STRATEGY ANALYTICS: East European Wireless Profitability Continues Rapid Slide; 29 Percent Decline in Average Subscriber Margins Three Times Global Average.BOSTON -- Strategy Analytics, the global research and consulting company Noun 1. consulting company - a firm of experts providing professional advice to an organization for a fee consulting firm business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a , reports that average margins per user (AMPUs) in Central and Eastern Europe The term "Central and Eastern Europe" came into wide spread use, replacing "Eastern bloc", to describe former Communist countries in Europe, after the collapse of the Iron Curtain in 1989/90. fell almost 30 percent to just $6 per month in 2Q 2005. Operators in the region are losing ground with AMPU AMPU Average Margin Per User AMPU Active Memory Processor Unit AMPU Automated Maneuver Planning Utility AMPU Average Minute Per User levels 50 percent below the global average in the current quarter, according to the newly released report, "Wireless Operator Benchmarking Report Q2 2005." The quarterly report provides a health check for the wireless operator community, tracking the operational and financial performance of 61 individual operators, accounting for more than 60 percent of global wireless subscribers. Global AMPUs were down 10 percent to $12 per subscriber per month in Q2 2005. "On face value, the rapid fall in the value of new subscribers in Russia and the Ukraine is a cause for concern, although underlying profitability remains strong," explained Sara Harris, Senior Industry Analyst at Strategy Analytics and the author of the report. "Exceptional subscriber growth in those countries is driving strong EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become growth, ranging from 19 percent at MTS (1) See Microsoft Transaction Server. (2) (Modular TV System) The stereo channel added to the NTSC standard, which includes the SAP audio channel for special use. 1. MTS - Message Transport System. 2. to 55 percent at Vimpelcom. This is still a lucrative region for global operators." David Kerr, Vice President of the Global Wireless Practice, added, "By contrast, EBITDA growth was 10 percent in North America and a meager mea·ger also mea·gre adj. 1. Deficient in quantity, fullness, or extent; scanty. 2. Deficient in richness, fertility, or vigor; feeble: the meager soil of an eroded plain. 3. 2 percent in Western Europe. Following more than three years of growth, AMPUs have posted annual declines for the last three quarters in Western Europe and there is no return to growth in sight. Regulatory pressure on interconnect rates, sluggish data ARPUs, and an increasingly competitive market driven by limited subscriber growth, MVNO (Mobile Virtual Network Operator) A reseller of wireless services. MVNOs do not own licensed spectrum and typically do not have any of their own wireless network infrastructure. activity and 3G launches, are all taking their toll on financial stability in the region." About Strategy Analytics Strategy Analytics, Inc. - a global research and consulting firm - provides timely insights and strategic business solutions to companies operating at the convergence of information, communications and entertainment technologies. With worldwide headquarters in Boston, MA. and principal offices in England, France and Germany, Strategy Analytics focuses on market opportunities and challenges in the areas of Automotive Electronics & Multimedia, Digital Consumer, Wireless Strategies and Enabling Technologies. For more information, see www.strategyanalytics.com |
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