BUSINESS INSIGHTS The Top 10 Telecom Service Providers Positioning, performance and SWOT analyses New Technology Report

- Published May 2008 Market positioning of top 10 companies, 2007 Source: The Top 10 Telecom Service Providers Key questions answered by this report... • How do the leading telecom services companies compare in terms of financial perf ormance and coverage by country and services? • What are the key strategies of the leading telecom services companies and how do these strategies drive revenue an d profitability? • What are the strengths and weaknesses of the leading telecom se rvices companies and what opportunities and threats they are faced with? • Which r egions and segments offer the greatest growth opportunities? Benchmark the performance of leading telecoms service providers, identify their strengths and weaknesses and learn from their growth strategies with this new ma nagement report...

Business Intelligence for the Technology Industry Business Insights' portfolio of technology management reports is designed to hel p you make well informed and timely business decisions. We understand the proble ms facing today's technology executives when trying to drive your business forwa rd, and appreciate the importance of accurate, up-to-date, incisive product, mar ket and company analysis. We help you to crystallize your business decisions. Th e strength of our technology research and analysis is derived from access to unp aralleled databases and libraries of information and the use of proprietary anal ytic techniques. Business Insights reports are authored by independent experts a nd contain findings garnered from dedicated primary research. Our authors' leadi ng positions secure them access to interview key executives and to establish whi ch issues will be of greatest strategic significance for the industry. Our techn ology portfolio of reports can be used across a wide range of business functions to assess market conditions and devise future strategies. The order form on the back of this brochure lists recent titles available from the categories of CRM, Strategy, eCommerce, Information and Communications Technology and vertical mar kets including Finance and Healthcare. Key findings from this report... Deutsche Telekom’s business segments performance ($bn) 2005-2007 • The global telecom services market grew at a CAGR of 11.4% over the period 20022006 to reach $1785 bn in 2006. • AT&T was the largest player in the telecom servi ces market by revenues, followed by Verizon and NTT. • Emerging markets, broadband Internet and mobile data are the major growth drivers in the market. • Latin Amer ica is the fastest growing telecom market, expected to grow at a CAGR of 7.8% ov er the period 2006-2010. • Large players are making investments in IP based next g eneration networks to drive future growth. Source: The Top 10 Telecom Service Providers ”The net revenue from business customers reached $12.3bn ( 9.0bn) for the financia l year ended 31 December 2007, an increase of 5.2% in dollar terms and a decline of 3.6% in Euro terms over the financial year 2006. The overall Euro decrease w as the result of lower revenues from medium and large business customers, partia lly offset by increased revenues from enterprise customers...”

The Top 10 Telecom Service Providers Positioning, performance and SWOT analyses The global telecoms services market g rew by 25.8% from 2005 to $1,785bn in 2006. Focus on emerging markets has increa sed due to saturation and competition in developed economies. The Top 10 Telecom Service Providers: Positioning, performance and SWOT analyses is a new report p ublished by Business Insights that examines market dynamics in the telecom servi ce market focusing on the top 10 vendors. This new report provides SWOT analyses of top 10 companies and assesses their market positioning, financial performanc e and growth strategies. This report analyzes company developments in light of i ndustry size, industry structure, service offerings, major strategies and the co mpetitive situation to discern trends of the industry and its major players. Ass ess the world’s leading telecoms service providers, anticipate future trends and e nhance your competitive strategies with this new report. France Telecom’s financial performance, 2004-2007 Source: The Top 10 Telecom Service Providers ”The group’s operating profit increased 54.5% over the financial year 2006 to reach $14.8bn ( 10.8bn). The primary driver for revenue growth was a strong performanc e in emerging markets, which registered a revenue growth of 15.3% and an overall strong growth in the group’s personal communications business...” This new report will enable you to... Telefonica’s business segments performance ($bn), 2005-2007) • Create more effective competitive strategies based on the financial and SWOT ana lyses of the top 10 telecom service providers detailed in this report. Benchmark your performance against leading telecom service providers with this report’s ran king of the top 10 telecoms service providers, their financial performance and m arket share by company and category. Identify and target future growth areas fro m this report’s analysis of the acquisitions and divestments made by leading telec om service providers and their strategies for growth. Understand the key issues in the telecoms market and the impact that they are expected to have on the mark et using this report’s assessment of the declining traditional fixed voice service s market, maturation in developed markets and the European regulatory framework. • • Source: The Top 10 Telecom Service Providers “Telefonica Europe grew revenues by 19.9% in dollar terms and 9.9% in Euro terms t o reach $19.8bn ( 14.4bn) in financial 2007. The UK registered strong growth in subscriber numbers and ARPU, contributing significantly to revenue growth. The G ermany market saw revenues decline due to major price cuts...“ •

Sample Information: ‘The Top 10 Telecom Service Providers’ Chapter 4: Verizon - Grow th Strategies Growth Strategies Focus on growth products The company is streamlining its portfolio and investing in growth products such as broadband and fiber optic. The company divested its directory business and also its telecom operations in Latin America and Caribbea n. The capital for these transactions was used to make some strategic acquisitio ns, such as MCI, Rural Cellular and Cybertrust as well as to develop its broadba nd and fiber optic networks. Building next generation networks to provide innova tive services With the traditional services reaching maturity levels in the dome stic and European markets, the company is focusing on building next generation w ireless, wireline and IP networks and services. Verizon is expanding its FiOS ne twork and offering services such as FiOS TV and FiOS Internet. It is also expand ing its 3G networks to offer services such as wireless broadband to its customer s. The company is also planning to roll out fourth generation of wireless techno logy. The company witnessed a growth of 64% in wireless data revenue over 2006. Its FiOS Internet customers increased from 0.7 m in 2006 to 1.5 m in 2007. Selec tive acquisitions Verizon Communications has made a number of acquisitions since its inception, primarily for consolidating its product portfolio. The company n ow seeks to expand its product portfolio and offer a comprehensive suite of serv ices before expanding geographically. The company has indicated that it will go in only for selective M&A activity to grow internationally. Strengths Strong position in domestic market Verizon Communications is the second largest telecom player in the domestic market by revenue. It is also the largest wireles s player in the US by revenues. In the year 2007, Verizon recorded the highest g rowth in the wireless data segment compared to its peers. The company is also th e largest communication provider to the US government. Strong position in domest ic market gives the company a good brand image. Strong network coverage to meet future demand Verizon Communications has an extensive network in the US, serving 49 of top 50 markets, 90% of the total population and 97% of Fortune 500 compan ies. The company’s FiOS network passed 9.3 m homes at the end of 2007 and is expec ted to reach 18-20 m homes by 2010. Order this report today to find out more...

Table of Contents CHAPTER 1: INTRODUCTION CHAPTER 2: MARKET DEVELOPMENT • Overview - Market size and growth - Positioning and performance of top ten companies • Major trends and grow th drivers in the market - Digitization of information - Growth in emerging mark ets - Deploying NGN - Venturing in new business models CHAPTER 3: AT&T • Company o verview and history • Company overview and history • Group structure and services Wireless - Wireline - Advertising and Publishing - Other services • Recent financi al performance - Performance by business segments - Wireless - Wireline - Advert ising & Publishing - Other services - Acquisitions and divestments • Growth strate gies • SWOT analysis - Strengths - BellSouth acquisition - Strong financial positi on - Significant development of IP infrastructure and Wi-Fi - Weaknesses - Geogr aphic concentration - Opportunities - Bundled services - Threats - Integration p roblems - US economy slowdown - Competition CHAPTER 4: VERIZON • Company overview and history • Business segments and services - Wireline - Domestic Wireless • Recent financial performance - Performance by business segments - Performance by geogr aphies • Acquisitions and divestments • Growth strategies - Focus on growth products - Building next generation networks to provide innovative services - Selective acquisitions • SWOT analysis - Strengths - Strong position in domestic market - St rong network coverage to meet future demand - High customer loyalty - Weaknesses - Dependence on domestic markets - Opportunities - Growth in wireless data serv ices - Threats - The US Economy slowdown - Stiff competition CHAPTER 5: NTT CORP ORATION (NTT) • Company overview and history • Business segments and services - Regi onal Communications Business - Long Distance and International Communications Bu siness - Data Communication Business - Mobile Communications Business - Other bu sinesses • Recent financial performance - Performance by business segments - Regio nal Communications Business - Long Distance and International Communications Bus iness - Data Communications Business - Mobile Communications Business - Performa nce by geographies • Acquisitions and divestments • Growth strategies - Expanding an d strengthening broadband services - Consolidating IP services through Next-Gene ration Network (NGN) - Growth through partnerships

Table of Contents (contd.) CHAPTER 5: NTT CORPORATION (CONTD.) • SWOT analysis - Strengths - Comprehensive se rvice portfolio, with focus on growth areas - Strong domestic market position Focus on research and development - Low churn rate - Weaknesses - Declining reve nue and operating profit - Geographic concentration - Weak performance of PHS bu siness - Opportunities - Demand for Broadband, 3G and IP services - Threats - De clining demand for voice services and slow growth of mobile services - Stiff com petition further intensified by number portability CHAPTER 6: DEUTSCHE TELEKOM • C ompany overview and history • Group structure and services - Mobile Communications - Broadband/ Fixed Network - Business Customers - Group Headquarters and Shared Services • Recent financial performance - Performance by business segments - Mobi le Communications - Broadband/Fixed Network - Business Customers - Performance b y geographies - Acquisitions and divestments • Growth strategies - Improve competi tiveness in Germany - Growing internationally through mobile communication - Gro wth through expansion of mobile Internet - Realigning T-Systems • SWOT analysis Strengths - Strong performance in the US mobile business - Competitive advantage in mobile Internet - Increasing share of international revenue - Weaknesses - W eak domestic business performance - Weak business and financial performance - ‘Mob ile only’ offering in the US - Opportunities - Mobile Internet growth - Broadband growth - Threats - Slowing down of the US economy and competitive disadvantage i n the US - Extensive competition in the domestic market - Regulations CHAPTER 7: TELEFONICA • Company overview and history • Business segments - Telefonica Spain Telefonica Latin America - Telefonica Europe • Recent financial performance - Perf ormance by business segments - Acquisitions and divestments • Growth strategies Growth strategies in Europe and Spain - Growth strategies in Latin America • SWOT analysis - Strengths - Diversified revenue portfolio - Strong presence in high g rowth markets - Strong financial position - Weakness - Weak German business - Op portunities - Growth in Latin America market - Growth in broadband and mobile da ta services - Threats - Intense competition in some of the key markets - Regulat ory, political and legal risks - Weakening Spanish economy CHAPTER 8: FRANCE TEL ECOM • Company overview and history • Group structure and services - Personal Commun ication Services (PCS) - Home Communication Services (HCS) - Enterprise Communic ations Services (ECS) • Recent financial performance - Performance by business seg ments - Personal Communication Services (PCS) - Home Communication Services (HCS ) - Enterprise Communication Services (ECS) - Performance by geographies - Acqui sitions and divestments

Table of Contents (contd.) CHAPTER 8: FRANCE TELECOM (CONTD.) • Growth strategies - Launching new innovative services - Strengthening the broadband infrastructure - Further rollout in Afric a - Growth through disciplined acquisitions • SWOT analysis - Strengths - Strong p osition in European market - Strong geographic presence - Innovative services Weaknesses - Limited top-line growth - Opportunities - Further expansion into Af rica, Middle East and Eastern Europe - Growth in broadband - Growth in e-health - Threats - Stiff competition - Grant of fourth UMTS license - Roaming price cut - Exposure to greater legal and political risk CHAPTER 9: VODAFONE • Company over view and history • Group structure and services - Europe - EMAPA - Voice Services - Messaging Services - Data Services - Fixed line and DSL services • Recent financ ial performance - Performance by services - Performance by geographies - Acquisi tions and divestments • Growth strategies - Focus on emerging and high growth mark ets - Cost reduction and stimulating minute usage in Europe - Managing Group’s por tfolio to maximize returns • SWOT analysis - Strengths - Global presence and stron g emerging market portfolio - Comprehensive product portfolio - Weaknesses - Fai lure in Japanese market - Lack of control over partnerships - Opportunities - Em erging markets - Broadband Internet and 3G services - Threats - Increased exposu re to economic, political and legal risks - Market saturation in Europe CHAPTER 10: CHINA MOBILE • Company overview and history • Business segments - Voice Business - New Businesses • Recent financial performance - Performance by services - Acqui sitions and divestments - Growth strategies - Focus on rural Chinese markets - I nnovative value-added services - Expanding business customer base - Expansion in to emerging markets • SWOT analysis - Strengths - Dominant position in domestic mo bile communications market - Strong performance and healthy financial position Network coverage and quality - Strong brand - Weaknesses - Service portfolio Opportunities - Rural markets - Value added services - 3G - Emerging Markets - T hreats - Regulatory changes - Future competition

Table of Contents (contd.) CHAPTER 11: TELECOM ITALIA • Company overview and history • Business segments - Dome stic - European Broadband - Brazil Mobile - Media - Olivetti - Other operations • Recent financial performance - Performance by business segments - Domestic - Eur opean Broadband - Brazil Mobile - Media - Olivetti - Other Operation - Performan ce by geographies - Acquisitions and divestments • Growth strategies - Domestic ma rket - Retaining customers and increasing value share - Expanding into adjacent ICT markets - International strategy - Consolidating growth in Brazilian market - Strengthen position in Germany market - Increasing presence in high growth Lat in America markets - Reviewing investment portfolio • SWOT analysis - Strengths Strong position in domestic market - Strong position in Brazilian mobile market - Weaknesses - Geographic concentration - Weak financial position - Weak operati onal performance and weak outlook - Opportunities - Opportunity for further grow th in Brazil - European broadband market - Further expansion in Latin America Threats - Regulatory environment in domestic market - Competition in Brazil and Germany - Mature domestic market CHAPTER 12: SPRINT NEXTEL • Company overview and history • Business segments - Wireless - Wireline • Recent financial performance - P erformance by business segments - Acquisitions and divestments • Growth strategies • SWOT analysis - Strengths - Strong presence in domestic market - Attractive ass et portfolio - Weaknesses - Weak performance of the wireless segment - Problems with Nextel integration - Poor Marketing - Opportunities - WiMAX opportunity - T hreats - Threats to iDEN network - Market saturation and economy slowdown - Inte nse competition CHAPTER 13: COMPANIES RANKED 11 TO 20 • BT - Company snapshot - Fi nancial performance, 2005-2007 • Comcast - Company snapshot - Financial performanc e ($bn), 2003-2007 • Vivendi - Company snapshot - Financial performance, 2004-2007 • KDDI - Company snapshot - Financial performance ($bn), 2003-2007 • America Movil - Company snapshot - Financial performance ($bn), 2003-2007 • China Telecom - Comp any snapshot - Financial performance ($bn), 2003-2007 • Korea Telecom - Company sn apshot - Financial performance, 2002-2006

Table of Contents (contd.) CHAPTER 13: COMPANIES RANKED 11 TO 20 (CONTD.) • Telstra - Company snapshot - Fina ncial performance ($bn), 2003-2007 • KPN - Company snapshot - Financial performanc e, 2004-2007 • Bell Canada - Company snapshot - Financial performance ($bn), 20032007 FIGURES & TABLES • Global telecom services market size & growth ($bn), 2002–200 6 • Market positioning of top 10 companies, 2007 • Top ten companies’ growth & profita bility • Household broadband penetration in Europe, 2007 and 2010 • AT&T - Company s napshot - Key milestones - SWOT analysis - Financial performance ($bn), 2003-200 7 - Business segments performance ($bn) 2005-2007 • Verizon - Company snapshot - K ey milestones - Financial performance ($bn), 2003-2007 - SWOT analysis - Busines s segments performance ($bn) 2006-2007 - Performance by geography, 2005–2007 - Rev enue break-up by geography, 2007 • NTT - Company snapshot - Key milestones - SWOT analysis - Financial performance ($bn), 2003-2007 - Business segments performanc e ($bn) 2005-2007 • Deutsche Telekom - Company snapshot - Key milestones - SWOT an alysis - Financial performance ($bn), 2003-2007 - Business segments performance ($bn) 2005-2007 - Performance by geography, 2005–2007 - Revenue break-up by geogra phy, 2007 • Telefonica - Company snapshot - Key milestones - SWOT analysis - Finan cial performance ($bn), 2003-2007 - Business segments performance ($bn), 2005-20 07 - Performance by geography, 2005–2007 • France Telecom - Company snapshot - Key m ilestones - Key milestones (cont’d) - Financial performance, 2004-2007 - Business segments performance ($bn), 2005-2007 - Performance by geography, 2006–2007 - Reve nue break-up by geography, 2007 • Vodafone - Company snapshot - Group’s key mileston es - Key milestones (cont’d) - Financial performance ($bn), 2003-2007 - Business s egments performance ($bn) 2006-2007 - Performance by geography, 2005–2007 - Revenu e break-up by geography, 2007 • China Mobile - Company snapshot - Key milestones Financial performance ($bn), 2003-2007 - Performance by services ($bn), 2006-20 07 • Telecom Italia - Company snapshot - Key milestones - Financial performance, 2 004-2007 - Business segments performance ($bn), 2006-2007 - Performance by geogr aphy, 2005–2007 - Revenue break-up by geography, 2007 • Sprint Nextel - Company snap shot - Key milestones - Key milestones (cont’d) - Financial performance ($bn), 200 3-2007 - Business segments performance ($bn), 2007

TECHNOLOGY The Top Ten Telecom Service Providers Positioning, performance and SWOT analyses

Positioning and performance of top ten companies AT&T is the market leader with the total revenues of $118.9bn. AT&T, Telefonica and China Mobile had registered maximum growth in the last five years and had high operating margin in the fina ncial year 2007. Verizon, France Telecom and Telecom Italia registered high oper ating margin (in the range of 15 - 20%) in the last financial year but grew at s lower pace in the last five years. Figure 2.2: Market positioning of top 10 companies, 2007 Size of bubble = Revenue (2007) 40% High Growth Low Margin 30% Revenue CAGR (200 3 - 2007) Sprint Nextel 20% Verizon 10% Low Growth Low Margin DT France Telecom NTT 0% -5% -10% Operating Margin 2007 Vodafone 5% 15% Telecom Italia 25% 35% 45% Low Growth High Margin High Growth High Margin Telefonica China Mobile AT&T Source: Company Information, Business Insights Business Insights Ltd 32

Business segments and services NTT has the following business segments: Regional Communications Business The regional communication business includes NT T’s local fixed-line telecom operations and is conducted by its wholly owned subsi diaries, NTT East and NTT West and 109 other companies. NTT East caters primaril y to the Tokyo region and NTT West caters to the western and southern regions of Japan. The regional communications business contributed 34.0% of the total reve nues for the financial year ended 31 March 2007. Long Distance and International Communications Business The long distance and in ternational communications business includes national and international fixed-li ne telecom services, IP network services and ICT solutions services. NTT’s wholly owned subsidiary, NTT Communications and 50 other subsidiaries across the globe, provide these services. The segment has its operations in various foreign marke ts such as the US, Europe, Australia and parts of Asia. Long distance and intern ational communications business contributed 10.8% of the total revenues for the financial year ended 31 March 2007. Data Communication Business NTT’s data communication business is conducted by NTT’s publicly traded subsidiary, NTT Data. NTT has 54.2% stake in the company. The gr oup’s data communication business includes data communication services including s ystem integration and network management services. Data communications business contributed 8.1% of the total revenues for the financial year ended 31 March 200 7. 67

Expanding business customer base In 2007 strengthened its sales and marketing se rvices to corporate customers and launched several mobile based services, such a s Trade & Business Express, the Supply and Sales Information Service and the Fin ancial Information Express. Expansion into emerging markets China Mobile plans to increase its international presence in emerging markets. In 2007, it acquired Paktel, the fifth largest mo bile operator in Pakistan, China Mobile’s first entry into emerging markets and th e start of a likely emerging markets portfolio. SWOT analysis Figure 10.22: China Mobile SWOT analysis Strengths Weaknesses Dominant position in domestic mobile communications market Strong performance an d healthy financial position Network coverage and quality Strong brand Service portfolio Opportunities Threats Rural Markets Value added services 3G Emerging Markets Regulatory changes Future competition Source: Author analysis Business Insights Ltd 148

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