The European Mobile Market There are many issues to consider when entering Europe with a view to selling mobile content services. Whether you are operating in a single European country today or are an non-European country but wish to have access to a wider European consumer base the following provides some pointers that customers have found to be insightful. Please note that this is a summary of some characteristics that past customers have found to be valuable considerations. Europe while a single continent is made up of many very individual countries. In comparison to the US which is made up of many states the states have much less influence on doing business whereas in Europe the countries due to cultural, language, business practices have a major impact. The net effect is that it is very important not to treat Europe as one business area - local contacts/partners in most countries are essential. There are really only 2 pan-European mobile operators, Orange and Vodafone. All others are regional and make decisions in their local countries. Even for Orange and Vodafone it is frequently important to make local country agreements. However Vodafone Live! has helped to at least centralise some activities however the offering in each country even for Vodafone Live! is different due to language difference and consumer preferences. The net effect is that there is a need to make many agreements with many companies - an agreement with 1 or 2 players, while a good start, is not seen as sufficient in the long run. The main source for consumers to get mobile content today varies greatly per country in Europe. In the US the mobile operators dominate as the source consumers turn to in order to buy mobile content services. In many parts of Europe this is also the case however in the most open mobile markets (the UK and Scandinavia in particular) the operators provide less that 50% of the total mobile content consumed by consumers, in fact closer to 25%. Independent companies selling directly to consumers provide the majority of mobile content in the UK and Scandinavia. Italy on the other hand is more like the US with the operators providing about 85% of the mobile content to consumers - however this is now changing and the role of independents is about to grow. The net effect is that in several countries the mobile operator is not the key customer or distribution partner for a company wishing to sell mobile content to consumers. This is especially true for downloadable products such as ringtones, icons and java services be they mobile games or productivity tools. Due to the number of potential distributors/marketers and the number of mobile operators a business entity that we call mobile content aggregators has grow in importance in Europe and now also in the US. These companies sell the mobile services of others and have a very broad portfolio of services that they provide on a white label basis. There are several such companies and some of these are important to use in order to gain access to many customers and markets. They do require a sales margin but open up a much larger addressable market without the sales costs and thus generate more revenue to the application/content provider. The net effect is that for entry into several markets and also for faster entry into several customers the use of aggregators is often recommended and used. However it is important to choose the right partner - many develop their own services and may in fact by competing. Others aggregate the services of many providers and do not "work" on your behalf in the way you may require. The revenue sharing model can be very different between companies. In the US the revenue share model is more or less established and as per BREW approximately 80% of the mobile content sales value going to the service creator/developer. In some cases this is now also established practice in Europe however with some operators, for example O2 they charge an, albeit small, fee so as to ensure the service will be sold in their portfolio. For non-operator distributors of mobile content the revenue share model is closer to a 50:50 split and in some cases even less for the application owner - all subject to negotiations and the type of product you are providing. In some cases however where the content provider has a very strong brand the content provider can maintain over 80%. The net effect is that all agreements need to be made individually and the boundaries for the revenue share etc. well understood. Mobile content pricing is becoming uniform in the US market whereas it is different from country to country in Europe. For example in the UK a typical ringtone will cost about $4.50 and even more in many cases whereas in Scandinavia the same product will cost the consumer about $1-1.5. This will most likely mean different pricing points for your product in different European countries - something we review with each local country customer and representative. The above information was designed to provide a very brief backdrop to the market so as to better understand the differences and some of the challenges and also so as to clarify how we will work so that you can more clearly understand our role in assisting your business. There are many other issues when working with these markets and we will ensure we represent your interests fully based on our experience.