Yankee Group Forecasts that Eastern Europe and Africa Will Drive Wireless Market Growth in EMEA

The EMEA wireless/mobile market is far from saturated

London, UK, February 15, 2006 — The new Yankee Group Global Mobile Market Forecast predicts that total service revenue in EMEA will increase from 177 billion euros in 2004 to 231 billion in 2009. Growth will be driven by increased service penetration in Eastern Europe and African emerging markets.

According to the Yankee Group report, Eastern Europe and Africa will Drive Market Growth in EMEA, prepaid services will continue to underpin subscriber growth in EMEA but there will be a modest decline in the share of customers using prepaid services. The sharpest reduction will be in Western Europe, where many operators continue to encourage customers to migrate to contract services. ARPU will continue to decline in most regions over the next 4 years. For EMEA as a whole, ARPU will fall until 2007, after which it will be broadly flat. Although these territories appear saturated, Yankee Group predicts that Eastern European, emerging and African markets will drive revenue into the mobile market over the next 5 years.

Yankee Group forecasts growth in several areas, including mobile infotainment services, ring tones and 3G. Mobile infotainment services will capture a larger share of revenue as more compelling audio and video services are commercialized. Ring tones will continue to be the largest single application in the infotainment category. The adoption rate for 3G phones will accelerate during the next 2 years. By the end of 2007 almost 30% of customers in Western Europe will own a 3G phone. This trend will be fuelled by operators’ sustained handset subsidization policies and lower wholesale prices for 3G terminals.

"EMEA will continue to represent a significant growth opportunity for mobile service providers and technology vendors in the next 5 years," said Declan Lonergan, Yankee Group, director of wireless research for EMEA. "Emerging markets in the region will drive organic customer growth, while advanced infotainment applications will fuel demand for data services in the more developed countries. Incumbent pan-national players should therefore pursue business growth opportunities in Eastern Europe and Africa."