1. IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 1 U M T S F o r u m IMT-2000 The business case and Key Markets IMT-2000 Workshop, St Helier, Jersey, 10-11 November 1998 A presentation from UMTS Forum, Market Aspect Group

2. IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 2 U M T S F o r u m Content 2G Experience Challenges 2G versus 3G 3G at the beginning Framework for commercial case conclusion

3. IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 3 U M T S F o r u m 2G Experience Phasing the Mobile Evolution in Western Europe MediumMarket driverPhaseActionCompetitionMobile Penetration GSM phase 1 Voice centricInfancyAttracting subscribers 1 or 2 operators Marginal GSM phase 2 Services - voice mail - pre paid - messaging - pre-data Sophistication Differentiation Keeping subscribers, Increasing Traffic 2 or 3 operators 10 to 30% GSM phase 2+ -Data(64 kb/s) -Internet Maturation and Technological limits Increasing traffic Developing data applications Preparing Next Step 3 or 4 operators 30 to 40% UMTS 3rd Generation Mature Multimedia Content (2Mb/s)New Age Developing the market 40 to 50%

4. IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 4 U M T S F o r u m 2G Experience Competition at Operator Level Operator 1 Operator 2 Operator 3 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 19921993199419951996199719981999200020012002 Million Subscribers

5. IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 5 U M T S F o r u m 2G Experience The future will very likely be Service Driven Time Infra. Capex Coverage Capacity QoS Services Packet Data capability Deep Indoor Coverage Approach per Segment A typical investment profile from Operator’s perspective, in 2G packet data capability is an issue. Was National in 2G

6. IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 6 U M T S F o r u m Challenge Delivering information services over mobile

7. IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 7 U M T S F o r u m Challenge The value proposition to the end user must be obvious (and affordable)

8. IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 8 U M T S F o r u m 3G at the beginning Early Adopters likely to be Business Users Mass Market Business Starting point of mobile business VIP Penetration Process over Time Solution for Corporates Pre-paid Data Services

9. IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 9 U M T S F o r u m 3G at the beginning Non voice adoption over mobile (Western Europe)

10. IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 10 U M T S F o r u m Challenge Industry relationships End user categories in different contexts –Value Proposition (Voice and Non Voice based services) Operators Service Providers Value Added /Content Service Providers Vendors (Infrastructure, Terminal, Software Application, Components…)

11. IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 11 U M T S F o r u m Challenge New relationships

12. IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 12 U M T S F o r u m 2G versus 3G New productExisting Product Existing Market New Market Where 2G is = Mobile Voice Where 2G will be = Information Service on mobile with data bearer service Where 3G will be

13. IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 13 U M T S F o r u m 2G versus 3G Expanding The market 3G 3G will enable a wide range of services and combinations with fixed

14. IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 14 U M T S F o r u m 3G at the beginning IMT-2000 is likely to emerge in a strong 2G installed base UMTS will emerge as islands in an ocean of GSM Dual mode terminals will be key 0 50 100 150 200 250 989900010203040506 10% 20% 30% 40% 50% 60% 70% UMTS GSM analogue Penetration Million SubscribersPenetration (%) Western Europe case

15. IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 15 U M T S F o r u m 3G at the beginning Revenue Side 0 10 20 30 40 50 60 70 80 90 1994199519961997199819992000 2001 Data-Professional Data Corporate Voice-Corporate Voice-Consumer Voice-Professional Billion $ Mobile market prediction for Western Europe by 2005 0% 50% 100% Mobile Multimedia Mobile 200 millions 104 billion ECU 6.3 billion Mbytes/month Users Service Revenues Traffic The likely traffic Revenue picture in Western Europe before 3G Source: UMTS Forum 97

16. IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 16 U M T S F o r u m Framework for commercial case Business versus mass market Services what are they? How different from 2G Services? –Business, Social, Entertainment Timing-time to market dates Basic relationship of Service Charge

17. IMT-2000 Workshop, 10-11 November 1998 UMTS Forum 17 U M T S F o r u m Business Case for IMT-2000 Will vary among operators Need full industry support to meet a scale effect (vendor concerns) Need new relationships and content player to bring information services on mobile (Challenge)