Frost & Sullivan Confident In Vehicle Positioning Systems' Growing Prominence In European Road User Charging Systems Markets

LONDON--Aug. 9, 2004--The replacement of older, non-interoperable systems with new, interoperable systems in the electronic toll collection (ETC) segment and the expanded installation of technologically advanced charging systems are set to boost the European road user charging systems (RUC) markets. As various technologies battle for market share, the superior benefits of vehicle positioning systems (VPS) are expected to give them an edge over their competitors.

Efforts to achieve Europe-wide interoperability in toll systems and meet Comite Europeen de Normalisation (CEN) instituted standardisation norms are likely to motivate European countries to implement road user charging systems in one form or another, leading to impressive market growth.

At the same time, the projected success of Germany's VPS is likely to encourage similar deployments in other countries, thereby effecting a considerable leap in market revenues.

Buoyed by these trends, the total European market for RUC systems (comprising sales of on-board units and infrastructure equipment) is forecast to grow at an estimated annual rate of 10 per cent over 2003-2011, increasing from EUR 444.3 million to nearly EUR 1 billion.

Over this time frame, the fastest growth - at almost 35 per cent per year - is likely to be recorded by on-board units (OBUs). Significant growth rates registered by ETC OBUs in the near term are likely to taper off while VPS OBU sales are expected to shake off a tepid start and pick up pace over the long term.

Sales revenues from infrastructure equipment are set to for a quantum jump from 2003 to 2004. This surge is ascribed to installations of the new ETC-based toll collection system for heavy vehicles (Europass system) in Austria during the first half of the year, as well as the proposed installation of the VPS-based LKW Maut system in Germany during the later half of 2004.

With an 84 per cent share, ETC currently dominates the European RUC market. This technology is, however, expected to be overtaken in the long term by the more expensive VPS systems utilising the concepts of GPS, GSM, GPRS or 3G.

Automatic number plate recognition (ANPR) systems also offer exciting growth opportunities and are expected to compete for share with established ETC and the newer VPS systems. Regarded as the most effective system for curbing urban congestion, ANPR has been successfully deployed in the London congestion charging scheme.

According to analysis by Frost & Sullivan (http://www.transportation.frost.com), however, it is the higher benefits of VPS systems compared to that of ETC and ANPR that are likely to underline their rising uptake.

"The potential revenues from Germany of over EUR 2,800 million within just one year of the system becoming operational and the 40 per cent increase in toll revenues within a span of three years in Switzerland show that the payback period of VPS systems is much quicker than the ETC and ANPR systems'," says Frost & Sullivan Industry Analyst Hema Bhaskaran.

"Furthermore, the operational costs for VPS systems are lower than the relative costs associated with ETC and ANPR systems. Decreasing price trends, in addition to the increasing potential revenues, indicate higher profitability of the VPS systems compared to the ETC and ANPR systems," she adds.

Revenues derived from the European toll operations are estimated to grow from EUR 12.9 million in 2003 to EUR 17.7 million in 2011. Currently, France is the largest geographical market for road user charging systems followed by Italy, Spain, Switzerland, Portugal and Norway. Large-scale road user charging schemes planned in the United Kingdom, France, Portugal, Spain and Norway are likely to provide further momentum to market growth. In an essentially consolidated market, only a few companies such as Autostrade, Q-Free, Kapsch/Combitech, Ascom and GEA have significant pan-European operations. This scenario is likely to change as the market grows.

"Competition is expected to intensify even further with new entrants from the telecommunications sector and the threat of entry of global participants in the European market being imminent," concludes Ms. Bhaskaran.

Market categories analysed in this study include Enforcement Systems, Vehicle Identification and Classification Lane Equipment, On Board Units, Automatic Number Plate Recognition Systems (ANPR), Vehicle Positioning Systems (VPS), Electronic Toll Collection (ETC) - Dedicated Short Range Communication (DSRC) Systems, Automatic Toll Collection and Manual Toll Collection.

If you are interested in a summary of this research service providing an introduction to the On-Site Power End-User Requirements in Europe, please send an email to Kristina Menzefricke, Corporate Communications at kristina.menzefricke@frost.com with the following information: full name, company name, title, contact telephone number, email. Upon receipt of the above information, the summary will be emailed to you.

Title: Strategic Analysis Of The European Road User Charging Systems Markets

Code: B321

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