Boston, MA - April 19, 2005-The latest quarterly Strategy Analytics wireless operator benchmarking study indicates potentially serious global operator profit slides, as global margins fell below 40 percent for the first time in eight quarters. While subscriber volumes rose by 24 percent, year on year EBITDA was up by less than 4 percent, resulting in a 15 percent decline in average margins per user (AMPU).

These findings come from Strategy Analytics' Wireless Operator Performance Benchmarking database, tracking 60 operators, accounting for over 60 percent of global wireless phone subscribers. A health check of those operators based on the important measure of average margin per user (AMPU) shows serious cause for concern. Globally, AMPU among the operators fell by 15 percent over the previous year, to a low of $11.54 in Q4 2004, from 2003's $15-plus figure. The heaviest declines were in Central & Eastern Europe and Asia-Pacific, both regions where exceptionally high subscriber growth among lower-value customers has outstripped profitability.

Regional AMPUs, 3Q03 - 4Q04

"The influx of new customers in emerging markets, such as Russia, the Ukraine and China, has brought many benefits both to the users and operators in those markets," said Sara Harris, Senior Industry Analyst at Strategy Analytics, and author of this report. "However, growth like this always comes at a cost - 15-20 percent declines in AMPUs for the Chinese operators and significantly deeper cuts in Russia and the Ukraine."

• more mature markets have not been immune to AMPU declines, with 3 percent declines in North America and Western Europe as competitive pressures and, in the case of Europe, regulatory interconnect rate cuts, left their mark. This report also includes information on voice and data ARPUs, churn, average minutes of use and capital expenditures.