How Do You Compare With Your Peers?

The PricewaterhouseCoopers 2006 Wireless Industry Survey — EMEA and Asia-Pacific

16 November 2007 — With the Communications industry continuing to change at a rapid pace and with industry barriers evaporating, companies are reshaping themselves to compete in a fiercely competitive environment.

To help companies better understand the current and emerging trends within the wireless industry, PricewaterhouseCoopers today publishes the findings of its “PricewaterhouseCoopers 2006 Wireless Industry Survey, EMEA and Asia-Pacific.”

Paul Rees, Global Communications Industry Leader commented:

“With over 2 billion new mobile subscribers predicted in the emerging markets over the next 5 years this continues to be an industry in the midst of flux and change. New services offerings such as mobile TV and a continued push towards wireless broadband are challenging mobile companies to adapt their business models in order to cope with the evolving industry.

“Perhaps one question operators should be asking themselves is whether the metrics, needed to accurately assess and report their performance have kept pace with the ever changing market conditions and demands.”

Key Observations

• Performance measures and revenue:

  The performance measures used do not appear to have changed notably in the past few years with companies continuing to report ARPU (average revenue per user), MOU (minutes of use), CPGA (cost per gross addition), customer numbers and churn. There did not appear to be a consensus over which metric operators use to track data usage and performance.

• Legal and Regulatory:

  One of the most significant areas of change for EMEA and Asia-Pacific highlighted in this survey, compared with 2003, is the increased level of regulation that has been introduced. Most notable are the Sarbanes-Oxley Act, which is relevant to wireless operators that are listed in the US, and the requirement for many EMEA and Asia-Pacific operators to convert their external financial reporting to International Financial Reporting Standards (IFRS). Compliance with these new regulations has caused significant costs for the operators.

• Property, plant and equipment:

  Consistent with 2003, impairment continued to be a theme with 69% of the respondents recording an impairment charge in the year. This was triggered by technological advancements including the planned rollout of Next Generation Networks together with the impact of network outsourcing.

• Data Services:

  Total revenue from data services continues to be less than 10% for all respondents. However, it is still viewed as an important driver of the forecast increase in overall revenue and ARPU. Short message service (SMS), and phone/Blackberry-based e-mail and Web access are the data revenue streams that generated the majority of revenue for the carriers: a disparity continues to exist in how customers are billed for data services.

• Compensation:

  The majority of respondents (63%) have not made any changes to their compensation strategies as a result of the new requirement to record a compensation expense in the income statement following the adoption of IFRS2, Share-based Payments (IFRS2) or its equivalent, for the first time in 2005 and 2006. The results contrast with the results from PricewaterhouseCoopers’ North American Wireless Survey, where most of the responding companies indicated they had decreased the issuance of stock-based compensation after adopting SFAS 123R in 2006.

1. Copies of the 2006 Wireless Industry Survey – EMEA and Asia-Pacific are available from Angela Bolzonello, by email: .
2. Soft copies of The 2006 Wireless Survey – North America are available from Angela Bolzonello, by email: .
3. The survey results represent the responses of 12 EMEA (Europe, Middle East and Africa) and 3 Asia-Pacific companies. Of the 15 companies that took part, 10 are listed on one or more public stock exchange and all 10 reported financial or certain non-financial information externally. Two of the five companies that are not listed also report externally.

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