A Draft study for evaluation of EE and CIS markets to help Telecoms Software Providers

1. EASTERN EUROPE & CIS ICT MARKET EVALUATION İsmail İspir January 2010

3. Key Variables driving Market Potential Customers End Users Business Users Operators, service providers, Media Mobile Operators and Service Providers Size, Structure, Strategies... Partners Strategic Alliances, Distribution, Support... Technology Diversity, Infrastructure, Handset, &Service availability Competitive Environment Level of Competition, Global vs Local, Vendors Competition Products and Services Variety, Availability, Affordability, Acceptance, Perceptions Internet / Broadband Environment Convergence Level, Digital Divide Macroeconomic, SocioDemographic and Regulatory Issues Potential Evaluatıon Index

4. Basic Indicators Source : CIA Factbook, ITU, World Bank

7. Demographics & Macro-economics

8. Demographics & Macro-economics

9. Demographics & Macro-economics

17. ICT Market CIS TOTAL 28.010.600 EE TOTAL 33.433.800 GRAND TOTAL 61.444.400 CIS TOTAL 121.158.000 EE TOTAL 140.768.000 GRAND TOTAL 261.926.000 CIS TOTAL 26.374.100 EE TOTAL 52.637.900 GRAND TOTAL 79.012.000 CIS TOTAL 4.085.100 EE TOTAL 14.088.600 GRAND TOTAL 18.173.700

18. ICT Market

19. ICT Market

20. ICT Market

21. ICT Market

22. ICT Market CIS CEE WORLD EU

24. Mobile Operators and Ownerships Country Operator Technology Subscribers Albania AMC GPRS, GSM, EDGE 1.250.000 Albania Vodafone GPRS, GSM, EDGE 1.127.000 Albania Eagle Mobile GPRS, GSM, EDGE 385.000 Albania 2.762.000 Armenia Viva Cell GSM 1.490.000 Armenia Armentel GSM 635.000 Armenia Orange GSM Armenia 2.125.000 Azerbaijan Azercell GSM 2.990.000 Azerbaijan BakCell GSM 270.000 Azerbaijan Catel CDMA One 5.000 Azerbaijan Azerfon-Nar Mobile GSM 1.000 Azerbaijan Aztrank CDMA2000 Azerbaijan 3.266.000 Belarus MTS GPRS, GSM, EDGE 4.520.000 Belarus Velcom GPRS, GSM, EDGE 4.000.000 Belarus Life:) GPRS, GSM, EDGE 1.000.000 Belarus DIALLOG CdmaOne, CDMA2000 EV-DO 132.000 Belarus 9.652.000 BH BH Mobile GPRS, GSM, EDGE, HSDPA 1.800.000 BH MTEL BH GPRS, GSM, EDGE 1.200.000 BH HT ERONET GPRS, GSM, EDGE 620.000 BH 3.620.000

25. Mobile Operators and Ownerships Country Operator Technology Subscribers MS - % Bulgaria M-Tel GPRS, GSM, EDGE, HSDPA, UMTS 5.200.000 50,5% Bulgaria GLOBUL GPRS, GSM, EDGE, HSDPA, UMTS, HSUPA 4.100.000 39,8% Bulgaria Vivacom GPRS, GSM, EDGE, HSDPA, UMTS 1.000.000 9,7% Bulgaria 10.300.000 Croatia T-Mobile GPRS, GSM, EDGE, HSDPA, UMTS 2.780.000 46,0% Croatia Vip GPRS, GSM, EDGE, HSDPA, UMTS 2.500.000 41,4% Croatia Tele2 GPRS, GSM, HSDPA, UMTS 765.000 12,7% Croatia 6.045.000 Czech Republic T-Mobile GPRS, GSM, EDGE, HSDPA, UMTS, HSUPA, UMTS TDD 5.400.000 40,6% Czech Republic O2 GPRS, GSM, EDGE, HSDPA, UMTS, HSUPA, CDMA Ev-DO 5.187.000 39,0% Czech Republic Vodafone GPRS, GSM, EDGE, HSDPA, UMTS, HSUPA 2.700.000 20,3% Czech Republic U Fon Czech Republic 13.287.000 Estonia EMT GPRS, GSM, EDGE, HSPA 755.000 70,1% Estonia Elisa GPRS, GSM, EDGE, HSPA 322.800 29,9% Estonia Tele2 GPRS, GSM, EDGE, HSPA Estonia 1.077.800 Georgia GeoCell GPRS, GSM, UMTS, HSDPA Georgia Magti GSM GPRS, GSM, UMTS, HSDPA Georgia Beeline GSM 146.000 Georgia Wand GPRS, GSM, EDGE, WiMax Georgia

26. Mobile Operators and Ownerships Country Operator Technology Subscribers MS - % Hungary T-Mobile GPRS, GSM, EDGE, HSDPA, UMTS, HSUPA 44,0% Hungary Pannon GPRS, GSM, EDGE, HSDPA, UMTS, HSUPA 34,2% Hungary Vodafone GPRS, GSM, EDGE, HSDPA, UMTS, HSUPA 21,9% Hungary Kazakhstan K-Cell GSM 6.500.000 55,1% Kazakhstan Beeline GSM 5.100.000 43,2% Kazakhstan Altel CDMA One, GSM 200.000 1,7% Kazakhstan 11.800.000 Kosovo Vala 900 GSM, GPRS, EDGE 850.000 65,0% Kosovo IPKO GSM, GPRS, EDGE 458.000 35,0% Kosovo 1.308.000 Kyrgyzstan BITEL GSM 600.000 54,5% Kyrgyzstan MegaCom GSM 500.000 45,5% Kyrgyzstan OI Kyrgyzstan 1.100.000 Latvia Latvijas Mobilais Telefons GSM, UMTS 1.014.000 45,3% Latvia Tele2 GSM, UMTS 1.000.000 44,7% Latvia BITE Latvija GSM, UMTS 222.000 9,9% Latvia Triatel Latvia 2.236.000 Lithuania Omnitel GSM, EDGE, UMTS 2.012.000 38,6% Lithuania Tele2 GSM, EDGE, UMTS 1.900.000 36,5% Lithuania BITE GSM 1.300.000 24,9% Lithuania 5.212.000

27. Mobile Operators and Ownerships Country Operator Technology Subscribers MS - % Macedonia T-Mobile GSM, GPRS, EDGE 1.213.000 54,8% Macedonia One GSM, GPRS, UMTS 752.000 34,0% Macedonia Vip GSM, GPRS 250.000 11,3% Macedonia 2.215.000 Moldova Orange GSM, GPRS, EDGE, UMTS, HSDPA, HSUPA 1.722.000 62,0% Moldova Moldcell GSM, GPRS, EDGE, HSDPA, HSUPA 732.000 26,4% Moldova Interdnestrcom CDMA One 200.000 7,2% Moldova Eventis GSM, GPRS, EDGE 21.000 0,8% Moldova Unite CDMA One, EVDO 101.000 3,6% Moldova 2.776.000 Montenegro ProMonte GSM, GPRS, EDGE, UMTS 487.000 35,7% Montenegro T-Mobile GSM, GPRS, EDGE, UMTS 471.000 34,5% Montenegro M Tel GSM, GPRS, EDGE, UMTS 407.000 29,8% Montenegro 1.365.000 Poland Plus GSM, GPRS, EDGE, UMTS, CDMA, NMT 450 14.474.000 32,6% Poland Orange GSM, GPRS, EDGE, UMTS 14.182.000 31,9% Poland Era GSM, GPRS, EDGE, UMTS 13.768.000 31,0% Poland Play GSM, GPRS, EDGE, UMTS 2.008.000 4,5% Poland 44.432.000 Romania Orange GSM, GPRS, EDGE, UMTS, HSDPA, HSUPA 10.354.000 36,5% Romania Vodafone GSM, GPRS, UMTS, HSDPA, HSPA+ 9.532.000 33,6% Romania Cosmote GSM, GPRS 6.000.000 21,2% Romania Zapp CDMA 2000, EVDO,UMTS, HSDPA 1.250.000 4,4% Romania Digi Mobil UMTS, HSDPA 1.200.000 4,2% Romania Rom Telecom CDMA2000 Romania 28.336.000

28. Mobile Operators and Ownerships Country Operator Technology Subscribers MS - % Russia MTS GSM, GPRS, EDGE, UMTS 65.680.000 34,7% Russia Beeline GSM, GPRS, EDGE, UMTS 49.980.000 26,4% Russia MegaFon GSM, GPRS, EDGE, UMTS, HSDPA 44.040.000 23,2% Russia Tele2 GSM, GPRS, EDGE 13.300.000 7,0% Russia Uralsvyazinform GSM 5.900.000 3,1% Russia SMARTS GSM 3.750.000 2,0% Russia SibirTelecom GSM 3.700.000 2,0% Russia Nizhni Novgorod Telecom GSM 1.180.000 0,6% Russia Sotovaja Svjaz MOTIV GSM 950.000 0,5% Russia New Telephone Company GSM 630.000 0,3% Russia SkyLink CdmaOne, CDMA EV-DO 440.000 0,2% Russia Yota WiMax Russia 189.550.000 Serbia mt:s GSM, GPRS, UMTS, HSDPA 5.867.000 60,5% Serbia Telenor GSM, GPRS, EDGE, UMTS, HSDPA 2.831.000 29,2% Serbia Vip GSM, GPRS, EDGE, UMTS 1.000.000 10,3% Serbia 9.698.000 Slovakia Orange GSM, UMTS, HSDPA 2.869.000 52,1% Slovakia T-Mobile GSM, UMTS, HSDPA 2.138.000 38,8% Slovakia O2 GSM, GPRS, EDGE 500.000 9,1% Slovakia 5.507.000 Slovenia Mobitel GSM, GPRS, EDGE, UMTS, HSDPA, HSUPA 57,2% Slovenia Si Mobil GSM, GPRS, EDGE, UMTS, HSDPA 27,9% Slovenia Tusmobil GSM, GPRS, EDGE, UMTS, HSDPA, HSUPA 7,0% Slovenia T-2 GSM, GPRS, UMTS, HSDPA, HSUPA 7,0% Slovenia

29. Mobile Operators and Ownerships Country Operator Technology Subscribers MS - % Tajikistan Babilon Mobile GSM 800.000 51,4% Tajikistan Somoncom GSM, UMTS 205.000 13,2% Tajikistan Beeline GSM 378.000 24,3% Tajikistan TT Mobile GSM Tajikistan Indıgo GSM, UMTS 172.000 11,1% Tajikistan 1.555.000 Turkmenistan MTS GSM 570.000 Ukraine KyivStar GSM, GPRS, EDGE 23.050.000 41,2% Ukraine MTS CDMA2000, CDMA 2000 EV-DO, GSM, GPRS, EDGE 19.130.000 34,2% Ukraine Life:) GSM, GPRS, EDGE 11.325.000 20,2% Ukraine Beeline GSM, GPRS, EDGE 1.913.000 3,4% Ukraine Velton Telecom CDMA One 120.000 0,2% Ukraine ITC CDMA One 115.000 0,2% Ukraine InterTelecom CDMA One 114.000 0,2% Ukraine PeopleNet CDMA2000, CDMA 2000 EV-DO 103.000 0,2% Ukraine Golden Telecom GSM 42.000 0,1% Ukraine CST Invest CDMA One 26.000 0,0% Ukraine Utel UMTS, HSDPA 10.000 0,0% Ukraine 55.948.000 Uzbekistan Uzdunrobita GSM 4.370.000 67,8% Uzbekistan Beeline GSM 1.587.000 24,6% Uzbekistan CosCom GSM 487.000 7,6% Uzbekistan Perfectum CDMA One Uzbekistan 6.444.000

32. General Evaluation

34. Country Dashboard – Sample for Poland Calculated Overall Potential Index ME Indicators 95,1 Market perf. 75,1 Overall Rank 3 The competition level in the country is a critical indicator for potential sales or business Benchmark Evaluation Region EE Population (2009 est) 10.211.904 Pop. Growth Rate (2009 est. %) -0,094 Pop. Trend (2000-2007) -> Urban Pop. (2008) 0,73 GDP Current (2008 est million USD)) WB 216.490 Real GDP Growth rate (2008 est. %)WB 3,2 GDP Trend (2000-2008) ↑ GDP Per Capita (2007 Current USD) WB 14.580 Labor Force - 2008 Est 5.360.000 Unemployment Rate (2008 est. %) 5,4 Pop. Below Poverty Line (% - 2008 est)) 5,0 Inflation Rate (2008 est. %), 6,3 Fixed Lines (2008) 2.278.000 Mobile Lines (2008) - ITU 13.780.000 TV Stations 71 Internet Hosts (2009) 3.233.000 Internet Users (2008)- CIA 6.028.000 Number of Mobile Opertaors 4 Mobile Penetration 1,35 Broadband Subscribers 1.759.600 Telecoms Revenue (%0f GDP) 3,7 Telecom Revenues Est. 2007 (million USD) 8.010 Mobile and Fixed Subscribers Per Employee 796 Telephone Lines per 100 People 23,3 ↘ ↘ Mobile Subscriptions Per 100 People 123,1 ↗ ↗ Internet Susbcribers per 100 People 13,6 ↗ ↗ Personal Computers per 100 people 27,4 ↗ ↗ Mobile Telephone Usage (min./person/month) 122 Internet Users Per 100 people 48,3 Fixed BB Subscribers (% of Internet Users) 93,3 Average Price Basket for Fixed Telephony (USD / Month) 25,5 Average Price Basket for Mobile Service(USD / Month) 12,8 Average Price Basket for Internet Service(USD / Month) 19,9 Operator Rank Technology Subscribers Market Share (Q3 2008) Ownership Level of Competition T-Mobile 1 GPRS, GSM, EDGE, HSDPA, UMTS, HSUPA, UMTS TDD 5.400.000 40,6% Deutsche Telecom Very High O2 2 GPRS, GSM, EDGE, HSDPA, UMTS, HSUPA, CDMA Ev-DO 5.187.000 39,0% Telefonica Vodafone 3 GPRS, GSM, EDGE, HSDPA, UMTS, HSUPA 2.700.000 20,3% Vodafone U Fon 4 Planned Total 13.287.000

36. Price Basket - Affordability

37. Price Basket - Affordability

38. Conclusions Customers Mobile Operators and Service Providers Partners Technology Competitive Environment Products and Services Internet / Broadband Environment Macroeconomic, SocioDemographic and Regulatory Issues Telenity Potential Evaluatıon Index General View Customers The EE and CIS Regions have a significant customer base, well segmented with sophisticated needs especially in EE Mobile Operators, Service Providers There are around 90 operators with mostly global or regional group ownerships and competing fiercely in some countries. Partners All major infrastructure providers and orther vendors are strongly present in the scope region. A global vendor partnership will be a key asset targeting these regions Macroeconomic and Demographic The EE and CIS Regions are quite below EU averages in terms of some critical ındicators . However for most of the criteria they are above the world averages as a proof of theri emerging character. Technology Technologic infrastructure is quite developed in most of the countries offering all possibilities for 3G, BB access as well. Product and Services Product and services portfolios tend to be quite similar as Europe's developed countries mostly for EE region Convergence There is still some gap in terms of technology and service convergence when compared to Europe but developing fastly Competitive Environment The competition levels are generally high especially in EE countries Regulations ICT regulatory bodies are separate entities in most of the regions and trying to keep up with EU regulations fastly