3G Trends - The Coming of a Price War

The entry of 3G challengers with plenty of capacity on the market will most likely lead to a price war. Northstream expects prices to come down more quickly and drastically for 3G than it did for its forerunner GSM. This change in the competitive situation is the most important factor for wireless operators during 2003.

Inset shows Northstream's multinational team of wireless experts.

- What we see is that established players are delaying 3G and
infrastructure investments while prioritising service development and
launch, said Bengt Nordström, CEO Northstream, today at the "Mobile Market
Analysis and Forecasts " seminar at the 3GSM World Congress. - But the
present growth of MMS, imaging and other data services is now quickly
increasing the need for additional network capacity and, subsequently,
bandwidth. Meanwhile, 3G challengers will enter the market with plenty of
capacity allowing for a dumping of prices. Northstream foresees a cautious
but steady expansion of 3G over the coming years. The growth rate will be
determined by a number of factors:

· 3G is currently in an intense build-up phase all over Western Europe and
in many other places in the world.
· An inevitably growing demand for increased bandwidth, caused by an
increasingly rich communication experience and richer content services,
will drive 3G.
· The implementation of 3G is thus a gradual process where more and more
consumers over time will make use of relevant services delivered using 3G.
· Volume rather than high prices will create revenue in future 3G markets.
The 2G service experience shows a limited potential for increasing prices.
This will put pressure on operators to be creative in service innovations
and marketing to achieve the volumes needed.

The success of individual operators and service providers will be determined
by how well they handle these key factors for success:

· Innovativeness - How to continuously create attractive services and How to
make increased spending an enjoyable and useful exercise?
· Efficiency - How to manage operational costs while investing in new
services
· Customer attention - How to ensure that customers turn to you for their
mobile communication and digital services

- From the Northstream point of view as strategic advisor, it is clear that
a number of operators and manufactures are now working much harder at
crafting their strategies. That, if anything bodes well for the future, said
Bengt Nordström.

This Press Release Sponsored by AGILENT TECHNOLOGIES

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