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China Mobile Limited and America Movil: The two wireless companies of the future.

By Ion Nemerenco Telecommunications: Wireless

Rapid subscriber growth over the past few years

More than 500 million people use mobile communications

This number is expected to reach 1 billion by 2004 Telecommunications: Wireless

• Most of the growth over the past years came from the switch from analog to digital networks

• Most of the subscriber growth is expected to come from South America and South-East Asia Telecommunications: Wireless

• New 3G standard on the horizon

• Major wireless companies already showed their strong interest in the new standard.

• Mobile Internet China Mobile Limited (Hong Kong)

•Incorporated in Hong Kong 3 September 1997

•80 Million subscribers, more than 50% of total market

•Offers services in 21 provinces China Mobile Limited (Hong Kong)

• Sales: $12.9 Billion • Net Income: $3.6 Billion

• Net Profit Margin last year: 27.6% • Net Profit Margin 5 -year average: 25.5%

• Debt to Equity Ratio: .16 • Quick and Current Ratios: 1.9 and 2 respectively

• Return on Equity last year: 22.5% • ROE 5-year average: 17.8% China Mobile Limited (Hong Kong)

• Highly professional management team • Strategic alliance with Vodafone • The company was recognized throughout the world: 1st in the “Top 200 Emerging Markets” by Business Week 1st “Best Financial Management” by FinanceAsia 3rd in terms of revenue in Fortune’s list of “China 100” WHY CHIA MOBILE?

• China – the biggest growing wireless market in the world

• Huge potential for extraordinary growth without taking high investment risks

• The company will continue to buy infrastructure from the Chinese government, who is willing to sell. America Movil (AMX)

• Established in September 2000 as a spin-off from the biggest Mexican telecommunications company TelMex in order to seize the opportunities from the mobile wireless market in Latin America

• 12 subsidiaries and affiliates that provide services to 30 million clients in 10 countries

• Carl Helung America Movil (AMX)

• Sales: $3.9 billion • Net Income $395 million

• Gross Margin: 58.3% • Net Profit Margin: 8.1%

• Debt to Equity Ratio: .40 • Current and Quick Ratio: 1 and .5

• Return on Equity 6.5% America Movil (AMX)

• Telecom Americas: strategic company created for penetrating the Brazilian market 2 years ago • Currently has 4 operators in Brazil, with 4 million subscribers and plans to buy a 5 th one.

• Brazil is a key market for America Movil, due to its size. America Movil (AMX)

• 70% of profits come from Mexico, where it has a 75% market share.

• Interested in establishing a strong presence in Brazil, the biggest market in Latin America, relatively untapped.

• Acquisition period is in the past and the company today is focusing on reducing costs and increasing its profit margins.

• The company will continue to buy infrastructure from companies that are pulling out of Latin America such as BellSouth, AT&T, etc. Why America Movil?

• Significant increase in it’s profit margins

• Strong Consolidation efforts

• Strategically positioned for success, especially in Mexico and Brazil Similarities between America Movil and China Mobile • Both companies located in extremely attractive markets and industry.

• Both Chinese and Latin American market have big potential for growth and are relatively untapped compared with the European and North American markets.

• Both companies have finished investing in their infrastructure and will focus on reducing costs and increasing subscriber base. Why Invest in these companies? Why Invest in this industry?

• The industry will grow globally, that is a fact! • The growth will occur in the two emerging markets of Latin America and China. • These two companies are positioned the best in each of this two markets. • Both of these companies are entering the stage of becoming extremely profitable, without any other major capital expenditures.