gtm-skype 2003 sep

DAIWA DAIWA INSTITUTE OF RESEARCH LTD.

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

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.

CONTENTS 2 Global Telecom Monthly

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 events

P. 37

Appendix

Equity relationships among global telcos P. 38

INVESTMENT STANCE September 2003 3

Regional/subsector investment stance summary Wtd. stock Region/segment Stance recommendations* 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, mmO2 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. Some support may come from consolidation speculation. AsiaPac Integrated OVERWEIGHT 1.74 KT Corp, Impressive combination of value and balance NTT, Telstra, sheet strength, though selectivity is essential. China Telecom AsiaPac Wireless OVERWEIGHT 1.56 China Mobile, Balance sheet strength coupled with a mixture NTT DoCoMo, of secular growth and success in advanced KDDI data services.

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

GLOBAL PERSPECTIVE 4 Global Telecom Monthly

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 PERSPECTIVE September 2003 5

I’m a telco, you’re a telco

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). 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. 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

I’m gonna tear your playhouse down

Regulate this!

It’s child’s play

GLOBAL PERSPECTIVE 6 Global Telecom Monthly

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) Population penetration (%) Africa 7.943 1.00 Americas 205.658 24.21 Asia 201.079 5.58 Europe 166.386 20.79 Oceania 10.500 33.30 Total 591.566 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 MSN Messenger, ICQ, AIM, Other standard Skype Net2Phone Yahoo Messenger VoIP clients

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 Worse than phones Worse than phones

Secure and encrypted communications ü r r r

100% ad-free ü r r Sometimes

Source: Skype

GLOBAL PERSPECTIVE September 2003 7

• 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.”

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

% 0

% 10

% 20

% 30

% 40

% 50

% 60

% 70

DT FT KPN PT Swisscom TI Telefonica TeliaSonera

Fixed EBITDA contribution/group Fixed capex consumption/group

(%)

Source: DIR estimates based on last reported results

Honey, there’s trouble at the mill

NEWS – EUROPE 8 Global Telecom Monthly

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 – US September 2003 9

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 – JAPAN 10 Global Telecom Monthly

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 – ASIA September 2003 11

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 higher-than-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 dial-up 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 12 Global Telecom Monthly

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.

STATISTICS & VALUATIONS September 2003 13

Statistics and valuations Cellular subs

2000A 2001A 2002A 2003F 2004F 2005F 2006F Europe (m) Western Europe 243.7 288.8 303.2 325.0 343.2 358.0 368.7 % change 58 18 5 7 6 4 3 UK 40.0 44.9 49.9 53.0 56.0 58.4 60.1 % change 68 12 11 6 6 4 3 France 29.7 37.0 38.6 41.0 42.5 43.0 43.6 % change 44 25 4 6 4 1 1 Germany 48.1 54.2 57.0 60.5 63.3 65.4 66.7 % change 106 13 5 6 5 3 2 Italy 42.1 49.9 52.9 56.2 58.8 60.7 61.9 % change 40 19 6 6 5 3 2 Spain 24.3 28.8 33.2 35.2 36.9 38.3 39.4 % change 62 19 15 6 5 4 3 Source: Mobile Communications/DIR forecasts USA (m) USA 109.5 128.4 140.8 155.0 156.4 157.7 159.1 % change 27 17 10 10 1 1 1 Japan (m) Japan 58.0 67.1 73.5 79.5 84.2 87.7 n.a. % change 20 16 10 8 6 4 n.a. Asia (ex-Japan) (m) China 85.3 144.8 206.6 251.4 284.1 316.5 350.7 % change 97 70 43 22 13 11 11 Hong Kong 5.2 5.7 6.2 6.4 6.5 6.7 6.8 % change 31 9 9 2 2 2 2 Singapore 2.4 2.9 3.2 3.5 3.6 3.7 3.9 % change 66 17 13 6 5 3 3 Korea 26.8 29.0 32.4 35.0 36.8 38.5 39.8 % change 14 8 12 8 5 5 3 Taiwan 17.9 21.6 23.9 25.8 26.2 26.7 27.3 % change 55 21 11 8 1 2 2 Australia 10.1 12.0 13.5 14.6 14.9 15.1 15.5 % change 30 18 12 8 2 2 3 Source: DIR estimates

Cellular penetration

2000A 2001A 2002A 2003F 2004F 2005F 2006F Europe (%) Western Europe 63.1 74.8 78.5 84.1 88.9 92.7 95.5 UK 68.1 76.4 84.9 90.2 95.2 99.3 102.3 France 53.3 66.4 69.3 73.6 76.2 77.2 78.3 Germany 58.5 65.9 69.3 73.6 77.0 79.6 81.1 Italy 73.4 87.2 92.3 98.0 102.6 105.9 108.1 Spain 61.3 72.7 83.7 88.9 93.0 96.6 99.5 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 6.7 11.3 16.1 19.4 21.7 24.0 26.4 Hong Kong 78.0 84.4 91.1 92.1 93.1 94.1 95.1 Singapore 74.8 71.2 77.9 82.4 85.6 87.6 89.5 Korea 57.0 61.0 68.0 73.0 76.3 79.5 81.7 Taiwan 80.2 96.6 106.2 114.0 115.0 117.0 119.0 Australia 54.1 63.4 70.5 75.4 76.0 76.5 77.5

Source: DIR estimates

STATISTICS & VALUATIONS 14 Global Telecom Monthly

Cellular ARPU

GDP* (US$ PPP/capita) 2000A 2001A 2002A 2003F 2004F 2005F 2006F Name of operator

Europe (US$) UK 24,700 37.1 32.4 34.3 35.9 37.8 39.1 40.2 Orange UK % change (20) (13) 6 5 5 4 3 % non-voice 4 11 14 17 19 20 22 Line yield (US$) 118 124 157 169 181 191 200 USA (US$) USA 36,300 45.3 47.4 48.4 55.2 57.7 57.5 57.4 Industry average % change 3 5 2 14 5 0 0 Line yield (US$) - - - - - GDP* (US$ PPP/capita) 2000A 2001A 2002F 2003F 2004F 2005F 2006F Name of operator

Japan (US$) Japan 27,200 73.7 72.2 69.2 67.5 65.9 65.2 n.a. NTT DoCoMo % change (1) (2) (4) (2) (2) (1) n.a. % non-voice 10 18 22 23 25 27 n.a. Line yield (US$) 372 375 371 364 357 353 n.a. GDP* (US$ PPP/capita) 2000A 2001A 2002A 2003F 2004F 2005F 2006F Name of operator

Asia (ex-Japan) (US$) China 4,300 26.6 17.0 13.9 12.3 11.6 11.3 11.2 China Mobile (HK) % change (26) (36) (18) (11) (6) (3) (1) % non-voice 2 3 4 7 12 17 22 Line yield (US$) 178 127 99 87 81 79 80 Hong Kong 25,000 25.2 23.4 23.2 22.8 23.5 25.1 26.4 SmarTone % change (43) (7) (1) (2) 3 7 5 % non-voice 1 2 4 8 15 21 26 Line yield (US$) 55 10 74 93 89 106 119 Singapore 24,700 44.4 30.3 32.2 30.8 31.4 31.5 31.6 SingTel % change (17) (32) 6 (4) 2 1 0 % non-voice 0 0 13 18 21 26 28 Korea 18,000 33.6 34.7 37.1 37.2 39.5 40.0 41.9 SK Telecom % change (10) 3 7 0 6 1 5 % non-voice 3 7 14 19 24 27 32 Line yield (US$) 146 168 213 211 223 226 247 Taiwan 17,200 32.7 21.6 19.3 17.7 17.0 16.5 16.2 Far EasTone % change (18) (34) (11) (8) (4) (3) (2) % non-voice 0 3 5 8 12 17 20 Line yield (US$) 120 114 112 99 102 99 99 Australia 24,000 26.9 25.8 25.5 26.6 27.2 28.8 30.1 Telstra % change (17) (4) (1) 5 2 6 4 % non-voice 1 4 7 10 13 16 18

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)


Broadband Internet subs

2000A 2001A 2002A 2003F 2004F 2005F 2006F Europe (m) UK 0.0 0.3 1.4 2.6 3.5 4.1 4.6 % change n.a. 817 303 90 35 17 12 Germany 0.7 2.5 3.4 4.2 4.8 5.2 5.7 % change n.a. 274 37 25 14 8 10 France 0.2 0.6 1.7 2.8 3.6 4.3 5.0 % change 249 271 178 66 29 19 16 Netherlands 0.2 0.5 1.1 1.7 2.1 2.5 270 % change n.a. 113 139 52 24 19 8 Western Europe total 1.8 6.5 13.6 21.0 26.0 30.0 33.0 % change n.a. 272 108 55 24 15 10 2000A 2001A 2002F 2003F 2004F 2005F 2006F

USA (m) USA 7.1 12.8 19.9 26.7 43.0 75.0 102.6 % change 157 81 55 34 61 74 37 2000A 2001A 2002A 2003F 2004F 2005F 2006F Japan (m) Japan 0.6 2.8 7.8 15.0 20.0 22.0 24.0 % change 323 347 175 92 33 10 9 Asia (ex-Japan) (m) China 0.3 1.0 3.3 10.9 15.6 20.7 24.6 % change n.a. 232 244 226 43 33 18 Hong Kong 0.4 0.6 1.0 1.3 1.5 1.7 1.9 % change 692 59 59 27 19 16 12 Singapore 0.1 0.1 0.2 0.4 0.5 0.6 0.7 % change 1,986 85 70 67 35 23 15 Korea 4.0 7.8 9.9 10.9 11.3 12.0 12.1 % change 402 94 26 10 4 6 1 Taiwan 0.2 1.1 2.1 3.0 3.9 5.1 6.3 % change n.a. 393 86 43 30 29 25 Australia 0.1 0.2 0.4 0.7 1.1 1.6 2.2 % change n.a. 235 64 69 57 46 38



Valuation –––––––––––––EV/EBITDA––––––––––– –––––––––––––––EV/sales––––––––––––– Company Rating Currency Price 2001 2002 2003 2004 2001 2002 2003 2004 Integrated operators AT&T (T US) 4 US$ 22.30 2.1 2.4 3.2 3.2 0.7 0.7 0.8 0.8 BellSouth (BLS US) 3 US$ 25.57 5.0 5.0 4.7 4.3 2.3 2.2 2.1 1.9 BT Group (BT/A LN) 3 GBp 188.25 5.2 4.5 4.3 4.3 1.6 1.4 1.4 1.3 China Telecom (728 HK) 2 HK$ 2.00 6.0 4.7 3.9 3.5 3.0 2.4 2.1 1.9 Deutsche Telekom (DTE GR) 3 Eur 13.29 7.8 7.2 6.5 5.7 2.4 2.2 2.1 1.9 France Telecom (FTE FP) 2 Eur 22.38 9.8 9.3 6.8 5.9 2.8 3.0 2.5 2.2 KPN (KPN NA) 3 Eur 6.66 9.0 6.6 5.5 4.9 2.6 2.4 2.1 1.9 KT Corp (3020 KS) 1 Won 45,350 3.5 3.9 3.3 2.8 1.3 1.5 1.3 1.1 NTT (9432 JP) 2 Yen 511,000 5.1 3.4 3.4 3.1 1.2 1.2 1.2 1.1 PCCW (8 HK) 4 HK$ 4.90 8.9 7.3 7.3 7.0 3.0 2.9 2.8 2.6 Portugal Telecom (PTC PL) 2 Eur 6.60 6.5 5.5 5.2 4.4 2.4 2.2 2.1 1.8 Qwest (Q US) 4 US$ 3.92 4.3 5.5 5.7 5.2 1.6 1.7 1.6 1.5 SBC (SBC US) 4 US$ 23.41 5.3 5.6 5.7 5.5 1.9 1.9 1.8 1.7 Singapore Telecom (ST SP) 2 S$ 1.63 10.8 7.6 6.6 6.1 5.3 3.8 3.3 3.1 Sprint (FON US) 4 US$ 14.71 4.3 3.8 3.4 2.9 1.1 1.1 1.0 0.9 Swisscom (SCMN VX) 3 CHF 397.00 5.3 6.1 5.9 5.7 1.6 1.8 1.8 1.6 Telecom Italia ordinaries (TIT IM) 4 Eur 2.185 5.0 4.6 5.9 5.5 2.1 2.1 2.7 2.5 Telecom Italia savers (TITR IM) 3 Eur 1.522 5.0 4.6 5.9 5.5 2.1 2.1 2.7 2.5 Telefonica (TEF SM) 3 Eur 10.90 6.5 6.7 6.6 6.0 2.7 2.8 2.8 2.5 Telstra (TLS AU) 2 A$ 4.97 7.9 7.3 7.2 6.8 3.6 3.5 3.4 3.3 Verizon (VZ US) 3 US$ 35.51 5.7 5.5 5.3 4.7 2.4 2.2 2.1 1.9

Weighted average 5.9 5.5 5.1 4.6 2.2 2.1 1.9 1.8 Cellular/wireless-centric AT&T Wireless (AWE US) 1 US$ 8.73 8.7 8.5 6.3 5.2 2.0 2.1 1.8 1.6 China Mobile (941 HK) 2 HK$ 21.00 7.1 5.9 4.7 4.1 4.3 3.5 2.8 2.4 China Unicom (762 HK) 3 HK$ 5.80 5.8 6.0 4.0 2.9 2.7 2.7 1.5 1.2 Far EasTone (4904 TT) 3 NT$ 22.20 5.0 4.1 4.0 3.4 1.7 1.7 1.6 1.5 Japan Telecom (9434 JP) 3 Yen 355,000 6.9 3.7 3.5 3.3 1.3 1.1 1.0 1.0 KDDI (9433 JP) 1 Yen 648,000 8.1 7.2 5.7 5.1 1.5 1.5 1.4 1.3 KT Freetel (3239 KS) 3 Won 23,150 5.3 5.0 4.7 4.5 1.5 1.7 1.6 1.6 M1 (M1 SP) 3 S$ 1.35 6.2 5.7 5.2 4.8 2.4 2.2 2.0 1.9 mmO2 (OOM LN) 2 GBp 59.75 13.4 6.7 4.9 4.0 1.4 1.2 1.1 1.0 Nextel (NXTL US) 3 US$ 19.49 16.8 9.5 7.5 6.8 4.1 3.5 2.9 2.8 NTT DoCoMo (9437 JP) 1 Yen 291,000 9.3 8.3 7.9 7.3 3.4 3.2 3.1 2.9 Orange (OGE FP) 3 Eur 9.81 16.3 10.5 7.7 6.8 3.5 3.2 2.8 2.4 SK Telecom (1767 KS) 3 Won 200,000 4.4 3.5 2.8 2.2 2.1 1.7 1.3 1.0 SmarTone (315 HK) 3 HK$ 10.25 33.5 4.2 3.1 3.4 1.0 1.0 0.8 0.8 Sprint PCS (PCS US) 5 US$ 5.98 14.6 7.7 6.1 5.0 2.3 1.8 1.6 1.5 Taiwan Cellular (3045 TT) 3 NT$ 24.60 5.2 7.6 6.2 5.6 2.1 2.8 2.4 2.2 Telefonica Moviles (TEM SM) 4 Eur 7.24 12.0 10.2 8.3 7.5 4.8 4.2 3.7 3.3 Vodafone (VOD LN) 2 GBp 124.00 12.0 8.8 7.7 7.0 4.2 3.2 2.9 2.7

Weighted average 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


Valuation (cont’d) ––––––––– EV/Net PP&E ––––––– ––––– Capex/sales (%) ––––– Company Rating Currency Price 2001 2002 2003 2004 2001 2002 2003 2004 Integrated operators AT&T (T US) 4 US$ 22.30 2.1 1.0 1.2 1.1 13.7 10.3 10.2 10.2 BellSouth (BLS US) 3 US$ 25.57 2.7 2.6 2.5 2.4 20.3 13.3 11.7 11.9 BT Group (BT/A LN) 3 GBp 188.25 1.6 1.6 1.7 1.7 16.8 13.0 13.8 13.6 China Telecom (728 HK) 2 HK$ 2.00 1.4 1.2 1.0 1.0 64.3 41.6 33.0 29.0 Deutsche Telekom (DTE GR) 3 Eur 13.29 2.1 2.1 2.2 2.1 20.4 12.6 12.3 12.4 France Telecom (FTE FP) 2 Eur 22.38 3.6 4.1 3.2 2.9 18.8 15.9 11.9 12.2 KPN (KPN NA) 3 Eur 6.66 2.8 2.8 2.8 2.8 23.9 9.3 11.3 12.5 KT Corp (3020 KS) 1 Won 45,350 1.2 1.4 1.3 1.2 24.6 19.7 22.4 19.4 NTT (9432 JP) 2 Yen 511,000 1.2 1.2 1.2 1.1 20.8 18.1 18.0 17.6 PCCW (8 HK) 4 HK$ 4.90 2.6 2.5 2.4 2.4 11.0 8.0 8.8 8.8 Portugal Telecom (PTC PL) 2 Eur 6.60 2.5 2.4 2.6 2.5 23.0 20.1 12.6 14.0 Qwest (Q US) 4 US$ 3.92 1.1 1.1 1.4 1.5 43.4 17.7 20.2 20.9 SBC (SBC US) 4 US$ 23.41 2.1 2.0 1.8 1.7 20.6 13.3 9.6 12.5 Singapore Telecom (ST SP) 2 S$ 1.63 4.1 3.0 2.9 2.9 40.9 16.3 15.1 14.8 Sprint (FON US) 4 US$ 14.71 1.1 1.0 0.9 0.8 31.3 14.4 13.2 16.2 Swisscom (SCMN VX) 3 CHF 397.00 2.6 3.4 3.6 3.7 8.7 8.4 8.9 8.6 Telecom Italia ordinaries (TIT IM) 4 Eur 2.185 3.2 3.1 4.2 4.0 21.8 15.4 15.1 15.5 Telecom Italia savers (TITR IM) 3 Eur 1.522 3.2 3.1 4.2 4.0 21.8 15.4 15.1 15.5 Telefonica (TEF SM) 3 Eur 10.90 2.2 2.5 3.1 3.1 21.8 13.3 13.5 15.0 Telstra (TLS AU) 2 A$ 4.97 3.3 3.2 3.3 3.3 16.8 15.3 13.9 15.9 Verizon (VZ US) 3 US$ 35.51 2.2 2.0 1.9 1.9 25.9 17.7 17.6 16.8





Valuation (cont’d) ––––––––– P/OFCF ––––––– ––––––––– PER (x) ––––––– Company Rating Currency Price 2001 2002 2003 2004 2001 2002 2003 2004 Integrated operators AT&T (T US) 4 US$ 22.30 5.4 4.7 5.3 5.5 1.8 n.m. 8.7 9.6 BellSouth (BLS US) 3 US$ 25.57 13.6 9.1 8.3 7.5 19.7 36.3 11.7 11.4 BT Group (BT/A LN) 3 GBp 188.25 24.2 9.2 7.0 8.0 21.3 13.2 11.1 10.0 China Telecom (728 HK) 2 HK$ 2.00 n.m. 13.1 10.0 8.6 15.6 13.5 12.5 11.0 Deutsche Telekom (DTE GR) 3 Eur 13.29 n.m. 10.6 7.2 6.8 n.m. n.m. 68.8 19.9 France Telecom (FTE FP) 2 Eur 22.38 17.1 16.3 8.2 6.4 n.m. n.m. 21.1 13.3 KPN (KPN NA) 3 Eur 6.66 n.m. 10.6 7.3 7.7 n.m. n.m. 18.4 15.0 KT Corp (3020 KS) 1 Won 45,350 37.0 9.0 22.0 10.2 12.4 7.4 5.5 5.5 NTT (9432 JP) 2 Yen 511,000 n.m. 6.4 7.2 6.6 n.m. 34.9 16.4 14.9 PCCW (8 HK) 4 HK$ 4.90 16.5 6.8 11.7 10.3 16.3 n.m. 17.9 20.3 Portugal Telecom (PTC PL) 2 Eur 6.60 24.8 14.5 6.0 5.5 26.4 21.2 21.3 13.4 Qwest (Q US) 4 US$ 3.92 n.m. 5.9 n.m. 109.2 n.m. n.m. n.m. n.m. SBC (SBC US) 4 US$ 23.41 22.1 11.8 11.2 12.1 11.3 13.8 8.5 15.2 Singapore Telecom (ST SP) 2 S$ 1.63 n.m. 18.0 29.9 28.9 16.7 20.7 11.5 14.9 Sprint (FON US) 4 US$ 14.71 n.m. 6.8 6.4 7.3 n.m. 10.8 5.3 10.2 Swisscom (SCMN VX) 3 CHF 397.00 9.3 10.4 10.2 10.0 5.9 33.5 15.3 15.5 Telecom Italia ordinaries (TIT IM) 4 Eur 2.185 10.3 3.4 4.6 4.6 n.m. n.m. 16.2 34.7 Telecom Italia savers (TITR IM) 3 Eur 1.522 10.3 3.4 4.6 4.6 n.m. n.m. 16.2 34.7 Telefonica (TEF SM) 3 Eur 10.90 13.5 5.5 7.8 7.5 23.9 n.m. 39.5 31.3 Telstra (TLS AU) 2 A$ 4.97 16.9 15.1 14.1 14.1 17.5 16.4 15.5 14.9 Verizon (VZ US) 3 US$ 35.51 20.1 9.4 10.5 9.1 246.6 23.9 15.7 11.6

Weighted average 8.0 9.5 8.4 9.2 8.5 16.4 20.0 12.2 Cellular/wireless-centric AT&T Wireless (AWE US) 1 US$ 8.73 n.m. n.m. 14.3 12.9 n.m. n.m. 31.9 23.0 China Mobile (941 HK) 2 HK$ 21.00 64.7 25.6 14.7 11.4 14.8 13.0 12.3 11.3 China Unicom (762 HK) 3 HK$ 5.80 n.m. n.m. n.m. 8.5 17.3 16.9 16.1 11.5 Far EasTone (4904 TT) 3 NT$ 22.20 n.m. n.m. 10.2 4.7 5.5 6.4 8.4 6.5 Japan Telecom (9434 JP) 3 Yen 355,000 n.m. 8.5 10.6 8.1 n.m. 14.3 17.8 17.6 KDDI (9433 JP) 1 Yen 648,000 40.7 11.4 13.0 11.3 211.7 47.6 27.7 17.0 KT Freetel (3239 KS) 3 Won 23,150 n.m. 12.2 7.8 6.2 8.0 8.3 7.8 7.5 M1 (M1 SP) 3 S$ 1.35 n.m. 9.9 9.2 10.9 11.0 9.9 9.2 8.5 mmO2 (OOM LN) 2 GBp 59.75 n.m. n.m. n.m. 38.6 n.m. n.m. n.m. n.m. Nextel (NXTL US) 3 US$ 19.49 n.m. n.m. 17.1 14.5 n.m. 11.3 19.8 17.0 NTT DoCoMo (9437 JP) 1 Yen 291,000 65.5 21.2 18.0 16.1 n.m. 68.7 21.9 20.3 Orange (OGE FP) 3 Eur 9.81 n.m. 124.9 24.9 17.5 n.m. n.m. 11.0 20.1 SK Telecom (1767 KS) 3 Won 200,000 11.7 9.5 6.4 6.4 9.4 7.5 6.1 5.6 SmarTone (315 HK) 3 HK$ 10.25 n.m. 15.9 15.8 n.m. n.m. 52.4 15.2 17.8 Sprint PCS (PCS US) 5 US$ 5.98 n.m. n.m. 13.8 4.9 n.m. n.m. n.m. n.m. Taiwan Cellular (3045 TT) 3 NT$ 24.60 19.3 n.m. 7.3 7.2 6.4 7.4 7.2 7.0 Telefonica Moviles (TEM SM) 4 Eur 7.24 45.6 n.m. 11.6 9.3 34.5 n.m. 18.1 17.9 Vodafone (VOD LN) 2 GBp 124.00 35.2 n.m. 19.5 16.9 n.m. n.m. n.m. n.m.




Valuation (cont’d) –––– EBITDA margin (%)––– –––––––– Yield (%) –––––––– Company Rating Currency Price 2001 2002 2003 2004 2001 2002 2003 2004 Integrated operators AT&T (T US) 4 US$ 22.30 31.8 28.2 25.9 24.5 3.6 3.2 3.4 3.4 BellSouth (BLS US) 3 US$ 25.57 44.8 43.8 43.8 45.2 3.0 3.1 3.5 3.6 BT Group (BT/A LN) 3 GBp 188.25 31.2 31.0 31.6 30.9 1.1 3.5 5.3 5.8 China Telecom (728 HK) 2 HK$ 2.00 49.7 52.2 53.3 53.6 0.0 0.4 3.3 3.4 Deutsche Telekom (DTE GR) 3 Eur 13.29 31.4 30.3 32.6 32.7 2.8 0.0 0.0 0.0 France Telecom (FTE FP) 2 Eur 22.38 28.6 32.0 36.7 37.5 4.5 0.0 0.0 0.0 KPN (KPN NA) 3 Eur 6.66 29.0 36.0 39.1 39.1 0.0 0.0 0.0 3.3 KT Corp (3020 KS) 1 Won 45,350 37.3 37.4 39.1 40.0 1.6 2.0 2.4 2.8 NTT (9432 JP) 2 Yen 511,000 24.2 36.3 34.5 35.3 1.0 1.0 1.0 1.0 PCCW (8 HK) 4 HK$ 4.90 33.7 40.4 37.8 37.9 0.0 0.0 0.0 0.0 Portugal Telecom (PTC PL) 2 Eur 6.60 37.1 39.9 40.0 41.4 1.5 2.4 3.2 3.7 Qwest (Q US) 4 US$ 3.92 37.4 30.3 27.6 29.5 0.0 0.0 0.0 0.0 SBC (SBC US) 4 US$ 23.41 36.1 33.7 31.2 30.9 4.3 4.6 5.8 6.5 Singapore Telecom (ST SP) 2 S$ 1.63 49.5 49.8 50.5 50.8 3.4 3.4 3.4 3.4 Sprint (FON US) 4 US$ 14.71 25.2 29.6 30.7 32.7 3.4 3.3 3.4 3.4 Swisscom (SCMN VX) 3 CHF 397.00 31.1 30.4 29.9 28.7 2.8 3.0 3.3 3.5 Telecom Italia ordinaries (TIT IM) 4 Eur 2.185 42.8 44.7 45.5 46.7 14.4 14.4 4.4 4.5 Telecom Italia savers (TITR IM) 3 Eur 1.522 42.8 44.7 45.5 46.7 20.7 20.7 6.4 6.5 Telefonica (TEF SM) 3 Eur 10.90 41.2 41.3 42.6 42.3 0.0 2.3 3.7 3.7 Telstra (TLS AU) 2 A$ 4.97 46.0 47.9 47.5 48.8 4.4 5.4 5.2 5.6 Verizon (VZ US) 3 US$ 35.51 41.3 40.2 39.8 40.3 4.3 4.3 4.3 4.3





Valuation (cont’d) –––– Net debt/EBITDA ––––– –––– Net debt/equity (%) ––– Company Rating Currency Price 2001 2002 2003 2004 2001 2002 2003 2004 Integrated operators AT&T (T US) 4 US$ 22.30 0.80 0.75 1.31 1.11 61 46 68 54 BellSouth (BLS US) 3 US$ 25.57 1.47 1.19 0.89 0.70 110 82 58 44 BT Group (BT/A LN) 3 GBp 188.25 2.38 1.65 1.27 1.20 200 n.m. n.m. 192 China Telecom (728 HK) 2 HK$ 2.00 0.82 0.23 n.m. n.m. 25 8 n.m. n.m. Deutsche Telekom (DTE GR) 3 Eur 13.29 4.09 3.76 2.90 2.31 116 122 144 113 France Telecom (FTE FP) 2 Eur 22.38 5.15 4.56 2.63 1.96 234 n.m. 425 107 KPN (KPN NA) 3 Eur 6.66 4.39 2.82 1.90 1.44 118 150 130 73 KT Corp (3020 KS) 1 Won 45,350 1.26 1.71 1.21 0.84 65 108 84 48 NTT (9432 JP) 2 Yen 511,000 2.05 1.36 1.21 0.93 86 94 80 60 PCCW (8 HK) 4 HK$ 4.90 5.31 4.05 3.83 3.52 n.m. n.m. n.m. n.m. Portugal Telecom (PTC PL) 2 Eur 6.60 2.57 1.80 1.46 1.02 121 103 101 71 Qwest (Q US) 4 US$ 3.92 3.36 4.15 4.08 3.70 63 114 n.m. n.m. SBC (SBC US) 4 US$ 23.41 1.30 1.07 0.75 0.63 81 56 33 27 Singapore Telecom (ST SP) 2 S$ 1.63 2.79 1.90 1.41 1.20 87 65 49 40 Sprint (FON US) 4 US$ 14.71 1.22 0.83 0.30 n.m. 39 28 n.m. n.m. Swisscom (SCMN VX) 3 CHF 397.00 n.m. 0.13 n.m. n.m. n.m. 6 n.m. n.m. Telecom Italia ordinaries (TIT IM) 4 Eur 2.185 2.70 2.38 2.50 2.20 103 88 83 100 Telecom Italia savers (TITR IM) 3 Eur 1.522 2.70 2.38 2.50 2.20 103 88 83 100 Telefonica (TEF SM) 3 Eur 10.90 2.25 2.10 1.74 1.39 111 115 126 109 Telstra (TLS AU) 2 A$ 4.97 1.19 1.02 0.99 0.86 40 35 34 31 Verizon (VZ US) 3 US$ 35.51 2.21 1.86 1.75 1.43 183 155 148 126

Weighted average 2.19 1.84 1.41 1.11 106 n.m. 105 53 Cellular/wireless-centric AT&T Wireless (AWE US) 1 US$ 8.73 1.1 2.3 1.2 0.8 15 45 28 19 China Mobile (941 HK) 2 HK$ 21.00 n.m. 0.2 n.m. n.m. n.m. 12 n.m. n.m. China Unicom (762 HK) 3 HK$ 5.80 0.1 1.8 0.9 0.4 2 53 33 16 Far EasTone (4904 TT) 3 NT$ 22.20 0.6 0.5 0.5 0.3 23 22 19 12 Japan Telecom (9434 JP) 3 Yen 355,000 3.3 1.6 1.5 1.3 222 203 165 132 KDDI (9433 JP) 1 Yen 648,000 3.0 2.4 1.7 1.3 193 156 123 85 KT Freetel (3239 KS) 3 Won 23,150 2.5 2.5 2.4 2.3 170 154 143 134 M1 (M1 SP) 3 S$ 1.35 1.0 0.9 0.6 0.4 71 52 33 22 mmO2 (OOM LN) 2 GBp 59.75 1.4 0.6 0.6 0.4 0 4 7 5 Nextel (NXTL US) 3 US$ 19.49 6.5 3.4 2.5 2.1 n.m. 942 284 176 NTT DoCoMo (9437 JP) 1 Yen 291,000 0.7 0.4 0.3 n.m. 34 20 17 n.m. Orange (OGE FP) 3 Eur 9.81 1.9 1.4 0.3 n.m. 30 43 12 n.m. SK Telecom (1767 KS) 3 Won 200,000 1.0 0.4 n.m. n.m. 71 32 n.m. n.m. SmarTone (315 HK) 3 HK$ 10.25 n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m. Sprint PCS (PCS US) 5 US$ 5.98 10.5 5.6 4.2 3.4 n.m. n.m. n.m. n.m. Taiwan Cellular (3045 TT) 3 NT$ 24.60 0.6 2.4 1.6 1.1 27 84 58 35 Telefonica Moviles (TEM SM) 4 Eur 7.24 2.7 1.9 1.2 0.7 142 131 136 71 Vodafone (VOD LN) 2 GBp 124.00 1.5 1.2 0.8 0.4 9 11 8 5

Weighted average 1.4 1.1 0.7 0.4 40 37 28 14



Share price performance Share Shares Market Bloomberg price in issue cap Relative performance Absolute performance (US$) Company code (16 Sep) (m) (US$m) 1 Wk 1-mth 3-mth 12-mth 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) (3.88) (10.93) (8.68) (0.36) (2.50) (2.97) (5.27)

Cable & Wireless CW/ LN 1.223 2,382.1 4,622.3 (3.77) (3.57) 17.11 (17.06) (2.68) (2.18) 27.57 (13.97)

Deutsche Telekom DTE GR 13.29 4,203.1 62,434.0 2.37 (6.62) (2.99) 20.46 1.83 (3.62) 10.94 13.76

Equant EQU FP 7.00 282.1 2,207.1 (4.56) (2.33) 4.03 76.77 (3.95) 0.58 16.04 67.57

Europolitan Vodafone AB 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) 17.15 132.16

KPN KPN NA 6.66 2,491.0 18,542.7 6.52 2.24 4.00 22.71 5.86 5.58 20.44 7.67

KPNQwest KQIP NA 0.12 457.4 61.3 0.92 (10.87) (35.74) 138.34 0.30 (7.95) (25.58) 109.13

mmO2 OOM LN 0.598 8,670.0 8,222.5 1.74 4.94 0.41 29.35 2.89 6.46 9.38 34.17

Mobistar MOBB BB 40.20 62.5 2,809.0 3.36 (1.06) 1.20 67.33 (1.75) (0.36) 18.55 106.06

Orange OGE FP 9.81 4,814.6 52,790.2 2.71 11.76 24.29 64.85 3.36 15.09 38.64 56.28

Portugal Telecom SGPS SA PTC PL 6.60 1254.3 9,252.6 3.25 2.55 (0.62) 11.78 3.92 4.63 6.72 1.79

Stet Hellas STHLY US 11.000 83.2 818.8 0.13 1.81 10.88 75.14 0.73 5.78 12.82 106.38

Swisscom SCMN VX 397.00 66.2 18,914.5 (0.62) (0.22) (7.83) (9.51) 0.32 4.29 (5.78) 7.48

Tele2 AB TEL2B SS 332.00 125.8 5,130.5 3.36 (1.06) 1.20 67.33 3.51 7.09 7.38 132.62

Telecom Italia Mobile SpA TIM IM 4.059 8,434.0 38,262.9 0.26 (2.91) (5.98) (11.52) (0.07) (2.66) (1.67) (17.40)

Telecom Italia S.p.A. TIT IM 2.185 10,287.4 25,123.7 3.23 (5.64) (4.09) (6.71) 2.89 (5.39) 0.30 (12.92)

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 5.14 (0.18)

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 UPC NA 0.10 443.4 49.6 12.13 (3.44) 13.80 41.87 n.a. (0.28) 31.78 24.48

Vodafone VOD LN 1.240 67,895.1 133,630.4 0.81 (0.20) (1.73) 28.29 1.95 1.24 7.04 33.07

Vodafone Panafon PANF GA 0.06 543.3 3,643.6 (1.65) 8.35 1.30 29.40 (2.62) 0.73 10.59 16.70

USA

AT&T T US 22.30 788.1 17,573.7 0.76 2.06 9.31 (26.92) 1.36 6.04 11.22 (13.89)

AT&T Wireless AWE US 8.73 2,713.2 23,686.5 (1.72) 6.90 14.10 47.00 (1.13) 11.07 16.09 73.21

Bellsouth BLS US 25.57 1,847.4 47,237.0 0.23 (2.88) (6.30) (5.03) 0.83 0.91 (4.66) 11.90

Global Crossing GBLXQ US 0.023 888.6 20.4 3.92 22.98 7.64 (11.28) 4.55 27.78 9.52 4.55

Nextelcommunications NXTL US 19.49 999.9 19,487.6 (1.41) 7.13 15.38 101.95 (0.81) 11.31 17.40 137.97

Qwest Communication Q US 3.92 1,695.4 6,645.8 (5.42) (4.97) (22.79) 5.61 (4.85) (1.26) (21.44) 24.44

SBC Communications SBC US 23.41 3,323.6 77,805.1 1.53 (3.01) (9.95) (18.24) 2.14 0.77 (8.38) (3.66)

Sprint FON US 14.71 903.2 13,285.6 (1.40) (0.37) (0.63) 25.08 (0.81) 3.52 1.10 47.39

Sprint PCS PCS US 5.98 1,034.5 6,186.1 3.38 7.78 (0.04) 56.63 4.00 11.99 1.70 84.57

Verizon Communications VZ US 35.51 2,756.3 97,875.7 0.42 (4.59) (12.68) (1.33) 1.02 (0.87) (11.16) 16.27

WorldCom WCOEQ US 0.072 2,962.8 213.3 (20.92) 34.56 37.74 (51.12) (20.44) 39.81 40.13 (42.40)

Japan

Japan Telecom 9434 JP 355,000 3.2 9,762.5 (1.57) (7.75) (12.90) (5.21) (0.07) 3.38 5.24 12.31

KDDI 9433 JP 648,000 4.2 23,652.4 2.04 (2.50) 10.64 51.90 7.05 12.91 38.13 85.96

NTT 9432 JP 511,000 16.0 70,474.1 (1.31) (6.80) (5.24) 0.49 0.38 4.64 14.70 19.27

NTT DoCoMo 9437 JP 291,000 50.2 125,676.7 2.52 (4.60) (5.53) 16.68 1.82 4.60 11.65 35.24

Softbank 9984 JP 4,660 336.9 13,511.0 8.13 32.42 148.90 282.43 7.71 45.61 195.03 344.56

Usen 4842 JP 73,900 1.2 760.8 7.86 50.04 173.60 133.68 3.72 59.27 213.08 162.23

Yahoo! Japan 4689 JP 2,430,000 0.9 19,708.7 15.54 15.28 35.41 201.59 12.85 24.28 57.37 243.75

Source: Bloomberg


Share price performance (cont’d) Share Shares Market Bloomberg price in issue cap Relative performance Absolute performance (US$) Company code (16 Sep) (m) (US$m) 1 Wk 1-mth 3-mth 12-mth 1 Wk 1-mth 3-mth 12-mth

Hong Kong/China APT Satellite 1045 HK 2.45 413.2 129.8 (18.21) (14.37) 13.83 2.10 (13.37) (4.05) 31.11 25.53 AsiaSat 1135 HK 12.75 390.3 638.0 (6.10) (8.44) (7.41) 10.92 (5.18) (2.19) 1.68 30.02 CCT 138 HK 1.01 422.1 54.7 (1.92) 16.23 2.00 (10.17) (0.21) 25.10 12.85 6.09 China Mobile 941 HK 21.00 19,671.7 52,966.2 0.18 5.00 (2.81) (5.70) 1.69 10.52 6.32 6.60 China Telecom 728 HK 2.00 8,027.4 2,058.5 (11.51) (10.70) 2.07 n.a. (11.11) (6.98) 10.49 n.a. China Unicom 762 HK 5.80 12,553.0 9,335.0 0.53 4.26 (7.53) (1.04) 2.54 12.50 2.56 17.15 CTI 1137 HK 2.625 604.9 203.6 (0.99) (1.66) 16.82 52.63 2.73 7.94 31.81 83.81 Hutchison Whampoa 13 HK 57.75 4,263.4 31,567.8 (1.62) 5.82 8.05 1.97 0.34 14.17 19.84 20.71 i-Cable 1097 HK 2.025 2,019.2 524.3 (1.17) (11.79) (17.05) (49.54) 2.55 (3.18) (6.41) (39.23) PCCW 8 HK 4.90 5,368.8 3,372.9 3.91 12.28 (16.20) (27.68) 6.19 21.38 (6.87) (14.22) SmarTone 315 HK 10.25 583.0 766.2 (2.87) 3.62 7.73 13.38 (0.68) 12.10 19.79 34.58 Sunday 866 HK 0.33 2,990.0 126.5 4.96 14.09 88.68 158.56 7.28 23.36 109.71 206.74 Korea Dacom 1594 KS 9,650 37.0 305.5 3.66 (2.42) (25.40) (46.03) 4.68 3.96 (13.92) (40.52) Daum 3572 KS 63,700 14.7 801.0 0.94 (7.63) (9.71) 103.07 1.93 (1.59) 4.19 123.77 Dreamline 3543 KS 270 23.6 5.5 (13.74) (77.61) (83.43) (90.18) (12.89) (76.14) (80.88) (89.18) Hanaro 3363 KS 3,510 279.3 838.0 (8.64) 14.44 2.66 (26.44) (7.75) 21.03 17.00 (22.17) Hanaro (ADR) HANA US 3.07 279.3 857.5 (4.08) 26.69 8.98 (13.13) (3.14) 28.85 11.40 (8.64) Korea Thrunet KOREQ US 0.001 25.9 0.0 (0.96) (99.62) (12.26) (99.95) 0.01 (99.60) 1.24 (99.94) KT Corp (ADR) KTC US 19.35 581.4 11,249.5 4.27 2.05 1.67 (12.73) 5.28 3.04 2.65 (11.89) KT Corp (local) 3020 KS 45,350 290.7 11,267.7 5.31 (1.99) (11.28) (21.78) 6.34 4.41 2.37 (13.80) KT Freetel 3239 KS 23,150 191.1 3,782.1 (1.39) (5.66) (16.24) (35.64) (0.42) 0.51 (3.35) (29.08) KT Hitel 3603 KS 8,940 34.5 263.6 11.09 4.35 (4.34) 178.88 12.19 11.18 10.38 207.32 LG Telecom 3264 KS 4,075 277.3 965.8 0.02 (3.07) (10.39) (34.94) 1.00 3.26 3.40 (28.30) SK Telecom (ADR) SKM US 18.98 762.3 14,467.6 4.67 1.77 1.61 (12.57) 5.68 2.76 2.60 (11.72) SK Telecom (local) 1767 KS 200,000 82.3 14,065.0 3.44 (2.78) (11.37) (21.40) 4.45 3.58 2.27 (13.38) Taiwan Chunghwa Telecom 2412 TT 48.30 9,647.7 13,665.3 (0.53) (3.29) (19.62) (14.40) 0.63 1.26 (7.12) 6.15 Far EasTone 4904 TT 22.20 2,697.8 1,756.3 (1.59) (6.59) (13.88) (30.18) 0.00 (1.76) (0.03) (13.03) GigaMedia GIGM US 2.30 50.2 115.4 13.68 37.30 68.68 157.59 15.00 43.75 94.92 219.44 Taiwan Cellular 3045 TT 24.60 4,679.3 3,375.7 (1.55) (8.57) (15.49) (37.05) 1.22 (2.72) (0.76) (20.67) Singapore Keppel T&T KPTT SP 0.86 545.8 268.2 0.05 (3.36) (12.91) (18.50) 2.38 (2.83) (7.68) (9.09) MobileOne (Asia) M1 SP 1.35 1,050.0 809.9 (1.55) (5.46) (4.71) n.a. 0.75 (4.94) 1.00 n.a. Pacific Internet PCNTF US 8.05 12.8 103.2 (3.48) 32.44 (8.95) 246.70 (1.23) 35.52 (6.83) 254.78 Singapore Telecom ST SP 1.63 17,826.5 16,602.2 (2.87) (4.09) (4.49) 0.87 (0.61) (3.56) 1.24 12.53 Australasia Telecom NZ TEL AU 4.40 1,914.9 5,586.6 (0.47) (2.79) (4.11) 2.71 (3.11) (3.13) (1.70) (15.07) Telstra TLS AU 4.94 6,420.6 21,030.5 0.78 3.90 7.52 0.55 (1.11) 4.36 11.10 (16.20) Malaysia Digi.com * DIGI MK 3.80 750.0 750.0 (1.35) (6.33) (18.50) 9.19 0.00 (4.04) (11.22) 18.01 Telekom Malaysia T MK 7.85 3,198.7 6,607.8 0.56 2.14 (8.78) (5.08) 1.94 4.64 (0.63) 2.60 Thailand Advanced Info Services ADVANC TB 56.50 2,937.8 4,096.8 (1.40) (7.89) (3.41) 64.48 0.46 (4.90) 6.28 83.49 TelecomAsia TA TB 6.95 2,994.8 513.7 (4.34) (3.34) 19.91 4.50 (2.53) (0.20) 31.94 16.58 Total Access Comms TAC SP 1.57 474.4 425.6 (2.60) (7.58) 24.57 39.67 (0.63) 1.29 60.20 121.13 Philippines Globe Telecom GLO PM 695.00 151.9 1,918.6 (0.92) 0.78 2.11 18.25 0.61 6.20 3.02 27.33 PLDT TEL PM 635.00 169.3 1,953.6 1.44 20.56 16.54 93.04 (0.89) 22.23 13.12 99.98 Source: Bloomberg * Price as of 15 Sep 03


Corporate earnings

Europe Revenue Op. profit EBITDA Net profit EPS DPS CAPX Y/E December (EURm) (%) (EURm) (%) (EURm) (%) (EURm) (%) (EUR) (EUR) (EURm)

France Telecom FY01 43,026 27.8 2,879 (27.8) 12,320 14.0 (8,280) n.m. (7.51) 1.00 8,091 FY02 46,630 8.4 4,456 54.8 14,917 21.1 (20,736) n.m. (19.11) 0.00 7,441 FY03F 46,945 0.7 10,495 135.6 17,215 15.4 2,086 n.m. 1.06 0.00 5,601 FY04F 49,434 5.3 11,357 8.2 18,549 7.8 3,741 79.4 1.68 0.00 6,042 FY05F 51,960 5.1 11,765 3.6 19,264 3.9 5,012 34.0 2.25 1.00 6,247 Deutsche Telekom FY01 48,309 18.0 1,762 n.m. 15,188 17.4 (3,454) n.m. (0.93) 0.63 9,847 FY02 53,689 11.1 829 (53.0) 16,314 7.4 (24,587) n.m. (5.86) 0.00 7,589 FY03F 54,994 2.4 5,032 507.0 17,916 9.8 810 n.m. 0.19 0.00 6,765 FY04F 58,364 6.1 6,886 36.8 19,073 6.5 2,805 246.1 0.67 0.20 7,235 FY05F 59,699 2.3 7,910 14.9 19,575 2.6 4,175 48.9 1.00 0.40 6,635 KPN FY01 12,362 10.8 (153) n.m. 3,589 5.5 (7,495) n.m. (3.01) 0.00 2,949 FY02 12,170 (1.6) 1,614 n.m. 4,378 22.0 (9,542) n.m. (3.83) 0.00 1,136 FY03F 12,267 0.8 2,028 25.6 4,798 9.6 904 n.m. 0.36 0.00 1,391 FY04F 12,671 3.3 2,133 5.2 4,952 3.2 1,106 22.4 0.44 0.22 1,582 FY05F 12,886 1.7 2,493 16.9 5,258 6.2 1,532 38.5 0.62 0.46 1,445 Revenue Op. profit EBITDA Net profit EPS DPS CAPX Y/E December (CHFm) (%) (CHFm) (%) (CHFm) (%) (CHFm) (%) (CHF) (CHF) (CHFm)

Swisscom FY01 14,174 1.4 2,230 22.0 4,409 9.3 4,955 57.1 67.49 11.00 1,236 FY02 14,526 2.5 2,404 7.8 4,410 0.0 820 (83.4) 11.86 12.00 1,222 FY03F 14,725 1.4 2,441 1.5 4,399 (0.2) 1,720 109.7 25.99 13.00 1,305 FY04F 15,095 2.5 2,190 (10.3) 4,329 (1.6) 1,692 (1.7) 25.55 14.00 1,302 FY05F 15,380 1.9 2,048 (6.5) 4,404 1.7 1,723 1.8 26.02 15.00 1,255 Revenue Op. profit EBITDA Net profit EPS DPS CAPX Y/E March (GBPm) (%) (GBPm) (%) (GBPm) (%) (GBPm) (%) (GBp) (GBp) (GBPm)

BT Group FY02 18,447 7.6 2,655 (13.9) 5,748 (0.5) 995 n.m. 8.80 2.00 3,140 FY03 18,727 1.5 2,790 5.1 5,806 1.0 1,226 23.2 14.23 6.50 2,445 FY04F 19,151 2.3 2,932 5.1 6,043 4.1 1,469 19.8 17.03 10.00 2,635 FY05F 19,502 1.8 3,010 2.7 6,251 3.4 1,768 20.4 20.50 11.00 2,657 FY06F 19,682 0.9 3,057 1.6 6,138 (1.8) 1,807 2.2 20.95 11.52 2,789 Revenue Op. profit EBITDA Net profit EPS DPS CAPX Y/E December (EURm) (%) (EURm) (%) (EURm) (%) (EURm) (%) (EUR) (EUR) (EURm)

Portugal Telecom FY01 5,727 11.3 1,013 21.0 2,124 8.5 307 (43.1) 0.25 0.10 1,316 FY02 5,582 (2.5) 1,124 10.9 2,230 5.0 391 27.3 0.31 0.16 776 FY03F 5,587 0.1 1,230 9.5 2,236 0.3 388 (0.7) 0.31 0.21 709 FY04F 5,854 4.8 1,374 11.7 2,424 8.4 619 59.4 0.49 0.25 821 FY05F 6,091 4.1 1,507 9.7 2,551 5.2 766 23.7 0.61 0.31 755 Telefonica FY01 31,053 9.0 5,430 9.5 12,804 7.4 2,107 (15.9) 0.46 0.00 6,771 FY02 28,411 (8.5) 4,366 (19.6) 11,724 (8.4) (5,577) n.m. (1.13) 0.25 3,789 FY03F 28,371 (0.1) 4,967 13.8 11,783 0.5 1,654 n.m. 0.33 0.25 4,640 FY04F 30,659 8.1 6,239 25.6 12,794 8.6 2,506 51.5 0.51 0.25 4,678 FY05F 32,058 4.6 6,785 8.7 13,391 4.7 3,210 28.1 0.65 0.31 4,670 Telecom Italia FY01 32,016 12.8 5,308 n.a. 12,948 5.5 (3,090) n.m. (0.35) 0.03 6,990 FY02 31,408 (1.9) 5,989 12.8 13,257 2.4 (773) n.m. (0.09) 0.00 4,842 FY03F 30,772 (2.0) 7,138 19.2 13,357 0.8 2,174 n.m. 0.14 0.10 4,648 FY04F 31,320 1.8 7,589 6.3 13,851 3.7 1,009 (53.6) 0.06 0.10 4,857 FY05F 32,207 2.8 8,079 6.4 14,260 2.9 1,476 46.3 0.09 0.10 4,595

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


Corporate earnings (cont’d) Revenue Op. profit EBITDA Net profit EPS DPS CAPX Y/E March (GBPm) (%) (GBPm) (%) (GBPm) (%) (GBPm) (%) (GBp) (GBp) (GBPm)

Vodafone FY02 22,845 52.3 (11,834) n.m. 8,031 62.6 (16,155) n.m. (23.77) 1.47 4,145 FY03 30,375 33.0 (5,451) n.m. 11,217 39.7 (9,819) n.m. (14.41) 1.69 5,289 FY04F 31,974 5.3 (4,269) n.m. 12,243 9.1 (8,879) n.m. (13.02) 1.95 5,035 FY05F 33,370 4.4 (4,297) n.m. 12,843 4.9 (8,678) n.m. (12.73) 2.25 5,172 FY06F 34,740 4.1 (4,282) n.m. 13,557 5.6 (8,498) n.m. (12.46) 2.44 5,036 Revenue Op. profit EBITDA Net profit EPS DPS CAPX Y/E December (EURm) (%) (EURm) (%) (EURm) (%) (EURm) (%) (EUR) (EUR) (EURm)

Orange FY01 15,330 27.1 1,502 292.2 3,400 92.6 (4,459) n.m. (0.94) 0.00 3,018 FY02 17,085 11.4 2,782 85.2 5,146 51.4 (4,536) n.m. (0.94) 0.00 3,538 FY03F 17,884 4.7 4,011 44.2 6,353 23.5 4,280 n.m. 0.89 0.00 2,852 FY04F 19,223 7.5 4,322 7.8 6,945 9.3 2,354 (45.0) 0.49 0.00 2,668 FY05F 20,355 5.9 4,889 13.1 7,594 9.3 2,855 21.3 0.59 0.00 2,719 Revenue Op. profit EBITDA Net profit EPS DPS CAPX Y/E March (GBPm) (%) (GBPm) (%) (GBPm) (%) (GBPm) (%) (GBp) (GBp) (GBPm)

mmO2 FY02 4,276 11.5 (856) n.m. 433 n.m. (850) n.m. (9.80) 0.00 1,240 FY03 4,874 14.0 (8,778) n.m. 859 98.4 (10,148) n.m. (117.00) 0.00 975 FY04F 5,179 6.3 (44) n.m. 1,204 40.2 (100) n.m. (1.15) 0.00 1,295 FY05F 5,618 8.5 (41) n.m. 1,431 18.8 (102) n.m. (1.18) 0.00 1,236 FY06F 6,091 8.4 48 n.m. 1,660 16.0 12 n.m. 0.13 0.00 1,096 Revenue Op. profit EBITDA Net profit EPS DPS CAPX Y/E December (EURm) (%) (EURm) (%) (EURm) (%) (EURm) (%) (EUR) (EUR) (EURm)

Telefonica Moviles FY01 8,411 13.6 2,076 47.0 3,334 36.0 894 51.3 0.21 0.00 1,696 FY02 9,140 8.7 2,419 16.6 3,736 12.1 (3,724) n.m. (0.86) 0.18 919 FY03F 9,868 8.0 2,924 20.9 4,330 15.9 1,718 n.m. 0.40 0.18 1,335 FY04F 10,448 5.9 2,957 1.1 4,576 5.7 1,732 0.9 0.40 0.18 1,281 FY05F 11,072 6.0 3,151 6.5 4,873 6.5 1,881 8.6 0.43 0.20 1,231 USA Revenue Op. profit EBITDA Net profit EPS DPS CAPX Y/E December (US$m) (%) (US$m) (%) (US$m) (%) (US$m) (%) (US$) (US$) (US$m)

AT&T FY01 42,196 (9.9) 7,831 (38.8) 13,426 (25.8) 9,148 13.7 0.09 0.80 5,767 FY02 37,827 (10.4) 4,361 (44.3) 10,686 (20.4) (13,083) n.m. 1.26 0.71 3,878 FY03F 35,270 (6.8) 4,207 (3.5) 9,147 (14.4) 2,026 n.m. 2.52 0.75 3,591 FY04F 35,199 (0.2) 3,707 (11.9) 8,608 (5.9) 1,848 (8.8) 2.32 0.75 3,600 FY05F 36,342 3.2 3,474 (6.3) 8,492 (1.4) 1,766 (4.4) 2.20 0.75 3,700 Bellsouth FY01 29,589 7.8 7,716 6.4 13,260 7.3 4,265 28.0 2.26 0.76 5,997 FY02 28,497 (3.7) 7,106 (7.9) 12,488 (5.8) 3,818 (10.5) 2.04 0.78 3,785 FY03F 28,282 (0.8) 7,110 0.1 12,389 (0.8) 3,899 2.1 2.07 0.90 3,298 FY04F 29,410 4.0 7,545 6.1 13,291 7.3 4,307 10.4 2.28 0.92 3,503 FY05F 30,400 3.4 8,272 9.6 14,183 6.7 4,829 12.1 2.56 0.92 3,649 Qwest Communications International FY01 16,741 6.5 (1,299) n.m. 5,175 (14.8) (4,786) n.m. (0.72) 0.00 8,543 FY02 15,487 (7.5) (18,176) n.m. 4,248 (17.9) (35,913) n.m. (0.48) 0.00 2,866 FY03F 14,750 (4.8) 802 n.m. 3,999 (5.9) (207) n.m. (0.30) 0.00 3,000 FY04F 15,204 3.1 1,149 43.3 4,409 10.3 (161) n.m. (0.09) 0.00 3,200 SBC Communications FY01 45,908 (10.6) 10,508 (2.2) 19,585 (4.4) 7,007 (12.0) 2.29 1.00 11,189 FY02 43,138 (6.0) 8,621 (18.0) 17,199 (12.2) 5,650 (19.4) 2.17 1.07 6,808 FY03F 41,924 (2.8) 7,687 (10.8) 15,707 (8.7) 9,103 61.1 1.61 1.37 4,821 FY04F 43,597 4.0 7,851 2.1 16,114 2.6 5,100 (44.0) 1.54 1.53 6,540 FY05F 46,708 7.1 9,633 22.7 18,132 12.5 6,354 24.6 1.91 1.53 7,006



Corporate earnings (cont’d) Revenue Op. profit EBITDA Net profit EPS DPS CAPX Y/E December (US$m) (%) (US$m) (%) (US$m) (%) (US$m) (%) (US$) (US$) (US$m)

Verizon Communications FY01 67,190 3.8 11,533 (31.2) 27,781 9.9 391 (96.7) 3.02 1.54 17,371 FY02 67,304 0.2 15,004 30.1 27,099 (2.5) 4,080 944.3 3.04 1.53 13,058 FY03F 69,378 3.1 13,576 (9.5) 27,619 1.9 6,265 53.6 2.64 1.54 12,177 FY04F 74,747 7.7 16,087 18.5 30,132 9.1 8,439 34.7 3.07 1.54 12,534 FY05F 74,990 0.3 15,648 (2.7) 30,142 0.0 8,383 (0.7) 3.09 1.54 12,616 Sprint Corporation (FON Group) FY01 16,940 (4.2) 8 n.m. 4,261 (16.5) (122) n.m. 1.14 0.50 5,295 FY02 15,227 (10.1) 1,612 n.m. 4,508 5.8 1,235 n.m. 1.15 0.49 2,181 FY03F 14,161 (7.0) 1,362 (15.5) 4,347 (3.6) 2,524 104.4 1.29 0.50 1,872 FY04F 14,227 0.5 1,853 36.0 4,653 7.0 1,317 (47.8) 1.44 0.50 2,300 FY05F 14,901 4.7 1,930 4.2 4,807 3.3 1,360 3.3 1.47 0.50 2,450 AT&T Wireless Services FY01 13,622 30.4 248 n.m. 2,859 73.6 (963) n.m. (0.02) 0.00 5,205 FY02 15,631 14.7 (258) n.m. 3,822 33.7 (2,342) n.m. (0.02) 0.00 5,302 FY03F 16,628 6.4 1,739 n.m. 4,715 23.4 743 n.m. 0.27 0.00 3,074 FY04F 17,540 5.5 2,247 29.2 5,353 13.5 1,030 38.7 0.38 0.00 3,200 FY05F 18,907 7.8 3,063 36.3 6,261 17.0 1,646 59.9 0.61 0.00 3,200 Sprint Corporation (PCS Group) FY01 9,725 53.4 (647) n.m. 1,513 n.m. (1,268) n.m. (1.27) 0.00 3,751 FY02 12,074 24.2 475 n.m. 2,880 90.4 (592) n.m. (0.62) 0.00 2,668 FY03F 12,532 3.8 913 92.2 3,400 18.1 (435) n.m. (0.39) 0.00 2,030 FY04F 12,728 1.6 1,343 47.1 3,899 14.7 (63) n.m. (0.06) 0.00 1,550 FY05F 12,130 (4.7) 1,451 8.0 4,062 4.2 94 n.m. 0.09 0.00 1,400 Nextel Communications FY01 7,689 n.a. (1,715) n.m. 1,901 n.a. (2,858) n.m. (3.67) (1.06) n.a. FY02 8,721 13.4 1,536 n.m. 3,166 66.5 1,660 n.m. 1.72 0.00 1,863 FY03F 10,064 15.4 2,205 43.6 3,899 23.1 1,037 (37.6) 0.99 0.00 1,801 FY04F 9,971 (0.9) 2,346 6.4 4,096 5.1 1,205 16.2 1.14 0.00 1,800 FY05F 10,192 2.2 2,341 (0.2) 4,141 1.1 1,255 4.2 1.19 0.00 1,870

Japan Revenue Op. profit EBITDA Net profit EPS DPS CAPX Y/E March (¥m) (%) (¥m) (%) (¥m) (%) (¥m) (%) (¥) (¥) (¥m) NTT FY01 11,027,753 (3.4) 61,534 (93.2) 2,669,121 (28.6) (834,672) n.m. (51,734) 5,000 2,291,900 FY02 10,923,146 (0.9) 1,363,557 n.m. 3,966,557 48.6 233,358 n.m. 14,647 5,000 1,977,600 FY03F 10,975,000 0.5 1,390,000 1.9 3,781,000 (4.7) 490,000 110.0 31,147 5,000 1,980,000 FY04F 10,960,000 (0.1) 1,492,000 7.3 3,865,000 2.2 540,000 10.2 34,325 5,000 1,927,000 KDDI FY01 2,833,799 24.9 102,297 15.2 522,697 5.2 12,979 (3.3) 3,061 1,790 369,300 FY02 2,785,343 (1.7) 140,652 37.5 569,752 9.0 57,358 341.9 13,561 2,095 246,200 FY03F 2,808,000 0.8 269,000 91.3 686,000 20.4 98,500 71.7 23,366 2,400 338,000 FY04F 2,860,000 1.9 298,000 10.8 716,000 4.4 160,800 63.2 38,144 2,400 326,000 Japan Telecom FY01 1,704,039 16.3 89,134 (20.3) 312,734 7.0 (65,969) n.m. (20,646) 600 471,300 FY02 1,796,915 5.5 275,606 209.2 541,906 73.3 79,502 n.m. 24,882 1,200 279,300 FY03F 1,863,000 3.7 222,000 (19.5) 552,000 1.9 63,600 (20.0) 19,905 1,200 343,000 FY04F 1,912,000 2.6 225,000 1.4 572,000 3.6 64,600 1.6 20,218 1,200 331,000 NTT DoCoMo FY01 4,659,254 (0.6) 1,000,887 28.8 1,679,987 17.6 (116,191.0) n.m. (11,577) 1,500 1,032,200 FY02 4,809,088 3.2 1,056,719 5.6 1,844,491 9.8 212,491 n.m. 4,235 500 854,000 FY03F 4,968,000 3.3 1,136,000 7.5 1,930,000 4.6 633,000 197.9 13,279 1,000 818,000 FY04F 5,090,000 2.5 1,192,000 4.9 1,991,000 3.2 682,000 7.7 14,307 1,000 795,000 Source: DIR estimates Note: All the forecasts are as of September 16th, please contact to analyst for the latest.


Corporate earnings (cont’d) Asia (ex-Japan) Revenue Op. profit EBITDA Net profit EPS DPS CAPX Y/E December (Rmb m) (%) (Rmb m) (%) (Rmb m) (%) (Rmb m) (%) (HK$)* (HK$)* (Rmb m) China Mobile FY01 100,331 54.4 42,606 53.6 60,270 60.7 28,015 55.4 1.42 n.a. 42,330 FY02 128,561 28.1 49,546 16.3 77,309 28.3 32,742 16.9 1.61 0.32 49,680 FY03F 156,021 21.4 55,256 11.5 91,702 18.6 35,522 8.5 1.70 0.34 44,322 FY04F 165,319 6.0 58,835 6.5 96,916 5.7 38,829 9.3 1.86 0.37 38,568 FY05F 174,833 5.8 65,027 10.5 102,877 6.2 43,523 12.1 2.09 0.42 35,717 China Unicom FY01 29,393 24.1 5,263 0.8 13,526 23.4 4,457 37.8 0.335 n.a. 31,253 FY02 40,577 38.0 7,324 39.1 18,579 37.4 4,566 2.5 0.343 0.09 18,944 FY03F 67,260 65.8 8,635 17.9 25,128 35.2 4,800 5.1 0.361 0.10 19,766 FY04F 75,129 11.7 11,417 32.2 30,729 22.3 6,731 40.2 0.506 0.14 17,612 FY05F 80,298 6.9 10,983 (3.8) 32,623 6.2 6,490 (3.6) 0.488 0.13 16,595 China Telecom 1 FY01 62,256 (3.8) 13,147 (24.0) 30,950 (10.8) 9,289 (28.0) 0.128 n.a. 40,028 FY02 69,478 11.6 15,360 16.8 36,242 17.1 10,846 16.8 0.148 0.01 28,919 FY03F 75,644 8.9 18,529 20.6 40,297 11.2 12,800 18.0 0.160 0.07 25,000 FY04F 80,994 7.1 21,064 13.7 43,428 7.8 14,619 14.2 0.182 0.07 23,500 FY05F 83,571 3.2 22,784 8.2 45,389 4.5 16,071 9.9 0.201 0.07 19,577 * Converted at HK$1 = Rmb1.06 1 Numbers exclude amortised revenue on connection fee Revenue Op. profit EBITDA Net profit EPS DPS CAPX Y/E December (HK$m) (%) (HK$m) (%) (HK$m) (%) (HK$m) (%) (HK$) (HK$) (HK$m) PCCW FY01 21,959 6.2 4,833 26.5 7,396 20.0 1,343 n.a. 0.300 0.00 2,415 FY02 20,112 (8.4) 5,288 9.4 8,120 9.8 (7,762) n.a. (1.685) 0.00 1,611 FY03F 20,156 0.2 4,797 (9.3) 7,623 (6.1) 1,363 n.a. 0.274 0.00 1,778 FY04F 20,199 0.2 4,809 0.2 7,650 0.4 1,298 (4.8) 0.242 0.00 1,778 FY05F 19,593 (3.0) 4,862 1.1 7,733 1.1 1,564 20.5 0.290 0.06 1,778 Revenue Op. profit EBITDA Net profit EPS DPS CAPX Y/E June (HK$m) (%) (HK$m) (%) (HK$m) (%) (HK$m) (%) (HK$) (HK$) (HK$m) SmarTone FY01 2,485 (14.1) (321) n.a. 75 (76.6) (284) n.a. (0.470) 0.00 367 FY02 2,401 (3.4) 145 n.a. 568 657.4 115 n.a. 0.196 0.07 250 FY03F 2,817 17.3 312 114.5 707 24.5 394 241.8 0.674 0.44 400 FY04F 2,754 (2.2) 260 (16.7) 662 (6.4) 337 (14.4) 0.577 0.38 500 FY05F 2,974 8.0 381 46.5 793 19.8 397 17.6 0.679 0.45 500 Revenue Op. profit EBITDA Net profit EPS DPS CAPX Y/E March (S$m) (%) (S$m) (%) (S$m) (%) (S$m) (%) (S$) (S$) (S$m) Singapore Telecom 2 FY02 7,338 49.0 3,057 17.4 3,635 10.5 1,631 (18.7) 9.77 5.50 3,000 FY03 10,259 39.8 3,700 21.0 5,112 40.7 1,401 (14.1) 7.86 5.50 1,668 FY04F 11,138 8.6 4,047 9.4 5,630 10.1 2,519 79.9 14.13 5.50 1,683 FY05F 11,614 4.3 4,172 3.1 5,902 4.8 1,944 (22.8) 10.90 5.50 1,724 FY06F 11,711 0.8 4,193 0.5 6,177 4.7 2,195 12.9 12.31 5.50 1,714 2 EBITDA include IDA compensation & associate contribution. Revenue Op. profit EBITDA Net profit EPS DPS CAPX Y/E December (S$m) (%) (S$m) (%) (S$m) (%) (S$m) (%) (S$) (S$) (S$m) MobileOne FY01 639 12.6 138 59.3 223 39.1 100 70.8 9.57 0.00 158 FY02 699 9.3 173 24.9 271 21.6 128 27.8 12.23 7.33 134 FY03F 744 6.5 192 11.3 291 7.3 143 11.0 13.57 8.10 135 FY04F 798 7.3 198 3.0 306 5.3 154 8.4 14.70 7.40 140 FY05F 827 3.5 210 6.0 322 5.3 166 7.8 15.85 7.93 142 Revenue Op. profit EBITDA Net profit EPS DPS CAPX Y/E December (Wonbn) (%) (Wonbn) (%) (Wonbn) (%) (Wonbn) (%) (Won) (Won) (Wonbn) KT Corp FY01 15,945 17.8 1,943 84.8 5,952 56.0 1,113 12.8 3,564 720 3,918 FY02 16,394 2.8 2,338 20.4 6,135 3.1 1,947 74.9 5,998 860 3,232 FY03F 16,823 2.6 2,641 13.0 6,576 7.2 1,983 1.9 8,015 1,037 3,762 FY04F 17,602 4.6 3,199 21.1 7,034 7.0 1,978 (0.3) 7,994 1,244 3,411 FY05F 18,425 4.7 3,565 11.4 7,319 4.0 2,280 15.3 9,216 1,493 3,407 Source: DIR estimates Note: All the forecasts are as of September 16th, please contact to analyst for the latest.


Corporate earnings (cont’d) Revenue Op. profit EBITDA Net profit EPS DPS CAPX Y/E December (Wonbn) (%) (Wonbn) (%) (Wonbn) (%) (Wonbn) (%) (Won) (Won) (Wonbn) SK Telecom FY01 6,227 8.1 2,203 34.7 3,301 28.9 1,141 20.1 13,180 690 1,244 FY02 8,635 38.7 2,673 21.3 4,087 23.8 1,512 32.6 16,963 1,696 1,973 FY03F 9,505 10.1 2,884 7.9 4,542 11.1 1,873 23.9 21,229 2,123 1,950 FY04F 10,396 9.4 3,271 13.4 4,959 9.2 2,266 21.0 25,949 2,595 1,535 FY05F 11,004 5.9 3,507 7.2 5,281 6.5 2,493 10.0 28,555 2,855 1,817 KT Freetel FY01 5,018 15.5 788 452.0 1,407 134.0 435 n.m. 2,362 0 1,129 FY02 5,354 6.7 844 7.1 1,570 11.6 532 22.4 2,891 0 1,125 FY03F 5,257 (1.8) 918 8.7 1,743 11.0 506 (4.9) 2,782 0 1,080 FY04F 5,510 4.8 970 5.7 1,889 8.4 534 5.6 2,973 951 1,004 FY05F 5,811 5.4 1,037 6.8 2,048 8.4 551 3.2 3,067 1,227 967 Revenue Op. profit EBITDA Net profit EPS DPS CAPX Y/E December (NT$m) (%) (NT$m) (%) (NT$m) (%) (NT$m) (%) (NT$) (NT$) (NT$m)

Taiwan Cellular Corp FY01 60,625 16.8 19,471 24.7 24,107 34.1 16,751 18.3 5.13 1.90 13,578 FY02 58,729 (3.1) 16,123 (17.2) 21,450 (11.0) 14,937 (10.8) 3.33 2.00 10,800 FY03F 63,101 7.4 17,933 11.2 24,309 13.3 15,428 3.3 3.43 2.07 7,800 FY04F 62,802 (0.5) 18,073 0.8 24,508 0.8 15,788 2.3 3.51 2.11 7,763 FY05F 63,911 1.8 18,722 3.6 25,260 3.1 16,621 5.3 3.69 2.23 7,900 Far EasTone FY01 34,544 7.4 6,553 66.4 11,577 64.3 6,626 64.0 4.03 1.00 13,081 FY02 34,476 (0.2) 7,915 20.8 14,279 23.3 7,807 17.8 3.72 1.30 12,965 FY03F 35,820 3.9 7,937 0.3 14,661 2.7 7,295 (6.6) 2.88 1.01 8,998 FY04F 37,588 4.9 10,206 28.6 16,704 13.9 9,458 29.7 3.43 1.20 5,075 FY05F 37,784 0.5 10,266 0.6 16,891 1.1 9,534 0.8 3.46 1.21 7,429 Revenue Op. profit EBITDA Net profit EPS DPS CAPX Y/E December (NT$bn) (%) (NT$bn) (%) (NT$bn) (%) (NT$bn) (%) (NT$) (NT$) (NT$bn)

Chunghwa Telecom FY01 184.4 n.a. 44.6 n.a. 83.5 n.a. 37.4 n.a. 3.87 3.50 52.9 FY02 179.4 (2.8) 55.7 24.7 96.0 14.9 44.1 17.7 4.57 4.00 43.3 FY03F 180.6 0.7 56.8 2.0 97.2 1.3 44.9 1.9 4.65 4.19 33.0 FY04F 180.7 0.0 59.4 4.7 99.4 2.2 46.9 4.4 4.86 4.37 24.3 FY05F 185.3 2.6 61.8 3.9 101.9 2.5 49.3 5.3 5.11 4.60 28.0 Revenue Op. profit EBITDA Net profit EPS DPS CAPX Y/E June (A$m) (%) (A$m) (%) (A$m) (%) (A$m) (%) (A$) (A$) (A$m)

Telstra FY02 20,802 (9.5) 6,297 (11.9) 9,564 (4.5) 3,661 2.8 0.28 0.22 3,491 FY03 21,616 3.9 6,748 7.2 10,195 6.6 3,895 6.4 0.30 0.27 3,261 FY04F 21,557 (0.3) 6,529 (3.2) 10,240 0.4 4,063 4.3 0.32 0.26 3,000 FY05F 21,979 2.0 6,734 3.1 10,728 4.8 4,234 4.2 0.33 0.28 3,500 FY06F 22,622 2.9 7,044 4.6 11,347 5.8 4,508 6.5 0.36 0.29 3,605



Earnings revisions Europe Orange Date of change: 1 Sep ––––––––––– Revenue (EURm) –––––––––– ––––––––– EBITDA (EURm) ––––––– ––––––– Net profit (EURm) ––––––– Y/E Dec Previous Revised % revision Previous Revised % revision Previous Revised % revision FY03F 17,954 17,884 0 6,311 6,353 1 2,047 4,280 109 FY04F 19,298 19,223 0 6,855 6,945 1 2,514 2,354 (6) FY05F 20,437 20,355 0 7,505 7,594 1 3,027 2,855 (6) Reason for revision: 1H03 results, taxation adjustments. Vodafone Date of change: 16 Sep ––––––––––– Revenue (GBPm) –––––––––– ––––––––– EBITDA (GBPm) ––––––– ––––––– Net profit (GBPm) ––––––– Y/E March Previous Revised % revision Previous Revised % revision Previous Revised % revision FY04F 32,936 31,974 (3) 12,527 12,243 (2) (8,764) (8,879) n.m. FY05F 34,571 33,370 (3) 13,196 12,843 (3) (8,591) (8,678) n.m. FY06F 36,430 34,740 (5) 14,000 13,557 (3) (8,390) (8,498) n.m. Reason for revision:To reflect the deconsolidation of Japan Telecom, with effect from October. 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) –––––––––––– –––––––––––––– EBITDA (¥m) –––––––––– ––––––––––––– Net profit (¥m) –––––––––– Y/E Dec Previous Revised % revision Previous Revised % revision Previous Revised % revision FY03F 10,985,000 10,975,000 0 3,781,000 3,781,000 0 490,000 490,000 0 FY04F 10,976,000 10,960,000 0 3,865,000 3,865,000 0 540,000 540,000 0 Reason for revision: Although we lowered revenues due to the reduced subscriber net additions for FY03 and FY04, we ma intained earnings thanks to the higher ARPU forecast. 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) –––––––––––– –––––––––––––– EBITDA (¥m) –––––––––– ––––––––––––– Net profit (¥m) –––––––––– Y/E Dec Previous Revised % revision Previous Revised % revision Previous Revised % revision FY03F 4,978,000 4,968,000 0 1,930,000 1,930,000 0 633,000 633,000 0 FY04F 5,106,000 5,090,000 0 1,991,000 1,991,000 0 682,000 682,000 0 Reason for revision: Although we lowered revenues due to the reduced subscriber net additions for FY03 and FY04, we maintained earnings thanks to the higher ARPU forecast.


Earnings revisions (cont’d) Asia ex-Japan China Unicom Date of change: 29 Aug ––––––––––– Revenue (Rmb m) –––––––––– ––––––––––– EBITDA (Rmb m) –––––––––– –––––––– Net profit (Rmb m) ––––––– Y/E Dec Previous Revised % revision Previous Revised % revision Previous Revised % revision

FY03F 68,585 67,260 (1.9%) 25,691 25,128 (2.2%) 5,263 4,800 (8.8%) FY04F 75,813 75,129 (0.9%) 31,307 30,729 (1.8%) 7,232 6,731 (6.9%) FY05F 81,054 80,298 (0.9%) 33,156 32,623 (1.6%) 6,964 6,490 (6.8%) Reason for revision: We have raised our forecasts of interconnection costs for the LD/Internet/Data operations as well as for the sales and marketing costs for cellular operations, and have factored in the provision for the paging operations. 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) –––––––––– –––––––––– Net profit (Wbn) ––––––––– Y/E Dec Previous Revised % revision Previous Revised % revision Previous Revised % revision FY03F 9,362 9,505 2 4,423 4,542 3 1,790 1,873 5 FY04F 10,172 10,396 2 4,788 4,959 4 2,141 2,266 6 FY05F 10,699 11,004 3 5,044 5,281 5 2,320 2,493 7 Reason for revision: Upward revisions to subscriber forecasts. KT Freetel Date of change: 8 Sep –––––––––––– Revenue (Wbn) –––––––––––– ––––––––––––– EBITDA (Wbn) –––––––––– –––––––––– Net profit (Wbn) ––––––––– Y/E Dec Previous Revised % revision Previous Revised % revision Previous Revised % revision FY03F 5,831 5,257 (10) 1,734 1,743 1 492 506 3 FY04F 6,597 5,510 (16) 1,950 1,889 (3) 583 534 (8) FY05F 7,435 5,811 (22) 2,199 2,048 (7) 716 551 (23) Reason for revision: Lower handset sales, lower subscriber growth, lower VAS revenues. Telstra Date of change: 20 Aug ––––––––––– Revenue (A$m) ––––––––––––– ––––––––––––– EBITDA (A$m) ––––––––––– –––––––––– Net profit (A$m) ––––––––––– Y/E Jun Previous Revised % revision Previous Revised % revision Previous Revised % revision

FY04F 21,612 21,557 0 10,133 10,240 1 3,971 4,063 2 FY05F 22,046 21,979 0 10,453 10,728 3 4,049 4,234 5 FY06F 22,400 22,622 1 10,700 11,347 6 4,250 4,508 6 Reason for revision: We have upgraded our earnings forecasts for FY04, FY05 and FY06 on the back of expected cost savings going forward. Source: DIR estimates


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.


MONTHLY STATISTICS September 2003 31

Europe cellular subscribers France UK Germany Italy Spain Others Western Europe Subscribers (m) Jan-02 37.5 45.9 56.4 51.4 29.9 70.3 291.4 Feb-02 38.0 46.1 56.6 51.5 30.1 70.8 293.1 Mar-02 37.3 46.1 54.0 50.5 29.9 70.2 287.9 Apr-02 35.5 46.4 53.8 50.6 30.1 70.1 286.5 May-02 35.7 46.4 54.0 50.7 30.2 70.2 287.3 Jun-02 35.8 46.8 54.3 51.0 30.8 71.0 289.7 Jul-02 36.0 47.0 54.3 51.0 31.0 71.4 290.8 Aug-02 36.2 47.1 54.5 51.2 31.1 71.9 291.9 Sep-02 36.0 47.4 54.7 51.2 31.6 72.4 293.3 Oct-02 36.1 48.2 55.5 51.9 32.0 72.5 296.3 Nov-02 36.3 48.4 55.8 52.0 32.2 73.1 297.8 Dec-02 36.8 49.5 57.0 52.9 33.2 73.7 303.1 Jan-03 37.1 50.1 57.5 53.7 33.3 74.3 306.0 Feb-03 37.3 50.4 57.3 52.5 33.5 74.3 305.2 Mar-03 37.1 49.7 57.6 52.9 34.0 74.7 306.0 Apr-03 37.2 49.8 57.9 53.4 34.6 74.8 307.7 May-03 37.4 49.8 58.3 53.7 34.8 75.1 309.1 Jun-03 37.5 49.9 58.6 53.9 35.0 75.5 310.3 Jul-03 39.3 50.3 59.5 53.0 34.8 76.7 313.6 Net additions (m) Jan-02 0.50 0.21 0.51 0.59 0.26 0.53 2.60 Feb-02 0.49 0.17 0.25 0.15 0.18 0.47 1.70 Mar-02 (0.68) 0.04 (2.68) (1.04) (0.21) (0.60) (5.18) Apr-02 (1.78) 0.32 (0.13) 0.13 0.19 (0.10) (1.38) May-02 0.21 0.03 0.16 0.06 0.18 0.18 0.82 Jun-02 0.09 0.37 0.32 0.31 0.54 0.73 2.36 Jul-02 0.16 0.24 0.00 0.04 0.19 0.47 1.10 Aug-02 0.18 0.10 0.17 0.14 0.12 0.43 1.13 Sep-02 (0.21) 0.26 0.19 0.05 0.51 0.54 1.33 Oct-02 0.14 0.82 0.84 0.73 0.41 0.10 3.04 Nov-02 0.15 0.19 0.34 0.09 0.14 0.56 1.47 Dec-02 0.58 1.11 1.16 0.88 1.03 0.58 5.33 Jan-03 0.23 0.61 0.46 0.82 0.12 0.63 2.87 Feb-03 0.21 0.24 (0.20) (1.18) 0.17 0.02 (0.73) Mar-03 (0.18) (0.68) 0.36 0.33 0.47 0.44 0.75 Apr-03 0.13 0.07 0.31 0.54 0.61 0.08 1.73 May-03 0.13 0.07 0.34 0.24 0.25 0.32 1.35 Jun-03 0.13 0.06 0.30 0.21 0.15 0.36 1.21 Jul-03 1.77 0.43 0.90 (0.83) (0.14) 1.15 3.28

Source: Mobile Communications

MONTHLY STATISTICS 32 Global Telecom Monthly

Quarterly broadband stats (subscriber ‘000)

–––––––––––––––––––––––––––––––UK––––––––––––––––––––––––––––––– –––––––––––––––––––––––––––––––France ––––––––––––––––––––––––––––––– ADSL Cable Penetration (%) ADSL Cable Penetration (%) 2001 1Q 49,000 44,916 0.16 96,000 151,109 0.42 2Q 72,000 76,892 0.25 177,000 163,302 0.58 3Q 99,000 132,334 0.39 267,000 169,302 0.74 4Q 136,164 203,222 0.58 420,400 188,522 1.03 2002 1Q 170,250 309,200 0.81 587,472 208,663 1.35 2Q 300,800 452,994 1.28 730,800 233,579 1.63 3Q 404,500 596,773 1.65 882,150 250,053 1.92 4Q 590,100 779,319 2.30 1,415,800 276,000 2.87 2003 1Q 831,200 960,121 3.04 1,795,500 312,707 3.57 2Q 1,071,700 1,093,536 3.67 2,062,000 338,920 4.07 ––––––––––––––––––––––––––––––––––Germany––––––––––––––––––––––––––––––– –––––––––––––––––––––––––––––––––Italy––––––––––––––––––––––––––––––––––––– ADSL Cable Penetration (%) ADSL FTTH Penetration (%) 2001 1Q 1,000,000 24,300 1.23 180,000 10,000 0.33 2Q 1,440,000 27,000 1.77 239,000 14,500 0.44 3Q 2,292,000 31,055 2.80 310,000 22,700 0.58 4Q 2,420,000 39,131 2.96 390,000 48,900 0.77 2002 1Q 2,440,000 45,000 3.23 505,000 76,700 1.02 2Q 2,660,000 49,000 3.50 615,000 104,000 1.25 3Q 2,860,000 49,000 3.63 700,000 131,500 1.45 4Q 3,295,000 53,800 4.06 925,000 176,100 1.71 2003 1Q 3,740,000 61,500 4.58 1,189,500 213,313 2.45 2Q 4,180,000 70,000 5.12 1,481,000 247,000 3.02 ––––––––––––––––––––––––––––––––Spain––––––––––––––––––––––––––––––––––– –––––––––––––––––––––––––––––Switzerland––––––––––––––––––––––––––––– ADSL Cable Penetration (%) ADSL Cable Penetration (%) 2001 1Q 100,000 42,000 0.35 2,492 85,100 1.07 2Q 157,702 54,000 0.52 20,000 106,300 1.54 3Q 223,158 62,000 0.70 30,000 124,800 1.89 4Q 375,816 70,000 1.10 45,000 145,300 2.32 2002 1Q 527,604 115,000 1.58 62,966 168,000 2.82 2Q 661,261 141,000 1.98 101,177 185,000 3.49 3Q 847,769 165,000 2.49 132,617 200,000 4.06 4Q 951,100 195,000 2.82 195,220 214,000 4.57 2003 1Q 1,154,500 264,000 3.49 235,000 229,000 5.66 2Q 1,300,000 440,000 4.29 317,000 245,000 6.85 –––––––––––––––––––––––––––Netherlands ––––––––––––––––––––––––––– –––––––––––––––––––––––––––––––––Sweden–––––––––––––––––––––––––––––––– ADSL Cable Penetration (%) ADSL Cable/FTTH Penetration (%) 2001 1Q 1,140 260,000 1.65 61,600 132,000 2.17 2Q 1,939 300,000 1.91 93,765 181,900 3.09 3Q 79,000 330,000 2.59 135,850 190,000 3.66 4Q 118,000 350,000 2.96 223,953 227,200 5.06 2002 1Q 151,000 390,000 3.43 304,611 252,200 6.25 2Q 208,000 427,000 3.78 345,200 263,080 6.83 3Q 239,000 460,000 4.40 383,400 269,020 7.32 4Q 356,000 650,000 6.29 436,000 283,300 8.07 2003 1Q 485,000 690,000 7.44 462,400 298,600 8.54 2Q 593,000 740,000 8.44 480,000 308,000 8.84

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


Japan monthly data (mobile)

NTT AU TU-KA J-phone Japan ––––––Docomo––––– ––––KDDI Group–––– ––––KDDI Group––– Japan Telecom ––––––––––––––– total –––––––––––––– Subscribers (m) Total i-mode Total EZ-Web Total EZ-Web Total J-Sky Total Internet access Jul-02 41.8 34.1 12.8 9.2 3.9 1.5 12.8 10.8 71.2 55.6 Aug-02 41.9 34.4 12.9 9.4 3.9 1.5 12.9 10.9 71.6 56.3 Sep-02 42.2 34.9 13.1 9.6 3.9 1.6 13.0 11.1 72.1 57.1 Oct-02 42.3 35.2 13.2 9.8 3.9 1.6 13.1 11.2 72.4 57.8 Nov-02 42.5 35.6 13.3 9.9 3.9 1.6 13.2 11.3 72.8 58.4 Dec-02 42.9 36.2 13.5 10.1 3.8 1.6 13.3 11.5 73.5 59.5 Jan-03 43.0 36.6 13.6 10.3 3.8 1.6 13.5 11.7 73.9 60.2 Feb-03 43.2 36.9 13.7 10.5 3.8 1.7 13.6 11.9 74.4 60.9 Mar-03 43.9 37.8 14.0 10.9 3.8 1.7 14.0 12.2 75.7 62.5 Apr-03 44.1 38.1 14.3 11.1 3.8 1.7 14.2 12.3 76.3 63.3 May-03 44.2 38.3 14.5 11.3 3.8 1.7 14.3 12.4 76.7 63.8 Jun-03 44.4 38.6 14.7 11.5 3.7 1.7 14.4 12.5 77.2 64.4 Jul-03 44.7 39.1 14.9 11.8 3.7 1.8 14.5 12.6 77.8 65.2 Aug-03 44.9 39.4 15.1 12.0 3.7 1.8 14.6 12.6 78.2 65.8 NTT AU TU-KA J-phone Japan Net new ––––––Docomo––––– ––––KDDI Group–––– ––––KDDI Group––– Japan Telecom ––––––––––––––– total –––––––––––––– additions (m) Total i-mode Total EZ-Web Total EZ-Web Total J-Sky Total Internet access Jul-02 0.3 0.6 0.1 0.2 (0.0) 0.0 0.1 0.1 0.5 0.9 Aug-02 0.2 0.4 0.1 0.2 (0.0) 0.0 0.1 0.2 0.4 0.8 Sep-02 0.2 0.4 0.1 0.2 (0.0) 0.0 0.1 0.1 0.5 0.8 Oct-02 0.1 0.3 0.1 0.2 (0.0) 0.0 0.1 0.1 0.4 0.7 Nov-02 0.2 0.4 0.1 0.2 (0.0) 0.0 0.1 0.1 0.4 0.7 Dec-02 0.4 0.6 0.2 0.2 (0.0) 0.0 0.2 0.2 0.7 1.1 Jan-03 0.2 0.4 0.1 0.2 (0.0) 0.0 0.1 0.2 0.4 0.7 Feb-03 0.2 0.4 0.1 0.2 (0.0) 0.0 0.2 0.2 0.5 0.7 Mar-03 0.6 0.8 0.3 0.4 (0.0) 0.0 0.3 0.3 1.3 1.5 Apr-03 0.2 0.3 0.2 0.3 (0.0) 0.0 0.2 0.2 0.7 0.8 May-03 0.1 0.2 0.2 0.2 (0.0) 0.0 0.1 0.1 0.4 0.5 Jun-03 0.2 0.3 0.2 0.2 (0.0) 0.0 0.1 0.1 0.5 0.6 Jul-03 0.3 0.5 0.2 0.2 (0.0) 0.0 0.1 0.1 0.6 0.8 Aug-03 0.2 0.3 0.2 0.2 (0.0) 0.0 0.1 0.0 0.4 0.6

Source: NTT DoCoMo, KDDI, Japan Telecom, DIR

Japan broadband subscribers Subscribers ('000) ADSL CATV FTTH Total Jul-02 3,610.2 1,710 84.9 5,405 Aug-02 3,915.7 1,758 99.4 5,773 Sep-02 4,223.2 1,800 114.6 6,138 Oct-02 4,639.5 1,852 138.0 6,630 Nov-02 5,117.9 1,901 172.3 7,191 Dec-02 5,645.7 1,954 206.2 7,806 Jan-03 6,119.8 1,992 233.1 8,345 Feb-03 6,589.9 2,028 263.1 8,881 Mar-03 7,023.0 2,069 305.4 9,397 Apr-03 7,477.9 2,135 346.9 9,960 May-03 7,907.4 2,183 398.3 10,489 Jun-03 8,257.1 2,224 458.3 10,939 Jul-03 8,541.3 2,283 531.3 11,356 Aug-03 8,881.0 n.a. n.a. n.a.

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


China monthly data

Subscribers (m) CMHK Unicom China Mobile (parent) Unicom Group (parent) China total Jun-02 80.3 34.1 43.0 18.8 176.2 Jul-02* 107.4 35.4 18.1 19.3 180.3 Aug-02 109.4 36.9 18.6 20.0 184.9 Sep-02 111.4 38.4 19.1 21.5 190.4 Oct-02 113.6 40.1 19.5 22.7 195.8 Nov-02 115.6 41.6 19.9 23.3 200.3 Dec-02 117.7 43.1 20.8 25.1 206.6 Jan-03 119.8 61.7 21.6 9.4 212.4 Feb-03 121.8 63.1 21.9 9.6 216.4 Mar-03 123.8 64.9 22.6 10.2 221.5 Apr-03 125.5 66.6 23.0 10.6 225.7 May-03 127.2 68.1 23.6 11.2 230.1 Jun-03 129.1 69.6 24.1 11.6 234.5 Jul-03 131.0 71.4 24.9 12.2 239.5 Aug-03 132.9 73.0 25.4 12.7 244.1 Net new additions (m) Jul-02* 27.1 1.3 (24.9) 0.5 4.1 Aug-02 1.9 1.4 0.5 0.7 4.5 Sep-02 2.1 1.6 0.4 1.5 5.5 Oct-02 2.1 1.6 0.4 1.3 5.4 Nov-02 2.0 1.5 0.4 0.6 4.5 Dec-02 2.1 1.6 0.9 1.8 6.3 Jan-03 2.1 18.6 0.8 (15.6) 5.8 Feb-03 2.0 1.4 0.4 0.2 4.0 Mar-03 2.0 1.8 0.7 0.6 5.1 Apr-03 1.7 1.7 0.4 0.4 4.2 May-03 1.7 1.5 0.6 0.6 4.3 Jun-03 1.9 1.5 0.5 0.4 4.4 Jul-03 1.9 1.7 0.7 0.6 5.0 Aug-03 1.9 1.7 0.6 0.5 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


Korea monthly broadband subscriber data

Korea Telecom Hanaro Thrunet Dreamline Dacom Other Total Subscribers (m) Jul-02 4.39 2.73 1.31 0.18 0.15 0.10 8.86 Aug-02 4.47 2.80 1.32 0.18 0.15 0.34 9.26 Sep-02 4.56 2.85 1.31 0.18 0.15 0.40 9.46 Oct-02 4.67 2.88 1.30 0.18 0.15 0.49 9.67 Nov-02 4.80 2.89 1.31 0.18 0.15 0.51 9.83 Dec-02 4.92 2.87 1.30 0.18 0.77 0.37 10.41 Jan-03 5.05 2.90 1.30 0.18 0.78 0.36 10.57 Feb-03 5.13 2.93 1.30 0.18 0.79 0.38 10.71 Mar-03 5.25 2.97 1.30 0.18 0.79 0.38 10.87 Apr-03 5.30 2.98 1.30 0.18 0.79 0.38 10.92 May-03 5.35 2.97 1.30 0.18 0.79 0.44 11.03 Jun-03 5.39 2.96 1.29 0.18 0.79 0.49 11.10 Jul-03 5.45 2.97 1.49 0.18 0.79 0.34 11.22 Aug-03 5.45 n.a. n.a. n.a. n.a. n.a. n.a. Net new additions (m) Jul-02 0.06 0.00 0.00 0.00 0.00 (0.00) 0.06 Aug-02 0.07 0.07 0.02 (0.00) 0.00 0.24 0.40 Sep-02 0.09 0.05 (0.01) (0.00) 0.00 0.06 0.19 Oct-02 0.11 0.03 (0.01) (0.00) (0.00) 0.09 0.22 Nov-02 0.12 0.01 0.00 0.00 - 0.02 0.15 Dec-02 0.13 (0.02) (0.00) - (0.07) (0.14) 0.58 Jan-03 0.13 0.02 0.00 - 0.01 (0.01) 0.16 Feb-03 0.08 0.04 0.00 - 0.00 0.02 0.14 Mar-03 0.12 0.04 - - - (0.00) 0.16 Apr-03 0.05 0.00 - - - 0.00 0.06 May-03 0.05 (0.01) - - - 0.06 0.10 Jun-03 0.04 (0.01) (0.02) - - 0.05 0.07 Jul-03 0.06 0.01 0.20 - - (0.15) 0.12 Aug-03 (0.00) n.a. n.a. n.a. n.a. n.a. n.a.

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

Korea monthly cellular subscriber data SK Telecom, STI KT Freetel LG Telecom Korea total Total 2.5G Total 2.5G Total 2.5G Total 2.5G

Subscribers (m) Jul-02 16.62 7.36 10.08 3.17 4.31 0.94 31.01 11.46 Aug-02 16.79 7.97 10.13 3.55 4.41 1.18 31.33 12.69 Sep-02 17.00 8.51 10.38 4.08 4.71 1.43 32.08 14.02 Oct-02 17.11 8.81 10.49 4.45 4.73 1.58 32.32 14.83 Nov-02 17.15 9.46 10.50 4.86 4.78 1.69 32.43 16.01 Dec-02 17.22 9.94 10.33 4.86 4.79 1.74 32.34 16.54 Jan-03 17.36 10.37 10.28 5.05 4.78 1.80 32.42 17.21 Feb-03 17.50 10.71 10.33 5.36 4.80 1.87 32.63 17.94 Mar-03 17.63 11.17 10.38 5.66 4.86 1.99 32.86 18.82 Apr-03 17.72 11.60 10.43 5.92 4.84 2.06 32.99 19.58 May-03 17.77 12.00 10.47 6.17 4.84 2.13 33.07 20.30 Jun-03 17.86 12.38 10.49 6.40 4.82 2.25 33.17 21.02 Jul-03 17.90 12.76 10.47 6.59 4.79 2.34 33.16 21.69 Aug-03 17.96 13.17 10.45 6.78 4.75 2.45 33.16 22.41 Net new additions (m) Jul-02 0.15 0.69 (0.05) 0.28 0.02 0.18 0.12 1.14 Aug-02 0.17 0.62 0.05 0.38 0.09 0.24 0.32 1.23 Sep-02 0.21 0.54 0.25 0.54 0.30 0.25 0.76 1.32 Oct-02 0.11 0.30 0.11 0.37 0.02 0.15 0.24 0.81 Nov-02 0.04 0.65 0.01 0.41 0.05 0.11 0.11 1.18 Dec-02 0.07 0.48 (0.16) - 0.01 0.05 (0.09) 0.53 Jan-03 0.14 0.43 (0.06) 0.19 (0.01) 0.06 0.08 0.67 Feb-03 0.13 0.35 0.06 0.31 0.03 0.07 0.21 0.73 Mar-03 0.13 0.46 0.04 0.30 0.06 0.12 0.23 0.88 Apr-03 0.09 0.43 0.05 0.26 (0.01) 0.07 0.13 0.76 May-03 0.04 0.40 0.04 0.25 (0.01) 0.07 0.07 0.72 Jun-03 0.09 0.38 0.02 0.22 (0.01) 0.08 0.10 0.69 Jul-03 0.05 0.38 (0.02) 0.20 (0.04) 0.09 (0.01) 0.67 Aug-03 0.05 0.41 (0.02) 0.19 (0.04) 0.12 (0.00) 0.72 Source: MIC, SK Telecom, KT Freetel, LG Telecom, DIR estimates


Taiwan cellular subscribers

Chunghwa Taiwan TCC KG Telecom Cellular Transasia Group Far EasTone Telecom FET+KGT Mobitai Total Subscribers (‘000) Jun-02 6,940 5,625 1,375 7,000 4,163 4,256 8,419 651 23,010 Jul-02 7,058 5,820 1,429 7,249 4,151 4,151 8,302 671 23,280 Aug-02 7,144 5,972 1,513 7,485 4,040 4,183 8,223 689 23,540 Sep-02 7,229 5,974 1,623 7,597 4,200 3,932 8,133 708 23,666 Oct-02 7,294 6,132 1,743 7,875 4,226 3,715 7,942 715 23,825 Nov-02 7,340 6,141 1,805 7,946 4,278 3,512 7,791 722 23,799 Dec-02 7,422 6,240 1,876 8,116 4,341 3,306 7,647 721 23,905 Jan-03 7,510 6,326 1,946 8,272 4,353 3,340 7,693 721 24,197 Feb-03 7,563 6,479 1,994 8,473 4,380 3,343 7,723 721 24,480 Mar-03 7,619 6,626 2,053 8,678 4,384 3,336 7,720 721 24,738 Apr-03 7,676 6,626 2,112 8,738 4,358 3,358 7,716 722 24,851 May-03 7,726 6,633 2,178 8,811 4,344 3,387 7,731 721 24,989 Jun-03 7,765 6,633 2,246 8,879 4,327 3,417 7,744 721 25,109 Jul-03 7,825 6,635 2,332 8,968 4,305 3,442 7,747 721 25,260 Net additions ('000) Jun-02 162 54 68 123 23 (99) (76) 16 225 Jul-02 118 195 54 248 (12) (105) (117) 20 269 Aug-02 86 152 84 236 (112) 32 (79) 18 260 Sep-02 85 2 110 112 161 (251) (90) 19 126 Oct-02 65 158 120 278 26 (217) (191) 7 160 Nov-02 46 9 62 71 52 (203) (151) 7 (27) Dec-02 82 99 71 170 62 (206) (144) (0) 107 Jan-03 89 86 70 157 13 34 47 (0) 292 Feb-03 53 153 48 201 27 2 29 (0) 283 Mar-03 57 147 58 205 4 (7) (3) 0 259 Apr-03 56 0 59 60 (26) 22 (4) 0 113 May-03 50 7 66 73 (14) 29 15 (1) 138 Jun-03 39 - 68 68 (17) 30 13 - 120 Jul-03 60 2 86 89 (22) 25 3 0 151

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

Singapore cellular subscribers (‘000) Date Postpaid Prepaid Subs % change Net adds % change Jun-02 2,250 791 3,041 0 14 (35) Jul-02 2,307 779 3,087 2 46 231 Aug-02 2,291 811 3,102 1 16 (66) Sep-02 2,307 815 3,122 1 20 25 Oct-02 2,330 802 3,132 0 10 (48) Nov-02 2,362 816 3,178 1 46 355 Dec-02 2,404 841 3,245 2 67 45 Jan-03 2,416 856 3,272 1 27 (59) Feb-03 2,421 874 3,295 1 23 (16) Mar-03 2,422 890 3,313 1 18 (24) Apr-03 2,419 877 3,296 0 (16) n.m. May-03 2,437 883 3,320 1 23 n.m. Jun-03 2,440 896 3,336 1 17 (27) Jul-03 2,443 914 3,356 1 20 16

Source: IDA, DIR estimates

FORTHCOMING EVENTS September 2003 37

Europe 1 October J-Phone rebranding 7 October Global release of Nokia n-Gage 7 October Closure of FT offer to Orange minorities 9-10 October Telefonica investor conference 12-18 October Telecom 2003 Geneva 16 October Nokia 3Q results 16 October Cesky Telecom 3Q results 21 October Tele2 AB 3Q results 29 October TeliaSonera 3Q results 30 October Telenor 3Q results 30 October Alcatel 3Q results 30 October Ericsson 3Q results Early November BT 1H results 3 November TIM 3Q results 4 November TDC 3Q results Mid November FT 3Q results 13 November DT 3Q 2003 report 17 November mmO2 1H04 18 November Vodafone 1H04 19-20 November Alcatel analysts day 20 November Swisscom 3Q results 24-25 November Nokia year end strategy update

USA 1 October Do Not Call Registry takes effect 11-15 October United Stated Telecommunication Association annual conference & exhibition 15 October Final date for the FCC to evaluate SBC’s section 271 application in Illinois, Indiana, Ohio

and Wisconsin 21 October SBC Communications 3Q03 results announcement and conference call 28 October Verizon Communications 3Q03 results announcement and conference call 13 November SBC Communications Analyst Day 24 November Wireless Number Portability takes effect

Japan End-September Number of Internet users as of end-August to be announced 7 October Number of mobile phone subscribers in September to be announced Around 10 October Number of DSL users as of end-September to be announced Around 10 October Number of subscribers to broadband services at Usen as of end-September to be announced Around 10 October Number of subscribers Yahoo BB broadband service service (operated by Softbank BB) as of

end-September to be announced End-October Usen FY03 (FY ended August) results From early to mid-November Interim results announcements from NTT, NTT DoCoMo, and KDDI

Asia 1 October Singapore Telecom – Investor Day (full-day analyst event) 20 October China Mobile (HK) – 3Q03 Results 20 October China Unicom – 3Q03 Results 21 October Telstra – First quarter market update 28 October SK Telecom to announce 3Q03 results 14 November Telstra – AGM

APPENDIX 38 Global Telecom Monthly

Equity relationships among global telcos

Swiscom (Swiss)

OPI (Italy)

Verizon Communications(USA)

Cingular Wireless (USA)

TIW (Canada)

SFR (France)

Cegetel (France)

45

Telmex (Mexico)

TDC(Denmark)

Hutchison Telephone

Telecom Italia (Italy)

France Telecom (France) Orange (France)

MobilCom (Germany)

Telefonica (Spain) Portugal Telecom (Portugal)

77

55

23

25

20

80

9

60

40

42

67

16 24

97.8

86

29

67

15

7.7

4.7

45

40

30

75

20

20

AT&T Wireless (USA)

Belgacom (Belgium)75

China Mobile (HK) (China)

3.3

2.2

20

55

18

Rogers Wireless (Canada)

Rogers Communications(Canada)

51

3423

BITCO (Thailand)

TA Orange (Thailand)

4941

99.8

Sprint PCS (USA)

Sprint Corporation (USA) Virgin Mobile USA (USA) Virgin Mobile (UK)50 50

TIM (Italy)

IS-TIM (Turkey)Telekom Austria (Austria)

56

15 49

25

SBC Communications(USA)

Vodafone (UK)

J-Phone(Japan)

Swisscom Mobile(Swiss)

Japan Telecom(Japan)

Verizon Wireless(USA)

BellSouth(USA)

NTT(Japan)

PLDT(Philippine)

Polkomtel(Poland)

Proximus(Belgium)

Connex GSM(Romania)

Far EasTone(Taiwan)

TelecomAsiaCorporation

KPN(Netherland)

KPN Mobile(Netherland)

NTT DoCoMo(Japan)

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.

September 2003 39

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

Europe

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]

USA

Kenji Nishimura Integrated/Cellular/Equipment Manufacturers (1 212) 612 6108 [email protected]

Japan

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]

Asia (ex-Japan)

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]

DIR main global offices

London 1st Floor, 5 King William Street, Tel: (44 20) 7597 8000 Fax: (44 20) 7597 8654

London EC4N 7AX, United Kingdom

New York 11th Floor, Financial Square, 32 Old Slip, Tel: (1 212) 612 6100 Fax: (1 212) 612 7103

New York NY1005-3538, USA

Tokyo (Head Office) 15-16 Fuyuki, Koto-ku, Tokyo 135-8460, Japan Tel: (813) 5620 5100 Fax: (813) 5620 5609

Hong Kong Level 26, One Pacific Place, 88 Queensway, Tel: (852) 2848 4974 Fax: (852) 2845 2190

Hong Kong

Singapore #25-08, DBS Building Tower Two, 6 Shenton Way, Tel: (65) 6220 3666 Fax: (65) 6224 7606

Singapore 068809, Singapore

Taipei (Representative Office) 13th Floor, 200 Kee-Lung Road, Section 1, Tel: (886) 2 2758 8754 Fax: (886) 2 2345 3699

Taipei 106, Taiwan R.O.C.

Disclaimer This publication is produced by Daiwa Institute of Research (Hong Kong) Limited, and distributed by Daiwa Institute of Research (Hong Kong) Limited and/or its affiliates. This publication and the contents hereof are intended for information purposes only, and may be subject to change without further notice. Any use, disclosure, distribution, dissemination, copying, printing or reliance on this publication for any other purpose without our prior consent or approval is strictly prohibited. Neither Daiwa Institute of Research (Hong Kong) Limited, nor Daiwa Institute of Research Ltd., nor any of its or their respective parent, holding, subsidiaries or affiliates, nor any of its or their respective directors, officers, servants and employees, represent nor warrant the accuracy or completeness of the information contained herein or as to the existence of other facts which might be significant, and will not accept any responsibility or liability whatsoever for any use of or reliance upon this publication or any of the contents hereof. Neither this publication, nor any content hereof, constitute, or are to be construed as, an offer or solicitation of an offer to buy or sell any of the securities or investments mentioned herein in any country or jurisdiction nor, unless expressly provided, any recommendation or investment opinion or advice. Any view, recommendation, opinion or advice expressed in this publication may not necessarily reflect those of Daiwa Institute of Research (Hong Kong) Limited, except where the publication states otherwise. Daiwa Institute of Research (Hong Kong) Limited, its parent, holding, subsidiaries or affiliates, or its or their respective directors, officers, servants and employees may have positions in or may be materially interested in the securities in any of the markets mentioned or may have also performed investment banking and other services for the issuers of such securities. United Kingdom This material was produced by Daiwa Institute of Research (Hong Kong) Limited, and is distributed by Daiwa Securities SMBC Europe Limited which is regulated by The Financial Services Authority and is a member of the London Stock Exchange. Daiwa Securities SMBC Europe Limited may, from time to time, to the extent permitted by applicable UK law and other applicable law or regulation, participate or invest in other financing transactions with the issuers of the Securities referred to herein (the "Securities"), perform services for or solicit business from such issuers, and/or have a position or effect transactions in the Securities or options therefore and/or may have acted as an underwriter during the past three years for the issuer of such Securities. In addition, employees of Daiwa Securities SMBC Europe Limited and its affiliate may have positions and effect transactions in such Securities or options and may serve as directors of such issuers. Daiwa Securities SMBC Europe Limited may, to the extent permitted by applicable UK law and other applicable law or regulation, effect transactions in the Securities before this material is published to recipients. This document is intended for investors who are not Private Customers within the meaning of the Rules of The Financial Services Authority and should not, therefore, be distributed to Private Customers in the United Kingdom. This document is not to be used or considered as an offer to sell or solicitation of an offer to buy any Securities. Information and opinions contained herein have been compiled or arrived at from sources believed to be reliable, but neither Daiwa Securities SMBC Europe Limited and/or its affiliates accepts liability for any loss arising f rom the use hereof or makes any representation as to their accuracy or completeness. Any information to which no source has been attributed should be taken as an estimate by Daiwa Institute of Research (Hong Kong) Limited. This document is not to be relied upon as such or used in substitution for the exercise of independent judgment. Should you enter into investment business with any Daiwa Securities SMBC Europe Limited affiliate outside the United Kingdom, we are obliged to advise that the protection afforded by the United Kingdom regulatory system may not apply; in particular, the benefits of the Financial Services Compensation Scheme may not be available. North America This research report was prepared by Daiwa Institute of Research (Hong Kong) Limited (“DIR”), and is being distributed by Daiwa Securities America Inc. (“DSA”). DIR and DSA are affiliates. Except as otherwise stated, all disclosures are effective as of the date of this report. Ownership of Securities. DSA and its affiliates beneficially own one percent or more of a class of common equity securities of the following issuers: Belx Co., Ltd.; Daiko Denshi Tsushin Ltd.; Ehime Bank Ltd.; Estore Corporation; Imperial Hotel, Ltd.; Japan Securities Finance Co. Ltd.; Japan Securities Agents, Ltd.; Kokusai Densetu Co., Ltd.; Livin’ on the Edge Co., Ltd.; Meisei Electric Co., Ltd.; NIF Ventures Co. Ltd.; Nomura Co., Ltd.; Shinkin Central Bank; Usen Corp.; Taitao Corporation; Taiyo Life Insurance Company. Investment Banking Relationships. DSA or an affiliate has managed or co-managed a public offering of securities in the past 12 months, or has received compensation for investment banking services in the past 12 months, or expects to receive or intends to seek compensation for investment banking services in the next three months, for or from the following issuers: ABC -Mart, Inc.; ABN Amro; AC Real Estate; Acom Co. Ltd.; A&D Co Ltd.; Admiral Systems; Advance Create Co. Ltd.; Aeon Credit Service Co. Ltd.; Aeon Fantasy Co. Ltd.; Aiful Corp.; Alliance & Leicester Plc; All Nippon Airways Co. Ltd.; Ajinomoto Co, Inc.; Alpha Credit Group, Inc.;, Inc.; Amiyaki Tei Co. Ltd.; Anritsu Corp.; AOL Time Warner, Inc.; A-One Seimitsu Inc.; Apamanshop Co. Ltd.; Arata Corp.; Arisaka Co. Ltd.; Arrk Corp.; Asahi Breweries Ltd.; Asahi Broadcasting Corp.; Asahi Glass Co. Ltd.; Asahi Pretec Corp.; Asatsu-DK, Inc.; ASB Bank Ltd.; Associant Technology, Inc.; A&T Corp.; Au Optronics Corp.; Australia and New Zealand Banking Group Ltd.; Banca Comerciala Romana SA; Bandai Co Ltd.; Bandai Visual Co. Ltd.; The Bank of Fukuoka Ltd.; Bank of Nova Scotia Ltd.; Bank of Western Australia; BAT International Finance; BCP Finance Bank; Belluna Co. Ltd.; BHP Finance USA Ltd.; BHP Billiton Ltd.; BHW Bausparkasse AG; BMW AG; BNP Paribas; Boeing Co.; BOS International Australia Ltd.; Bradford & Bingley; Bunadarbanki Islands; C4 Technology Inc.; Calsonic Kansei Corp.; CAM Global Finance; Caixa Catalunya International Finance; Canopus Co. Ltd.; Cassina Ixc. Ltd.; Cawachi Ltd.; Central Japan Railway Co.; Chiba Bank Ltd./The; Chubu Electric Power Co. Inc.; Chugoku Electric Power Co Inc/The; Chunghwa Telecom; Citigroup Inc.; Citizen Watch Co. Ltd.; Cleanup Corp.; CNA Co. Ltd.; CNOOC Ltd; Cognis Group; Commonwealth Bank of Australia; Concorde Securities; Cosworth Tech/LDV/ MSX Int.; Cota Co. Ltd Credit Saison Co. Ltd.; Crymson Co. Ltd.; Culture Convenience Club Co. Ltd.; CVS Bay Area, Inc.; Daibiru Corp.; Daicel Chemical Industries Ltd.; Daikin Industries Ltd.; Daikoku Denki Co. Ltd.; Dainippon Ink and Chemicals Incorporated; Dainippon Screen Mfg; Daio Paper Corp.; Denkodo Co. Ltd.; Denso Corp.; Dentsu, Inc.; Depfa Deutsche Pfandbriefbank AG; Deutsche Bank Finance; Dexia Credit Local; Diamond City Co. Ltd.; Dorma Holding GmbH & Co.; Dow Chemical Company; Dowa Mining Co. Ltd.; Dreamtime Holdings; Dydo Drinco, Inc.; E-Liberty Inc.; East Japan Railway Co.; EFG Hellas plc; The Eighteenth Bank Ltd.; Elecom Co. Ltd.; Endo Manufacturing Co. Ltd.; Eneserve Corp.;. Exel; Faith, Inc.; Finconsumo SPA; First Financial Holding Co., Ltd.; Ford Credit Australia Limited; F T Communications Co. Ltd.; Fuji Co. Ltd.; Fujicco Co. Ltd.; Fuji Country; Fuji Electric Co Ltd.; Fuji Heavy Industries Ltd.; Fuji Logistics Co Ltd.; Fujio Food System Co. Ltd.;Fujitsu Ltd.; Furukawa Electric Co. Ltd.; Gambro, GECC; GE Capital Australia Funding; Gentosha; Glory Ltd.; GM; GMAC; G-mode Co. Ltd.; Goldman Sachs Group, Inc.; Gulliver International Co. Ltd.; Haba Laboratories, Inc.; The Hachijuni Bank Ltd.; Hamakyorex Co. Ltd.; Hankyu Corp.; Harakosan Co. Ltd.; Heiwa Real Estate Co. Ltd.; Henkel; Hikari Tsushin, Inc.; Hiroshima Bank Ltd./The; Hitachi Ltd.; Hitachi Construction Machinery Co. Ltd.; Hokkaido Electric Power; Hokkaido Gas Co. Ltd.; Hokuriku Electric Power Co.; Hokuyu Lucky Co. Ltd.; Hon Hai Precision Industry Co Ltd.; Hoosiers Corp.; Hopewell Highway Infrastructure Ltd.; Horiba Ltd.; Hosokawa Micron Corporation; HSH N Finance; IBE Inc.; IK Co. Ltd.; Impexbank; International Business Machine Corp; Ishikawajima-Harima Heavy Industries Co. Ltd.; Itochu Corp.; Ito-Yokado Co. Ltd.; JFE Holdings Inc.; Japan Prime Realty Investment Corp.; Japan Pulp & Paper Co. Ltd.; Jastec Co. Ltd.; KGaA; Kajima Corp.; Kanebo; Kansai Electric Power Co.; Kato Sangyo Co. Ltd.; KBC IFIMA NV; Keihan Electric Railway Co.; Keisei Electric Railway Co. Ltd.; Keyence Corp.; Kinki Nippon Railway Co. Ltd.; Kintetsu World Express, Inc.; Kisoji Co. Ltd.; KOGAS; Kohnan Shoji Co. Ltd.; Komatsu Ltd.; Kourakuen Corp.; Koyo Futures Co. Ltd.; Koyo Seiko Co. Ltd.; Kubotek Corp.; Kyushu Electric Power Co. Ltd.; Leopalace21 Corp.; Link Consulting Associates -Japan Corp.; Maeda Corp.; Macquarie Bank Limited; Mainichi Comnet Co. Ltd.; Malzen Co. Ltd.; Mandom Corp.; Marubeni Corp.; Marvelous Entertainment, Inc.; Mazda Motor Corp.; MDM Holdings GmbH; Meadwestvaco Corp.; Media Lynks Corp.; Meiji Seika Kaisha Ltd.; Meisei Electric Co. Ltd.; Meitetsu Transportation Co.; MG Technologies; Millennium America; Mitsubishi Corp.; Mitsubishi Chemical Corp.; Mitsubishi Electric Corp;. Mitsubishi Estate Co. Ltd.; Mitsubishi Heavy Industries Ltd Mitsubishi International GmbH; Mitsubishi Tokyo Financial Group Inc.; Mitsui & Co. Ltd.; Mitsui Chemicals, Inc.Mitsui Mining & Smelting Co Ltd.; Miyoshi Oil & Fat Co. Ltd.; MobileOne Ltd.; Moc Corp.;Modec, Inc.; Nagoya Railroad Co. Ltd.; Nankai Electric Railway Co. Ltd.; Nanya Technology Corporation; National Bank of Canada; Nationwide Building Society; NEC; NEC Electronics Corp.; NEC Fielding Ltd.; Nestle Australia Limited; Nichii Gakkan Co.; Nichirei Corp.; Nihon Trim Co. Ltd.; Nihon Unisys Ltd.; Niitaka Co Ltd.; Nikon Corp.; Nippon Cable System Inc.; Nippon Herald Films, Inc.; Nippon Information Development; Nippon Oil Corp.; Nippon Restaurant Corp.; Nippon Restaurant System, Inc.; Nippon Sanso Corp.; Nippon Steel Corp.; Nippon Telegraph & Telephone Corp; Nippon Unipac Holding; Nippon Yusen Kabushiki Kaisha; Nishimatsu Construction Co. Ltd.; Nissin Food Products Co. Ltd.; Nittyu Co. Ltd.; Niws Co. Ltd.; Noritz Corp; North Corp.; Northern Rock Plc.; NS Solutions Corp.; NSK Ltd.; NTN Corp.; NTT DoCoMo Inc.; Obayashi Corp.; Odakyu Electric Railway Co. Ltd.; O&H Capital; OJI Paper Co. Ltd.; Okinawa Electric Power; Okuwa Co. Ltd.; ORIX Corp.; Osaka Gas C. Ltd.; OX Information; Petrolub International Co.; PHH Corp.; Phoenix Electric; Pia Corp.; Pixela Corp.; Plenus Co. Ltd.; Point, Inc.; Postabank rt; Premier Investment Co.; Promise Co. Ltd.; Rabobank Nederland; R.S. 2 Software; Rann International; Renown; Renown; Rentokil Initial; Rinnai Corp.; Royal Bank of Scotland; Ryowa Life Create Co. Ltd.; S Ishimitsu & Co. Ltd.; Sanko Marketing Foods Co. Ltd.; Sanyo Electric Co. Ltd; Sanyo Shokai Ltd.; Sapporo Breweries Ltd.; Sawai Pharmaceutical Co. Ltd.; Sega Toys Ltd.; Seiko Epson Corp.; Sekiwa Real Estate Kyushu Ltd.; Senko Co. Ltd.; Shikoku Electric Power Co. Inc.; Shimamura Co. Ltd.; Shinohara System of Construction Co. Ltd.; Shiomi Co Ltd.; Showa Shell Sekiyu KK; Shuei Yobiko Co. 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.

gtm-skype 2003 sep

Documents