Mobile Market Overview

December 2009
 UK Top 20 handsets (installed base)
The Top 10 handsets represent c. 21% of the UK devices; Top 20 = 31%
Market
Rank OEM Model Subscribers Share

1 Nokia 6300 1,562,295 3.4%

2 Apple iPhone 1,329,511 2.9%
3 Nokia N95 1,119,500 2.4%
4 Nokia 6500 1,049,200 2.3%
5 Samsung SGH-G600 1,045,005 2.3%
6 Motorola RAZR V3 961,734 2.1%
7 Nokia 5800 880,222 1.9%
8 Samsung Tocco SGH-F480 688,421 1.5%
9 Sony Ericsson K800i 656,518 1.4%
10 Samsung SGH-U600 555,447 1.2%
11 Samsung SGH-J700 539,880 1.2%
12 Nokia 2630 525,638 1.1%
13 Sony Ericsson W810i 516,843 1.1%
14 LG Cookie KP500 480,824 1.0%
15 Nokia 1100 460,844 1.0%
16 Sony Ericsson W910i 459,967 1.0%
17 Samsung SGH-E250 442,437 1.0%
18 Samsung Soul SGH-U900 442,144 1.0%
19 Sony Ericsson C905 432,748 0.9%
20 RIM BlackBerry Curve 403,128 0.9%
Note:
iPhone includes 3G and 3GS
N95 includes N95 Plum, N95, N95 8GB
6500 includes Classic & Slide
SGH-G600 includes Pink
RAZR V3 includes V3 Ice Blue, V3i Dolce & Gabbana, V3i Orchid, V3xx i-mode, V3i Maroon, V3x, V3i Deep Violet, V3 Lilac Mauve, V3 Cosmic Blue, V3xx, V3 Pink, V3i, V3 Silver, V3 Black Edition
SGH-U900 includes SGH-U900v
Curve includes 8320 Sunset, 8520, 8320, 8310 Red, 8320 Titanium, 8310, 8300, 8900

Source: ComScore Sept 09, Incentivated Analysis

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 Smart phones in the UK
[Strong growth of Smartphones; Google, Apple and RIM take share]

Number of Smart Phones subscribers in the UK (000s) Breakdown of Smart Phones in the UK
(Average number of subs for the 3 month ended) (Adults 13+ for the 3 months ended Sept 09)

9,000
Google Palm
Microsoft 2%
8,000 0%
12%

7,000

6,000
+42%
RIM
YoY 12%
5,000

4,000

3,000
Symbian
58%
2,000
Apple
16%
1,000

0
Sep 08 Sep 09

Source: ComScore. Note, Operating Systems: Microsoft or Palm or RIM or Symbian or Apple or Google

3
 3G Penetration in the UK
[3G now has nearly 30 active connections per 100 population]

Active Connections per 100 population (includes dongles)

35

30

25

20

15

10

0
2003 2004 2005 2006 2007 2008

Source: OFCOM August 2009.

4
 Network Operator Market Share in the UK
[OFCOM continues to review Orange & T-Mobile merger of UK business]

Mobile subscriptions market share, by network operator (millions)

(Total number of subscriptions = 77 million)

3UK
6%

O2
Orange 28%
21%

T-Mobile
22%
Vodafone
23%

Source: OFCOM, August 2009. Note: O2 includes Tesco Mobile; T-Mobile includes Virgin mobile

5
 Contract type in the UK
[Prepay still dominant, but declining market share]

Postpay versus prepay contracts in the UK

100%

90%

80%
Prepay
70%

60%

50%

40%

30%
39%
Postpay
33%
20%

10%

0%
2003 2008

Source: OFCOM, August 2009.

6
 Data & SMS revenues as a % of Mobile Revenue
[Pure data revenue is now worth over £1 billion in the UK]

Data and SMS revenues as a % of Total Mobile Revenue

20%
DATA SMS
18%
+ 9%
16%

14%

12%

10%

8%

6% + 241%
4%

2%

0%
2004 2008

Source: OFCOM, August 2009.

7
SMS used by all age groups
[SMS is becoming the entry point for many mobile marketing campaigns]

SMS by age and gender; % penetration

100%

90%

80%

70%

60%

50% Female

Male
40%

30%

20%

10%

0%
13-17 18-24 25-34 35-44 45-54 55+

Data: Three month average ending June 09

Country: UK - N= 13,997

8
 Development of Messaging volume in the UK
[SMS messaging volume continues to grow rapidly]

Billions of Messages sent

SMS (Left hand scale) MMS (Right Hand Scale)

100 1.0

90 0.9

80 0.8

70 0.7

60 0.6

50 0.5

40 0.4

30 0.3

20 0.2

10 0.1

0 0.0
2003 2004 2005 2006 2007 2008

Source: OFCOM August 2009.

9
 Mobile internet usage
[Strong growth in mobile internet usage in 2008 ]

Subscribers
12,000,000

+28% growth
11,000,000 in 2008

10,000,000

9,000,000

8,000,000

7,000,000

6,000,000
Dec 05 Jun 06 Dec 06 Jun 07 Dec 07 Jun 08 Dec 08

Source: Comscore 3 month rolling average

10
 Growth of Market Enablers
[Changing consumer behaviour driven by enhanced experience]

Growth of Mobile Enablers

Enhanced consumer experience triggered by growth of market enablers (UK for the 3 month-average ended June 09)

40%

FLAT RATE Affordable contracts

PRICING 35%
Removed cost uncertainty + 26%
30% 3G
BETTER Higher speed, new technology
NETWORKS 25%
Location Based Services

20%

BETTER Better choice

HANDSETS 15%
Better GUIs, halo effect of iPhone Smartphones + 32%
10%
BETTER Better choice
Unlimited
CONTENT Optimised for mobile, halo effect of iPhone 5%
Data + 84%
0%
Jun 08 Jun 09

Source: ComScore. Product: MobiLens Data: Three month average ending June 09

11
 2008 total mobile ad spend breakdown
[Search and Banners represent over 90% of market]

2008 Mobile Ad Spend Breakdown (£m)

Banners &
Text Links
Search £11.7m
£14.4m (41%)
(50%)

Tenancy
£1.2m (4%)
SMS, MMS Pre/Post Roll Total market
£1.0m (4%) + In Game £28.6m
£0.4m (1%)

Source: IAB / PwC mobile display ad spend survey 2008; search spend figure derived from modelling and industry estimates
Figures do not include SMS / MMS production and delivery costs, and other mobile marketing revenues
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 Mobile expenditure resilient in recession
Only spending on groceries and personal care less likely to be cut

Items where consumers are most likely to cut back their spending.

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Nights / Meals out

Holidays / week-ends away

New furniture or home improvements

Health club membership or sports
Music, books, DVDs
Clothing or Footwear

Newspapers or Magazines
Television subscriptions

Home, Mobile and Broadband * Communications products

Household groceries / essentials ** Household essentials

Source: Ofcom, Aug09

Note: Items mentioned as 1st, 2nd or 3rd choice. *Average of the three categories ** Average of the two
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