Bull CP8 Patents CDG IR Meeting

• 1. CDG IR Meeting RUIM Cards & Gemplus Beijing, 2005 March 2 nd

2.

• Welcome to China, Welcome to Beijing

• About Gemplus

• R-UIM cards in CDMA Networks

• 3 rdGeneration RUIM cards

• Conclusion

Agenda 3. The smart card leader

• Gemplus founded in 1988.

• One of the original pioneers of smart card technology.

• The worldwide leader *in shipments and revenue.

• Active in 37 countries around the world:

• • 50 sales & marketing offices.

• • 4 research & development centers.

• • 17 personalization facilities and 11 manufacturing sites.

• • 5000 employees.

4 billion:total smart cards supplied 570 million:smart cards supplied in 2003 749 million:2003 revenue 865 million:2004 revenue *Gartner 2003 4. R-UIM in CDMA The Chinese example 5. China wireless market

• National Mobile Penetration rate: 23.7%

• Urban Mobile Penetration rate: ~60%

84 M GSM Unicom 230 MGSM CMCC 330 M TOTAL 27 M CDMA Est. Subscribers (Nov 2004) Network China Telcos

• N umber of CDMA users grows from 7 million to 19 millionin 2003

• • Terminal subsidy and specially configured billing package

• • construction of CDMA 1X network brought about edges for China Unicom in high-speed data business, which attracted a good many high-end users of its rivals.

• Growth momentum began to slow down in 2004

• • China Unicom gradually declines the subsidy to CDMA terminals to improve its cash flow situation

• • Strongcompetitionwith low-end PAS and CMCC

6. Unicom: CDMA positioning

• Unicom CDMA rollout milestones

• • Jan 2002: 800MHz cdmaOne 95A nationwide launched with RUIM

• • Mar 2003: CDMA1X in big provinces launched

• • Jun 2003: Pre-paid services launched

• • Jul 2004: Dual Mode services launched based on RUIM

• • Winter 2004-2005: 4 Mu low-end handsets are purchased

• Positioning:

• • GSM (Mass market, SMS data)

• • CDMA (Biz, youth market: Voice, 1x and SMS data)

• • 2003 Unicoms CDMA Churn: 11.5%, and that of GSM network 29.1%.

• Strong external and Internal competition

• • Battling rival, China Mobile at the high-end market, and a PAS service at the low-end

• • Balancing act between GSM and CDMA networks

• • • CDMA promoted aggressively.

• • • GSM still not neglected

• • Strong image on high end through High-Speed Data Download has helped UNICOM to maintain CDMA positioning on High-End

7. R-UIM Handsets Supply 10.2 CNY=1 Euro

• Nearly 100 R-UIM CDMA Handset models available in China market

• From Low-end (cdmaOne) to High-End (cdma1x, Dual Mode,)

• 22 Handset manufacturers

• • 5 foreign brands:Motorola, Nokia, Samsung, LG, Kyocera

• • 2 joint-venture brands: Putian-Sanyo, Putian-Toshiba

• • 15 native brands: Hisense, ZTE, Daxian, Kejian, Langcaho, Soutec, Bird, Konka, Haier, Capitel, Eastcom, CECT, DTT, TCL, Lenovo

• In H1 2004 only,they produced 5.65 million R-UIM CDMA handsets in 73 models.

Unicom 2005 Strategy: Low end CDMA handsets Unicom has purchased 1 + 3 million units of cheap CDMA mobile phones as part of a drive to boost its CDMA service which experienced slowing growth last year.Cellphone providers include Samsung, Motorola, LG, Nokia, ZTE and Hisense.T hose phones will be sold at prices ranging from 700 to 1,300 yuan (US$84-157), targeting medium-range users, 75 10.59 100% total 4 2.32 22% 3000 Models Qty (Mu) Rate Price (CNY) 8. RUIM in 3G Market 9. MNOs challenges in 3G

• Migration issues

• • Ensure continuity of services

• • Implement cost effective and easy 3G migration

• • Solve logistic issues of 3G migration

• Control issues

• • Ensure global infrastructure security robustness

• • Open-up the network to third parties

• Mass adoption issues

• • Ease access to data services

• • Push innovative targeted data services at any time

Fast & new revenue while optimizing the investments 10. 3G Telco identified needs in 2004

• Deliver promised quality of basic offering

• • Quality of voice service

• • Quality of data (content & delivery)

• • National and international roaming

• • Quality of customer service and on-field support

Keep Qualitative image

• Educate the market on new services

• • To reach their acquisition target

• • To migrate the base from Cheap voice minutes to data services

Increase profitability

• Speed up subscriber acquisition to reach announced target

• • Improve point of sales experience (no shortage RUIMorHandsets, practical migration tools)

• • Diversification of offers (handsets, services, tariff plans, prepaid reload)

Acquisition 11. Current role of R-UIM

• Only operator controlled network element in subscribers hands

• A relatively small investment

• • Infrastructure 16%

• • Handset11.7%

• • R-UIM0.3%

• Costs as%of2003revenue s (280b$) S ource: Booz Allen & Morgan Stanley

Security Personal data storage Operators data storage Application platform Authentication Provisioning 12. Integrating R-UIMs withinthe Telecom infrastructure

• RUIM delivery & activation

• SIM RUIM data transfer

• Authentication

• RUIM registration

• OTA access

• Authentication

• RUIM UTK or CCAT

• Command set

• RUIM delivery

• Education

Subscribers Handsets/devices OpCos Infrastructure Content Retailers

• Portability

• Interoperability

• Access control

13. CDMA RUIM Requirements

• 2005 :

• • 3G EV-DO

• • • CDMA 1x EVDO support according to CP0023-B

• • • PRL downloading

• • • Inter-standard roaming

• • • Maintain service continuity: Current subscribers still can access to EV-DO services with old cards

• • • • Inherit 1X CAVE authentication in DO without changing

• • • • New Users: maintain two conventional authentication methods: DO: MD5; 1X: CAVE

• Memory Size:

• • 64Kb and 128Kb already available

• • 256Kb and more to come

Available NOW ! 14. 3GCard Platform (UICC) SIM R-UIM USIM ISIM WSIM Telecom WIM PKI E-Purse EMV DRM Other... Banking Security Plastic RoamingGSM, UMTS, CDMA , IP Networks, W-LAN ... Digital signature End - to - end secure communication BankingApplication EMVStandard for Europay Mastercard Visa Storage of purchase certificates :S ongs,M ovies bought online UICC is the standard for developing applications Other applications Loyalty, transport 15. A comprehensive 3G offer from G+ From Card to Server and ApplicationA comprehensiveUICC Card range Valuable RUIMbased application IMEI AD Roaming Apps Library E V D O. SIM Chronize Efficient renewal servicesRobust 2G-3Ggateway CDMA 1x OTASP/ OTAPAgateway New powerful bearers tomanage the RUIM 16. Guaranteeing Service Continuity2G 3G

• Personal data management

• Network access

• Service configuration and presentation

RUIM basics 17. www.gemplus.com