Research Report on Developing Trend of Post and Telecom Industry
in Beijing 2007

Table of content
Chapter One. General Introduction and Developing Environment of Post and Telecom Industry - 5 -
Section one. Category	- 5 -
1. Category and products and services	- 5 -
2. Analysis on industrial chain	- 7 -
3. Research range of this report	- 8 -
Section two. Analysis on developing environment	- 8 -
1. Relationship with overall economy	- 8 -
2. Analysis on policy environment	of post industry- 9 -
3. Analysis on policy environment	of telecom 
4. Analysis on policy environment	of telecom products manufacturing industry - 14 -
Chapter Two. Analysis on Telecom Operation Industry	- 15 -
Section one. Status quo	- 15 -
1. Status quo	- 15 -
Section two. Features and existing problems	- 38 -
Section three. Analysis on telecom contractors and capital channels	- 63 -
1. Major telecom contractors in China	- 63 -
2. Analysis on capital channels	- 66 -
Section four. Analysis on developing trend	- 67 -
1. Two big events will occur in 2007	- 67 -
2. Opportunity and challenge in 2007	- 68 -
3. Ten trends of telecom market in 2007	- 68 -
Chapter Three. Analysis on Development of Telecom Products Manufacturing Industry	- 71 -
Section one. Development	- 71 -
1. Analysis on status quo of global telecom products manufacturing industry	- 71 -
2. Analysis on status quo of China’s telecom products manufacturing industry	- 72 -
Section two. Features and existing problems	- 79 -
1. Features 	- 79 -
2. Existing problems	- 80 -
Section three. Supply of major products	- 81 -
1. Supply of mobile phones	- 81 -
2. Supply of small smart	- 82 -
3. Supply of program-controlled exchangers	- 83 -
4. Facilities of mobile communication 	- 84 -
5. Supply of telephones	- 84 -
Section four. Analysis on major enterprises and capital channels	- 85 -
1. Comprehensive ranking of enterprises	- 85 -
2. Key enterprises	- 86 -
3. Analysis on capital source	- 89 -
Section five. Analysis on developing trend	- 91 -
1. Three trends of development of the world’s telecom manufacturing industry	- 91 -
2. Analysis on developing trend of China’s telecom facilities industry	- 91 -
3. Analysis on risks of future investment 	- 92 -
Chapter Four. Important Changes and Impacts	- 93 -
Section one. Division of China Netcom and China Telecom	- 93 -
1. History of China Telecom	- 93 -
2. Analysis on merging and restructuring plan	- 93 -
3. Capacity comparison of China Telecom and China Netcom	- 93 -
4. Analysis on industrial chain after restructuring	- 93 -
5. Analysis on purpose of restructuring	- 94 -
6. Suggestions on strategic development of telecom contractors	- 94 -
Section two. Post Reform “Half Step Forward”- 95 -
1. System of “Parent and Subsidiary Companies”	- 95 -
2. Reform plans	- 96 -
3. Business area, service and compensation system	- 97 -
Section three. Emerging 3G brands	- 98 -
1. Emerging 3G	- 98 -
2. Worries behind optimism	- 99 -
3. Unpredicable future of TD	- 99 -
Chapter Five. Development of Post Industry	- 101 -
Section one. Status quo	- 101 -
1. Developing environment	- 101 -
2. Status quo	- 103 -
3. Types of services	- 105 -
Section two. Basic features and existing problems	- 107 -
1. Basic features	- 107 -
2. Existing problems	- 108 -
Section three. Supply of products/services	- 110 -
1. Public business	- 110 -
2. Express service	- 115 -
3. Finance business	- 119 -
4. Logistics service	- 125 -
5. Information service	- 130 -
6. Stamp collection service	- 131 -
7. Internationa post service	- 134 -
Section four. Bodies of operation and capital channels	- 136 -
1. Construction of capital channels	- 136 -
2. Assessment on competitiveness of key enterprises- 137 -
Section five. Analysis on developing trend	- 137 -
1. Public business	- 137 -
2. EMS	- 142 -
3. Finance business		- 148 -
4. Logistics service	- 151 -
5. Information service - 157 -
6. Stamp collection service	- 160 -
7. Internationa post service	- 162 -
Chapter Six. Suggestion on Investment and Finance Exploration	- 164 -
Section one. Analysis on investment opportunities	- 164 -
1. Analysis on investment opportunities of post industry	- 164 -
2. Analysis on investment opportunities of telecom industry	- 167 -
Section two. Analysis on risks of investment and prevention	- 175 -
1. Analysis on risks of investment and prevention of post industry	- 175 -
2. Analysis on risks of investment and prevention	 of telecom industry- 178 -
Section three. Suggestion on Investment and Finance Exploration	- 180 -
1. Investment direction	- 180 -
2. Key investment areas	- 182 -
3. Market exploration	- 182 -
List of tables	- 184 

 
List of tables
Table 1. Industrial chain of business letters	- 9 -
Table 2. Percentage of income of China’s telecom industry in GDP from 2001 to 2006 - 17 -
Table 3. Comparison of growth rate of telecom income and GDP from 2001 to 2006	- 18 -
Table 4. Statistics of Jan. to Dec. 2006	- 19 -
Table 5. Statistics of income of China’s telecom industry from 2000 to 2006	- 38 -
Table 6. Prediction of income from 2007 to 2010 - 38 -
Table 7. Structure of telecom business in 2006	- 44 -
Table 8. Growht rates of services of telecom industry in 2006	- 44 -
Table 9. Telecom subscribers at the end of each year in the “Tenth Five-year Plan” period-
Table 10. Comparison of monthly income of telecom services from 2003 to 2006	- 45 -
Table 11. Comparison of monthly growth of telephone subscribers from 2003 to 2006- 46 -
Table 12. Comparison of monthly growth of mobile phone subscribers from 2003 to 2006 - 46 -
Table 13. Structure of calling time of distance calls from 2004 to 2006	- 47 -
Table 14. Comparison of ARPU of telephone and mobile phone service from 2004 to 2006 - 47 -
Table 15. Incomes of telecom in the East, Middle and West from 2005 to 2006	- 48 -
Table 16. Newly increased telephone subscribers in the East, Middle and West from 2004 to 2006
Table 17. Newly increased mobile phone subscribers in the East, Middle and West from 2004 to 2006
Table 18. Top 10 provinces of telecom income in 2006	- 49 -
Table 19. Top 10 provinces with most telephone subscribers in 2006		- 50 -
Table 20. Top 10 provinces with most mobile phone subscribers in 2006		- 50 -
Table 21. Number of telephone subscribers in every province in Dec., 2006 (unit: 10,000) - 51 -
Table 22. Number of telephone subscribers in every province in Nov., 2006 (unit: 10,000)
Table 23. Number of telephone subscribers in every province in Oct., 2006 (unit: 10,000)- 53 -
Table 24. Number of telephone subscribers in every province in Sep., 2006 (unit: 10,000)- 54 -
Table 25. Number of telephone subscribers in every province in Aug., 2006 (unit: 10,000)- 55 -
Table 26. Number of telephone subscribers in every province in July, 2006 (unit: 10,000)- 56 -
Table 27. Number of telephone subscribers in every province in June, 2006 (unit: 10,000)- 58 -
Table 28. Number of telephone subscribers in every province in May, 2006 (unit: 10,000) - 59 -
able 29. Number of telephone subscribers in every province in Apr., 2006 (unit: 10,000)- 60 -
Table 30. Number of telephone subscribers in every province in Mar., 2006 (unit: 10,000)- 61 -
Table 31. Number of telephone subscribers in every province in Feb., 2006 (unit: 10,000)- 62 -
Table 32. Number of telephone subscribers in every province in Jan., 2006 (unit: 10,000)- 63 -
Table 33. Advantages and disadvantages of telecom contractors 	- 66 -
Table 34. Analysis on business of contractors	- 66 -
Table 35. Profit growth rate and market share components of top four telecom contractors
 from Jan. to Jun., 2006	- 67 -
Table 36. Comparison of investment of telecom contractors from 2004 to 2006	- 67 -
Table 37. Analysis on capital channels 	- 68 -
Table 38. Change trend of investment scale of global communication from 2002 to 2006	- 73 -
Table 38. Change trend of service income of China’s telecom industry from 1999 to 2005- 74 -
Table 40. Investment in real assets of China Telecom from 2000 to 2005	- 74 -
Table 41. Comparison of net profit from 2001 to 2005	- 74 -
Table 42. List of big events in telecom manufacturing industry in 2006	- 79 -
Table 43. Production of mobile phones from 2004 to 2006 (unit: 10,000)	- 83 -
Table 44. Monthly production of mobile phones from 2004 to 2006 (unit: 10,000)	- 83 -
Table 45. Production of small smart phones from 2004 to 2006 (unit: 10,000)	- 84 -
Table 46. Monthly production of small smart phones from 2004 to 2006 (unit: 10,000)	- 84 -
Table 47. Production of program-controlled exchangers from 2004 to 2006 (unit: 10,000)- 85 -
Table 48. Monthly production of program-controlled exchangers from 2004 to 2006
 (unit: 10,000)- 85 -
Table 49.  Production of mobile communication facilities from 2004 to 2006 
(unit: 10,000)	- 86 -
Table 50. Monthly production of mobile communication facilities from 2004 to 2006 
(unit: 10,000)- 86 -
Table 51. Production of telephones from 2004 to 2006 (unit: 10,000)	- 86 -
Table 44. Monthly production of telephones from 2004 to 2006 (unit: 10,000)- 87 -
Table 53. Top 50 enterprises with the strongest capacity of telecom manufacturing industry - 87 -
Table 54. Changes of China Huawei Technology Co., Ltd. from 2002 to 2005	- 88 -
Table 55. Structure of capital sources of China’s telecom manufacturing industry in 2005- 92 -
Table 56. Percentage of capital source from Jan. to Nov., 2006	- 92 -
Table 57. Three steps of postal system reform	- 103 -
Table 58. Plan of postal system reform 	- 103 -
Table 59. Real asset and investment of post industry from 2004 to 2005	- 105 -
Table 60. Status quo and prediction of growth of postal service from 2000 to 2008	- 106 -
Table 61. Total business of postal service from 2003 to 2005 (unit: 100 million RMB)	- 106 -
Table 64. Status quo of postal service from 1999 to 2003	- 112 -
Table 65. Market scale and growth of letter industry from Jan. to Nov., 2006	- 113 -
Table 66. Market scale and growth of letter industry from 1999 to 2005	- 113 -
Table 67. Comparison of incomes of letter incomes of 1999 and 2005	- 113 -
Table 68. Percentages of business letters and civil letters from 1999 to 2004	- 114 -
Table 69. Package business and growth rate from Jan. to Nov., 2006	- 114 -
Table 70. Income of pakage service from 2003 to 2004	- 115 -
Table 73. Subscribion and sales and growth rate of newpapers in 2006	- 116 -
Table 74. Income of posting newpapers and periodical from 2003 to 2004	- 116 -
Table 75. EMS business and growth rate from Jan. to Nov., 2006 	- 118 -
Table 76. Income of EMS from 2003 to 2004	- 118 -
Table 77. Structure of express post market from 2003 to 2004	- 119 -
Table 78. Structure of express post market in 2004	- 119 -
Table 80. Recognition of EMS by residents 	- 119 -
Table 82. Balance and growth rate of post savings from Jan., to Nov., 2006	- 121 -
Table 83. Coverage of post savings at the end of June, 2005	- 121 -
Table 84. Balance of post savings from 2003 to 2004 (unit: 100 million RMB)	- 122 -
Table 85. Transactions of over-province business by post green card from 2003 to 2004	- 122 -
Table 86. Income of Westunion remitting from 2003 to 2004	- 123 -
Table 87. Advantages and disadvantages of international electronic currency exchange	- 124 -
Table 88. Development of insurance agents of postal departments in 2004	- 124 -
Table 89. Other intermedia services by postal departments	- 125 -
Table 90. Advantages and disadvantages of Westunion remitting - 127 -
Table 91. Four advantages of post logistics 	- 128 -
Table 92. Disadvantages of post logistics	- 129 -
Table 93. Opportunity and threat of post logistics	- 129 -
Table 94. Income of telecom agency by post industry	- 132 -
Table 95. Structur of income of telecom agency by post industry	- 132 -
Table 96. Income of information platform and telecom business by China Post	- 133 -
Table 97. Stamp collection and growth rate from 2005 to 2006	- 134 -
Table 98. Income of stamp collection business	- 134 -
Table 99. Income of export business to the world, Hong Kong, Macao and Taiwan in 2004- 136 -
Table 100. Market structure of export business to the world, Hong Kong, Macao and Taiwan in 2004
Table 101. Investment scale of China Post from 2003 to 2005 (unit: 100 million RMB)	- 138 -
Table 102. Investment condition of China Post from 2003 to 2005	- 138 -
Table 103. Types of letter business	- 139 -
Table 104. More than 2/3 income is from big customers 	- 140 -
Table 105. Comparison of civil letters and business letters	- 141 -
Table 106. Analyisis on the use of over-regional counting up by four types of customers - 152 -
Table 107. Assessment of the effect of third phase project of postal green card	- 152 -
Table 108. Comparison of logistic business by postal services in every provinces	- 154 -
Table 109. Growth of international post business from 2004 to 2008	- 165 -
Table 110. Change of growth rate of postal services in 2005 (%)	- 166 -
Table 111. Change of growth of different types of postal service in 2006 (%)	- 166 -
Table 112. Capital expence of international telecom industry from 2000 to 2008	- 169 -
Table 113. Industrial chain of 3G industry	- 171 -
Table 114. TD-SCDMA chain in China is maturing	- 173 -
Table 115. Prediction of mobile subscribers from 2007 to 2009	- 174 -
Table 116. Prediction of investment on 3G network construction from 2007 to 2009	- 174 -
Table 117. Changes of competition structure of China’s telecom facility industry	- 175 -
Table 118. Prediction of testing market of 3G contractors in China from 2007 to 2009	- 175 -
Table 119. Demand and market shares of optical fiber and optical cables	- 176 -

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