The unlimited future of mobile music Tim Hadley, PR Director, Omnifone

Founded: 2003 CEO: Rob Lewis Staff: 75 Funding: Private Services: MusicStation, MusicStation Max Live rollouts: Europe, Asia Pacific, Africa Headquarters: Island Studios, London, UK Satellite offices: Scotland, Sweden, Hong Kong, South Africa

Founded: 2003

CEO: Rob Lewis

Staff: 75

Funding: Private

Services: MusicStation, MusicStation Max

Live rollouts: Europe, Asia Pacific, Africa

Headquarters: Island Studios, London, UK

Satellite offices: Scotland, Sweden, Hong Kong, South Africa

Omnifone Milestones 2007: Q1 2007: Omnifone announces MusicStation Q2 2007: International licensing signed with all majors European launch: Telenor Sweden Red Herring EMEA 100 Music Service Award Meffy Q3/4 2007: Asia Pacific launch: 3HK UK launch: Vodafone South Africa launch: Vodacom Red Herring Global 100

Omnifone Milestones 2007:

Q1 2007:

Omnifone announces MusicStation

Q2 2007:

International licensing signed with all majors

European launch: Telenor Sweden

Red Herring EMEA 100

Music Service Award Meffy

Q3/4 2007:

Asia Pacific launch: 3HK

UK launch: Vodafone

South Africa launch: Vodacom

Red Herring Global 100

Omnifone Milestones 2008: Q1 2008: Omnifone announces MusicStation Max Best Mobile Music Service: Global Mobile Awards Gold Award Mobile Music: Future Mobile Awards Gold Award Most Effective Use of Music: MAMAs Entrepreneur of the Year: UK Technology, Innovation & Growth Awards Q2> 2008: Multiple MusicStation rollouts MusicStation available on 100m mobile users MusicStation Desktop Edition launches MusicStation Max launches

Omnifone Milestones 2008:

Q1 2008:

Omnifone announces MusicStation Max

Best Mobile Music Service: Global Mobile Awards

Gold Award Mobile Music: Future Mobile Awards

Gold Award Most Effective Use of Music: MAMAs

Entrepreneur of the Year: UK Technology, Innovation & Growth Awards

Q2> 2008:

Multiple MusicStation rollouts

MusicStation available on 100m mobile users

MusicStation Desktop Edition launches

MusicStation Max launches

Music Revenues: Digital not compensating for 8yr physical decline: Global physical sales down 6% to $16.4bn in 2007 Global digital sales $2.9bn in 2007 (IFPI) Digital pay per track downloads slow to take off: 20 iTunes tracks for every iPod sold (Apple) Mobile pay per track: 6 mobile tracks per user per year (Groove Mobile) Predicted Mobile Music Revenue: by 2012 (Juniper) Subscription based rental services $3.3bn Original recordings delivered to mobile $2.8bn

Music Revenues:

Digital not compensating for 8yr physical decline:

Global physical sales down 6% to $16.4bn in 2007

Global digital sales $2.9bn in 2007 (IFPI)

Digital pay per track downloads slow to take off:

20 iTunes tracks for every iPod sold (Apple)

Mobile pay per track:

6 mobile tracks per user per year (Groove Mobile)

Predicted Mobile Music Revenue: by 2012 (Juniper)

Subscription based rental services $3.3bn

Original recordings delivered to mobile $2.8bn

Market Opportunity: iPhone launch driving interest >1 billion new handsets per year JAVA >75% of handsets in Europe and Asia Pacific Mobile network now larger than internet Multi-billion $ investment in 3G/HSDPA network infrastructure

Market Opportunity:

iPhone launch driving interest

>1 billion new handsets per year

JAVA >75% of handsets in Europe and Asia Pacific

Mobile network now larger than internet

Multi-billion $ investment in 3G/HSDPA network infrastructure

Mobile music services: High-end 3G contract mobiles only Slow WAP based user experience Non competitive pricing Uncertainty over data charges

Mobile music services:

High-end 3G contract mobiles only

Slow WAP based user experience

Non competitive pricing

Uncertainty over data charges

Competitive threats to operator lead music services: Online P2P, Bluetooth, communities Sideloading iPhone Nokia ‘Comes With Music’

Competitive threats to operator lead music services:

Online P2P, Bluetooth, communities

Sideloading

iPhone

Nokia ‘Comes With Music’

Next generation mobile music experience: Anytime, anywhere access on virtually any device Build connected music experience through community Facilitate music discovery and recommendations Utilise integrated billing, direct to subscriber Mass market mobile music: unlimited downloads: Cultural and generational shift away from ownership Provides legal framework for unlimited discovery, downloading and sharing Better revenue proposition for operators and music industry: doubles music revenues, long term repeatable revenues

Next generation mobile music experience:

Anytime, anywhere access on virtually any device

Build connected music experience through community

Facilitate music discovery and recommendations

Utilise integrated billing, direct to subscriber

Mass market mobile music: unlimited downloads:

Cultural and generational shift away from ownership

Provides legal framework for unlimited discovery, downloading and sharing

Better revenue proposition for operators and music industry: doubles music revenues, long term repeatable revenues

MusicStation: Unlimited music downloads, wherever you are, whenever you want, on virtually any music phone News, recommendations and community features: search, discover, play and share music Pre-installed or OTA 1.7 million tracks Priced to suit market: (weekly/price plan) No data costs No credit card needed No computer or internet needed Never lose your music again

MusicStation:

Unlimited music downloads, wherever you are, whenever you want, on virtually any music phone

News, recommendations and community features: search, discover, play and share music

Pre-installed or OTA

1.7 million tracks

Priced to suit market: (weekly/price plan)

No data costs

No credit card needed

No computer or internet needed

Never lose your music again

MusicStation Results: One new subscriber every minute >75% of those trying for free stay with the service. Low churn Arun Sarin; 500,000 track downloads in first 10 days Annualised revenues from MusicStation exceeded one operator’s pay per track service in just 9 weeks

MusicStation Results:

One new subscriber every minute

>75% of those trying for free stay with the service. Low churn

Arun Sarin; 500,000 track downloads in first 10 days

Annualised revenues from MusicStation exceeded one operator’s pay per track service in just 9 weeks

MusicStation Max: First pre-licensed unlimited music phones produced in cooperation with major manufacturers Free unlimited music ‘out of the box’ MusicStation Max price plans: drives data revenues Hero handset: full utilisation of handset capabilities Keep favourite music at end of contract Fully interoperable with MusicStation

MusicStation Max:

First pre-licensed unlimited music phones produced in cooperation with major manufacturers

Free unlimited music ‘out of the box’

MusicStation Max price plans: drives data revenues

Hero handset: full utilisation of handset capabilities

Keep favourite music at end of contract

Fully interoperable with MusicStation

Thank you

Analyst Community Reaction: MusicStation Juniper Research: Windsor Holden “ We believe that services such as the Vodafone MusicStation, where consumers rent unlimited mobile music for the period of the subscription, represent a tremendous opportunity for operators.” Yankee Group: Declan Lonegran “ The mobile version of rented music is about to explode, and the implications for the mobile and music industries will be enormous… MusicStation will be a success story.”

Analyst Community Reaction: MusicStation

Juniper Research: Windsor Holden

“ We believe that services such as the Vodafone MusicStation, where consumers rent unlimited mobile music for the period of the subscription, represent a tremendous opportunity for operators.”

Yankee Group: Declan Lonegran

“ The mobile version of rented music is about to explode, and the implications for the mobile and music industries will be enormous… MusicStation will be a success story.”

Analyst Community Reaction: MusicStation Current Analysis: Emma Mohr-McClune “ MusicStation is not only the strongest competitive response to the iPhone we’ve seen to date, but it neatly offsets ‘Nokia Comes With Music’ competition some six months before its expected release.” IDC: Jill Finger Gibson “ Omnifone's MusicStation could become the game-changer that propels mobile music services into the mainstream and makes it harder for the iPhone to gain traction outside of the US.”

Analyst Community Reaction: MusicStation

Current Analysis: Emma Mohr-McClune

“ MusicStation is not only the strongest competitive response to the iPhone we’ve seen to date, but it neatly offsets ‘Nokia Comes With Music’ competition some six months before its expected release.”

IDC: Jill Finger Gibson

“ Omnifone's MusicStation could become the game-changer that propels mobile music services into the mainstream and makes it harder for the iPhone to gain traction outside of the US.”

Analyst Community Reaction: MusicStation Max Jupiter Research: Mark Mulligan “ Considered together, MusicStation Max and Nokia Comes With Music have long-term potential to drive mainstream adoption beyond paid digital music’s current niche.” CCS Insight: Paolo Pescatore “ MusicStation Max could prove attractive to operators who should benefit from increased usage on their data networks and significant ARPU uplift compared to existing full track downloads.”

Analyst Community Reaction: MusicStation Max

Jupiter Research: Mark Mulligan

“ Considered together, MusicStation Max and Nokia Comes With Music have long-term potential to drive mainstream adoption beyond paid digital music’s current niche.”

CCS Insight: Paolo Pescatore

“ MusicStation Max could prove attractive to operators who should benefit from increased usage on their data networks and significant ARPU uplift compared to existing full track downloads.”