Speaker: Ian Stone - Pontis Partners Algiers, June 2018

1. Smart Cities
A Hong Kong Personal Perspective
Ian Stone - PONTIS PARTNERS

2. …Technology Disruption = Accelerating…Internet > PC > TV > Telephone
source Mary Meeker
New Technology Adoption Curves
Electricity
Telephone
Car
Television
Microwave
Personal Computer
Mobile Phone
90
Dishwasher
Radio
Air Conditioning
Washer
Refrigerator
Internet
0
15
30
45
60
75
1867 1887 1907 1927 1947 1967 1987 2007 2017
YearsUntil25%Adoption,USA
Source: The Economist (12/15), Pew Research Center (1/17), Asymco (11/13).
Note: Starting years based on invention year of each consumer product. 2

3. Last 28 Years and while I have been in Hong Kong.
Snapshot of Disruption in my World.
• Governments introduced telecom competition (fixed and mobile)
• Mobile phones - analogue to digital (Nokia etc)
• Optical fibre systems introduced in the 1980s rolled out on a huge scale..
• The intranet and internet arrived.
• Emails - in the office and socially.
• Texts led to messaging (ICQ to WeChat, WhatsApp, Messenger etc) and so to OTT.
• Google, Amazon, Tencent and Alibaba founded and now in top 7 market value
along with Apple, Microsoft and Facebook.
• At least 3 financial crisis and SARS – disrupted us the World.
• Smart devices extended consumer freedoms while at the same time capturing our
time and data.
• Large, successful and admired companies have disappeared (Nokia, Kodak, …..)
• Commerce (the market) has overtaken Governments in planning the future as
technology innovates rapidly and leap frogs legacy systems, and policies and rules
Disruption is not just about now…..we have always been disruptive.

4. The last 28 years has seen extraordinary technology developments in
telecoms.
• Huge growth of bandwidth through optical fibre on land and at sea.
• Phenomenal growth on mobile coverage and bandwidth.
• Huge growth in processing power, and in battery life,
• Humans converting from Voice to:
• Text to messaging.
• To data to video to streaming (everything)
• To Social Media, electronic payments, inter-acting electronically with
each other and with machines, directly and via the internet.
• Games Games Games. China leads in the consumption of games.
• Machines to Machines, IOT etc.
• Extraordinary volumes of data leading to the growth of data centres and
the cloud to store our information as well as demand on radio systems.
An amazing trust by us in the systems despite an increasing
awareness of the dangers.

5. What makes a Smart City or a Country smart?
Source PCCW Global
5

6. Overview - Smart City DNA
source PCCW Global
Building Automation
City Infrastructure
Automation
Utilities
Public Amenities
Transportation
Asset Tracking
Residential
Estate
Commercial
Smart Services
Smart Living
Smart Grid / Meter
Smart Amenities
(incl Parking, Lighting, etc.)
Enterprise Integration
User & Asset Mgt.
CRM & ERP
Finance & Billing
Community Apps
Social & Entertainment
Health & Safety
Leisure & Travel
Info & Education
Smart Card
(Access & Payment)
Traffic Management
Event Management
Resource Allocation &
Logistics
Knowledge
Management
Safety & Security
(incl. Emergencies, Customs, etc.)
Lighting & Electronics
HVAC
Appliances
Meters & Sensors
A/V & Telecoms
Surveillance
Wearables
Vehicle / Drone
Robots & Actuators
Fiber
Wi-Fi
Mesh
LTE/3G-5G
RFID
LPWAN
Devices Network Applications
Smart City Application Platform
Big Data / A.I.
6
Network & Teleport
“Racing” to 5G!
Data Centre
The Cloud already dominates!

7. The 5G Operators Dilemma or The Change in Business Case Variables
from “Smartphone” 4G to “SmartCity “5G source Paul Berriman
Base Stns Spectrum No of Devices Low Power Battery Reliability
ARPU
$30
$ 1
3,000
30,000
100 MHz
To 1 GHz
20 MHz 4 Million
40 Million
1 Day
4 Years
Reliable
Never
Fails
Anywhere
Latency
50 ms
2 ms
Think 5G SmartCity Not 4G Smartphones

8. Critical Path Elements
• Proactive Government and recognized legal system and stable power supplies, etc.
• Yesterday’s 3G preceded innovative applications, 4G enabled applications, while 5G is
demanded for applications – users demands are accelerating at unprecedented rates.
• Consumer demand has become reciprocal or viral growth, driven by SmartPhones and
IoT, and a super abundance of content via Web and Apps – the requirements are for
extreme speed, extreme reliability and complete coverage.
• 5G requires a new mindset and consider new ideas:
• Proliferation of cell-sites requires more partnerships with landlords and local Gov.
• Shared networks and even potentially common networks (across borders?)
• Fibre is critical to support 5G leading to a natural partnership between Fibre and
Radio operators, especially as many IoT applications are static.
• Encourage experimentation and innovation in parallel with Regulation.
• Encourage new investors to accelerate 5G roll out.
Partnership to roll out quickly, with potential consortium of
operators, or specialist network developers on behalf of others.

9. 209
Privacy Act of 1974
Enacted = 12/31/74
General Data Protection Regulation
Enacted = 5/25/18
Personal Information Protection Act
Enacted = 09/30/11
Act on Protection of Personal Information
Enacted = 5/30/17
Data Privacy Laws
Enacted in Past 10 Years Developing (2018)
Source: Wikimedia, USA Congress, EU, Japan Government, South Korea Government, Argentina Government.
Note: Argentina proposed a 2017 draft amendment to the Personal Data Protection Act that would strengthen current regulation
and align with most GDPR requirements. Japan enacted an amendment to its Act on Protection of Personal Information that
went into effect on 5/30/17. All EU countries grouped due to passage of EU-wide GDPR laws.
EU / Asia / Americas = Rising Regulatory Focus on Data Management
source Mary Meeker

10. 188
...Data Gathering + Sharing + Optimization (from 2006 !) = Enabled by
Sensor Pervasiveness... source Mary Meeker
MEMS Sensor / Actuator Shipments
0
2012 2013 2014 2015 2016 2017
5B
10B
15B
GlobalShipments
Shared
Transportation
Mobike
Predictive
Maintenance
Samsara
Fitness
Tracking
Motiv
Precision
Cooking
Joule
Sensors + Data = In More Places
Visual
Navigation
Google Maps
Home
Temperature
Nest
sensors, like CMOS image sensors, also includes actuators made using MEMs processes, per IC Insights.
Source: IC Insights (2018), Google Maps, Mobike, Nest, Samsara, Motiv, Joule. Note: MEMS sensors and
actuators includes all MEMS-based sensors (e.g., Accelerometers, Gyroscopes, etc.), but does not include optical

11. China to Further Promote Government
Information Sharing & Disclosure
Xinhua State Press Agency, 12/7/17
. 210
...China = Encouraging Data Collection
source Mary Meeker
[Xi Jingping] called for building high-speed, mobile, ubiquitous &
safe information infrastructure, integrating government & social data
resources, & improving the collection of fundamental information...
[Xi stated] The Internet, ‘Big Data,’Artificial Intelligence, &
‘The Real Economy’ should be interconnected.
- Xinhua State News Agency, 12/9/17
Ministry of Industry & Information
Training to Build ‘Big Data’ Datacenter
Xinhua State Press Agency, 5/07/17
China Launches ‘Big Earth’ Big Data Project
To Boost Science Data Sharing
Xinhua State Press Agency, 2/13/18
Source: Xinhua (PRC’s official Press Agency).

12. 222
China Feature + Data-Rich Internet Platforms = Largest # of Users in One
Country
Largest Social Platform and Largest eCommerce
source Mary Meeker
Tencent
WeChat + WeChat Pay
Photos…Friends…Games…
Apps…Finances…Bills…
Alibaba
TaoBao + Alipay
Searches…News…Brands…
Feedback…Finances...Bills…
Source: Tencent, Alibaba

13. Hema Stores = Re-Imagining Grocery Retail Experience… High
Quality + Convenience + Digital…
Retail Revolution in China (o2o) source Mary Meeker
Digital Grocery Store
SKU Selection =
Based on Customer Data..
Alipay Membership To Pay
Real-Time E-Commerce
Ceiling-Conveyor System /
In-Store Fulfillment /
30-Minute Delivery
Restaurant
Cook To Order Chefs /
Eat-in-Shop
Source: Hillhouse. Note: As of 4/18, there are 37 Hema stores in China.
13

14. China On-Demand Transportation (Cars + Bikes) = +96%... 68%
Global Share & Rising
The largest Sharing platforms source
Mary Meeker
Source: Hillhouse Capital estimates. Note: Includes on-demand taxi, private for-hire vehicles,
On-Demand Transportation Trip Volume by Region
8B
ROW
N. America
2B
China Bike
China Car
0
4B
6B
Q1:13 Q1:14 Q1:15 Q1:16 Q1:17 Q1:18
QuarterlyCompletedTrips,Global
SE Asia
India
EMEA
China Bike
China Car
14
as well as on-demand for-hire motorbike and bike trips booked through smartphone apps.

15. I must have a WeChat page here……
• WeChat, Weixin in China, has 1 Billion users.
• China consumers use Weixin for every possible transaction and carry
minimum cash.
• WeChat accounted for 34% of total mobile data traffic in China in 2017.
• WeChat accounted for RMB 334B in consumption in 2017 (approx US$55B).
• On WeChat users can do “everything” directly or, via Apps or Mini Programs:
• Pay for any consumer item from Supermarkets to street vendors.
• Pay online or off-line at any time in any part of China.
• Public transport ticketing of all types.
• Transfer money peer to peer, including sending “Red Packets”
• Pay Government offices – Taxes, Road tax, Fines, licences etc
• Use as ID with Government
• Social communicating and general social networking (via Moments)
• Business communication (Lawyers, bankers, marketers, sales etc)
• Appointments for hospitals and doctors
• Parking, car/bike sharing, location apps etc
• Distributes news, encourages hobbies, finds Jobs, finds anything!
WeChat is used by local and national governments, with
experimental applications at cities all around China.

16. Some China Initiatives.
All the major China techs, led by Tencent and Alibaba are linking into local and
national government to develop easy access to government services for local users
as well as cooperating on new commercial innovation and experimentation:
• Electronic pass system for the Hong Kong, Macau and Guangdong borders to facilitate
fast crossing.
• Facial recognition for authorisation and person location
• Auto-drive testing and eco friendly auto development.
• Sharing of facilities of all types, bikes, cars, trucks.
• Local and national Gov ID via WeChat
• Credit management nationwide
• Hospital and doctor appointments management
• Local and national transport ticketing and scheduling via WeChat
• Purchasing via WeChat pay and Alipay for everything and no need to carry cash.
• Peer to peer payments are ubiquitous
• Alibaba US15B+ into nationwide smart logistics infrastructure
• Tencent and JD.Com Smart Retail initiative to digitise small retailers
• National Health data Network – 1.3B citizens health records (this year)
Working on regulation and legislation continuously, and in parallel with
development and experimentation.

17. To Summarise My View.
DISRUPTION IS NORMAL.
FAST AND CONTINUOUS TELECOM INFRASTRUCTURE GROWTH IS KEY (NEW
WIRELESS TECH HELPS)
GOVERNMENTS SHOULD COMMIT TO 5G AND OPEN UP TO NEW IDEAS.
SUPPLEMENT INCUMBENTS WITH NEW INVESTORS AND PARTNERSHIPS E.G
FIBRE NETWORK OPERATORS, PROPERTY DEVELOPERS, LOCAL GOVERMENTS
ETC – OPEN UP TO PARTNERSHIP (GOV + COMMERCE)
USE 5G TO OPEN UP WIRELESS RESOURCE TO ACCELERATE INVESTMENT AND
ROLL OUT
Ian Stone – Pontis Partners.