Background & Strategy;

International Presence;

Customer Strategy & Products;

Partnerships, Acquisitions & Disposals;

Financials;

Overview & Analysis;

Profiles of service providers.

· Operators selling mobile telecoms services in Western Europe;

· Companies investing in or supplying the above;

· Companies buying services from the service providers covered.

· The market has continued to grow, albeit more slowly, despite reaching 100% penetration levels in at least four countries of the 15 profiled;

· Another indication of the market maturing is consolidation, both at a multi-country and at an in-country level;

· Convergence with fixed services is starting to emerge and mobile service providers need to have a clear strategy to exploit it and avoid the potential threat it poses.

The fifteen countries covered in this report have a combined population of over 383 million who, between them, have over 354 million mobile subscriptions, representing a penetration level across Western Europe of about 92%.

Despite already high levels of penetration, the market grew by over 23 million new subscribers in the course of the last year, however growth in financial terms was markedly lower as a result of intensifying competition. In the more mature markets traffic growth only compensated for price declines.

Mobile operators are universally pursuing a strategy of trying to persuade customers to use their mobiles not just for more voice minutes, but also for new applications and activities, such as video calling, downloading music and even watching TV.

3G/UMTS services are starting to take off but appear largely to be driven by the natural process of handset upgrading, rather than by a groundswell of customer excitement except amongst a number of early adopters.

A continued shake-out of the market is taking place, both at a European level with Telefonica Moviles’ takeover of O2, and with in-country deals such as KPN Mobile-Telfort (in the Netherlands) and T-Mobile-tele.ring (in Austria), underlining that markets can only sustain three of four mobile network operators, particularly in countries where strong MVNOs are emerging and exploiting the strength of their brands to build substantial customer bases.

Service providers are showing signs of increasing sophistication in their segmentation of markets as they look to reduce churn and offer improved customer service. Certain service providers have successfully experimented with new brands targeted at, for example, the youth segment, while others have looked to new business models, such as offering a purely Internet-based channel to market.

There are growing signs of convergence in the market, not only with content providers exploiting mobiles as a new market opportunity, but also with fixed and mobile technologies coming together and potentially overlapping. In the short term this will only have a minor impact on the market and will actually improve some customer propositions, such as combined Wi-Fi/3G data cards. In the longer term, however, mobile service providers will need to develop a strategy that takes serious consideration of a more converged telecoms market. Many service providers will be able to exploit the combination of their fixed and mobile assets, but some, notably Vodafone, may need to look to partnerships with fixed operators to address a converged world.