3G Delays Will Boost GPRS and Public WLAN Revenue

Mobile operators at last appear to be halting the long-term decline in average revenue per user (ARPU) - an essential step in ensuring continued revenue growth in the face of
stagnating subscriber numbers - according to a new report released this week by Analysys, the global advisers on telecommunications, IT and media.

Inset is Katrina Bond the author of the report.

ARPU in Western Europe in 2002 averaged EUR31 per user per month; the number of active subscribers is forecast to grow just 5% in 2003 to 309 million.

The report, Western European Mobile Forecasts and Analysis 2003-2008,
reveals that France, Germany, Spain and the UK all experienced growth in
ARPU for their active subscriber bases during 2002, while Italy's ARPU
remained almost flat, and Sweden's continued to decline.

"The main reason operators have been able to improve ARPU is because they
are achieving big gains in revenue from non-voice services, which include
person-to-person messaging and mobile entertainment services," says Katrina
Bond, lead author of the report.

Analysys estimates that mobile operators in Western Europe generated an
average of 12% of their revenue from non-voice services in 2002, but points
out that some operators cited even more impressive figures. For example, in
the final quarter of 2002, mmO2 obtained over 17% of its revenue from
non-voice services in the UK and nearly 20% in Germany.

"We forecast that 24% of mobile service revenue will come from non-voice
services by 2005 and 36% by 2008, with the bulk of that going to mobile
operators," added Bond. "Person-to-person messaging has been responsible for
most of the growth to date, and these services will continue to be
important, but mobile entertainment services such as downloadable games will
become increasingly significant revenue earners."

The report forecasts that, across Western Europe, person-to-person messaging
will grow from EUR13 billion in 2003 to EUR20 billion in 2008 as this
service extends from SMS to also include large volumes of multimedia
messages and email. Meanwhile, mobile entertainment service revenue will
grow from less than EUR3 billion in 2003 to nearly EUR11 billion in 2008.
(Graph available on request.)

However, the long awaited and much delayed 3G services will only account for
6% of subscribers and 6.5% of non-voice revenue in 2005. This not only
widens the opportunity for GPRS, but also gives public wireless local area
networks (WLAN) a greater opportunity to take hold. Analysys forecasts that
1.5% to 2.5% of annual 2.5G and 3G non-voice revenue could be lost to public
WLAN by 2008, and that the loss could be as high as 8% amongst business
customers.

Western European Mobile Forecasts and Analysis 2003-2008 analyses the key
factors that are driving the mobile market in Western Europe, and provides
detailed forecasts of subscribers, ARPU and revenue for Western Europe as a
whole, as well as for France, Germany, Italy, Spain, Sweden and the UK. It
covers four market segments and eight service categories.

This Press Release Sponsored by AGILENT TECHNOLOGIES

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