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Country-Specific Market Information

for the U.S. Commercial Service’s

Platinum Key Service for U.S. Mobile Technologies SMEs

Belgium

Bulgaria

France

Germany

Greece

Ireland

Israel

Italy

Portugal

Romania

Spain

Sweden

Turkey

Ukraine

Belgium

Belgium’s medium-sized telecom market benefits from comprehensive DSL and cable networks, a strong cable-TV sector, and effective competition in the broadband and mobile telephone markets.

With 12.8 million devices in use, the Belgian mobile telecom market grew by 2.9% in 2010 to reach a market value of $6.3 million. In 2015, it is forecasted to reach $6.6 million, a 5.7% increase, with approximately 13.2 million devices in use.

Licensed mobile network operators (MNOs) (for 3G)

. Belgacom/Proximus (market share of 41%)

. Mobistar (France Telecom) – second largest (FR) – (market share of 31%)

. BASE (KPN Group Belgium) – (NL)

. Telenet Tecteo Bidco (recently granted the 4th license)

And multiple other “Mobile Virtual Network Operators” (MVNOs) that use the networks owned by the above companies. The total market share of MVNOs is 1.8%.

Prepaid users account for 48% of SIM cards in Belgium.

The mobile telecom market is regulated by the Belgian Institute for Postal services and Telecommunications (BIPT) which aims to encourage competition and protect consumer interests in addition to preparing legislation regarding the postal and telecom sectors. This group also distributes licenses to the MNOs and has recently concluded a bid process for the Belgian 4G network, with licenses going to Belgacom, BUCD, KPN group Belgium, and Mobistar with services starting July 1, 2012.

Doing Business in Belgium: 2012 Country Commercial Guide for U.S. Companies

Bulgaria

As Bulgarian companies must increase their competitiveness in the EU, and the Bulgarian Government must comply with EU directives and legislation on various aspects of the digital economy, new and expanded opportunities exist in the ICT sector. Bulgaria has long traditions in the IT sector and electronics with a large pool of IT experts.

A number of foreign companies are opening call/service centers in Bulgaria. There are opportunities for participation in tenders for sale of computers, peripherals, servers and other hardware technologies for government procurement. Moreover, the Bulgarian Government and many private companies have various information and communication initiatives that will provide major opportunities. The EU Operational Program on Regional Development has funding for broadband access for remote areas. The EU Operational Program on Administrative Capacity will provide funds for the e-government project.

Best prospects for U.S. providers include internet services, broadband Internet access technologies, cable television, routers, switches, access servers, equipment for mobile telephony, cable operators’ equipment and others.

Doing Business in Bulgaria: 2012 Country Commercial Guide for U.S. Companies

France

The IT and telecommunications market is currently being supported by the broadband, wireless and mobile telephone sectors, which should continue their rapid growth and further drive the industry. The French broadband market is going through an amazing phase of growth and convergence. The number of traditional wire line broadband connections to French residences is increasing steadily, dominated by ADSL. Use of broadband-capable, also known as “Third Generation,” cell phones, is also growing, as manufacturers aggressively target a maturing French mobile market. The 4G is on its phase of deployment from several telephone operators. The Wireless broadband connectivity is increasing as well, especially through the spread of public hot spots. France is among the 5 largest markets – the UK, Germany, France, Spain and Italy experiencing robust growth in broadband penetration.

Mobile and Internet Mobile usage in France have traditionally lagged behind the European average, but the country has been catching up in recent years. The number of mobile subscribers reached 63.2 million as of December 2010, and approximately 22.5 million subscribers to 3G services, an increase of 27 percent compared to 2009.

French business and consumer commitment to mobility and broadband consumption is clear. French consumers, particularly the young generation, seem to adapt fully to the continuing convergence of technologies. Consumer demand for mobile products, broadband technology, and services such as video on demand, mobile television, music and videophones is increasing. Also the exact combination of standards (UMTS, Wi-Fi, WiMax, 4G/LTE, RFID, etc) within French telecoms infrastructure continues to be rapidly implemented.

As broadband and wireless demand matures, the French market for telecom infrastructure, equipment, and support services will offer many exciting prospects for American exporters.

Security is a major concern for French consumers in regards to their online activities. French consumers have shown a willingness to pay more for equipment or services with better security. As broadband and mobile usage increases, so will the demand for protection of online transactions and the need for solutions to all Internet threats (spam, viruses, fraud etc.).

Doing Business in France: 2012 Country Commercial Guide for U.S. Companies

Germany

Accounting for 18.1% of the European mobile phones market value, the German Mobile market grew by 5% in 2010 reaching a value of $5,125 million. The market experienced a slight decline in 2009, but has experienced strong growth in recent years. In 2015, mobile devices are expected to increase by 21.5% to 44 million units and the market value by 32.7% to $6.8 million.

Doing Business in Germany: 2012 Country Commercial Guide for U.S. Companies

Greece

The telecommunications sector continues to be in a consolidation phase. This entails the provision of total telecommunication services by the network operators, combining fixed, mobile, and internet services and media. The sector is undergoing the unbundling of the local loop (LLU) from dominant fixed-line operator, OTE, and is witnessing a firmer and more proactive stance of national regulatory authority EETT (National Commission for Telecommunications & Post), and its growth potential has attracted foreign investors.

The relatively mature mobile market consists of three operators: Cosmote (part of OTE), Vodafone, and Wind in coordination with Q-Telecom. Mobile penetration surpassed over 15 million lines in use. Mobile penetration is estimated at 139 percent.

Given the situation, mobile operators in Greece are focused on maintaining and growing ARPU (Average Revenue per User), via competitive price offers and bundles, as well as value-added services. As the data users constitute only 11 percent of the entire base, this leaves ample room for content and data services growth, as well as usage increase.

It is important to mention that in November 2011 the Hellenic Telecommunications and Post Commission (EETT) successfully completed the spectrum auction process for mobile communication services in the 900 MHz and 1800 MHz bands by yielding a total sum of 380,535,000 euros. The three concession holders, Cosmote, Vodafone-Panafon and Wind, have allocated all available blocks in the 900 MHz and 1800 MHz bands for a period of 15 years. The allocation of said spectrum rights until the year 2027 is expected to promote the development of high-speed wireless broadband technologies, such as 4G and LTE, foster the growth of the market via the competitive provision of new services, and contribute to the bridging of the +digital divide+ between urban and rural areas in Greece."

Doing Business in Greece: 2012 Country Commercial Guide for U.S. Companies

Ireland

Ireland is one of the biggest global exporters of software and communications technology, with the ICT industry accounts for a larger share of the economy than in all other EU countries except Finland. In 2010 mobile devices numbered 5.3 million. There are 5 major operators in the mobile telecom market with an estimated 127% market penetration in 2010, expected to reach 137% by 2015. It is reported that a growing number of users have more than one subscription, often having multiple lines for business and private usage.

Doing Business in Ireland: 2012 Country Commercial Guide for U.S. Companies

Israel

Israel is a highly urbanized, technologically literate society. Israelis are used to having world-leading technology in many fields, and mobile phones are no exception. The Israeli telecom market is relatively stable in terms of size, with growth projected to go from $6.9bn in 2010 to $7.1bn in 2015. Over the next five years, the majority of growth in the Israeli telecom market will arise from fixed and mobile broadband, VoIP, and pay-TV.

Cellcom, Pelephone, Partner Communications/Orange, Hot Mobiles and Golan Telecom are the current mobile network operators. Golan recently won the Mobile Operator's License and is in the midst of mobilizing the development and construction of the new mobile operator on all engineering, service and operational fronts. In addition there is a growing number of Mobile Virtual Network Operators.

Israel’s very high broadband penetration rate provides great potential for triple play and digital media technologies. Another area of development is the Fixed Mobile Convergence (FMC) market. The mobile market continues to search for new and innovative applications such as value added services for its customers. Opportunities are in the IP Networks – Voice, Video, Data and Multimedia, FMC, IPTV, Wi-Fi, WiMAX and VOB. As the Israeli telecoms industry continues to expand and increase in revenue and with the introduction of new technologies, the market will continue to offer many opportunities for U.S. exporters.

Doing Business in Israel: 2012 Country Commercial Guide for U.S. Companies

Italy

The Italian market for telecommunications equipment and services is the third largest in Europe. Italy is also the second largest mobile communications market in Western Europe and one of the most advanced. Mobile phone diffusion in Italy is among the highest in the world, with 91 million active SIM cards with multiple-SIM ownership and over 46.5 million users, three quarters of the total Italian population. Italy is also one of the top countries in Europe for the number of Smartphone owners, who total 24 million and are estimated to become 30 million by the end of 2012.

At the end of 2011 all four mobile network operators in Italy - Telecom Italia, Vodafone, VimpelCom's Wind and H3G (Hutchison Whampoa Group) – participated in the country’s spectrum auction and paid a total of USD 5.2 billion for blocks of spectrum in the 800MHz, 1800MHz, 2GHz and 2.6GHz bands. This will enable them to develop next-generation, ultra-broadband mobile networks based on LTE (Long-Term Evolution) technology, providing a greater range of advanced mobile services and high-definition multimedia content at the same time, with data transmission speeds of more than 100 Mbit/s. First commercial launches are expected during 2012 and full deployment in 2013. Over the next few years, Italian MNOs are planning to invest USD 8 billion to develop LTE networks. These networks will improve national broadband connectivity while spearheading the valuable mobile data sector through the offer of new, technologically-advanced services that meet the needs for increasing quantities of traffic generated by cellphones, USB dongles, smart phones and tablets.

Best prospect areas include cloud computing, unified communications, mobile commerce, mobile payment, mobile security solutions, mobile marketing & services, and mobile applications.

Doing Business in Italy: 2012 Country Commercial Guide for U.S. Companies

Recent Market Research:

Mobile Payment Industry, July 2012

Mobile Marketing Industry, July 2012

Long Term Evolution Industry, July 2012

Italian Digital Agenda, July 2012

Portugal

The mobile telecom market in Portugal is smaller compared to the rest of Europe mainly because of its smaller population and lower income levels. In 2010, mobile subscriptions numbered about 16 million, with the growing trend of multiple subscriptions per user. Portugal has a high mobile subscription penetration rate of 161%. In the past few years, there has been dramatic growth in smartphones and the adoption of 3G technology as an alternative to internet access over traditional desktop computers. The economic recovery is expected to rely heavily on telecommunication technology growth.

Doing Business in Portugal: 2012 Country Commercial Guide for U.S. Companies

Romania

Although below western European standards, Romania has made significant progress in all of the information and communications technology (ICT) subsectors, including basic telephony, mobile telephony, the Internet, IT hardware, and software and services. The rapid growth in ICT will be supported by the country’s large pool of skilled labor. Romania is the second largest telecom market in central and eastern Europe after Poland and is the 7th largest market in the EU, making new operators very interested in the industry.

With penetration rates below most EU averages, the Romanian market has significant opportunities to generate highways for growth in all of the major service areas, especially mobile broadband. In 2010, total number of mobile subscribers was estimated at 29.4 million and a penetration rate of 137%. This rate is higher than the EU Average, while the mobile broadband rate was much lower with an average of 12%, compared to than the EU average of 35%.

There is a tremendous demand for high-speed connections, a boom in traffic data, demand for TV and video services, and a shift from voice to video and multimedia networks. Statistical data shows that the average talk time us up, the number of text messages is up, and the volume of data is up, proving an efficient market in terms of volume and usage.

There is tremendous opportunity in the near future for mobile broadband. In 2011 the industry witnessed avid competition for the engine of growth for mobile broadband internet, with 10 million 3G subscriptions. By year’s end, Romania will hold an auction that will decide what cellular phone operators will remain on the market until 2029. If the auction ends successfully, Romania will have 4G services by 2014. According to a NSN forecast, by 2020, smart phone traffic will grow by 30 times, and there will be approximately 2.7 million 4G subscriptions. Romania is a large market where people are tempted by innovation and adopt new technologies very quickly.

Doing Business in Romania: 2012 Country Commercial Guide for U.S. Companies

Spain

The ICT sector in Spain is clearly affected by the overall economic situation in Spain, as major investment decisions and in IT upgrades were reconsidered or postponed. This has been particularly relevant in the public sector. Nevertheless, Spain is one of the largest economies in the European Union, and industry specific solutions will continue to find good opportunities in the private sector. The United States is considered a supplier of innovative products and services.

In the telecommunications area, Telefonica is the dominant player in most market niches. Telecommunication services in Spain have undergone a consolidation process in recent years that is expected to continue in the near future, including that of large media groups.

The consumer area will benefit from increased penetration of Smartphones, offering opportunities for multiple digital apps. In the corporate area cloud services, Machine-to-Machine technology (M2M) and information security are expected to evolve positively in coming years.

Doing Business in Spain: 2012 Country Commercial Guide for U.S. Companies

Sweden

TeliaSonera is the largest provider of fixed telephony in Sweden with a market share of 61.5%, followed by Tele2 (11.8%), ComHem (8.1%) and Telenor (7.5%). Demand for fixed line services continues to decrease in Sweden in favor of mobile telephony. Mobile phone penetration is extremely high in Sweden, 97% of the Swedish population have mobile phones. Including MVNOs (Mobile Virtual Network Operators), there are over 20 service providers in the mobile telephony market. TeliaSonera is the dominant player with 41% of the market followed by Tele2 (30.9%), Telenor (16.2%), and Hi3G (9.3%).

IP telephony is gaining ground, both in the corporate and consumer markets, and represents 27% of the fixed telephony market.

Best prospects include wireless broadband, ip telephony/tv, wireless communications software, and content software.

Doing Business in Sweden: 2012 Country Commercial Guide for U.S. Companies

Turkey

The Turkish ICT market continues its rise as one of the key growth markets in Turkey with an anticipated growth of 8-10% for 2012. The Telecommunications sector is estimated at $25 billion. Although the industry has shown slower growth than in the past (with the exception of the 2002 crisis) investors still see the Turkish ICT market as a significant opportunity with increased investment in channels and local production.

The three GSM cellular operators, Turkcell, Vodafone and AVEA and the fixed line operator Turk Telekom invested in equipment and services at a total value of $3 billion to expand their services. Turkcell has almost 36 million subscribers (56.6 % of the total GSM cellular subscribers), Vodafone has 15 million (24.5% of the subscribers) and AVEA has 12 million almost 18.9% of the subscribers).

The total number of GSM cellular service subscribers reached almost 65 million with an approximate penetration rate of almost 89 %. The total telecom equipment and service market grew to $20 billion and is expected to expand in 2012 as the GSM sector is the driving force and the subscribers are expected to use more and more 3G services. Total number of 3G subscribers reached to almost 6 million while 2G subscribers decreased to 57 million. Fixed line subscribers are almost 17 million, reaching almost 100% penetration per house basis.

BTK estimates that Turkey imports approximately 10 million mobile handsets every year. Many subscribers continuously change their cell phones with new models sustaining consistent growth in the handset market. Apple’s iPhone has been extremely successful in the market in the past two years.

GSM cell phone sets suitable for video downloading and TV broadcasting equipped with wide band Internet access will be the driving force for growth in this sector. These new technologies will be the basis for the enhanced 3G and 4G operations.

Doing Business in Turkey: 2012 Country Commercial Guide for U.S. Companies

Recent Market Research:

ICT Market, August 2012

Ukraine

Ukraine is the 5th largest telecommunications market in value for central and eastern Europe. In 2010, Ukraine had an estimated 122.4 million mobile subscriptions and a mobile penetration rate of 120%. The market for 3G services is below central European levels accounting for only 1% of subscriptions in 2008. However, rapid growth is expected in mobile broadband and 3G services mainly because of the recent emergence of a middle class and a growth in real incomes in the last decade. The absence of 3G licenses prevents the segment development. Mobile penetration is expected to reach 132.2% in 2015.

Sector facts:

. An average user (all operators) spends about $0.5 per month on calls and text messages

. Market volume in 2011 was $3.85bn (+6%yoy; $4bn forecast for 2012)

. Sector growth rate lower than inflation rate