LONDON, May 17 /PRNewswire/ --
    - Opportunities Expected in the Longer Term; Operators Need to Devise
Appropriate Strategies
    Although by no means a new technology, Radio Frequency Identification
(RFID) is generating increasing interest in Europe due to its many advantages
over the currently used trace-and-track technologies. RFID projects are
proliferating in a variety of markets such as retail, transportation,
pharmaceuticals and livestock, propelling companies and suppliers to adopt
the technology in a bid to cut down costs in the supply chain while enhancing
productivity.
    Global growth consulting company Frost & Sullivan (http://frost.it.com)
estimates that spending on RFID-related hardware, software and services in
Europe will exceed EUR5 billion in 2007. While the retail and government
vertical markets are likely to lead this spending, transport and logistics as
well as manufacturing are also likely to contribute significant shares.
    Currently, the high prices of transponders or tags are a major obstacle
to the mass adoption of RFID. Manufacturers need to price these components
more realistically for RFID to enter the mainstream and realise its true
potential in the supply chain. Although this could take time, tag costs are
already dropping. Further price decreases are likely to positively impact
manufacturers' unit shipments and encourage them to attempt more large-scale
projects.
    As far as the opportunities for mobile operators are concerned, Frost &
Sullivan believes that RFID holds great potential for operators seeking to
increase average revenue per user (ARPU), especially revenue from the
low-margin data services.
    "European operators have a key role to play in the transport of RFID data
from field locations to the back office for at least either one of these two
reasons," notes Frost & Sullivan ICT Consultant Mr. Andrew Tanner-Smith.
"First, it is the best technology to allow remote access on a large scale,
and second, through the process of fixed-mobile substitution, it replaces
fixed telecommunications lines where these have been the preferred data
transport method in the past."
    While Frost & Sullivan does not expect significant opportunities in RFID
projects to materialise until 2007, it recommends that mobile operators start
developing and putting strategies in place to take advantage of these
opportunities. It believes that the market will start gaining traction around
2007 due to the ongoing fixed-mobile substitution
    Currently, the extent of the operator's role in a RFID implementation
seems to be confined to acting as a conduit for mobile and data traffic.
However, many larger European operators are beginning to realise that their
contribution to the market could be significantly higher.
    "For example, by developing mobile applications, operators are beginning
to add value to the mobile enterprise," remarks Mr. Tanner-Smith. "In the
future, Frost & Sullivan expects operators to increase the range of
applications they offer to include those that may make use of RFID data, with
some companies perhaps beginning to offer enterprise mobility services in
this area."
    As the market develops, mobile network operators and wireless local area
network (WLAN) providers are likely to gain over fixed telecom networks in
terms of carrying increased RFID data. Frost & Sullivan expects the volume of
data generated to increase tremendously - to the point where mobile operators
could well be transporting volumes of RFID generated data that could be
measured in terabytes through their networks in 2009.
    "This is not an insignificant amount of data, and operators need to ally
themselves with key participants in the RFID industry to turn this projected
scenario into a reality," says Mr. Tanner-Smith. "They need to identify the
right vertical markets for their organisations to target and be realistic
about the pricing of their data transport services."
    Frost & Sullivan further believes that there is a huge base of potential
end users seeking the most economical way of transporting data from the field
to the back office. Mobile operators can successfully convert these end users
into RFID clients by offering attractive pricing structures and bundling
voice and data services into one cost-effective option.
    If you are interested in an analysis which provides manufacturers, end
users, and other industry participants with an overview, summary, and
challenges in the European RFID-based Data Traffic market, please send an
e-mail to Kristina Menzefricke - European Corporate Communications at
kristina.menzefricke@frost.com with the following information: Full name,
Company Name, Title, Contact Tel Number, Contact Fax Number, E-mail. Upon
receipt of the above information, an overview will be e-mailed to you.
    Frost & Sullivan, a global growth consulting company, has been partnering
with clients to support the development of innovative strategies for more
than 40 years. The company's industry expertise integrates growth consulting,
growth partnership services and corporate management training to identify and
develop opportunities. Frost & Sullivan serves an extensive clientele that
includes Global 1000 companies, emerging companies, and the investment
community, by providing comprehensive industry coverage that reflects a
unique global perspective and combines ongoing analysis of markets,
technologies, econometrics, and demographics.

    Contact:
    Kristina Menzefricke
    Corporate Communications - Europe
    P: +44-207-343-8376
    F: +44-207-730-3343
    E: kristina.menzefricke@frost.com

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