Transatlantic Dialogue
Montpellier, France
November 22, 2005
The European Mobile Industry
– A Case for Consolidation?
Wolfgang Kopf, LL.M.
Executive Vice President
T-Mobile International AG & Co. KG
==!"§==Mobile=
Agenda
About T-Mobile
European Mobile Markets
US Mobile Markets
Key difference between European and
US Mobile Markets
 Main hurdles for Consolidation in Europe
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Wolfgang Kopf, T-Mobile International
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About T-Mobile
 T-Mobile International AG & Co. KG was established in December 1999
and is one of the largest mobile communications operators worldwide (3rd
place in terms of Revenues, 4th place in terms of subscribers)
 T-Mobile International was the first seamless transatlantic mobile network
operator and is still the only one
 DT Group holds direct or indirect investments in mobile communications
companies in 15 countries with more than 83 million subscribers
 Net revenue of T-Mobile International was 25,0 billion Euros in 2004 (eoy)
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Wolfgang Kopf, T-Mobile International
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Our Footprint

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T-Mobile US (100%)

T-Mobile D (100 %)
No. 4 Player *

No. 1 Player

T-Mobile CZ (56.0%)
•
PTC (Poland, 49 .0%)

No. 1 player
•
No. 1 Player
T-Mobile NL (100%)
•
T-Mobile Hungary (59.2 %)** •

No. 3 player
•
No. 1 Player
•
No. 1 Player

T-Mobile UK (100%)
•
T-Mobile Croatia (51.0 %)**
•
Monet (Montenegro, 45.5%)**

No. 1 Player (w/ Virgin Mobile)
•
No. 1 Player
•
No. 2 Player

T-Mobile AT (100 %)
•T-Mobile Slovakia (51.0 %)**
•
Eronet (Bosnia, 25.0%)**

No. 2 player
•No. 2 Player
•
No. 3 Player

Notes: Ranking based on subscribers number (status as of Q2/2005). Percentage of stakes in brackets.
* No. 4 player after closing of Sprint / Nextel merger
** Pro rata as (local) fixed line is holding the shares in the local mobile operation
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Wolfgang Kopf, T-Mobile International
•
•
Mobimak (Macedonia, 30.2%)**
T-Mobile branded
Not T-Mobile branded
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T-Mobile US

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Established under the name of VoiceStream in 1994; in July 2002, the
company became T-Mobile US
Subsidiary of T-Mobile International (100%)
More than 20.0 million subscribers
Market share 10%
US-Penetration rate 66 %
T-Mobile US has the largest GSM network in the USA
T-Mobile US is the largest Wi-Fi provider in the USA
Four awards by J.D. Power and Associates in 2004, among them “Highest
Overall Satisfaction Among Wireless Telephone Users”, and already two
further awards in 2005, among them “Highest Overall Business Customer
Satisfaction”
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Wolfgang Kopf, T-Mobile International
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EU25 Communications Market Volumes
EU25 communications markets growing faster than GDP. Mobile and fixed data
services main growth drivers. Fixed voice service revenues steadily declining.
EU25 Communications Market Volumes
(€ bn)
EU25 GDP growth
1.7%
1.1%
0.9%
2.4%
Yearly growth
5.3%
6.7%
3.9%
4.9%
CAGR
254
238
Cable TV Services
Fixed Data Services
15.1%
Fixed Voice Services
38.6%
Mobile Services
41.4%
13
42
14
45
92
92
91
98
107
114
12
36
2001
... %
2002
2003
= share at total market volume
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277
264
18.3%
14
51
5.3%
12.3%
32.5%
90
--0.7%
44.1%
122
7.6%
2004E
Source: EU Commission (10th Communications report)
Wolfgang Kopf, T-Mobile International
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EU15/EU25 Mobile Subscriber Development
European mobile markets approaching saturation. Addressable market
penetration already higher than 100%. Prepaid main growth driver.
Mobile Subscribers (SIM cards) and Penetration in EU 15 & EU 25
(in m)
Subscriber EU 15
Subscriber EU 25
282
431
415
328
301
359
371
236
62% 63%
Prepaid
penetration
CAGR 00-04:
11% (EU15)
Population
penetration
2000
2001
2002
2003
2004
2Q 2005
63%
75%
79%
86%
94%
96%
EU15
91%
94%
EU25
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Sources: Mobile Communications/Baskerville, Merrill Lynch (April/September 2005), Eurostat, own calculations
Note: Total EU25 population of 458m by end of 2004, EU15 with 384m population. End of year penetration rate.
CAGR = Compound Annual Growth rate; EU = Europe
Wolfgang Kopf, T-Mobile International
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European Mobile Competition – Key EU25 countries
Fierce Competition but no Consolidation yet.
Mobile Network operators & service providers / MVNOs / mobile brands
Key EU25 countries – 2Q 2005
Service providers / MVNO / mobile brands
Mobile network operators with GSM and/or UMTS licenses
64
42
32
3
3
CZ
3
3
3
3
3
3
POL POR SPA
4
4
4
4
4
4
8
3
5
IRE
GRE
ITA
AT
11
14
17
20
59
25
37
21
29
8
3
10
4
13
16
4
4
4
3
5
5
FRA
FIN
D
DK
SWE
BE
NL
UK
100%
90%
95%
111%
88%
103%
106%
Mobile penetration 2Q 2005 (SIM cards as of population)
108%
67%
109%
103%
99%
109%
114%
102% 75%
Sources: EU Commission (10th Communications report), Merrill Lynch (September 2005), own analysis
MVNO = Mobile Virtual Network Operator ; SIM = Subscriber Identity Module
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Wolfgang Kopf, T-Mobile International
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US Mobile Subscriber Market Development
US market with considerable subscriber growth. 66% population penetration
reached by end of June 2005.
+ 6.7%
Total US Mobile Subscriber
(in m)
CAGR 95-04:
20.6 %
33,8
44,0
55,3
1995
1996
1997
69,2
1998
86,0
1999
109,5
2000
128,4 140,8
2001
2002
158,7
182,1 194,4
Penetration
66 %
2003
2004
2Q05
Key subscriber growth drivers
 Introduction of digital network technologies (TDMA, GSM & CDMA in 1994/95)
 Better handset selection (especially related with introduction of GSM & CDMA)
 Attractive price plans (e.g. minute buckets, prepaid tariffs, family tariff plans)
 Introduction of national roaming
 Improved network quality & coverage, especially in-house and in rural areas
 Mobile data services (e.g. SMS, corporate applications used via data cards), mostly since 2002
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Source: CTIA, own estimates
Wolfgang Kopf, T-Mobile International
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US Mobile Competition
Market already consolidated.
US Subscriber Market Shares 2Q 2005
Others
21,3%
Key competition characteristics
Cingular
26,5%
100% = 194,4m subs
(+14.7% yoy)
Nextel
8,3%
T-Mobile
9,9%
Verizon Wireless
24,4%
Sprint
9,6%
Total US Subscribers 2Q 2005
(in m)
41,4
34,8
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18,7
Sp
rin
t
TM
US
Sp
rin
t
Ne
w
VZ
W
Ci
ng
ula
r
19,2
 Remaining 21% controlled by
affiliates of national operators
(e.g. Sprint / Nextel affiliates),
regional/local players (e.g.
Alltel, US Cellular, Cincinnati
Bell) and MVNOs/resellers
(e.g. Virgin Mobile, Boost
Mobile, TracFone)
16,1
Ot
he
rs
47,4
NX
TL
51,6
 After consolidation, four (from
initially six) national operators
controlling about 79% of total
US subscriber base
Source: CTIA, reported company data, own calculations.
Note: Sprint figures without wholesale & affiliates (included in others). Sprint / Nextel merger closed in August 2005
yoy = year on year ; BTA = Basic Trading Areas (see page 20 for overview)
Wolfgang Kopf, T-Mobile International
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Key differences between Europe & USA
Six key differences
 Market structure / Regulatory Characteristics
 Network technologies installed / Coverage
 Competition level
 Subscriber growth / penetration development
 Pricing schemes
 Usage behavior (voice, data)
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Wolfgang Kopf, T-Mobile International
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Main hurdles for Consolidation in Europe
 De facto spectrum cap
 Licensing areas determine the relevant
geographic market
 New EU Merger Rules and SIEC Test
 No clear division of jurisdiction among
competent authorities
 Culture?
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Wolfgang Kopf, T-Mobile International
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Thank you for your
attention.
Wolfgang Kopf, LL.M.
Executive Vice President Public & Regulatory Affairs
T-Mobile International AG & Co. KG
Landgrabenweg 151, D-53227 Bonn, Germany
Mail: wolfgang.kopf@t-mobile.net
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Wolfgang Kopf, T-Mobile International
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