1. EPP- ED Hearing on Roaming II Looking Ahead: challenges to overcome for a sustainable future Martin Whitehead Director GSMA Europe 8 January 2008

2. 2 What’s to come Sustainability – what do we all want? Sustainability – what have we got? Can you separate off the roaming market? Where are the challenges? Conclusions

3. 3 Sustainability – what do we all want? Looking forward we would all like to see a market where: Year on year, the burden of regulation is reduced in line with the competitive environment Intervention is the exception and not an annual event There is certainty – uncertainty holds back investment more than any other factor Consumer expectations continue to be met, or exceeded Levels of investment and innovation in Europe match, or exceed, those in other regions

4. 4 Sustainability – what have we got? A European success story A thriving and competitive market featuring strong growth, falling prices and high levels of customer satisfaction A huge socioeconomic contribution – 135 billion euros to European Economic Area’s GDP – Over 590.000 Europeans employed directly by the industry, and over two and a half million indirectly – Access to affordable communications All this driven by high levels of investment and innovation

5. 5 Capital Intensity; Europe 2006 European Mobile Observatory (Figure 35, p.34)

6. 6 Useful Life Spans of Mobile versus Other Utilities Infrastructure European Mobile Observatory (Figure 36, p.35) Mobile

7. 7 ROCE for Mobile and Other Industries, Europe 2006 European Mobile Observatory (Figure 37, p.36)

8. 8 Can the roaming market be separated from the overall mobile communications market? The ITRE/IMCO commissioned Europe Economics study concluded that “Roaming is best understood as an integral part of the main mobile telephony market” Commission’s Impact Assessment Board urged the services to “explain the rationale for analysing roaming as a market in its own right”

9. 9 Voice Roaming – where is the challenge? State of play – According to ERG data in the first quarter of 2008 voice roaming prices were already on average 10% below the Eurotariff caps – 40% of mobile phone users have remained on operator-defined tariffs The challenge would be the extension of the voice caps for three more years, the steepening of the glide path, and the introduction of regulated per second billing – The regulation of billing increments within the Eurotariff would amount to unnecessary micro regulation – 3 years, plus 3 years, plus? When and how can this end?

10. 10 SMS Roaming - where is the challenge? State of play The average price of SMS roaming services in the EU is declining steadily Market continues to grow as operators launch innovative tariff structures The challenge would be the introduction of price caps The proposed roaming SMS price caps would be below many domestic SMS prices Will take 540 million euro out of the market

11. 11 Data Roaming – where is the challenge? State of play – Market is growing fast – data roaming traffic more than doubled in the year ending Q1 2008 – Prices are falling fast - average retail price fell by over 40% in the same period The challenge is Bill Shock – Mobile operators want to encourage the take up of data roaming services and have a strong incentive to eliminate bill shock and boost consumer confidence in this new market

12. 12 Conclusions In the debate today and going forward we need to recognise the challenge that new and extended regulation presents to sustainable investment and innovation in the market. We must not lose sight of the long term consumer interest. We look forward to discussions going forward, particularly in the light of the draft Committee reports and the findings of the ITRE/IMCO commissioned Europe Economics study. We are sure there is good progress to be made on data roaming transparency measures and we welcome interest in discussion around the Review Clause. Thanks!