We have upgraded our mobile growth forecast, based on positive data from the regulator and the operators and we haveBMI Viewalso boosted our 3G/4G outlook for the same reason. While 3G subscriptions will gradually decline, we forecast strong growth for4G. Similarly, we believe that broadband growth will be stronger than we predicted in the previous forecast. The ICT sector is integralto China's 13th five-year plan (2016-2020) and will stimulate growth in other industries. While the plan lays out ambitious broadbandtargets, profitability in the telecoms sector will be largely undermined by the state-owned operators' need to compress prices tomeet them. On the other hand, local IT and consumer electronics companies will gain from a higher budget for R&D (2.1% of GDP to2.5%) and reduced reliance on imports for high-tech inputs.
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