Autostrade S.p.A. Receives Frost & Sullivan Honor for Vertical Market Penetration Leadership

LONDON--June 1, 2005--The 2004 Frost & Sullivan Vertical Market Penetration Leadership Award for the European road user charging (RUC) systems market was presented to Autostrade S.p.A. Autostrade S.p.A. has established a leading position in the traditionally conservative, risk-averse toll collection industry due to its progressive strategies. It is the only company in the RUC market with a focus on vertical penetration.

To be chosen as the recipient of the Award, Autostrade S.p.A. excelled in three key criteria: amount of market share in vertical market segments, levels of organizational effectiveness and strategic effectiveness.

"Uniquely, the Italy-based Autostrade S.p.A. is the only European company with a vertical focus on all three sectors of component supply, systems integration and toll operations," notes Ms. Hema Bhaskaran, Industry Analyst with Frost & Sullivan. "Its innovative market penetration strategies have enabled it to capture the largest share in each of these three areas."

As a toll operator, Autostrade S.p.A. controls over 60 percent of the Italian RUC market with over 3,408 kilometers of motorways. Autostrade S.p.A. currently controls the largest network of toll roads in Europe.

Employing a pioneering manufacturing strategy, Autostrade S.p.A. has outsourced the production of its Telepass(R) on board units (OBUs) while retaining the marketing and branding responsibilities. This enables Autostrade S.p.A. to achieve a 45 percent share in the European OBUs market with the additional benefit of profitability through effective cost management. Furthermore, strategic alliances with leading hardware and software market participants powered Autostrade S.p.A.'s 36 percent share of the European infrastructure equipment market in 2003.

Organizational effectiveness has been vital to Autostrade S.p.A.'s success. Following the completion of its 'Progetto Mediterraneo' reorganization plan in 2003, a separate motorway concession venture -- Autostrade per l'Italia S.p.A -- was formed. While it focused on construction and maintenance of motorways in Italy, the parent company -- Autostrade S.p.A. -- steered growth and expansion plans in the global RUC market through investments and merger and acquisition activity.

Autostrade S.p.A. has made concerted efforts to expand the electronic toll collection (ETC) market in Italy. Apart from efforts to educate non-users about the multiple benefits of ETC, the company has also pushed the enlargement and maintenance of the motorways network under construction, the installation of RUC systems in new toll areas and the implementation of RUC systems for vehicle access control in central urban areas. Rome, Siena and Florence have already adopted access control systems based on Telepass(R) applications.

Another area of focus will be the replacement (upon users' demand) of the current Telepass(R) OBUs with new bi-modal units also compliant with CEN standards (European Committee for Standardisation) for European interoperability.

Autostrade S.p.A.'s strategies for vertical integration and geographical expansion have underpinned its leadership position in the European market. Highlighting the advantages of outsourcing, it has pioneered a cost-effective, product expansion strategy aimed at providing total packaged solutions for all levels of the supply chain in the RUC systems market. In fact, outsourcing of the manufacturing process has enabled an impressive 100 percent growth within 10 years of the introduction of Telepass OBUs.

From being operational in Italy alone, Autostrade S.p.A. has now built a presence in the United States, the United Kingdom and Austria. In Austria, a fully owned company (Europpass Gmbh) was set to design, finance, build, operate and maintain an innovative multilane ETC system for heavy vehicles.

"Based on its perceptive vertical market penetration strategies, Frost & Sullivan expects Autostrade S.p.A. to strengthen its position in the European RUC market over the long term, whilst expanding on the global level to emerge as a leading participant in both the European and the global RUC systems markets," concludes Ms. Bhaskaran.

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