Communications Regulatory Authority

network voice services has characterized all the geographic areas, with the exception of
that called “other countries”. Compared to the forecasts, the trends in the European and
Asian areas were particularly negative, registering reductions of 1.1% and 1.3%
respectively. In percentage terms the reduction was greater in North America (-4.1%);
this is, however a better figure than expected, confirming the fact that in the US market
competition, even if still strong in the voice segment, is progressively shifting toward
other components of the market also.
As for Europe, the negative trend of the fixed network voice segment was
contributed to by both the phenomenon of the partial shifting of the traffic from fixed
network to mobile, and the higher degree of competition owing, in particular, to the
proliferation of the VoIP offerings. In some countries, the operators that last year were
offering broadband voice connections, as a second line in addition to that of the
incumbent carrier, have now proposed themselves as single providers of communication
services, offering customers the possibility to withdraw from their contract with the
historic operator. This phenomenon has brought about, as well as a change of the
competitive structures, a general lowering of the market value of the fixed network
telephony services.
On the other hand, the drop in the fixed network voice segment of the Asian area
was influenced in particular by the negative trend of the Japanese market.
In the European area, as regards mobile network voice services, the partial
replacement of fixed with mobile network telephony and various market factors have
determined a significant increase in revenues, equal to 4.7%, in spite of the high level of
penetration that has by now been reached by mobile technology (especially in Western
European countries). The result, higher than expected, bears witness to how the traffic
shift has been such that it has more than made up for the pressures on the prices per
minute resulting from the play of competition. However in the near future, in spite of
the expectations of a sizable increase in traffic volume, the competitive pressure on
prices will cause a slowdown of the revenues growth rate (3.2% and 1.9% in 2006 and
2007, respectively).
In North America, the growth of mobile network voice has been even stronger
(+14% of the lines in one year), owing to the effect of the increase in the penetration
rate of mobile services with the population. Also significant is the growth in the Asian
area, where market prospects are connected with the trends of several strongly
developing countries such as China and India, which make up for the negative trend of
the mobile network voice segment of a market as mature as Japan’s which, however,
still accounts for a share higher than 38% of mobile network voice services in this
region.
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