April 28, 2007

China and India Will Lead Growth in the Mobile Market by 2011

United States Will Remain Largest Market by Revenue
Global Insight Report Launches New Telecoms Service

Waltham, MA 19 April 2007 — Global Insight, the world's leading company for economic and financial analysis and forecasting, announced the findings of its inaugural report produced by Global Insight's new Telecoms Intermodal Forecasting Service. The report concluded that China and India will remain the world's growth engine for wireless services, accounting for 60% of the 1.2 billion predicted new mobile subscribers over the next five years. The report compares the world's 20 leading developed and emerging markets between 2006 and 2011, and predicts that over the next five years, market penetration of wireless services will grow from 34.8% to 69.1% in China; and from 13.4% to 31.0% in India.

According to the report, China will also outpace the other 19 markets in terms of broadband growth, accounting for more than one-third of the 350 million-plus new broadband subscriptions anticipated over the next five years. By 2011, China, with broadband revenues of more than US$19 billion and four times the subscribers, will surpass Japan as the world's second-largest broadband market. However, the United States will continue to maintain its position as the world's largest mobile and broadband market by revenues over the forecast period.

"The bulk of the revenues for the sector will still come from the developed markets. Another notable conclusion is that the so-called death of the landline has been overstated, even if traditional landline revenues will take a massive hit," stated Julian Watson, director of Global Insight Telecom Products and author of the Special Report, "Substitution Shakes Up the Telecoms Sector."

More than US$50 billion in revenues will be lost world-wide over the forecast period due to fixed-line subscriber declines and the migration of voice traffic to mobile and VoIP (Voice over Internet Protocol) networks. A 4.5% decline is predicted in traditional fixed-line accesses as the growth in the China and India markets fail to offset the erosion of traditional accesses in markets like Japan, South Korea, and Europe; the latter of which has already seen extensive migration of accesses from fixed lines to mobile.

"Primarily as a result of substitution, the next five years will see a fundamental shift in the revenue make-up of the global telecoms industry. In these 20 markets, fixed-line's share of total telecoms revenues will collectively fall from 39% in 2006 to 21% in 2011; while by the end of 2011, mobile will account for over two-thirds of total telecoms revenues in those markets," Watson said. "But as our research shows, disparate local regulatory, competitive, and economic conditions will mean that the pace of substitution will vary greatly across the 20 markets. Traditional telcos are seeking to offset or reduce substitution effects by moving into multimedia and convergent markets such as IP TV (Internet Protocol Television) and Fixed-to-Mobile Convergence (FMC), but this will not always be sufficient to protect and enhance their revenues," he concluded.

Global Insight's new Telecoms Intermodal Forecasting Service is the only international intermodal/convergence forecasting service available to the telecoms industry. The service initially covers the following 20 markets, with additional markets to be added: China, India, Japan, South Korea, Czech Republic, France, Germany, Hungary, Italy, Poland, Russia, Spain, Ukraine, United Kingdom, Argentina, Brazil, Chile, Mexico, Canada, and the United States. The service provides ongoing analysis of the latest trends in intermodal substitution and convergent technologies and services. For an extract of the special report and more information about the service, please visit: http://www.globalinsight.com/telecomsintermodal.

Julian Watson, Director, Telecoms Products, Global Insight
+ 44 (0) 20-7452-501 (julian.watson@globalinsight.com)

Catarina Walsh, Media Relations, Global Insight [Intern'l]
+ 44 (0) 20-7452-5183 (catarina.walsh@globalinsight.com)

Jim Dorsey, Media Relations, Global Insight [United States]
+ 1 (781) 301-9069 (jim.dorsey@globalinsight.com)

About Global Insight
Global Insight, Inc. (http://www.globalinsight.com/) is a privately held company that brought together the two most respected economic information companies in the world, DRI and WEFA. Global Insight provides the most comprehensive economic and financial information available on countries, regions and industries, using a unique combination of expertise, models, data and software within a common analytical framework to support planning and decision-making. Through the world's first same-day analysis and risk assessment service, Global Insight provides immediate insightful analysis of market conditions and key events around the world, covering economic, political, and operational factors. The company has over 3,800 clients in industry, finance, and government with revenues in excess of $95 million, over 600 employees and 23 offices in 13 countries covering North and South America, Europe, Africa, the Middle East, and Asia.

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