT

9432 JP

511,000

16.0

NTT DoCoMo

9437 JP

291,000

50.2 125,676.7

Softbank

9984 JP

4,660

336.9

Usen

4842 JP

73,900

1.2

Yahoo! Japan

4689 JP 2,430,000

0.9

Verizon Communications WorldCom

9.31 (26.92)

6,645.8 (5.42)

5.61

(4.85)

1.53

(3.01)

(9.95) (18.24)

2.14

0.77

13,285.6 (1.40)

(0.37)

(0.63)

25.08

(0.81)

3.52

1.10

47.39

7.78

(0.04)

56.63

4.00

11.99

1.70

84.57

(4.59) (12.68)

(1.33)

1.02

(0.87) (11.16)

16.27

77,805.1

(4.97) (22.79)

17.40 137.97

34.56

37.74 (51.12) (20.44)

39.81

24.44

(8.38) (3.66)

40.13 (42.40)

Japan (7.75) (12.90)

(5.21)

(0.07)

3.38

5.24

12.31

2.04

(2.50)

10.64

51.90

7.05

12.91

38.13

85.96

70,474.1 (1.31)

(6.80)

(5.24)

0.49

0.38

4.64

14.70

19.27

2.52

(4.60)

(5.53)

16.68

1.82

4.60

11.65

35.24

13,511.0

8.13

32.42 148.90 282.43

7.71

45.61 195.03 344.56

760.8

7.86

50.04 173.60 133.68

3.72

59.27 213.08 162.23

23,652.4

19,708.7 15.54

15.28

35.41 201.59

12.85

24.28

57.37 243.75

Source: Bloomberg

STATISTICS & VALUATIONS

September 2003

21

Share price performance (cont’d) Company Hong Kong/China APT Satellite AsiaSat CCT China Mobile China Telecom China Unicom CTI Hutchison Whampoa i-Cable PCCW SmarTone Sunday Korea Dacom Daum Dreamline Hanaro Hanaro (ADR) Korea Thrunet KT Corp (ADR) KT Corp (local) KT Freetel KT Hitel LG Telecom SK Telecom (ADR) SK Telecom (local)

Share Shares Bloomberg price in issue code (16 Sep) (m) 1045 HK 1135 HK 138 HK 941 HK 728 HK 762 HK 1137 HK 13 HK 1097 HK 8 HK 315 HK 866 HK

2412 TT 4904 TT GIGM US 3045 TT

Singapore Keppel T&T MobileOne (Asia) Pacific Internet Singapore Telecom

KPTT SP M1 SP PCNTF US ST SP

Relative performance 1 Wk 1-mth 3-mth 12-mth

2.45 413.2 129.8 (18.21) (14.37) 13.83 2.10 12.75 390.3 638.0 (6.10) (8.44) (7.41) 10.92 1.01 422.1 54.7 (1.92) 16.23 2.00 (10.17) 21.00 19,671.7 52,966.2 0.18 5.00 (2.81) (5.70) 2.00 8,027.4 2,058.5 (11.51) (10.70) 2.07 n.a. 5.80 12,553.0 9,335.0 0.53 4.26 (7.53) (1.04) 2.625 604.9 203.6 (0.99) (1.66) 16.82 52.63 57.75 4,263.4 31,567.8 (1.62) 5.82 8.05 1.97 2.025 2,019.2 524.3 (1.17) (11.79) (17.05) (49.54) 4.90 5,368.8 3,372.9 3.91 12.28 (16.20) (27.68) 10.25 583.0 766.2 (2.87) 3.62 7.73 13.38 0.33 2,990.0 126.5 4.96 14.09 88.68 158.56

1594 KS 9,650 3572 KS 63,700 3543 KS 270 3363 KS 3,510 HANA US 3.07 KOREQ US 0.001 KTC US 19.35 3020 KS 45,350 3239 KS 23,150 3603 KS 8,940 3264 KS 4,075 SKM US 18.98 1767 KS 200,000

Taiwan Chunghwa Telecom Far EasTone GigaMedia Taiwan Cellular

Market cap (US$m)

305.5 3.66 (2.42) (25.40) (46.03) 801.0 0.94 (7.63) (9.71) 103.07 5.5 (13.74) (77.61) (83.43) (90.18) 838.0 (8.64) 14.44 2.66 (26.44) 857.5 (4.08) 26.69 8.98 (13.13) 0.0 (0.96) (99.62) (12.26) (99.95) 11,249.5 4.27 2.05 1.67 (12.73) 11,267.7 5.31 (1.99) (11.28) (21.78) 3,782.1 (1.39) (5.66) (16.24) (35.64) 263.6 11.09 4.35 (4.34) 178.88 965.8 0.02 (3.07) (10.39) (34.94) 14,467.6 4.67 1.77 1.61 (12.57) 14,065.0 3.44 (2.78) (11.37) (21.40)

(13.37) (5.18) (0.21) 1.69 (11.11) 2.54 2.73 0.34 2.55 6.19 (0.68) 7.28

(4.05) 31.11 25.53 (2.19) 1.68 30.02 25.10 12.85 6.09 10.52 6.32 6.60 (6.98) 10.49 n.a. 12.50 2.56 17.15 7.94 31.81 83.81 14.17 19.84 20.71 (3.18) (6.41) (39.23) 21.38 (6.87) (14.22) 12.10 19.79 34.58 23.36 109.71 206.74

4.68 3.96 (13.92) (40.52) 1.93 (1.59) 4.19 123.77 (12.89) (76.14) (80.88) (89.18) (7.75) 21.03 17.00 (22.17) (3.14) 28.85 11.40 (8.64) 0.01 (99.60) 1.24 (99.94) 5.28 3.04 2.65 (11.89) 6.34 4.41 2.37 (13.80) (0.42) 0.51 (3.35) (29.08) 12.19 11.18 10.38 207.32 1.00 3.26 3.40 (28.30) 5.68 2.76 2.60 (11.72) 4.45 3.58 2.27 (13.38)

9,647.7 13,665.3 2,697.8 1,756.3 50.2 115.4 4,679.3 3,375.7

(0.53) (1.59) 13.68 (1.55)

(3.29) (19.62) (14.40) (6.59) (13.88) (30.18) 37.30 68.68 157.59 (8.57) (15.49) (37.05)

0.63 0.00 15.00 1.22

1.26 (1.76) 43.75 (2.72)

(7.12) 6.15 (0.03) (13.03) 94.92 219.44 (0.76) (20.67)

0.86 545.8 268.2 1.35 1,050.0 809.9 8.05 12.8 103.2 1.63 17,826.5 16,602.2

0.05 (1.55) (3.48) (2.87)

(3.36) (12.91) (18.50) (5.46) (4.71) n.a. 32.44 (8.95) 246.70 (4.09) (4.49) 0.87

2.38 0.75 (1.23) (0.61)

(2.83) (4.94) 35.52 (3.56)

(7.68) (9.09) 1.00 n.a. (6.83) 254.78 1.24 12.53

TEL AU TLS AU

4.40 4.94

1,914.9 5,586.6 6,420.6 21,030.5

(0.47) 0.78

(2.79) 3.90

(4.11) 7.52

2.71 0.55

(3.11) (1.11)

(3.13) 4.36

(1.70) (15.07) 11.10 (16.20)

DIGI MK T MK

3.80 7.85

750.0 3,198.7

750.0 6,607.8

(1.35) 0.56

(6.33) (18.50) 2.14 (8.78)

9.19 (5.08)

0.00 1.94

Thailand Advanced Info Services ADVANC TB TelecomAsia TA TB Total Access Comms TAC SP

56.50 6.95 1.57

2,937.8 2,994.8 474.4

4,096.8 513.7 425.6

(1.40) (4.34) (2.60)

(7.89) (3.34) (7.58)

(3.41) 19.91 24.57

64.48 4.50 39.67

0.46 (2.53) (0.63)

(4.90) (0.20) 1.29

6.28 83.49 31.94 16.58 60.20 121.13

695.00 635.00

151.9 169.3

1,918.6 1,953.6

(0.92) 1.44

0.78 20.56

2.11 16.54

18.25 93.04

0.61 (0.89)

6.20 22.23

3.02 13.12

Australasia Telecom NZ Telstra Malaysia Digi.com * Telekom Malaysia

Philippines Globe Telecom PLDT Source: Bloomberg * Price as of 15 Sep 03

GLO PM TEL PM

48.30 22.20 2.30 24.60

37.0 14.7 23.6 279.3 279.3 25.9 581.4 290.7 191.1 34.5 277.3 762.3 82.3

Absolute performance (US$) 1 Wk 1-mth 3-mth 12-mth

(4.04) (11.22) 4.64 (0.63)

18.01 2.60

27.33 99.98

STATISTICS & VALUATIONS

22

Global Telecom Monthly

Corporate earnings Europe Y/E December

Revenue (EURm) (%)

France Telecom FY01 FY02 FY03F FY04F FY05F

Op. profit (EURm) (%)

EBITDA (EURm) (%)

Net profit (EURm) (%)

EPS (EUR)

DPS (EUR)

CAPX (EURm)

43,026 46,630 46,945 49,434 51,960

27.8 8.4 0.7 5.3 5.1

2,879 4,456 10,495 11,357 11,765

(27.8) 54.8 135.6 8.2 3.6

12,320 14,917 17,215 18,549 19,264

14.0 21.1 15.4 7.8 3.9

(8,280) (20,736) 2,086 3,741 5,012

n.m. n.m. n.m. 79.4 34.0

(7.51) (19.11) 1.06 1.68 2.25

1.00 0.00 0.00 0.00 1.00

8,091 7,441 5,601 6,042 6,247

Deutsche Telekom FY01 48,309 FY02 53,689 FY03F 54,994 FY04F 58,364 FY05F 59,699

18.0 11.1 2.4 6.1 2.3

1,762 829 5,032 6,886 7,910

n.m. (53.0) 507.0 36.8 14.9

15,188 16,314 17,916 19,073 19,575

17.4 7.4 9.8 6.5 2.6

(3,454) n.m. (24,587) n.m. 810 n.m. 2,805 246.1 4,175 48.9

(0.93) (5.86) 0.19 0.67 1.00

0.63 0.00 0.00 0.20 0.40

9,847 7,589 6,765 7,235 6,635

KPN FY01 FY02 FY03F FY04F FY05F

10.8 (1.6) 0.8 3.3 1.7

(153) 1,614 2,028 2,133 2,493

n.m. n.m. 25.6 5.2 16.9

3,589 4,378 4,798 4,952 5,258

5.5 22.0 9.6 3.2 6.2

n.m. n.m. n.m. 22.4 38.5

(3.01) (3.83) 0.36 0.44 0.62

0.00 0.00 0.00 0.22 0.46

2,949 1,136 1,391 1,582 1,445

Net profit (CHFm) (%)

EPS (CHF)

DPS (CHF)

CAPX (CHFm)

9.3 0.0 (0.2) (1.6) 1.7

4,955 57.1 820 (83.4) 1,720 109.7 1,692 (1.7) 1,723 1.8

67.49 11.86 25.99 25.55 26.02

11.00 12.00 13.00 14.00 15.00

1,236 1,222 1,305 1,302 1,255

EBITDA (GBPm) (%)

Net profit (GBPm) (%)

EPS (GBp)

DPS (GBp)

CAPX (GBPm)

n.m. 23.2 19.8 20.4 2.2

8.80 14.23 17.03 20.50 20.95

2.00 6.50 10.00 11.00 11.52

3,140 2,445 2,635 2,657 2,789

Net profit (EURm) (%)

EPS (EUR)

DPS (EUR)

CAPX (EURm)

Y/E December

12,362 12,170 12,267 12,671 12,886

Revenue (CHFm) (%)

Swisscom FY01 FY02 FY03F FY04F FY05F

Y/E March

14,174 14,526 14,725 15,095 15,380

Revenue (GBPm) (%)

BT Group FY02 FY03 FY04F FY05F FY06F

Y/E December

1.4 2.5 1.4 2.5 1.9

18,447 18,727 19,151 19,502 19,682

7.6 1.5 2.3 1.8 0.9

Revenue (EURm) (%)

Op. profit (CHFm) (%) 2,230 2,404 2,441 2,190 2,048

22.0 7.8 1.5 (10.3) (6.5)

Op. profit (GBPm) (%) 2,655 2,790 2,932 3,010 3,057

(13.9) 5.1 5.1 2.7 1.6

Op. profit (EURm) (%)

EBITDA (CHFm) (%) 4,409 4,410 4,399 4,329 4,404

5,748 5,806 6,043 6,251 6,138

(0.5) 1.0 4.1 3.4 (1.8)

EBITDA (EURm) (%)

(7,495) (9,542) 904 1,106 1,532

995 1,226 1,469 1,768 1,807

Portugal Telecom FY01 5,727 FY02 5,582 FY03F 5,587 FY04F 5,854 FY05F 6,091

11.3 (2.5) 0.1 4.8 4.1

1,013 1,124 1,230 1,374 1,507

21.0 10.9 9.5 11.7 9.7

2,124 2,230 2,236 2,424 2,551

8.5 5.0 0.3 8.4 5.2

307 (43.1) 391 27.3 388 (0.7) 619 59.4 766 23.7

0.25 0.31 0.31 0.49 0.61

0.10 0.16 0.21 0.25 0.31

1,316 776 709 821 755

Telefonica FY01 FY02 FY03F FY04F FY05F

31,053 28,411 28,371 30,659 32,058

9.0 (8.5) (0.1) 8.1 4.6

5,430 4,366 4,967 6,239 6,785

9.5 (19.6) 13.8 25.6 8.7

12,804 11,724 11,783 12,794 13,391

7.4 (8.4) 0.5 8.6 4.7

2,107 (15.9) (5,577) n.m. 1,654 n.m. 2,506 51.5 3,210 28.1

0.46 (1.13) 0.33 0.51 0.65

0.00 0.25 0.25 0.25 0.31

6,771 3,789 4,640 4,678 4,670

Telecom Italia FY01 FY02 FY03F FY04F FY05F

32,016 31,408 30,772 31,320 32,207

12.8 (1.9) (2.0) 1.8 2.8

5,308 5,989 7,138 7,589 8,079

n.a. 12.8 19.2 6.3 6.4

12,948 13,257 13,357 13,851 14,260

5.5 2.4 0.8 3.7 2.9

(3,090) n.m. (773) n.m. 2,174 n.m. 1,009 (53.6) 1,476 46.3

(0.35) (0.09) 0.14 0.06 0.09

0.03 0.00 0.10 0.10 0.10

6,990 4,842 4,648 4,857 4,595

Source: DIR estimates Note: All the forecasts are as of September 16th, please contact to analyst for the latest.

STATISTICS & VALUATIONS

September 2003

23

Corporate earnings (cont’d) Y/E March Vodafone FY02 FY03 FY04F FY05F FY06F

Y/E December Orange FY01 FY02 FY03F FY04F FY05F

Y/E March mmO2 FY02 FY03 FY04F FY05F FY06F

Y/E December

Revenue (GBPm) (%) 22,845 30,375 31,974 33,370 34,740

52.3 33.0 5.3 4.4 4.1

Revenue (EURm) (%) 15,330 17,085 17,884 19,223 20,355

27.1 11.4 4.7 7.5 5.9

Revenue (GBPm) (%) 4,276 4,874 5,179 5,618 6,091

11.5 14.0 6.3 8.5 8.4

Revenue (EURm) (%)

Telefonica Moviles FY01 8,411 FY02 9,140 FY03F 9,868 FY04F 10,448 FY05F 11,072

13.6 8.7 8.0 5.9 6.0

Op. profit (GBPm) (%) (11,834) (5,451) (4,269) (4,297) (4,282)

n.m. n.m. n.m. n.m. n.m.

Op. profit (EURm) (%) 1,502 2,782 4,011 4,322 4,889

292.2 85.2 44.2 7.8 13.1

Op. profit (GBPm) (%) (856) (8,778) (44) (41) 48

n.m. n.m. n.m. n.m. n.m.

Op. profit (EURm) (%) 2,076 2,419 2,924 2,957 3,151

47.0 16.6 20.9 1.1 6.5

EBITDA (GBPm) (%)

EPS (GBp)

DPS (GBp)

CAPX (GBPm)

n.m. n.m. n.m. n.m. n.m.

(23.77) (14.41) (13.02) (12.73) (12.46)

1.47 1.69 1.95 2.25 2.44

4,145 5,289 5,035 5,172 5,036

Net profit (EURm) (%)

EPS (EUR)

DPS (EUR)

CAPX (EURm)

92.6 51.4 23.5 9.3 9.3

(4,459) n.m. (4,536) n.m. 4,280 n.m. 2,354 (45.0) 2,855 21.3

(0.94) (0.94) 0.89 0.49 0.59

0.00 0.00 0.00 0.00 0.00

3,018 3,538 2,852 2,668 2,719

EBITDA (GBPm) (%)

Net profit (GBPm) (%)

EPS (GBp)

DPS (GBp)

CAPX (GBPm)

n.m. n.m. n.m. n.m. n.m.

(9.80) (117.00) (1.15) (1.18) 0.13

0.00 0.00 0.00 0.00 0.00

1,240 975 1,295 1,236 1,096

Net profit (EURm) (%)

EPS (EUR)

DPS (EUR)

CAPX (EURm)

51.3 n.m. n.m. 0.9 8.6

0.21 (0.86) 0.40 0.40 0.43

0.00 0.18 0.18 0.18 0.20

1,696 919 1,335 1,281 1,231

Net profit (US$m) (%)

EPS (US$)

DPS (US$)

CAPX (US$m)

13.7 n.m. n.m. (8.8) (4.4)

0.09 1.26 2.52 2.32 2.20

0.80 0.71 0.75 0.75 0.75

5,767 3,878 3,591 3,600 3,700

4,265 28.0 3,818 (10.5) 3,899 2.1 4,307 10.4 4,829 12.1

2.26 2.04 2.07 2.28 2.56

0.76 0.78 0.90 0.92 0.92

5,997 3,785 3,298 3,503 3,649

n.m. n.m. n.m. n.m.

(0.72) (0.48) (0.30) (0.09)

0.00 0.00 0.00 0.00

8,543 2,866 3,000 3,200

7,007 (12.0) 5,650 (19.4) 9,103 61.1 5,100 (44.0) 6,354 24.6

2.29 2.17 1.61 1.54 1.91

1.00 1.07 1.37 1.53 1.53

11,189 6,808 4,821 6,540 7,006

8,031 11,217 12,243 12,843 13,557

62.6 39.7 9.1 4.9 5.6

EBITDA (EURm) (%) 3,400 5,146 6,353 6,945 7,594

433 859 1,204 1,431 1,660

n.m. 98.4 40.2 18.8 16.0

EBITDA (EURm) (%) 3,334 3,736 4,330 4,576 4,873

36.0 12.1 15.9 5.7 6.5

Net profit (GBPm) (%) (16,155) (9,819) (8,879) (8,678) (8,498)

(850) (10,148) (100) (102) 12

894 (3,724) 1,718 1,732 1,881

USA Y/E December

Revenue (US$m) (%)

Op. profit (US$m) (%)

EBITDA (US$m) (%)

AT&T FY01 FY02 FY03F FY04F FY05F

42,196 (9.9) 37,827 (10.4) 35,270 (6.8) 35,199 (0.2) 36,342 3.2

7,831 4,361 4,207 3,707 3,474

(38.8) (44.3) (3.5) (11.9) (6.3)

Bellsouth FY01 FY02 FY03F FY04F FY05F

29,589 28,497 28,282 29,410 30,400

7,716 7,106 7,110 7,545 8,272

6.4 (7.9) 0.1 6.1 9.6

Qwest Communications International FY01 16,741 6.5 (1,299) FY02 15,487 (7.5) (18,176) FY03F 14,750 (4.8) 802 FY04F 15,204 3.1 1,149

n.m. n.m. n.m. 43.3

5,175 (14.8) 4,248 (17.9) 3,999 (5.9) 4,409 10.3

(2.2) (18.0) (10.8) 2.1 22.7

19,585 (4.4) 17,199 (12.2) 15,707 (8.7) 16,114 2.6 18,132 12.5

7.8 (3.7) (0.8) 4.0 3.4

SBC Communications FY01 45,908 (10.6) FY02 43,138 (6.0) FY03F 41,924 (2.8) FY04F 43,597 4.0 FY05F 46,708 7.1

10,508 8,621 7,687 7,851 9,633

13,426 (25.8) 10,686 (20.4) 9,147 (14.4) 8,608 (5.9) 8,492 (1.4)

13,260 12,488 12,389 13,291 14,183

7.3 (5.8) (0.8) 7.3 6.7

9,148 (13,083) 2,026 1,848 1,766

(4,786) (35,913) (207) (161)

Source: DIR estimates Note: All the forecasts are as of September 16th, please contact to analyst for the latest.

STATISTICS & VALUATIONS

24

Global Telecom Monthly

Corporate earnings (cont’d) Y/E December

Revenue (US$m) (%)

Verizon Communications FY01 67,190 FY02 67,304 FY03F 69,378 FY04F 74,747 FY05F 74,990

3.8 0.2 3.1 7.7 0.3

Op. profit (US$m) (%)

EBITDA (US$m) (%)

Net profit (US$m) (%)

EPS (US$)

DPS (US$)

CAPX (US$m)

9.9 (2.5) 1.9 9.1 0.0

391 (96.7) 4,080 944.3 6,265 53.6 8,439 34.7 8,383 (0.7)

3.02 3.04 2.64 3.07 3.09

1.54 1.53 1.54 1.54 1.54

17,371 13,058 12,177 12,534 12,616

4,261 (16.5) 4,508 5.8 4,347 (3.6) 4,653 7.0 4,807 3.3

(122) n.m. 1,235 n.m. 2,524 104.4 1,317 (47.8) 1,360 3.3

1.14 1.15 1.29 1.44 1.47

0.50 0.49 0.50 0.50 0.50

5,295 2,181 1,872 2,300 2,450

11,533 15,004 13,576 16,087 15,648

(31.2) 30.1 (9.5) 18.5 (2.7)

Sprint Corporation (FON Group) FY01 16,940 (4.2) FY02 15,227 (10.1) FY03F 14,161 (7.0) FY04F 14,227 0.5 FY05F 14,901 4.7

8 1,612 1,362 1,853 1,930

n.m. n.m. (15.5) 36.0 4.2

AT&T Wireless Services FY01 13,622 FY02 15,631 FY03F 16,628 FY04F 17,540 FY05F 18,907

248 (258) 1,739 2,247 3,063

n.m. n.m. n.m. 29.2 36.3

2,859 3,822 4,715 5,353 6,261

73.6 33.7 23.4 13.5 17.0

(963) (2,342) 743 1,030 1,646

n.m. n.m. n.m. 38.7 59.9

(0.02) (0.02) 0.27 0.38 0.61

0.00 0.00 0.00 0.00 0.00

5,205 5,302 3,074 3,200 3,200

(647) 475 913 1,343 1,451

n.m. n.m. 92.2 47.1 8.0

1,513 2,880 3,400 3,899 4,062

n.m. 90.4 18.1 14.7 4.2

(1,268) (592) (435) (63) 94

n.m. n.m. n.m. n.m. n.m.

(1.27) (0.62) (0.39) (0.06) 0.09

0.00 0.00 0.00 0.00 0.00

3,751 2,668 2,030 1,550 1,400

(1,715) 1,536 2,205 2,346 2,341

n.m. n.m. 43.6 6.4 (0.2)

1,901 3,166 3,899 4,096 4,141

n.a. 66.5 23.1 5.1 1.1

(2,858) n.m. 1,660 n.m. 1,037 (37.6) 1,205 16.2 1,255 4.2

(3.67) 1.72 0.99 1.14 1.19

(1.06) 0.00 0.00 0.00 0.00

n.a. 1,863 1,801 1,800 1,870

EBITDA (¥m) (%)

Net profit (¥m) (%)

EPS (¥)

DPS (¥)

CAPX (¥m)

30.4 14.7 6.4 5.5 7.8

Sprint Corporation (PCS Group) FY01 9,725 53.4 FY02 12,074 24.2 FY03F 12,532 3.8 FY04F 12,728 1.6 FY05F 12,130 (4.7) Nextel Communications FY01 7,689 FY02 8,721 FY03F 10,064 FY04F 9,971 FY05F 10,192

n.a. 13.4 15.4 (0.9) 2.2

27,781 27,099 27,619 30,132 30,142

Japan Y/E March NTT FY01 FY02 FY03F FY04F

Revenue (¥m) (%)

Op. profit (¥m) (%)

11,027,753 10,923,146 10,975,000 10,960,000

(3.4) (0.9) 0.5 (0.1)

61,534 1,363,557 1,390,000 1,492,000

(93.2) n.m. 1.9 7.3

2,833,799 2,785,343 2,808,000 2,860,000

24.9 (1.7) 0.8 1.9

102,297 140,652 269,000 298,000

15.2 37.5 91.3 10.8

522,697 569,752 686,000 716,000

Japan Telecom FY01 1,704,039 FY02 1,796,915 FY03F 1,863,000 FY04F 1,912,000

16.3 5.5 3.7 2.6

89,134 275,606 222,000 225,000

(20.3) 209.2 (19.5) 1.4

312,734 541,906 552,000 572,000

KDDI FY01 FY02 FY03F FY04F

2,669,121 (28.6) 3,966,557 48.6 3,781,000 (4.7) 3,865,000 2.2

(834,672) 233,358 490,000 540,000

n.m. n.m. 110.0 10.2

(51,734) 14,647 31,147 34,325

5,000 5,000 5,000 5,000

2,291,900 1,977,600 1,980,000 1,927,000

5.2 9.0 20.4 4.4

12,979 57,358 98,500 160,800

(3.3) 341.9 71.7 63.2

3,061 13,561 23,366 38,144

1,790 2,095 2,400 2,400

369,300 246,200 338,000 326,000

7.0 73.3 1.9 3.6

(65,969) n.m. 79,502 n.m. 63,600 (20.0) 64,600 1.6

(20,646) 24,882 19,905 20,218

600 1,200 1,200 1,200

471,300 279,300 343,000 331,000

(11,577) 4,235 13,279 14,307

1,500 500 1,000 1,000

1,032,200 854,000 818,000 795,000

NTT DoCoMo FY01 4,659,254 (0.6) 1,000,887 28.8 1,679,987 17.6 (116,191.0) FY02 4,809,088 3.2 1,056,719 5.6 1,844,491 9.8 212,491 FY03F 4,968,000 3.3 1,136,000 7.5 1,930,000 4.6 633,000 FY04F 5,090,000 2.5 1,192,000 4.9 1,991,000 3.2 682,000 Source: DIR estimates Note: All the forecasts are as of September 16th, please contact to analyst for the latest.

n.m. n.m. 197.9 7.7

STATISTICS & VALUATIONS

September 2003

25

Corporate earnings (cont’d) Asia (ex-Japan) Revenue Y/E December (Rmb m) (%) China Mobile FY01 100,331 54.4 FY02 128,561 28.1 FY03F 156,021 21.4 FY04F 165,319 6.0 FY05F 174,833 5.8 China Unicom FY01 FY02 FY03F FY04F FY05F

29,393 40,577 67,260 75,129 80,298

24.1 38.0 65.8 11.7 6.9

Op. profit (Rmb m) (%)

Y/E June SmarTone FY01 FY02 FY03F FY04F FY05F

EPS (HK$)*

DPS (HK$)*

CAPX (Rmb m)

53.6 16.3 11.5 6.5 10.5

60,270 77,309 91,702 96,916 102,877

60.7 28.3 18.6 5.7 6.2

28,015 32,742 35,522 38,829 43,523

55.4 16.9 8.5 9.3 12.1

1.42 1.61 1.70 1.86 2.09

n.a. 0.32 0.34 0.37 0.42

42,330 49,680 44,322 38,568 35,717

5,263 7,324 8,635 11,417 10,983

0.8 39.1 17.9 32.2 (3.8)

13,526 18,579 25,128 30,729 32,623

23.4 37.4 35.2 22.3 6.2

4,457 4,566 4,800 6,731 6,490

37.8 2.5 5.1 40.2 (3.6)

0.335 0.343 0.361 0.506 0.488

n.a. 0.09 0.10 0.14 0.13

31,253 18,944 19,766 17,612 16,595

9,289 (28.0) 10,846 16.8 12,800 18.0 14,619 14.2 16,071 9.9

0.128 0.148 0.160 0.182 0.201

n.a. 0.01 0.07 0.07 0.07

40,028 28,919 25,000 23,500 19,577

30,950 (10.8) 36,242 17.1 40,297 11.2 43,428 7.8 45,389 4.5

Revenue (HK$m)

(%)

Op. profit (HK$m)

(%)

EBITDA (HK$m)

(%)

Net profit (HK$m)

(%)

EPS (HK$)

DPS (HK$)

CAPX (HK$m)

21,959 20,112 20,156 20,199 19,593

6.2 (8.4) 0.2 0.2 (3.0)

4,833 5,288 4,797 4,809 4,862

26.5 9.4 (9.3) 0.2 1.1

7,396 8,120 7,623 7,650 7,733

20.0 9.8 (6.1) 0.4 1.1

1,343 (7,762) 1,363 1,298 1,564

n.a. n.a. n.a. (4.8) 20.5

0.300 (1.685) 0.274 0.242 0.290

0.00 0.00 0.00 0.00 0.06

2,415 1,611 1,778 1,778 1,778

Revenue (HK$m)

(%)

Op. profit (HK$m)

(%)

EBITDA (HK$m)

(%)

Net profit (HK$m)

(%)

EPS (HK$)

DPS (HK$)

CAPX (HK$m)

2,485 (14.1) 2,401 (3.4) 2,817 17.3 2,754 (2.2) 2,974 8.0

(321) 145 312 260 381

n.a. n.a. 114.5 (16.7) 46.5

(284) n.a. 115 n.a. 394 241.8 337 (14.4) 397 17.6

(0.470) 0.196 0.674 0.577 0.679

0.00 0.07 0.44 0.38 0.45

367 250 400 500 500

(%)

EPS (S$)

DPS (S$)

CAPX (S$m)

1,631 (18.7) 1,401 (14.1) 2,519 79.9 1,944 (22.8) 2,195 12.9

9.77 7.86 14.13 10.90 12.31

5.50 5.50 5.50 5.50 5.50

3,000 1,668 1,683 1,724 1,714

75 (76.6) 568 657.4 707 24.5 662 (6.4) 793 19.8

Revenue Op. profit EBITDA Y/E March (S$m) (%) (S$m) (%) (S$m) Singapore Telecom 2 FY02 7,338 49.0 3,057 17.4 3,635 FY03 10,259 39.8 3,700 21.0 5,112 FY04F 11,138 8.6 4,047 9.4 5,630 FY05F 11,614 4.3 4,172 3.1 5,902 FY06F 11,711 0.8 4,193 0.5 6,177 2 EBITDA include IDA compensation & associate contribution. Y/E December MobileOne FY01 FY02 FY03F FY04F FY05F

Net profit (Rmb m) (%)

42,606 49,546 55,256 58,835 65,027

China Telecom 1 FY01 62,256 (3.8) 13,147 (24.0) FY02 69,478 11.6 15,360 16.8 FY03F 75,644 8.9 18,529 20.6 FY04F 80,994 7.1 21,064 13.7 FY05F 83,571 3.2 22,784 8.2 *1 Converted at HK$1 = Rmb1.06 Numbers exclude amortised revenue on connection fee Y/E December PCCW FY01 FY02 FY03F FY04F FY05F

EBITDA (Rmb m) (%)

(%) 10.5 40.7 10.1 4.8 4.7

Net profit (S$m)

Revenue (S$m)

(%)

Op. profit (S$m)

(%)

EBITDA (S$m)

(%)

Net profit (S$m)

(%)

EPS (S$)

DPS (S$)

CAPX (S$m)

639 699 744 798 827

12.6 9.3 6.5 7.3 3.5

138 173 192 198 210

59.3 24.9 11.3 3.0 6.0

223 271 291 306 322

39.1 21.6 7.3 5.3 5.3

100 128 143 154 166

70.8 27.8 11.0 8.4 7.8

9.57 12.23 13.57 14.70 15.85

0.00 7.33 8.10 7.40 7.93

158 134 135 140 142

(%)

EPS (Won)

DPS (Won)

CAPX (Wonbn)

12.8 74.9 1.9 (0.3) 15.3

3,564 5,998 8,015 7,994 9,216

720 860 1,037 1,244 1,493

3,918 3,232 3,762 3,411 3,407

Revenue Op. profit EBITDA Net profit Y/E December (Wonbn) (%) (Wonbn) (%) (Wonbn) (%) (Wonbn) KT Corp FY01 15,945 17.8 1,943 84.8 5,952 56.0 1,113 FY02 16,394 2.8 2,338 20.4 6,135 3.1 1,947 FY03F 16,823 2.6 2,641 13.0 6,576 7.2 1,983 FY04F 17,602 4.6 3,199 21.1 7,034 7.0 1,978 FY05F 18,425 4.7 3,565 11.4 7,319 4.0 2,280 Source: DIR estimates Note: All the forecasts are as of September 16th, please contact to analyst for the latest.

STATISTICS & VALUATIONS

26

Global Telecom Monthly

Corporate earnings (cont’d) Revenue Y/E December (Wonbn) SK Telecom FY01 6,227 FY02 8,635 FY03F 9,505 FY04F 10,396 FY05F 11,004

(%)

Op. profit (Wonbn)

(%)

EBITDA (Wonbn)

(%)

Net profit (Wonbn)

(%)

EPS (Won)

DPS (Won)

CAPX (Wonbn)

8.1 38.7 10.1 9.4 5.9

2,203 2,673 2,884 3,271 3,507

34.7 21.3 7.9 13.4 7.2

3,301 4,087 4,542 4,959 5,281

28.9 23.8 11.1 9.2 6.5

1,141 1,512 1,873 2,266 2,493

20.1 32.6 23.9 21.0 10.0

13,180 16,963 21,229 25,949 28,555

690 1,696 2,123 2,595 2,855

1,244 1,973 1,950 1,535 1,817

KT Freetel FY01 FY02 FY03F FY04F FY05F

5,018 5,354 5,257 5,510 5,811

15.5 6.7 (1.8) 4.8 5.4

788 844 918 970 1,037

452.0 7.1 8.7 5.7 6.8

1,407 134.0 1,570 11.6 1,743 11.0 1,889 8.4 2,048 8.4

435 532 506 534 551

n.m. 22.4 (4.9) 5.6 3.2

2,362 2,891 2,782 2,973 3,067

0 0 0 951 1,227

1,129 1,125 1,080 1,004 967

Revenue (NT$m)

(%)

Op. profit (NT$m)

(%)

Net profit (NT$m)

(%)

EPS (NT$)

DPS (NT$)

CAPX (NT$m)

Taiwan Cellular Corp FY01 60,625 FY02 58,729 FY03F 63,101 FY04F 62,802 FY05F 63,911

16.8 (3.1) 7.4 (0.5) 1.8

19,471 16,123 17,933 18,073 18,722

24.7 (17.2) 11.2 0.8 3.6

16,751 18.3 14,937 (10.8) 15,428 3.3 15,788 2.3 16,621 5.3

5.13 3.33 3.43 3.51 3.69

1.90 2.00 2.07 2.11 2.23

13,578 10,800 7,800 7,763 7,900

Far EasTone FY01 FY02 FY03F FY04F FY05F

34,544 34,476 35,820 37,588 37,784

7.4 (0.2) 3.9 4.9 0.5

6,553 7,915 7,937 10,206 10,266

66.4 20.8 0.3 28.6 0.6

11,577 14,279 14,661 16,704 16,891

64.3 23.3 2.7 13.9 1.1

6,626 7,807 7,295 9,458 9,534

64.0 17.8 (6.6) 29.7 0.8

4.03 3.72 2.88 3.43 3.46

1.00 1.30 1.01 1.20 1.21

13,081 12,965 8,998 5,075 7,429

Revenue (NT$bn)

(%)

Op. profit (NT$bn)

(%)

EBITDA (NT$bn)

(%)

Net profit (NT$bn)

(%)

EPS (NT$)

DPS (NT$)

CAPX (NT$bn)

Chunghwa Telecom FY01 184.4 FY02 179.4 FY03F 180.6 FY04F 180.7 FY05F 185.3

n.a. (2.8) 0.7 0.0 2.6

44.6 55.7 56.8 59.4 61.8

n.a. 24.7 2.0 4.7 3.9

83.5 96.0 97.2 99.4 101.9

n.a. 14.9 1.3 2.2 2.5

37.4 44.1 44.9 46.9 49.3

n.a. 17.7 1.9 4.4 5.3

3.87 4.57 4.65 4.86 5.11

3.50 4.00 4.19 4.37 4.60

52.9 43.3 33.0 24.3 28.0

Revenue (A$m)

(%)

Op. profit (A$m)

(%)

EBITDA (A$m)

(%)

Net profit (A$m)

(%)

EPS (A$)

DPS (A$)

CAPX (A$m)

20,802 21,616 21,557 21,979 22,622

(9.5) 3.9 (0.3) 2.0 2.9

6,297 6,748 6,529 6,734 7,044

(11.9) 7.2 (3.2) 3.1 4.6

9,564 10,195 10,240 10,728 11,347

(4.5) 6.6 0.4 4.8 5.8

3,661 3,895 4,063 4,234 4,508

2.8 6.4 4.3 4.2 6.5

0.28 0.30 0.32 0.33 0.36

0.22 0.27 0.26 0.28 0.29

3,491 3,261 3,000 3,500 3,605

Y/E December

Y/E December

Y/E June Telstra FY02 FY03 FY04F FY05F FY06F

EBITDA (NT$m)

(%)

24,107 34.1 21,450 (11.0) 24,309 13.3 24,508 0.8 25,260 3.1

Source: DIR estimates Note: All the forecasts are as of September 16th, please contact to analyst for the latest.

STATISTICS & VALUATIONS

September 2003

27

Earnings revisions Europe Orange

Date of change: 1 Sep ––––––––––– Revenue (EURm) –––––––––– Y/E Dec Previous Revised % revision FY03F 17,954 17,884 0 FY04F 19,298 19,223 0 FY05F 20,437 20,355 0 Reason for revision: 1H03 results, taxation adjustments.

EBITDA (EURm) ––––––– Revised % revision 6,353 1 6,945 1 7,594 1

––––––– Net profit (EURm) ––––––– Previous Revised % revision 2,047 4,280 109 2,514 2,354 (6) 3,027 2,855 (6)

Date of change: 16 Sep ––––––––––– Revenue (GBPm) –––––––––– ––––––––– EBITDA (GBPm) ––––––– Y/E March Previous Revised % revision Previous Revised % revision FY04F 32,936 31,974 (3) 12,527 12,243 (2) FY05F 34,571 33,370 (3) 13,196 12,843 (3) FY06F 36,430 34,740 (5) 14,000 13,557 (3) Reason for revision: To reflect the deconsolidation of Japan Telecom, with effect from October.

––––––– Net profit ( GBPm) ––––––– Previous Revised % revision (8,764) (8,879) n.m. (8,591) (8,678) n.m. (8,390) (8,498) n.m.

–––––––––

Previous 6,311 6,855 7,505

Vodafone

USA Qwest Communications

Date of change: 4 Sep Revenue (US$m) –––––––––– ––––––––– EBITDA (US$m) ––––––– ––––––– Net profit (US$m) ––––––– Y/E Dec Previous Revised % revision Previous Revised % revision Previous Revised % revision FY03F 14,819 14,750 0 4,088 3,999 (2) (178) (207) n.m. FY04F 15,278 15,204 0 4,515 4,409 (2) (115) (161) n.m. Reason for revision: New forecasts reflect better than expected improvement in wireless business in 1H03, while we factored in continued margin erosion from line loss. –––––––––––

Japan NTT

Date of change: 28 Aug ––––––––––––– Revenue (¥m) –––––––––––– Y/E Dec Previous Revised % revision FY03F 10,985,000 10,975,000 0 FY04F 10,976,000 10,960,000 0 Reason for revision: Although we lowered revenues due to earnings thanks to the higher ARPU forecast.

–––––––––––––– EBITDA (¥m) –––––––––– ––––––––––––– Net profit (¥m) –––––––––– Previous Revised % revision Previous Revised % revision 3,781,000 3,781,000 0 490,000 490,000 0 3,865,000 3,865,000 0 540,000 540,000 0 the reduced subscriber net additions for FY03 and FY04, we ma intained

KDDI

Date of change: 28 Aug ––––––––––––– Revenue (¥m) –––––––––––– –––––––––––––– EBITDA (¥m) –––––––––– ––––––––––––– Net profit (¥m) –––––––––– Y/E Dec Previous Revised % revision Previous Revised % revision Previous Revised % revision FY03F 2,830,000 2,808,000 (1) 685,000 686,000 0 98,000 98,500 1 FY04F 2,860,000 2,860,000 0 707,000 716,000 1 156,000 160,800 3 Reason for revision: We lowered revenues for FY03 due to the sluggish revenues in fixed-line business in 1Q. However, we raised earnings due to the higher subscriber net additions and ARPU forecasts. Japan Telecom

Date of change: 28 Aug ––––––––––––– Revenue (¥m) –––––––––––– –––––––––––––– EBITDA (¥m) –––––––––– ––––––––––––– Net profit (¥m) –––––––––– Y/E Dec Previous Revised % revision Previous Revised % revision Previous Revised % revision FY03F 1,866,000 1,863,000 0 552,000 552,000 0 63,600 63,600 0 FY04F 1,916,000 1,912,000 0 570,000 572,000 0 64,000 64,600 1 Reason for revision: The reduced ARPU forecast are more than offset by the declining subsidy costs in FY04. NTT DoCoMo

Date of change: 28 Aug ––––––––––––– Revenue (¥m) –––––––––––– Y/E Dec Previous Revised % revision FY03F 4,978,000 4,968,000 0 FY04F 5,106,000 5,090,000 0 Reason for revision: Although we lowered revenues due to earnings thanks to the higher ARPU forecast.

–––––––––––––– EBITDA (¥m) –––––––––– ––––––––––––– Net profit (¥m) –––––––––– Previous Revised % revision Previous Revised % revision 1,930,000 1,930,000 0 633,000 633,000 0 1,991,000 1,991,000 0 682,000 682,000 0 the reduced subscriber net additions for FY03 and FY04, we maintained

STATISTICS & VALUATIONS

28

Global Telecom Monthly

Earnings revisions (cont’d) Asia ex-Japan China Unicom Y/E Dec

Date of change: 29 Aug ––––––––––– Revenue (Rmb m) –––––––––– Previous Revised % revision

EBITDA (Rmb m) –––––––––– Previous Revised % revision

–––––––––––

–––––––– Net profit (Rmb m) ––––––– Previous Revised % revision

FY03F 68,585 67,260 (1.9%) 25,691 25,128 (2.2%) 5,263 4,800 FY04F 75,813 75,129 (0.9%) 31,307 30,729 (1.8%) 7,232 6,731 FY05F 81,054 80,298 (0.9%) 33,156 32,623 (1.6%) 6,964 6,490 Reason for revision: We have raised our forecasts of interconnection costs for the LD/Internet/Data operations as well as sales and marketing costs for cellular operations, and have factored in the provision for the pag ing operations.

(8.8%) (6.9%) (6.8%) for the

PCCW

Date of change: 3 Sep ––––––––––– Revenue (HK$m) –––––––––– –––––––––––– EBITDA (HK$m) –––––––––– –––––––– Net profit (HK$m) –––––––––– Y/E Dec Previous Revised % revision Previous Revised % revision Previous Revised % revision FY03F 19,323 20,156 4.3 8,271 7,623 (7.8) 2,164 1,363 (37.0) FY04F 19,176 20,199 5.3 8,479 7,650 (9.8) 2,302 1,298 (43.6) FY05F 19,163 19,593 2.2 8,764 7,733 (11.8) 2,604 1,564 (39.9) Reason for revision: We have reduced our earnings forecasts for local data services and Reach and raised our cost of sales forecast for the core Telecom services operation. China Telecom

Date of change: 18 Sep ––––––––––– Revenue (Rmb m) –––––––––– –––––––––– EBITDA (Rmb m) –––––––––– –––––––– Net profit (Rmb m) ––––––– Y/E Dec Previous Revised % revision Previous Revised % revision Previous Revised % revision FY03F 75,333 75,644 0.4 39,666 40,297 1.6 12,797 12,800 0.0 FY04F 80,823 80,994 0.2 42,450 43,428 2.3 14,463 14,619 1.1 FY05F 83,856 83,571 (0.3) 44,734 45,389 1.5 16,014 16,071 0.4 Reason for revision: We have revised up our forecasts for net interconnection and VAS revenue and revised down our forecasts for network operations and support expenses but these are mostly offset by our downward revisions to local telephony, internet services and leased line revenue and upward revisions to tax expenses. SingTel

Date of change: 28 Aug ––––––––––– Revenue (S$m) ––––––––––––– ––––––––––––– EBITDA (S$m) ––––––––––– –––––––––– Net profit (S$m) ––––––––––– Y/E Mar Previous Revised % revision Previous Revised % revision Previous Revised % revision FY04F 11,138 11,138 0 5,619 5,630 0 2,511 2,519 0 FY05F 11,614 11,614 0 5,881 5,902 0 1,927 1,944 1 FY06F 11,711 11,711 0 6,157 6,177 0 2,178 2,195 1 Reason for revision: We have revised down our staff cost estimates marginally after Singapore government's announcement of CPF (state pension fund) cut. SK Telecom

Date of change: 8 Sep –––––––––––– Revenue (Wbn) –––––––––––– ––––––––––––– EBITDA (Wbn) –––––––––– Y/E Dec Previous Revised % revision Previous Revised % revision FY03F 9,362 9,505 2 4,423 4,542 3 FY04F 10,172 10,396 2 4,788 4,959 4 FY05F 10,699 11,004 3 5,044 5,281 5 Reason for revision: Upward revisions to subscriber forecasts. Date of change: 8 Sep –––––––––––– Revenue (Wbn) –––––––––––– ––––––––––––– EBITDA (Wbn) –––––––––– Y/E Dec Previous Revised % revision Previous Revised % revision FY03F 5,831 5,257 (10) 1,734 1,743 1 FY04F 6,597 5,510 (16) 1,950 1,889 (3) FY05F 7,435 5,811 (22) 2,199 2,048 (7) Reason for revision: Lower handset sales, lower subscriber growth, lower VAS revenues.

–––––––––– Net profit (Wbn) ––––––––– Previous Revised % revision 1,790 1,873 5 2,141 2,266 6 2,320 2,493 7

KT Freetel

Telstra Y/E Jun

Date of change: 20 Aug ––––––––––– Revenue (A$m) ––––––––––––– Previous Revised % revision

–––––––––––––

Previous

EBITDA (A$m) ––––––––––– Revised % revision

FY04F 21,612 21,557 0 10,133 10,240 FY05F 22,046 21,979 0 10,453 10,728 FY06F 22,400 22,622 1 10,700 11,347 Reason for revision: We have upgraded our earnings forecasts for FY04, FY05 and FY06 going forward. Source: DIR estimates

–––––––––– Net profit (Wbn) ––––––––– Previous Revised % revision 492 506 3 583 534 (8) 716 551 (23)

Net profit (A$m) ––––––––––– Previous Revised % revision

––––––––––

1 3,971 4,063 2 3 4,049 4,234 5 6 4,250 4,508 6 on the back of expected cost savings

STATISTICS & VALUATIONS

September 2003

29

Rating revision Date of

6-month rating

change

Previous

Revised

Reason for revision

Vodafone

16 Sep

3

2

Following 3 month underperformance on succession and competition concerns, we believe that several issues are likely to trigger an improvement in sentiment towards the stock.

China Telecom

18 Sep

3

2

We believe the recent share price corrections have made the valuations of the company more compelling.

Source: DIR estimates

STATISTICS & VALUATIONS

30

Global Telecom Monthly

Europe cellular subscribers Subscribers (m) Jan-02 Feb-02 Mar-02 Apr-02 May-02 Jun-02 Jul- 02 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul- 03 Net additions (m) Jan-02 Feb-02 Mar-02 Apr-02 May-02 Jun-02 Jul- 02 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul- 03

France

UK

Germany

Italy

Spain

Others

Western Europe

37.5 38.0 37.3 35.5 35.7 35.8 36.0 36.2 36.0 36.1 36.3 36.8 37.1 37.3 37.1 37.2 37.4 37.5 39.3

45.9 46.1 46.1 46.4 46.4 46.8 47.0 47.1 47.4 48.2 48.4 49.5 50.1 50.4 49.7 49.8 49.8 49.9 50.3

56.4 56.6 54.0 53.8 54.0 54.3 54.3 54.5 54.7 55.5 55.8 57.0 57.5 57.3 57.6 57.9 58.3 58.6 59.5

51.4 51.5 50.5 50.6 50.7 51.0 51.0 51.2 51.2 51.9 52.0 52.9 53.7 52.5 52.9 53.4 53.7 53.9 53.0

29.9 30.1 29.9 30.1 30.2 30.8 31.0 31.1 31.6 32.0 32.2 33.2 33.3 33.5 34.0 34.6 34.8 35.0 34.8

70.3 70.8 70.2 70.1 70.2 71.0 71.4 71.9 72.4 72.5 73.1 73.7 74.3 74.3 74.7 74.8 75.1 75.5 76.7

291.4 293.1 287.9 286.5 287.3 289.7 290.8 291.9 293.3 296.3 297.8 303.1 306.0 305.2 306.0 307.7 309.1 310.3 313.6

0.50 0.49 (0.68) (1.78) 0.21 0.09 0.16 0.18 (0.21) 0.14 0.15 0.58 0.23 0.21 (0.18) 0.13 0.13 0.13 1.77

0.21 0.17 0.04 0.32 0.03 0.37 0.24 0.10 0.26 0.82 0.19 1.11 0.61 0.24 (0.68) 0.07 0.07 0.06 0.43

0.51 0.25 (2.68) (0.13) 0.16 0.32 0.00 0.17 0.19 0.84 0.34 1.16 0.46 (0.20) 0.36 0.31 0.34 0.30 0.90

0.59 0.15 (1.04) 0.13 0.06 0.31 0.04 0.14 0.05 0.73 0.09 0.88 0.82 (1.18) 0.33 0.54 0.24 0.21 (0.83)

0.26 0.18 (0.21) 0.19 0.18 0.54 0.19 0.12 0.51 0.41 0.14 1.03 0.12 0.17 0.47 0.61 0.25 0.15 (0.14)

0.53 0.47 (0.60) (0.10) 0.18 0.73 0.47 0.43 0.54 0.10 0.56 0.58 0.63 0.02 0.44 0.08 0.32 0.36 1.15

2.60 1.70 (5.18) (1.38) 0.82 2.36 1.10 1.13 1.33 3.04 1.47 5.33 2.87 (0.73) 0.75 1.73 1.35 1.21 3.28

Source: Mobile Communications

MONTHLY S TATISTICS

September 2003

31

Quarterly broadband stats (subscriber ‘000) UK––––––––––––––––––––––––––––––– Cable Penetration (%) 44,916 0.16 76,892 0.25 132,334 0.39 203,222 0.58 309,200 0.81 452,994 1.28 596,773 1.65 779,319 2.30 960,121 3.04 1,093,536 3.67

–––––––––––––––––––––––––––––––

2001 1Q 2Q 3Q 4Q 2002 1Q 2Q 3Q 4Q 2003 1Q 2Q

ADSL 49,000 72,000 99,000 136,164 170,250 300,800 404,500 590,100 831,200 1,071,700

Germany––––––––––––––––––––––––––––––– Cable Penetration (%) 24,300 1.23 27,000 1.77 31,055 2.80 39,131 2.96 45,000 3.23 49,000 3.50 49,000 3.63 53,800 4.06 61,500 4.58 70,000 5.12

––––––––––––––––––––––––––––––––––

2001 1Q 2Q 3Q 4Q 2002 1Q 2Q 3Q 4Q 2003 1Q 2Q

ADSL 1,000,000 1,440,000 2,292,000 2,420,000 2,440,000 2,660,000 2,860,000 3,295,000 3,740,000 4,180,000

Spain––––––––––––––––––––––––––––––––––– Cable Penetration (%) 42,000 0.35 54,000 0.52 62,000 0.70 70,000 1.10 115,000 1.58 141,000 1.98 165,000 2.49 195,000 2.82 264,000 3.49 440,000 4.29

––––––––––––––––––––––––––––––––

2001 1Q 2Q 3Q 4Q 2002 1Q 2Q 3Q 4Q 2003 1Q 2Q

ADSL 100,000 157,702 223,158 375,816 527,604 661,261 847,769 951,100 1,154,500 1,300,000

Netherlands ––––––––––––––––––––––––––– Cable Penetration (%) 260,000 1.65 300,000 1.91 330,000 2.59 350,000 2.96 390,000 3.43 427,000 3.78 460,000 4.40 650,000 6.29 690,000 7.44 740,000 8.44

–––––––––––––––––––––––––––

2001 1Q 2Q 3Q 4Q 2002 1Q 2Q 3Q 4Q 2003 1Q 2Q

ADSL 1,140 1,939 79,000 118,000 151,000 208,000 239,000 356,000 485,000 593,000

France ––––––––––––––––––––––––––––––– Cable Penetration (%) 151,109 0.42 163,302 0.58 169,302 0.74 188,522 1.03 208,663 1.35 233,579 1.63 250,053 1.92 276,000 2.87 312,707 3.57 338,920 4.07

–––––––––––––––––––––––––––––––

ADSL 96,000 177,000 267,000 420,400 587,472 730,800 882,150 1,415,800 1,795,500 2,062,000

Italy––––––––––––––––––––––––––––––––––––– FTTH Penetration (%) 10,000 0.33 14,500 0.44 22,700 0.58 48,900 0.77 76,700 1.02 104,000 1.25 131,500 1.45 176,100 1.71 213,313 2.45 247,000 3.02

–––––––––––––––––––––––––––––––––

ADSL 180,000 239,000 310,000 390,000 505,000 615,000 700,000 925,000 1,189,500 1,481,000

Switzerland––––––––––––––––––––––––––––– Cable Penetration (%) 85,100 1.07 106,300 1.54 124,800 1.89 145,300 2.32 168,000 2.82 185,000 3.49 200,000 4.06 214,000 4.57 229,000 5.66 245,000 6.85

–––––––––––––––––––––––––––––

ADSL 2,492 20,000 30,000 45,000 62,966 101,177 132,617 195,220 235,000 317,000

Sweden–––––––––––––––––––––––––––––––– Cable/FTTH Penetration (%) 132,000 2.17 181,900 3.09 190,000 3.66 227,200 5.06 252,200 6.25 263,080 6.83 269,020 7.32 283,300 8.07 298,600 8.54 308,000 8.84

–––––––––––––––––––––––––––––––––

ADSL 61,600 93,765 135,850 223,953 304,611 345,200 383,400 436,000 462,400 480,000

Source: DIR N.B. FTTH = fibre to the home, penetration is population penetration

MONTHLY S TATISTICS

32

Global Telecom Monthly

Japan monthly data (mobile) NTT Docomo––––– Total i-mode 41.8 34.1 41.9 34.4 42.2 34.9 42.3 35.2 42.5 35.6 42.9 36.2 43.0 36.6 43.2 36.9 43.9 37.8 44.1 38.1 44.2 38.3 44.4 38.6 44.7 39.1 44.9 39.4

AU KDDI Group–––– Total EZ- Web 12.8 9.2 12.9 9.4 13.1 9.6 13.2 9.8 13.3 9.9 13.5 10.1 13.6 10.3 13.7 10.5 14.0 10.9 14.3 11.1 14.5 11.3 14.7 11.5 14.9 11.8 15.1 12.0

NTT Docomo––––– Total i-mode 0.3 0.6 0.2 0.4 0.2 0.4 0.1 0.3 0.2 0.4 0.4 0.6 0.2 0.4 0.2 0.4 0.6 0.8 0.2 0.3 0.1 0.2 0.2 0.3 0.3 0.5 0.2 0.3

AU KDDI Group–––– Total EZ- Web 0.1 0.2 0.1 0.2 0.1 0.2 0.1 0.2 0.1 0.2 0.2 0.2 0.1 0.2 0.1 0.2 0.3 0.4 0.2 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2

––––––

Subscribers (m) Jul- 02 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul- 03 Aug-03

Net new additions (m) Jul- 02 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul- 03 Aug-03

––––––

––––

––––

TU- KA KDDI Group––– Total EZ- Web 3.9 1.5 3.9 1.5 3.9 1.6 3.9 1.6 3.9 1.6 3.8 1.6 3.8 1.6 3.8 1.7 3.8 1.7 3.8 1.7 3.8 1.7 3.7 1.7 3.7 1.8 3.7 1.8

J-phone Japan Telecom Total J-Sky 12.8 10.8 12.9 10.9 13.0 11.1 13.1 11.2 13.2 11.3 13.3 11.5 13.5 11.7 13.6 11.9 14.0 12.2 14.2 12.3 14.3 12.4 14.4 12.5 14.5 12.6 14.6 12.6

TU- KA KDDI Group––– Total EZ- Web (0.0) 0.0 (0.0) 0.0 (0.0) 0.0 (0.0) 0.0 (0.0) 0.0 (0.0) 0.0 (0.0) 0.0 (0.0) 0.0 (0.0) 0.0 (0.0) 0.0 (0.0) 0.0 (0.0) 0.0 (0.0) 0.0 (0.0) 0.0

J-phone Japan Telecom Total J-Sky 0.1 0.1 0.1 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.2 0.2 0.1 0.2 0.2 0.2 0.3 0.3 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.0

––––

––––

Japan total –––––––––––––– Internet access 55.6 56.3 57.1 57.8 58.4 59.5 60.2 60.9 62.5 63.3 63.8 64.4 65.2 65.8

–––––––––––––––

Total 71.2 71.6 72.1 72.4 72.8 73.5 73.9 74.4 75.7 76.3 76.7 77.2 77.8 78.2

Japan total –––––––––––––– Internet access 0.9 0.8 0.8 0.7 0.7 1.1 0.7 0.7 1.5 0.8 0.5 0.6 0.8 0.6

–––––––––––––––

Total 0.5 0.4 0.5 0.4 0.4 0.7 0.4 0.5 1.3 0.7 0.4 0.5 0.6 0.4

Source: NTT DoCoMo, KDDI, Japan Telecom, DIR

Japan broadband subscribers Subscribers ('000) Jul- 02 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul- 03 Aug-03

ADSL 3,610.2 3,915.7 4,223.2 4,639.5 5,117.9 5,645.7 6,119.8 6,589.9 7,023.0 7,477.9 7,907.4 8,257.1 8,541.3 8,881.0

CATV 1,710 1,758 1,800 1,852 1,901 1,954 1,992 2,028 2,069 2,135 2,183 2,224 2,283 n.a.

FTTH 84.9 99.4 114.6 138.0 172.3 206.2 233.1 263.1 305.4 346.9 398.3 458.3 531.3 n.a.

Total 5,405 5,773 6,138 6,630 7,191 7,806 8,345 8,881 9,397 9,960 10,489 10,939 11,356 n.a.

Source: Ministry of Public Management, Home affairs, Posts and Telecommunications

MONTHLY S TATISTICS

September 2003

33

China monthly data Subscribers (m) Jun-02 Jul- 02* Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul- 03 Aug-03 Net new additions (m) Jul- 02* Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul- 03 Aug-03

CMHK 80.3 107.4 109.4 111.4 113.6 115.6 117.7 119.8 121.8 123.8 125.5 127.2 129.1 131.0 132.9

Unicom 34.1 35.4 36.9 38.4 40.1 41.6 43.1 61.7 63.1 64.9 66.6 68.1 69.6 71.4 73.0

China Mobile (parent) 43.0 18.1 18.6 19.1 19.5 19.9 20.8 21.6 21.9 22.6 23.0 23.6 24.1 24.9 25.4

Unicom Group (parent) 18.8 19.3 20.0 21.5 22.7 23.3 25.1 9.4 9.6 10.2 10.6 11.2 11.6 12.2 12.7

China total 176.2 180.3 184.9 190.4 195.8 200.3 206.6 212.4 216.4 221.5 225.7 230.1 234.5 239.5 244.1

27.1 1.9 2.1 2.1 2.0 2.1 2.1 2.0 2.0 1.7 1.7 1.9 1.9 1.9

1.3 1.4 1.6 1.6 1.5 1.6 18.6 1.4 1.8 1.7 1.5 1.5 1.7 1.7

(24.9) 0.5 0.4 0.4 0.4 0.9 0.8 0.4 0.7 0.4 0.6 0.5 0.7 0.6

0.5 0.7 1.5 1.3 0.6 1.8 (15.6) 0.2 0.6 0.4 0.6 0.4 0.6 0.5

4.1 4.5 5.5 5.4 4.5 6.3 5.8 4.0 5.1 4.2 4.3 4.4 5.0 4.7

Source: Companies, DIR estimates Notes: For year 2001, Jan to May and July to Nov are as the 20th of each month For June and December figures are as of month end. For year 2002, all figures are as of month end * For CMHK, subscribers of the eight newly acquired networks have been included since July 1, 2002 The eight networks had a subscriber base of 25.1m by end-June, 2002 * For Unicom, subscribers of the nine newly accquired network have been included since January 1, 2003. The nine networks had a subscriber base of 16.6m by end-2002

MONTHLY S TATISTICS

34

Global Telecom Monthly

Korea monthly broadband subscriber data Korea Telecom

Hanaro

Thrunet

Dreamline

Dacom

Other

Total

4.39 4.47 4.56 4.67 4.80 4.92 5.05 5.13 5.25 5.30 5.35 5.39 5.45 5.45

2.73 2.80 2.85 2.88 2.89 2.87 2.90 2.93 2.97 2.98 2.97 2.96 2.97 n.a.

1.31 1.32 1.31 1.30 1.31 1.30 1.30 1.30 1.30 1.30 1.30 1.29 1.49 n.a.

0.18 0.18 0.18 0.18 0.18 0.18 0.18 0.18 0.18 0.18 0.18 0.18 0.18 n.a.

0.15 0.15 0.15 0.15 0.15 0.77 0.78 0.79 0.79 0.79 0.79 0.79 0.79 n.a.

0.10 0.34 0.40 0.49 0.51 0.37 0.36 0.38 0.38 0.38 0.44 0.49 0.34 n.a.

8.86 9.26 9.46 9.67 9.83 10.41 10.57 10.71 10.87 10.92 11.03 11.10 11.22 n.a.

0.06 0.07 0.09 0.11 0.12 0.13 0.13 0.08 0.12 0.05 0.05 0.04 0.06 (0.00)

0.00 0.07 0.05 0.03 0.01 (0.02) 0.02 0.04 0.04 0.00 (0.01) (0.01) 0.01 n.a.

0.00 0.02 (0.01) (0.01) 0.00 (0.00) 0.00 0.00 (0.02) 0.20 n.a.

0.00 (0.00) (0.00) (0.00) 0.00 n.a.

0.00 0.00 0.00 (0.00) (0.07) 0.01 0.00 n.a.

(0.00) 0.24 0.06 0.09 0.02 (0.14) (0.01) 0.02 (0.00) 0.00 0.06 0.05 (0.15) n.a.

0.06 0.40 0.19 0.22 0.15 0.58 0.16 0.14 0.16 0.06 0.10 0.07 0.12 n.a.

Subscribers (m) Jul- 02 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul- 03 Aug-03 Net new additions (m) Jul- 02 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul- 03 Aug-03

Source: Companies, MIC, National Statistics Office, DIR estimates

Korea monthly cellular subscriber data SK Telecom, STI Total 2.5G Subscribers (m) Jul- 02 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul- 03 Aug-03

16.62 16.79 17.00 17.11 17.15 17.22 17.36 17.50 17.63 17.72 17.77 17.86 17.90 17.96

7.36 7.97 8.51 8.81 9.46 9.94 10.37 10.71 11.17 11.60 12.00 12.38 12.76 13.17

KT Freetel Total 2.5G 10.08 10.13 10.38 10.49 10.50 10.33 10.28 10.33 10.38 10.43 10.47 10.49 10.47 10.45

Net new additions (m) Jul- 02 0.15 0.69 (0.05) Aug-02 0.17 0.62 0.05 Sep-02 0.21 0.54 0.25 Oct-02 0.11 0.30 0.11 Nov-02 0.04 0.65 0.01 Dec-02 0.07 0.48 (0.16) Jan-03 0.14 0.43 (0.06) Feb-03 0.13 0.35 0.06 Mar-03 0.13 0.46 0.04 Apr-03 0.09 0.43 0.05 May-03 0.04 0.40 0.04 Jun-03 0.09 0.38 0.02 Jul- 03 0.05 0.38 (0.02) Aug-03 0.05 0.41 (0.02) Source: MIC, SK Telecom, KT Freetel, LG Telecom, DIR estimates

LG Telecom Total 2.5G

Korea total Total 2.5G

3.17 3.55 4.08 4.45 4.86 4.86 5.05 5.36 5.66 5.92 6.17 6.40 6.59 6.78

4.31 4.41 4.71 4.73 4.78 4.79 4.78 4.80 4.86 4.84 4.84 4.82 4.79 4.75

0.94 1.18 1.43 1.58 1.69 1.74 1.80 1.87 1.99 2.06 2.13 2.25 2.34 2.45

31.01 31.33 32.08 32.32 32.43 32.34 32.42 32.63 32.86 32.99 33.07 33.17 33.16 33.16

11.46 12.69 14.02 14.83 16.01 16.54 17.21 17.94 18.82 19.58 20.30 21.02 21.69 22.41

0.28 0.38 0.54 0.37 0.41 0.19 0.31 0.30 0.26 0.25 0.22 0.20 0.19

0.02 0.09 0.30 0.02 0.05 0.01 (0.01) 0.03 0.06 (0.01) (0.01) (0.01) (0.04) (0.04)

0.18 0.24 0.25 0.15 0.11 0.05 0.06 0.07 0.12 0.07 0.07 0.08 0.09 0.12

0.12 0.32 0.76 0.24 0.11 (0.09) 0.08 0.21 0.23 0.13 0.07 0.10 (0.01) (0.00)

1.14 1.23 1.32 0.81 1.18 0.53 0.67 0.73 0.88 0.76 0.72 0.69 0.67 0.72

MONTHLY S TATISTICS

September 2003

35

Taiwan cellular subscribers Chunghwa Telecom Subscribers (‘000) Jun-02 6,940 Jul- 02 7,058 Aug-02 7,144 Sep-02 7,229 Oct-02 7,294 Nov-02 7,340 Dec-02 7,422 Jan-03 7,510 Feb-03 7,563 Mar-03 7,619 Apr-03 7,676 May-03 7,726 Jun-03 7,765 Jul- 03 7,825 Net additions ('000) Jun-02 Jul- 02 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul- 03

162 118 86 85 65 46 82 89 53 57 56 50 39 60

Taiwan Cellular

Transasia

TCC Group

Far EasTone

KG Telecom

FET+KGT

Mobitai

Total

5,625 5,820 5,972 5,974 6,132 6,141 6,240 6,326 6,479 6,626 6,626 6,633 6,633 6,635

1,375 1,429 1,513 1,623 1,743 1,805 1,876 1,946 1,994 2,053 2,112 2,178 2,246 2,332

7,000 7,249 7,485 7,597 7,875 7,946 8,116 8,272 8,473 8,678 8,738 8,811 8,879 8,968

4,163 4,151 4,040 4,200 4,226 4,278 4,341 4,353 4,380 4,384 4,358 4,344 4,327 4,305

4,256 4,151 4,183 3,932 3,715 3,512 3,306 3,340 3,343 3,336 3,358 3,387 3,417 3,442

8,419 8,302 8,223 8,133 7,942 7,791 7,647 7,693 7,723 7,720 7,716 7,731 7,744 7,747

651 671 689 708 715 722 721 721 721 721 722 721 721 721

23,010 23,280 23,540 23,666 23,825 23,799 23,905 24,197 24,480 24,738 24,851 24,989 25,109 25,260

54 195 152 2 158 9 99 86 153 147 0 7 2

68 54 84 110 120 62 71 70 48 58 59 66 68 86

123 248 236 112 278 71 170 157 201 205 60 73 68 89

23 (12) (112) 161 26 52 62 13 27 4 (26) (14) (17) (22)

(99) (105) 32 (251) (217) (203) (206) 34 2 (7) 22 29 30 25

(76) (117) (79) (90) (191) (151) (144) 47 29 (3) (4) 15 13 3

16 20 18 19 7 7 (0) (0) (0) 0 0 (1) 0

225 269 260 126 160 (27) 107 292 283 259 113 138 120 151

Source: Ministry of Transport and Communications (MoTC), DIR estimates

Singapore cellular subscribers (‘000) Date Jun-02 Jul- 02 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul- 03

Postpaid 2,250 2,307 2,291 2,307 2,330 2,362 2,404 2,416 2,421 2,422 2,419 2,437 2,440 2,443

Prepaid 791 779 811 815 802 816 841 856 874 890 877 883 896 914

Subs 3,041 3,087 3,102 3,122 3,132 3,178 3,245 3,272 3,295 3,313 3,296 3,320 3,336 3,356

% change 0 2 1 1 0 1 2 1 1 1 0 1 1 1

Net adds 14 46 16 20 10 46 67 27 23 18 (16) 23 17 20

% change (35) 231 (66) 25 (48) 355 45 (59) (16) (24) n.m. n.m. (27) 16

Source: IDA, DIR estimates

MONTHLY S TATISTICS

36

Global Telecom Monthly

Europe 1 October 7 October 7 October 9-10 October 12-18 October 16 October 16 October 21 October 29 October 30 October 30 October 30 October Early November 3 November 4 November Mid November 13 November 17 November 18 November 19-20 November 20 November 24-25 November

J-Phone rebranding Global release of Nokia n-Gage Closure of FT offer to Orange minorities Telefonica investor conference Telecom 2003 Geneva Nokia 3Q results Cesky Telecom 3Q results Tele2 AB 3Q results TeliaSonera 3Q results Telenor 3Q results Alcatel 3Q results Ericsson 3Q results BT 1H results TIM 3Q results TDC 3Q results FT 3Q results DT 3Q 2003 report mmO2 1H04 Vodafone 1H04 Alcatel analysts day Swisscom 3Q results Nokia year end strategy update

USA 1 October 11-15 October 15 October 21 October 28 October 13 November 24 November

Do Not Call Registry takes effect United Stated Telecommunication Association annual conference & exhibition Final date for the FCC to evaluate SBC’s section 271 application in Illinois, Indiana, Ohio and Wisconsin SBC Communications 3Q03 results announcement and conference call Verizon Communications 3Q03 results announcement and conference call SBC Communications Analyst Day Wireless Number Portability takes effect

Japan End-September 7 October Around 10 October Around 10 October Around 10 October End-October From early to mid-November

Number of Internet users as of end-August to be announced Number of mobile phone subscribers in September to be announced Number of DSL users as of end-September to be announced Number of subscribers to broadband services at Usen as of end-September to be announced Number of subscribers Yahoo BB broadband service service (operated by Softbank BB) as of end-September to be announced Usen FY03 (FY ended August) results Interim results announcements from NTT, NTT DoCoMo, and KDDI

Asia 1 October 20 October 20 October 21 October 28 October 14 November

Singapore Telecom – Investor Day (full-day analyst event) China Mobile (HK) – 3Q03 Results China Unicom – 3Q03 Results Telstra – First quarter market update SK Telecom to announce 3Q03 results Telstra – AGM FORTHCOMING EVENTS

September 2003

37

Equity relationships among global telcos Connex GSM (Romania)

China Mobile (HK) (China)

TIW (Canada)

55

3.3

Swiscom (Swiss)

20

75

Swisscom Mobile (Swiss)

25

25

20

77

OPI (Italy)

20

45 55

Belgacom (Belgium)

Polkomtel (Poland)

Vodafone (UK)

23

75

Proximus (Belgium)

20

Verizon Wireless (USA)

18

30 TDC (Denmark)

SFR (France)

Verizon Communications (USA)

67

80

40

Cegetel (France) Japan Telecom (Japan)

Rogers Communications (Canada)

42

J-Phone (Japan)

45

SBC Communications (USA)

51

9 Far EasTone (Taiwan)

Rogers Wireless (Canada) 34

Telmex (Mexico)

23

AT&T Wireless (USA)

60 40

BellSouth (USA)

Hutchison Telephone

Cingular Wireless (USA)

24

16 NTT DoCoMo (Japan)

97.8

KPN Mobile (Netherland)

2.2

KPN (Netherland)

67 NTT (Japan)

PLDT (Philippine)

15

TelecomAsia Corporation 41

86

France Telecom (France)

Orange (France)

BITCO (Thailand)

29

7.7

99.8 TA Orange (Thailand)

MobilCom (Germany)

Sprint PCS (USA) 50 Sprint Corporation (USA) Telefonica (Spain)

49

4.7

Virgin Mobile USA (USA)

50

Virgin Mobile (UK) 56

Portugal Telecom (Portugal)

Telecom Italia (Italy) 15 Telekom Austria (Austria)

TIM (Italy) 49 IS-TIM (Turkey)

Source: DIR Note 1: Telecom Italia will divest its stake in Telekom Austria in 2003. Note 2: In March 2003, Orange announced to sell its stake in Wind to Enel. Note 3: Verizon and Vodafone sold their holdings in Iusacell to Mr. Ricardo Salinas Pliego. Note 4: In September 2003, France Telecom announced its intension to buy out minority stake of Orange.

APPENDIX

38

Global Telecom Monthly

DIR telecom contacts Global Co-ordinator

Kaoru Uchida

(813) 5683 5989

[email protected]

Global Telecom Strategy

James Enck

(44 20) 7597 8455

[email protected]

Analyst

Coverage

Telephone

E-mail

James Enck

Integrated Operators

(44 20) 7597 8455

[email protected]

Matthew Lewis

Cellular Operators/Equipment Manufacturers

(44 20) 7597 8453

[email protected]

Jacqueline Millan

Integrated Operators

(44 20) 7597 8460

[email protected]

Integrated/Cellular/Equipment Manufacturers

(1 212) 612 6108

[email protected]

Shinji Moriyuki

Integrated/Cellular

(813) 5683 6958

[email protected]

Jun Hasebe

Alternative Operators

(813) 5683 5109

[email protected]

Hiroyuki Masuko

Equipment Manufacturers

(813) 5683 6957

[email protected]

Andrew Jobson

Regional/Taiwan/Korea

(852) 2848 4463

[email protected]

Jenny Szeto, CFA

Hong Kong/China

(852) 2848 4465

[email protected]

Brenda Lee, CFA

Singapore

(65) 6321 3039

[email protected]

Jerry Yeu

Australia

(613) 9916 1354

[email protected]

Europe

USA Kenji Nishimura Japan

Asia (ex-Japan)

DIR main global offices London

1st Floor, 5 King William Street,

Tel: (44 20) 7597 8000

Fax: (44 20) 7597 8654

Tel: (1 212) 612 6100

Fax: (1 212) 612 7103

London EC4N 7AX, United Kingdom New York

11th Floor, Financial Square, 32 Old Slip, New York NY1005-3538, USA

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Tel: (813) 5620 5100

Fax: (813) 5620 5609

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Tel: (852) 2848 4974

Fax: (852) 2845 2190

Tel: (65) 6220 3666

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September 2003

39

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Ltd.; Siliconware Precision Industries Company; Singapore Telecommunications Ltd.; Skylark Co. Ltd.; Softbank Inves tment Corp.; Softfront; Sohgo Security Services Co. Ltd.; Sohken Homes Co. Ltd.; Sotsu Agency; Sparebanken Rogaland; Studio Alice Co. Ltd.; Sumitomo Chemical Co. Ltd.; Sumitomo Metal Industries Ltd.; Sumitomo Metal Mining Co. Ltd.; Sumitomo Mitsui Banking Corp.; Sumitomo Mitsui Financial Group Inc.; Sumitomo Osaka Cement Co. Ltd.; Sumitomo Realty & Development Co. Ltd.; Sumitomo Rubber Industries; Sumitomo Trust & Banking Co Ltd/The; Sumitomo Wiring Systems Ltd.; Sunpot Co. Ltd.; Suruga Corp.; Suzumo Machinery Co Ltd.; System Technology -i Co. Ltd.; Tac Co. Ltd.; Taisei Corp.; Taiyo Life Insurance Company; Takara Holdings, Inc.; Takefuji Corp; Takeuchi Manufacturing Co. Ltd.; Tanaka Co. Ltd/Tokyo; Telemedia; Telstra; Telstra Corp Ltd.; Toho Gas Co. Ltd.; Tohoku Electric Power; Tokki Corp.; Tokyo Electron Device Ltd.; Tokyo Electric Power Co.; Tokyo Gas Co. Ltd.; Tokyu Corp.; Tokyu Store Chain; Tomen Cyber-Business Solutions Inc.; Tomen Electronics Corp.; Toray Industries Inc.; Toray Medical; Toshiba Corp.; Tow Co. Ltd.; Toyo Suisan Kaisha Ltd.; Toyoda Boshoku Corp.; Toyoda Gosei Co Ltd.; Toyoda Machine Works Ltd.; Toyota Credit Canada, Inc.; Toyota Finance Australia Ltd.; Toyota Industries Corp.; Toyota Motor Corp.; Toyota Motor Credit Corporation; Toyota Tsusho Corp.; Toyo Tire & Rubber Co Ltd.; Trans Genic Inc.; TT Electronics; Tullet & Tokyo; UFJ Holdings Inc.; Ulvac Inc.; Union Oil Co. of California; Union Pacific Corp.; United Microelectronics Corporation; Valor Co. Ltd; Verizon Global Funding Corp.; Viacom Inc.; Vivanco Gruppe AG/Vivanco Electronic; Volkswagen Financial Services AG; Volkswagen International Finance NV; Wacom Co Ltd./Japan; Wella AG; Westpac Banking Corporation; Win International Co. Ltd.; World Co. Ltd.; XNET Corp.; Yahoo Japan Corp.; Yokogawa Electric Corp.; Yokohama Rubber Co. Ltd./The; Yumeshin Co Ltd.; Yusen Air & Sea Service Co. Ltd. The statements in the two preceding paragraphs are made as of September 1, 2003. DSA Market Making. DSA made a market in securities or ADRs of the following issuers at the time this report was published: Mitsui & Co.; NEC; Millea Holdings; Trend Micro; Crayfish; Makita; Internet Initiative Japan; Fuji Photo Film; Kirin Brewery; Nissan Motor; Sanyo Electric; CSK Corp.; Daiei Inc.; Wacoal Corp.; All Nippon Airways; Bandai; Bridgestone; Casio; Fujitsu; Isuzu; Sega; Sharp; Shiseido; Q.P. Corp.; and Sumitomo Corporation. Research Analyst Conflicts. The principal research analysts who prepared this report have no financial interest in securities of the issuers covered in the report and are not aware of any material relevant conflict of interest involving the analyst or DSA, except as noted: no exceptions. The following explains the rating system in the report as compared to relevant local indices, based on the beliefs of the author of the report. "1": the security could outperform the local index by more than 15% over the next six months. "2": the security is expected to outperform the local index by 5-15% over the next six months. "3": the security is expected to perform within 5% of the local index (better or worse) over the next six months. "4": the security is expected to underperform the local index by 5-15% over the next six months. "5": the security could underperform the local index by more than 15% over the next six months. Additional information may be available upon request.