Svc Wireless Final

Jefferies & Company, Inc.

Wireless Investing – A Wall Street Perspective

SVC Wireless Technology Association June 24, 2006

CONFIDENTIAL DRAFT

The Global Investment Bank Of Choice For Growth Companies

A leading institutional brokerage and investment banking firm – led by one of the most powerful capital markets trading platforms in the industry

The Leading Sales and Trading platform for NASDAQ stocks

#1 High Yield underwriter (under $150 million) Leading emerging growth equity research Most rapidly growing full service investment bank on

Wall Street

Technology Group of Jefferies with over 90 tech bankers

Highly differentiated approach to the market with dedicated sector teams globally focused on full-service relationship banking

Jefferies Broadview is the M&A platform of choice in technology

– Since 1998 Jefferies Broadview has advised on 440 technology transactions globally worth approximately $67.3 billion

Technology Group(Jefferies Broadview)

Jefferies

(1) Wall Street Journal, March 2004.(2) Market Capitalization as of May 10, 2006.(3) Revenue represents FY2005 ending December 31, 2005.

Austin

San Francisco Los Angeles

Dallas Houston

New Orleans

Chicago Nashville

Atlanta Richmond

Boston

Stamford New York Jersey City Washington

London Paris Zurich

Tokyo

Sydney**Melbourne**

Silicon Valley Israel*

Waltham

Hong Kong*

Shanghai

New Delhi

Publicly-held (NYSE:JEF)

The #1 performing stock price of investment banks over the past 10 years(1)

$4.0 billion market capitalization(2)

$1.5 billion in annual revenue(3)

Over 2,000 employees in 27 offices worldwide

50%+ Employee Owned

Cities in red indicate Jefferies Broadview locations, * Affiliates

$0

$10

$20

$30

$40

$50

$60

4/22/99 11/22/99 6/22/00 1/22/01 8/22/01 3/22/02 10/22/02 5/22/03 12/22/03 7/22/04 2/22/05 9/22/05 3/20/06

Investment Dealers Digest

2005

Middle Market

Bank of the Year

2005

Middle Market

Bank of the Year

1

Jefferies Delivers The Full Spectrum Of Products And Services To Technology Clients

Investment Banking

Leading banking franchise focused on high growth companies with over 400 Investment Bankers (nearly 100 in technology) in over 20 offices worldwide

Equity Offerings – Completed over 230 IPO and Follow-on offerings, raising over $40B since 2000

M&A – Ranked #1 in technology M&A advisory assignments in 2006YTD, 2005 and 2004(1)

Private Equity - Regular dialogue and relationships with over 250 financial sponsors

Restructuring - Restructured approximately $150 billion in securities and liabilities

Equity

Over 135 account executives cover over 2,200 institutional accounts; make markets in over 4,000 stocks

#2 YTD volume trader of NASDAQ and OTC stocks; #3 trader in 2005(2); handle over 10% of NYSE volume; top 5 trader in nearly 2,000 NASDAQ stocks

Over 100 research analysts covering over 700 companies

Debt

Dedicated high yield team of over 40 experienced senior professionals

Integrated sales, trading, research, capital markets and banking functions

#1 underwriter of mid-cap high yield debt(3); led by team that joined Jefferies Broadview from Drexel Burnham Lambert

Investm

ent B

ankin

g

Equity

Asset ManagementDebt

Cash Managemen

tCapital Partners High Yield

PrivatePlacements

Structured Finance

Trading

Sales

Research

Capital Markets

IndustryCoverageMergers

andAcquisitions

FinancialSponsors

Restructuring

Private ClientServices

Offers A Full Suite Of Investment Banking Products And Services To Serve High Growth Companies Throughout The

Corporate Lifecycle

(1) Source: SDC, 1/1/2005 - 12/31/2005.(2) Source: Autex, 1/1/2005 - 12/31/2005 (2005), 1/1/2006 – 5/19/2006 (YTD). (3) Source: SDC, 1/1/2005 - 12/31/2005.

Asset Management

Private Client Services / Cash Management – advisory, portfolio management and customized financial solutions

Jefferies Capital Partners - more than $685 million in private equity funds under management

2

CHF80,000,000

Co-Manager

Initial Public OfferingJoint Book Runner

$1,803,000,000

SMIC

*

Considerable Asian Investment Banking Experience

Japan

Korea

* Transaction completed by team at previous employer

Greater China

$62,000,000

has been acquired by

$106,000,000

Initial Public OfferingCo-Manager

$80,600,000


China Finance Online Co. Limited

$165,100,000

has divested its Handset Division to

has divested certain manufacturing assets to

Confidential

formerly the graphics unit of

Confidential

has restructured its Digital Media Business and Merged

its Graphics Business with

Initial Public OfferingSole Book Runner

$92,479,037

*Silicon Motion

Initial Public OfferingLead Book Runner

$71,454,555

*

$30,000,000

has sold certain mobilecomputing assets to

has completed aSeries C Round of

Financing

Pequot CapitalNational SemiconductorPericom Semiconductor

and other investors$37,000,000

has divested itsbroadcasting equipment

subsidiary TV/COMInternational, Inc., to

Confidential Confidential


HK$ 882,000,000

Och-Ziff Capital Management

速达软件Superdata Software

速达软件Superdata Software

India

has agreed to be acquired by

Financial Advisor to the Seller

$324,000,000

Access Co. Ltd.

Confidential

has been acquired by has been acquired by

$90,000,000

Financial Advisor to the Seller


Confidential Confidential

has made a minority investment in

Uniccs Co. Ltd.

has sold a minority interest to

Confidential

Confidential

has sold a minority stake to

$450,000,000

has acquired

$38,000,000

has acquired


Softbank

Kingston Technology Corporation

Confidential


Softbank

$30,000,000

has made a minorityinvestment in

SunUp DesignSystems, Inc.

Electronics Inc.

Confidential

$34,500,000

Convertible Bond PlacementSole Manager

$28,750,000

Convertible Notes OfferingSole Manager

$32,200,000


$38,000,000

Co-Manager

$50,000,000

Co-Manager

$34,500,000


$139,800,000

Initial Public Offering (ADS)Co-Manager

has been delisted from the Hong Kong GEM in a

management-led buyout sponsored by




Sole Placement Agent$13,000,000

Ambow Education

has sold a minority stake to

$80,500,000


$50,000,000


$45,000,000Convertible Notes Offering

Sole Manager

Nahar Industrial Enterprises Ltd.

$33,000,000Convertible Notes Offering

Sole Manager

The Simbhaoli Sugar Mills Limited

$50,000,000


$160,813,125


$30,000,000


¥11.3 billion$100,000,000

Convertible Notes OfferingInternational Financial Advisor

$160,000,000


3

http://www.elong.com/

http://www.cisco.com/en/US/hmpgs/index.html

http://www.cidvc.com/html/body-1.htm

Representative Asian Investment Banking Services

Mergers & Acquisitions Advisory

– Buy-side or sell-side cross border M&A advisory Examples:

Japan: PalmSource/Access, Airborne/Cybird, Zingy/For-Side China: Ross Systems/CDC, Audiovox/UT Starcom Korea: Integrant/ADI

– Private equity/hedge fund sponsored buyouts Example: Superdata Software delisting from HK stock market

Equity, Equity-Linked and Debt Financings

– IPO listings: U.S. NYSE/NASDAQ, London AIM/Euronext, Japan Mothers Examples:

China: China Finance Online (U.S.), Ninetowns (U.S.) Japan: Gung Ho (Japan), Cybird (Japan) India: Patni (India & U.S.)

– Convertible financings Examples:

India: HEG (Euro), GHCL (Euro), Bilcare (Euro)

– High yield and bank debt financing

Jefferies provides Asian clients with the same broad range of investment banking services offered to U.S. and European clients

4

Mobile Media Industry Overview

5

Robust Subscriber Fundamentals Continue To Drive The Wireless Market Forward…

(1) Source: IDC December 2004(2) Source: Morgan Stanley(3) Source: Yankee Group 2005(4) CAGR referes to total wireless data revenue growth.

508

560

606645

676

$400

$450

$500

$550

$600

$650

$700

2004 2005 2006 2007 2008

CAGR=7.4%

Worldwide Service Revenue (USD Billions)(1)

Global Wireless Subscribers (In Billions)(1)

1.651.86

2.032.19 2.31

1.001.201.401.601.802.002.202.40

2004 2005 2006 2007 2008

Data Revenue as a Percentage of North American Wireless Carrier Revenue(3),(4)

Average Minutes of Use (MOU)(2)

199 204209 214

219

175

200

225

250

2004 2005 2006 2007 2008

CAGR=8.8%

0%

5%

10%

15%

20%

2004 2005 2006 2007 2008

CAGR=51.2

%

6.38.6

11.4

14.0

16.5

CAGR=2.4%

6

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

2004 2005 2006 2007 2008 2009

$9,194

$14,563

$20,922

$27,801

$33,331$37,690

…And Investments Are Plowing Into The Mobile Entertainment Market, A Multi-Billion Dollar Opportunity!!

Global mobile entertainment revenues ($ million)

CAGR 32.6%

04 - '09 CAGR

Games 3,140 5,596 9,042 12,837 15,882 18,497 42.6%

Music 3,576 4,974 6,304 7,739 8,700 9,318 21.1%

Sports/Infotainment 2,477 3,992 5,575 7,225 8,748 9,875 31.9%

Total 9,194 14,563 20,922 27,801 33,331 37,690 32.6%

Source: Juniper Research Limited, "Mobile Entertainment Content Series," 2nd Edition, February 2005

Growth Drivers:

Pricing decreases for devices with mobile media capabilities will accelerate mass-market growth.

Carriers seek to provide innovative content in order to reverse declining ARPU trends.

Next-generation networks will gain predominance in the near future.

Carriers will continue to develop mobile payment plans such as “mobile wallets” and “virtual lockers”.

7

Globally, All Key Players Are Actively Addressing The Multimedia Content Space And Convergence Has Begun…

Entertainment and Media

Key Strategies: Leverage content portfolio into mobile space Drive licensing relationships between developers

and publishers towards providing rich, interactive mobile media

Infrastructure

Key Strategies: Create enabling end-to-end solutions Allow carriers to use multimedia apps for differentiation Push multimedia applications to drive high-end

devices/advanced network solutions

Mobile Carriers

Key Strategies: Leverage multimedia applications to drive

ARPU and data usage rates Maintain customer relationship

Interactive Media

Key Strategies: Aggregate/leverage content into mobile channel Partner to deliver email, messaging, ring tones, games, etc.

8

…But In China, the Wireless Value-Added Service Market Has Already Converged And Is Growing Rapidly…

Rapid Growth From Virtually Zero to $1BN+ in Under 4 Years– Currently accounts for approx. 50% of China Internet revenue – 300MM+ SMS messages in 2005– WVAS expected to be $1.6 billion market in 2007(1)

Wired/Wireless Chinese Internet Has Demonstrated Crossover

Chinese WVAS Market Is Tremendously Competitive

– Over 4 pure-play NASDAQ listed WVAS and 2,000 SPs(2)

Chinese Internet Market Landscape

China WVAS Market(1)

0

500

1,000

1,500

2,000

2,500

2004 2005E 2006E 2007E 2008E 2009E 2010E

Sal

es (

US

$)

(1) Source: Jefferies and Street estimates. Does not include carrier revenue. (2) Source: China Mobile, April 2005

Wireless Media Wired Media

Wireless Value Added Service Providers

eCommerce Companies

Online Ad Companies

Online Game Providers

China Wireless MarketOverview

Wireless subscribers outnumber wired subscribers

400MM+ mobile users (#1 globally) but only 30% penetration

100MM+ Internet users (#2 globally) but less than 10% penetration

CAGR: 19%

Wireless Operators

9

http://www.elong.net/

…But Risks of Disintermediation and Operator Dependence Weigh Heavily on the Business Models of Typical WVAS CPs And SPs…

Risk 1a: DisintermediationFaced primarily by SPs who risk being squeezed out of the equation by both CPs and mobile operators

Risk 1b: Too Far from End-UserAs goal for CPs should be to capture more of the value chain by getting closer to their customers, middlemen risk being cut out as CPs develop ways to go direct to the end-user

Risk 2: Operator DependenceFaced by CPs and SPs alike in that mobile operators currently possess significant control over how content and applications are marketed, distributed, and paid for

Generic / Shared Content

Channels

CP 2

World Wide Web

Consumers

Risk 1a: Disintermediation

Risk 2: Operator Dependence

Risk 1b: Too Far from End-User

SP 1

CP n

CP 1

SP 2

400MM+ mobile; 100MM+ desktop

e.g., Mobile Operators, Desktop,

IPTV, Cable, etc.

e.g., SINA, Namco, Gamevil…and hundreds of thousands of companies

e.g., KongZhong, Tom Online,

Linktone, Hurray!...and 2,000

other SPs!

10

…As Evidenced By Recent Mobile Operator Moves

Chinese Operators Aren’t Ignorant!

– Won’t make the same mistakes of their U.S. / European counterparts

– Likely to capture as much of the value chain as possible

Market Will Continue To See Volatile Operator Policy Changes

– China Mobile recently imposed policy changes in 2006 Double confirmation for SMS, IVR, WAP before payment No subscriptions and charging for message move to fixed month fees No renewal of provincial licenses regarding Instant Messaging

(Tencent, Netease, Sina, Tom)

Chinese WVAS Providers Have Substantial Disintermediation Risk

– Dependent on operators for distribution and CPs for content

3G Will Reshuffle The Deck

– Represents opportunity for Chinese to create hybrid voice/data companies similar to Asian counterparts (e.g., SK Telecom - Korea, NTT Docomo - Japan)

11

Strategic Observations

Market is Huge…But Supremely Competitive

– Dynamics will likely be repeated in other sectors of China Internet

– No free lunch!

Industry Growth Potential Relies More on Up-Sell

– Highways are built and now is time to monetize traffic

Disintermediation Will Occur Rapidly

– 3G upgrade will reshuffle the deck

– Public company pressures on operators and competitive forces will likely drive consolidation faster than in the U.S.

Where Is the Smart Money Going?

– Operators

– Out-of-Network Distribution Channels (e.g., TV, Kiosks, Slim Devices)

– Proprietary Content

– Large Scale Distribution Platforms With Proprietary Content

12

Mobile Media Investment Overview

13

Venture Investment In Chinese Companies Remains Hot

Total VC Investment In Chinese Companies Since 2002 (US$millions)

Source: Zero2IPO

Key Trends

- Technology continues to attract the most investment

- Increase in average deal size

- Money continues to flow into China but demand for quality investment opportunities not being met

2005 was a record year in terms of VC money raised with over $4 billion raised to invest in China. 2006 is on pace to be another big year with $904 million raised in Q1 2006.

$418

$992

$1,269$1,173

$334

226

170

253228

42

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

2002 2003 2004 2005 Q1 2006

0

50

100

150

200

250

300

Total Invested Deal Count

14

Foreign IPOs Outside of Mainland China Continue To Be Exit Of Choice For Chinese Companies

Source: Thomson Financial, CapitalIQ; as of June 16, 2006. Dual listed companies listed by primary exchange. Other exchanges includes London AIM, Mothers, Kuala Lumpur, SG SESDAQ and TSXVenture.

Total Number Of Chinese IPOs By ExchangeTotal Amount Raised Through Chinese IPOs

By Exchange

Hong Kong

New York

Nasdaq

Singapore

Shenzhen

Shanghai

HK GEM

OtherAvg. IPO Amt. Since 2000

$262

$1,896

$98

$21

$56

$79

$19

$31

(US$Millions)

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

2000 2001 2002 2003 2004 2005 2006YTD

0

50

100

150

200

2000 2001 2002 2003 2004 2005 2006YTD

15

But Recent End Of Yearlong Ban On Share Sales Marks Potential Return Of Domestic China IPO Activity

Shanghai Stock Exchange IPO Volume 2004-2006YTD

Shenzhen Stock Exchange IPO Volume 2004-2006YTD

Shanghai and Shenzhen Stock Exchange Relative Performance

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

Q1 '04 Q2 '04 Q3 '04 Q4 '04 Q1 '05 Q2 '05 Q3 '05 Q4 '05 Q1 '06 Q2 '06

IPO

Am

ou

nt

Rai

sed

($m

illi

on

s)

0

5

10

15

20

25

30

35

IPO

Co

un

tAmount Raised Count

Source: Thomson Financial, CapitalIQ; as of June 16, 2006

China CAMC Engineering’s $55mn IPO, the first since the moratorium was lifted in May, was 576x and 100x oversubscribed for the retail (80%) and institutional (20%) portions, respectively. Shares begin trading on June 19.

The domestic markets in China have been on a rebound in 2006 but have given back some gains recently due to profit taking and concerns over liquidity as new IPOs flood the market

0

20

40

60

80

100

120

140

Jan-04 Mar-04 May-04 Jul-04 Sep-04 Nov-04 Jan-05 Mar-05 May-05 Jul-05 Sep-05 Nov-05 Jan-06 Mar-06 May-06

Re

lativ

e In

de

x

Dow Jones Shanghai Index Dow Jones Shenzhen Index

Median IPO Proceeds Since 2004: $43mn

Median IPO Proceeds Since 2004: $27mn

$0

$100

$200

$300

$400

$500

$600

$700

Q1 '04 Q2 '04 Q3 '04 Q4 '04 Q1 '05 Q2 '05 Q3 '05 Q4 '05 Q1 '06 Q2 '06

IPO

Am

ou

nt

Rai

sed

($m

illi

on

s)

0

5

10

15

20

25

IPO

Co

un

t

Amount Raised Count

16

Nasdaq Continues To Be The Listing Venue Of Choice For Technology Companies But Record Is Mixed

Source: Thomson Financial, CapitalIQ; as of June 16, 2006

Chinese Technology Nasdaq IPOs Since 2004

(US$Millions)

Aftermarket perf.

Name Ticker

Pricing

date

Shrs

offered

(mm)

Offer

price

Amt

offered

($mm)

% sec

shrs

% of post-

deal mkt

cap

% chng

price

file/offer

% chng

shares

file/offer

Price vs.

filing

range T+1 T+7 T+30 current

China GrenTech Corp. Ltd. GRRF 03/29/06 6.3 18.00 112.5 20.0% 25.0% 20.0% 0.0% Above 5.6% (6.1%) (12.9%) (35.9%)Actions Semiconductor Co., Ltd. ACTS 11/29/05 9.0 8.00 72.0 33.3% 10.5% (23.8%) (30.8%) Below 0.0% 0.1% (4.5%) 36.3%Vimicro International Corp. VIMC 11/14/05 8.7 10.00 87.0 22.3% 23.7% (16.7%) 0.0% Below (16.4%) (9.8%) (9.2%) 40.1%China Medical Technologies Inc. CMED 08/09/05 6.4 15.00 96.0 0.0% 24.2% 0.0% 28.0% Within 8.0% 36.7% 31.2% 50.0%Baidu.com, Inc. BIDU 08/04/05 4.0 27.00 108.0 27.3% 11.7% 35.0% 8.1% Above 353.9% 244.4% 203.7% 206.3%Focus Media Holding Ltd. FMCN 07/12/05 10.1 17.00 171.7 30.7% 27.2% 13.3% 0.0% Above 18.8% 8.8% 28.8% 257.5%China Techfaith Wireless Communication Technology Ltd. CNTF 05/05/05 8.7 16.25 141.4 0.0% 16.5% 1.6% 0.0% Within (5.7%) (1.9%) 2.1% (15.7%)Hurray! Holding Co. Ltd. HRAY 02/03/05 6.9 10.25 70.5 3.7% 31.4% (3.3%) 0.0% Within 0.0% (7.3%) (20.4%) (43.2%)The9 Ltd. NCTY 12/14/04 5.9 17.00 100.3 8.5% 25.3% 21.4% (5.6%) Above 23.5% 25.9% 5.3% 40.7%Ninetowns Digital World Trade Holdings Ltd. NINE 12/02/04 9.6 11.00 105.6 33.3% 27.9% 0.0% 0.0% Within 3.6% 3.3% (15.4%) (54.7%)eLong Inc. LONG 10/27/04 4.6 13.50 62.1 21.3% 32.2% 8.0% 0.0% Within 6.7% 56.3% 50.4% 5.0%China Finance Online Co. Ltd. JRJC 10/14/04 6.2 13.00 80.6 19.4% 31.2% 18.2% 0.0% Above (10.0%) (17.3%) (12.3%) (58.5%)51job Inc. JOBS 09/28/04 5.3 14.00 73.5 0.0% 19.6% 16.7% 0.0% Above 51.1% 90.0% 143.6% 55.0%Kongzhong Corp. KONG 07/08/04 10.0 10.00 100.0 20.0% 29.2% (9.1%) 0.0% Within 1.0% (12.5%) (43.0%) 0.1%Shanda Interactive Entertainment Ltd. SNDA 05/12/04 13.9 11.00 152.4 30.4% 19.8% 0.0% 0.0% Within 8.8% 30.0% 51.5% 19.4%TOM Online Inc. TOMO 03/10/04 12.5 15.55 194.4 0.0% 25.7% 0.2% 0.0% Within (16.2%) (18.3%) (23.0%) 22.2%Linktone Ltd. LTON 03/03/04 6.1 14.00 86.0 16.1% 24.5% 27.3% 1.3% Above 24.4% (14.2%) (23.6%) (57.7%)

Mean 7.9 $14.15 106.7 16.8% 23.9% 6.4% 0.1% 26.9% 24.0% 20.7% 27.5%Median 6.9 $14.00 100.0 20.0% 25.0% 1.6% 0.0% 5.6% 0.1% (4.5%) 19.4%

Key Observations:• YTD06 and FY05 issuances (8) approximately same as FY04 (9)• Although only 6 IPOs trading below IPO price, aftermarket performance tends to be binary• IPO Sectors: Software/Internet (11), Media (1), Semis (2), Telecom Equipment (1), Med Devices (1), EMS (1)• Absent Sectors: Financial Technology, Healthcare/Bio Technology, Education, etc.

17

The IPO Market For Wireless Enhanced Services Is Currently Being Led By Content & Applications(1,2)

Recent technology IPO’s have had the following median financial metrics:- Revenue of $79 million- Revenue growth of 44%- EBIT Margin of 16%- 5 quarters of profitability

(1) Financial Data as of 6/16/2006.(2) Jamdat went public in 2004 but was acquired by EA in December 2005.

Raised

$100.0m

Date:

07/08/04

EMC:

$347m

Profitable Quarters before IPO:

5

Quarterly

$11.9mmRevenue

before IPO:

%Change

0.1%Since IPO:

TEV / TTM Rev

2.6x

TEV / TTM EBITDA

7.9x

TEV / 2006E Rev

2.0x

TEV / 2006E EBITDA

7.8x

Raised

$70.5m

Date:

02/04/05

EMC:

$130m


>5

Quarterly

$14.0mmRevenue

before IPO:

%Change

-43.2%Since IPO:

TEV / TTM Rev

0.8x

TEV / TTM EBITDA

3.6x

TEV / 2006E Rev

0.7x

TEV / 2006E EBITDA

4.1x

Date:

12/08/05

EMC:

$228m


>3

Quarterly

$25.6mmRevenue

before IPO:

%Change

-4.3%Since IPO:

TEV / TTM Rev

1.3x

TEV / TTM EBITDA

6.8x

TEV / 2006E Rev

1.1x

TEV / 2006E EBITDA

5.3x

Raised

$72.0m

Date:

02/09/05

EMC:

$1,024m


4

Quarterly

$88.3mmRevenue

before IPO:

%Change

-5.9%Since IPO:

TEV / TTM Rev

4.0x

TEV / TTM EBITDA

10.0x

TEV / 2006E Rev

4.0x

TEV / 2006E EBITDA

9.8x

Raised

$281.9m

Asian WVAS operators trade at discount to global comps due to lack of control

18

http://www.kongzhong.com/

http://www.hurray.com.cn/english/home_b.htm

70

80

90

100

110

120

130

140

150

160

170

180

190

Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06

Ind

exed

Pri

ce

U.S. Mobile Media(1) Asian Mobile Media(2) European Mobile Media(3) NASDAQ

Indices Have Retreated From Gains Posted Earlier In The Year With Asian Mobile Media Companies Suffering The Greatest Decrease

In the Public Markets, US-Listed Mobile Media Companies Have Underperformed Over The Past Few Months

Change (%)

-21.1%

+1.9%

+22.3%

-5.8%

Indices Performance Comparison June 17, 2005 – June 16, 2006

(1) U.S. Mobile Media Index: VeriSign, NeuStar, Syniverse Holdings, WiderThan, InfoSpace, Kongzhong, TOM Online, Linktone, Hurray! Holding(2) Asian Mobile Media Index: Faith, Index, For-side.com, Cybird, Access Company, Aplix Corporation(3) European Mobile Media Index: Buongiorno Vitaminic, Monstermob Group, Index Multimedia, Opera Software, Bango

19

While Overall M&A Activity Has Been Declining, Technology M&A Has Been On the Rise

Technology M&A Transactions Involving Chinese Targets With Deal Value >$20mn Since 2000

All M&A Transactions Involving Chinese Targets With Deal Value >$20mn Since 2000

$85,487

$16,769 $19,374 $18,191 $15,135 $10,026$3,075

7578

60

75 95

73

16

$0

$20,000

$40,000

$60,000

$80,000

$100,000

2000 2001 2002 2003 2004 2005 2006YTD

Dea

l Val

ue ($

mill

ions

)

0

20

40

60

80

100

Deal C

ount

Deal Value Deal Count

$2,790

$1,355

$946

$360

$948$708

$398

2

1210

95

1016

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

2000 2001 2002 2003 2004 2005 2006YTD

Dea

l Val

ue ($

mill

ions

)

0

5

10

15

20

Deal C

ount

Deal Value Deal Count

Source: Thomson Financial; as of June 16, 2006. Includes completed deals with announced consideration and involving the acquisition of >50% ownership.

Over 40% of these transactions were cross-border deals

Over 50% of these transactions were cross-border deals

(US$Millions)

20

Followed By A Number Of High Profile Mobile Media Content / Applications M&A Transactions

Acquired by

Value: $317m

P/R: 2.1x

P/EBIT: 20.5x

Currency: Cash

Acquired byAcquired by

Value: $671m

P/R: 10.2x

P/EBIT: 67.3x

Currency: Cash/Stock

Value: $129m

P/R: Conf.

P/EBIT: Conf.

Currency: Cash/Stock

Acquired by

Value: $250m

P/R: Conf.

P/EBIT: Conf.

Currency: Cash

Chinese WVAS Sector Is Ripe for M&A and Consolidation

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Summary: Predictions For 2006 And 2007

Venture Investment Will Be Highly Targeted

– Proprietary content, large scale SPs, hybrid wireless/wireless

Chinese Wireless Sector Will See Substantial Consolidation

– Operator moves, 3G all likely to spur consolidation over the next 12 months

Chinese Wireless Companies Increasingly Looking To List Outside U.S.

– U.S. appetite for Chinese WVAS IPOs correlated with TOMO, KONG, HRAY

– London, Singapore and Tokyo represent real alternatives with less stringent listing requirements…particularly wireless IPOs

– Hong Kong, in particular, will continue to attract Chinese IPOs given proximity to Mainland, lax disclosure, performance of Tencent

– Growing number of Chinese technology companies below the US$300MM valuation range will choose to either list in London/Hong Kong or grow to larger scale before listing in U.S.

M&A Will Increasingly Be Deemed a Viable Exit Strategy

– Uncertain, volatile capital markets environment

– Will IPO valuations reflect China “premium” or “emerging market discount”?

– Realization that being public is only the “beginning”

– China is top strategic priority for many international firms

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Contact Information

David A. Liu 刘大伟Managing DirectorUS Tel: 650-573-4803China Tel: 86-1371-823-9325Email: [email protected]

Wei Z. Hopeman 张晨为Vice President & Chief RepresentativeUS Tel: 650-573-4883China Tel: 86-1391-830-6556Email: [email protected]

Randy C. Wang 王鸿宇Shanghai RepresentativeChina Tel: 86-1368-198-5889Email: [email protected]

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Svc Wireless Final

Technology

Transcript of Svc Wireless Final