1. The European Wireless Data Market Mark Holden Wireless Data Service Director Strategy Analytics mholden@strategyanalytics.com October 1998

2. 2 AGENDA 1.Current Market Status -Networks, devices, applications, users 2.Future Developments -Cellular enhancements 3.Market Forecasts -Differences between 1997 & 1998 forecasts

3. October 1998 3 Current Status - Networks  Cellular the dominant wide-area technology 4 Consistent SMS usage growth across Europe 4 Operator shift towards the verticals 4 Growing focus on coverage issues & service/ quality assurance levels 4 The operator as ISP  Dedicated operators face an uncertain future  TETRA vs. TETRAPOL  Interactive paging: is there a future in Europe?

4. October 1998 4 Current Status - Devices/Equipment  Devices & equipment are a major user concern 4 Leveraging existing portable devices & systems 4 Cost of accessories (e.g. PC cards) 4 Practicalities of use 4 Ease of operation & human computer interface  Smart phones & hand-held computers not yet widely accepted by European corporates

5. October 1998 5 Current Status - Applications  Key user segments are the verticals 4 Remote information access & short messaging 4 Reporting & updating functions 4 Resource location & allocation  Mobile professionals have similar needs 4 File transfer applications have yet to emerge  Fixed applications, e.g. telemetry

6. October 1998 6 Current Status - Users  Relatively high awareness in the verticals 4 Productivity & service level imperatives  Few formal corporate cellular implementations 4 Evaluation & assessment of the practicalities  Coverage, speed, reliability  Equipment considerations, e.g. power issues  Impact on existing systems, applications & working practices  COST

7. October 1998 Analogue Trunked (PMR/PAMR) Analogue Cellular (Circuit Switched) Alphanumeric Paging Dedicated Packet Satellite 1994-1996 Pre 1994 1997 1998 1999 2000 GSM Data/Fax GSM P-P SMS ERMES Digital Cellular Consolidation UMTS Iridium Digital Trunked HSCSD GPRS 2-way Paging P-M SMS P-P = Point-to-Point, P-M = Point to Multi-Point Roadmap for Wireless Data Services

8. October 1998 8 UMTS  Dec ‘97 - ETSI shortlisted W-CDMA and TD-CDMA air interface standards  Jan ‘98 - ETSI decides on compromise W-CDMA/TD-CDMA  Jun ‘98 - deadline for submitting standard proposals to ITU  Future European Union deadlines: 4 1 Jan 2000 - issue licensing rules and tenders for licence bids 4 1 Jqn 2002 - launch of commercial services  UK likely to be first European country to issue licences (mid 1999, four licences). Network deployment planned for 2002  Adjudication process will vary between countries (auction vs. ‘beauty contest’  Licence candidates: consortia including: existing cellular operators (national and international), fixed telecoms carriers, cable TV companies, utilities, entertainment/media groups, companies from other sectors with established brands

9. October 1998 9 Other GSM Network Enhancements  High Speed Circuit Switched Data (HSCSD) 4 up to 14.4kbps (single channel); 57.6 kbps by multiplexing 4 commercially available: end-1998/Q1 ‘99  General Packet Radio Service (GPRS) 4 Ericsson demonstration achieved 115kbps in Feb ‘98 4 commercial deployment: 2000  Enhanced Data Rates over GSM Evolution (EDGE) 4 alternative to UMTS? 4 Uses alternative modulation scheme, supports circuit & packet switching 4 300+ kbps; commercial deployment 2000 onwards

10. October 1998 10 European Wireless Data Market to 2004 2695 8824 1223783 Figures in thousands CAAGR 1997- 2004: 41% Cellular: 55% PMR: 23%

11. October 1998 11 1997& 1998 Forecasts - Differences  Cellular data forecast reduced significantly 4 Operators shifting focus towards vertical markets 4 But GPRS implementation delayed 4 MoPro sector will not be opened up as anticipated  PMR data forecast slightly higher 4 Impact of initiatives in the public safety segment  Dedicated packet forecast reduced 4 Networks will close where operators are also cellular players

12. October 1998 12 Wireless Data Market - Germany

13. October 1998 13 Wireless Data Market - Italy

14. October 1998 14 Wireless Data Market - UK

15. October 1998 15 Cellular Data Market - US

16. October 1998 16 ARPU & Total Data Revenues - Germany

17. October 1998 17 ARPU & Total Data Revenues - Finland

18. October 1998 18 ARPU & Total Data Revenues - UK

19. October 1998 19 ARPU & Total Data Revenues - US

20. October 1998 20 Data Services Uptake

21. October 1998 21 Summary & Challenges Ahead  Market characterised by steady not spectacular growth - STILL!  Move towards the ‘virtual’ organisation most pronounced in the verticals  Data is demanding, not a numbers game  Success in the MoPro sector relates to channel, packaging, and cost issues  The consumer market will be content-driven & cost-related