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IEMR’s Mobile Operator Forecast on Spain provides over 50 operational and financial metrics for the Spanish wireless market and is one of the best forecasts in the industry. We provide five-year forecasts at the operator level going out to 2014. We also provide quarterly historical and forecast data starting in 1Q2003 and ending in 3Q2011. Operators covered for Spain include: Telefónica de España, S.A.U, Vodafone Group Plc, Orange Communications SA, and Xfera Moviles S.A. Our Mobile Operator Forecasts are updated quarterly and are available for one-time delivery or through regular updates.

IEMR’s Global Mobile Operator Forecast covers 50 operational metrics of 200+ mobile operators in 50+ countries, making up 80% of the world’s population. Our forecasts are based on our proprietary, country-specific forecasting models. These models deploy multiple regression analysis and cross-impact matrices that estimate relationships between subscriber data, technology use and deployment data, overall economic and demographic changes expected in a particular country; and relate these to company operational and financial metrics.

Executive Summary

Wireless subscriber growth is slowing down in Spain

+4.2% industry average subscriber growth in 3Q.2009

ARPU levels continue decreasing in Spain

-8.9% operator-wide average ARPU growth in 3Q.2009

Minutes of Use per Subscriber decreasing

-4.9% industry average MOU/Sub growth in 3Q.2009

EBITDA growth was negative across operators in the latest quarter

Industry average EBITDA growth was -4.9% in 3Q.2009

So what is IEMR’s Forecast?

There will be 64.9 million mobile subscribers in Spain in 2014

• We forecast that total mobile subscribers in Spain will increase from 54.7 million in 2009 to 64.9 million in 2014.

• Telefónica will continue to be the largest operator in the country with its subscriber base increasing to 27.5 million by the end of 2014.

• Vodafone will continue to be the second largest operator in the country. Given the latest quarter numbers, we now forecast that Vodafone's subscriber base will increase from 17.5 million in 2009 to 19.7 million in 2014.

• Our model predicts that the numbers of subscribers at Orange and Xfera will be approximately 13.5 million and 4.2 million respectively by the end of 2014.

Telefónica's subscriber market share will be declining over the next several years

• Although Telefónica will continue to lead Spain in market shares, we predict that its subscriber market share will decline from 43.8% in 2009 to 42.4% in 2014. Vodafone's share of subscribers will also fall from 32.1% in 2009 to 30.3% in 2014.

• Our model predicts that subscriber market shares at Orange and Xfera will be approximately 20.9% and 6.5% respectively in 2014.

Monthly ARPUs will continue to decline from 2009 to 2014

• We think that monthly ARPUs will continue to decline across operators in Spain. Our model predicts that the industry average monthly ARPU will fall from €26.61 in 2009 to €23.84 in 2014.

• However, we expect that Data ARPU will be increasing. We predict that the industry average monthly Data ARPU will increase from €4.73 in 2009 to €5.41 in 2014.

• Given the latest data, we expect that Telefónica's monthly Data ARPU will increase from €5.37 in 2009 to €6.70 in 2014.

EBITDA margins to improve at Xfera

• We expect that the industry average EBITDA margin (calculated as EBITDA/reported revenue) will remain in the range of 34% - 35% over the next five years.

• Telefónica will continue to enjoy higher EBITDA margins than the other operators in Spain (We forecast that it will be 42% in 2014).

• Xfera's EBITDA margin in 2008 was -63.0% due to a negative EBITDA figure. However, we think that this will improve over the next five years. We forecast that Xfera's EBITDA margin will turn positive in 2010.

Companies Covered in this Country Mobile Operator Forecast

Telefónica de España, S.A.U

Vodafone Group Plc

Orange Communications SA

Xfera Moviles S.A.

Annual Results & Forecasts for each of the above operators is covered in this report for: CY 2001-CY 2014. Quarterly Results & Forecasts are covered for: March 2003 - September 2011

PREPAID AND POSTPAID SUBSCRIBERS                         

SUBSCRIBER GROWTH (YoY)                   

SUBSCRIBERS BY OPERATOR                   

SUBSCRIBER GROWTH BY OPERATOR (YoY)                   

NET SUBSCRIBER ADDS BY OPERATOR

NET SUBSCRIBER ADDS GROWTH BY OPERATOR

MONTHLY CHURN BY OPERATOR *

POST-PAID SUBSCRIBERS BY OPERATOR

POST-PAID SUBSCRIBER GROWTH BY OPERATOR (YoY)

PREPAID/WHOLESALE SUBSCRIBERS BY OPERATOR

PREPAID/WHOLESALE SUBSCRIBER GROWTH BY OPERATOR

POST-PAID % OF TOTAL SUBSCRIBERS BY OPERATOR

PREPAID/WHOLESALE % OF TOTAL SUBSCRIBERS BY OPERATOR

POST-PAID NET ADDS BY OPERATOR

POST-PAID ADDS GROWTH BY OPERATOR (YoY)

PREPAID/WHOLESALE NET ADDS BY OPERATOR

PREPAID/WHOLESALE ADDS GROWTH BY OPERATOR

MONTHLY ARPU BY OPERATOR *

MONTHLY ARPU GROWTH BY OPERATOR (YoY %) *

DATA % OF SERVICE REVENUES BY OPERATOR *

MONTHLY DATA ARPU BY OPERATOR *

DATA ARPU GROWTH BY OPERATOR (YoY) *

MONTHLY VOICE ARPU BY OPERATOR *

VOICE ARPU GROWTH BY OPERATOR (YoY) *

VOICE REVENUE PER MINUTE BY OPERATOR *

VOICE REVENUE PER MINUTE GROWTH BY OPERATOR (YoY) *

MOU PER SUBSCRIBER BY OPERATOR (MINUTES/MONTH) *

MOU/SUBSCRIBER GROWTH BY OPERATOR (YoY %) *

SHARE OF TOTAL SUBSCRIBERS BY OPERATOR

HHI INDEX BY SUBSCRIBER SHARE

SHARE OF NET ADDS BY OPERATOR

SHARE OF POST-PAID NET ADDS BY OPERATOR

SHARE OF PREPAID/WHOLESALE NET ADDS BY OPERATOR

SHARE OF SERVICE REVENUE BY OPERATOR

HHI INDEX BY SERVICE REVENUE SHARE

YoY CHANGE IN REVENUE SHARE BY OPERATOR

REPORTED REVENUE BY OPERATOR (REPORTING CURRENCY)

SERVICE REVENUE BY OPERATOR (REPORTING CURRENCY)

EBITDA BY OPERATOR (REPORTING CURRENCY)

CAPEX BY OPERATOR (REPORTING CURRENCY)

SERVICE REVENUE GROWTH BY OPERATOR (YoY)

EBITDA GROWTH BY OPERATOR (YoY)

EBITDA/REPORTED REVENUE BY OPERATOR

EBITDA/SERVICE REVENUE BY OPERATOR

EBITDA/INCREMENTAL SERVICE REVENUE BY OPERATOR

CAPEX/REPORTED REVENUE BY OPERATOR

CAPEX/SERVICE REVENUE BY OPERATOR

(EBITDA-CAPEX)/REPORTED REVENUE BY OPERATOR

EBITDA MARGIN EXPANSION/CONTRACTION BY OPERATOR

REPORTED REVENUE BY OPERATOR (USD)

ARPU BY OPERATOR (USD) *

DATA ARPU BY OPERATOR (USD) *

VOICE REV/MINUTE BY OPERATOR (USD) *

SERVICE REVENUE BY OPERATOR (USD)

EBITDA BY OPERATOR (USD)

CAPEX BY OPERATOR (USD)

* Not available for Xfera Moviles S.A.