UK 1H 2005 Mobile Market Overview

1. Vodafone – 15.3M (24%)
2. O2 – 14.38M (23%)
3. Orange – 14.33M (23%)
4. T-Mobile – 10.76M (17%)
5. Virgin – 5.36M (7%)
6. 3 – 3.05M (5%)
7. Other (1%)

Overall market growth up 5% for the year.

• All operators highly competitive and active in market
• One new market entrant, Easy Mobile, and additional contract player (Virgin Mobile)
• Vodafone plans to launch MVNO (w/ Extreme) in fall 2005;
• O2 has stated it will likely have two additional MVNOs on network by end of year
• Possible O2 takeover from BT or Deutsche Telekom
• Greater focus by all carriers on 3G sales, customer migration, new content
• More players talking about 3G and 3G “type” services
• 3 has the highest blended ARPU of around 29 British pounds
• O2 has the highest data revenue
• Virgin Mobile has highest data revenue percentage of total revenue (30+%)
• Overall non-sms data growth still minimal
• Largest advertising spend by Orange (30% of total spent by all carriers)
• Largest proporation of advertising spent on Internet advertising was O2 (nearly 20% of its overall spend!)

Industry analysts still guessing at what will work (from conference: Mobile Entertainment Market 2005, 21 June):

• Estimate that most content is off-portal and adult related
• Estimate 50-70% of all mobile content downloaded from outside network operator portals
• 70-80% of mobile pictures and video downloads related to adult content with 20% sports related
• Demand for games limited to very simple, easy-to-play games
• Most customers still perceive difficulties with accessing off-portal content including hidden/ unknown charges

Looks like Christmas ’05 will be a highly competitive time in the UK 3G mobile market and overall a great one for end users!