Mobile Communications Services Market Analysis for România

1. MARKET AREA

The market of mobile phones has known a rapid increase during recent years, and will continue to expand as each market member aims for leadership. There are four major providers of mobile phone services today, as follows:

Orange România is Romania 's largest GSM network operator , the subsidiary of Orange SA. It is now fully owned by the France Télécom Group (who owns Orange SA), the biggest initial investor, who gradually increased its ownership.

Between 1997 and April 2002, they operated under two brand names Dialog (for monthly subscription plans) and Alo (for prepay services). In 2002, after France Télécom gained a majority stake it was re-branded to comply with the group's global strategy. At March 14 2006 , Orange Romania has 10,000,000 subscribers.

Orange leads the Romanian market with 8 million customers at the end of 2006 and is part of the Orange Group, one of the largest communications companies in the world, operating in 18 countries. At the end of 2006, Orange Romania had a turnover of more than 1 billion euros and 8 million customers. To stay close to its customers, Orange has developed a wide network of shops which now includes 42 locations all over the country and a concept store.

key figures on 12/31 2004 2005 2006 2007

personal communication services

Market penetration rate* 83 % 86 % 79 % 96%

Orange network coverage (in %)** 97 % 97 % 97 % 97%

Number of customers (000)s** 4 938 6 823 8 043 9 813

Number of broadband customers (000)s - 46 383 1 012

Market share* 48,3 % 51,6 % 46,0 % 43,6%

Vodafone is Romania 's second-largest mobile phone network operator. It launched in April 1997 as the first GSM network in Romania (although not the first mobile phone network). Until October 2005 , it was known as Connex, after which it was rebranded Connex-Vodafone and in April 2006, the Connex name was dropped, the operator being simply known as Vodafone Romania, aligning itself with the global Vodafone brand.

Vodafone covers 95% of the Romanian population, with over 8.23 million subscribers at June 30th 2007 and 45% market share.

Its network coverage is:

Cosmote România is a Romanian mobile phone operator. It has become the third mobile phone operator in the country, following Orange Romania and Vodafone Romania after surpassing Zapp Mobile. It is a GSM network and it reached 3.000.000 subscribers in October 2007 with an estimated market share of around 10%.

It started operations under the brand name Cosmorom, but was re branded as Cosmote România in 6 December 2005, after the takeover by the Greek Cosmote in August 2005.

Its network coverage is :

Zapp Mobile is the only CDMA2000 mobile phone operator in Romania , since the country's market leaders use GSM. Overall, Zapp is the fifth largest network operator in the country and the 4th mobile operator. Zapp has around 500,000 subscribers, giving the CDMA network around 2% market share. It is also the only EV-DO mobile data operator in Romania, with a number of more than 85.000 customers.

As it is a service whose sales do not depend on geographic factors,it is difficult to establish regional sales.Instead ,each company has an evidence of its local sales, meaning sales in each city.

2. MARKET STRUCTURE

Mobile phones do not have an exactly define target market. Due to the service they provide, they address the general consumer, from children to adults and also elder people. Their target market isn’t focused on income, age, sex, education, profession or other criteria.

The mobile phones are used by all categories of consumers, natural and legal persons. There are also many households that disconnect their home phone as the inhabitants each purchase and use a mobile phone.