Technological Advancements See Eastern European Road User Charging Markets Shift into Top Gear

LONDON, May 10, 2006 -- Increasing road congestion coupled with ongoing technological advancements in Eastern Europe is driving innovation in tolling methods in the region. The concept of road user charging (RUC) - or the charging of a vehicle based on the distance it travels on a highway - has revolutionised tolling in Western Europe and is set to do so in Eastern Europe as well. Frost & Sullivan expects every country in Eastern Europe to have sophisticated RUC systems in place by 2012.

Frost & Sullivan's (http://www.transportation.frost.com), Strategic Analysis of the Road User Charging Markets in Eastern Europe, reveals that this market generated revenues of EUR1.5 billion in 2004 and estimates this to reach EUR 2.6 billion by 2015.

"Rising road congestion and pollution have intensified environmental concerns in the European Union (EU)," observes Frost & Sullivan Research Analyst Malavika Srinath. "This, combined with the need to increase revenues in order to finance multiple infrastructure projects, has led many countries in the EU to implement road user charging as a matter of course."

Electronic toll collection systems account for the bulk of the European RUC market, with an overall share of 84 per cent overall. Revenues derived from these systems are likely to increase from EUR12.9 million in 2003 to EUR17.7 million in 2011. Although, manual toll collection systems dominate in eastern Europe, the success of microwave-based/dedicated short-range communication (DSRC) systems and satellite-based vehicle positioning systems (VPS) in western Europe indicates that eastern Europe will also gradually shift towards more technologically advanced methods.

Currently, the lack of standardisation and interoperability between Eastern European countries is proving to be a significant challenge to the development of RUC systems within the region. This is primarily due to the varying levels of infrastructural development and the different types of systems in use within the individual countries.

Government ministries are looking to address this challenge by implementing legislations, whereby the market for RUC systems will see an increasing convergence of business processes with IT solutions and mobile communications. While achieving standardisation and interoperability between countries is not likely to be an easy task, the compelling need to do so opens up significant opportunities for systems integrators and providers.

Following the success of the microwave-based/DSRC system developed in Austria and Switzerland as well as the revolutionary satellite-based VPS introduced and operated in Germany, countries in eastern Europe are proactively issuing tenders with the aim of choosing a system most suited to their needs and objectives.

"As a result, the market for on-board units (OBUs) installed in vehicles being charged under these systems will grow significantly over the next five years to ensure compliance with EU standards for interoperability," notes Ms. Srinath. "Interoperability initiatives also aim at the implementation of a single OBU for Europe-wide toll collection and this is likely to drive vehicle manufacturers to integrate OBUs as standard devices in vehicles."

Future trends indicate that Europe will increasingly move from DSRC to VPS systems, which in turn will drive VPS adoption in eastern Europe, as the interoperability issue is gradually resolved. This is borne out by the massive growth in VPS OBUs from 8,000 units in 2003 to 500,000 units in 2004. VPS technology is likely to hold approximately 60 per cent of the market by 2015 Market trends also indicate that the EU will mandate the use of this dynamic technology for all heavy vehicles by 2013.

"With the installation of satellite-based tolling systems in eastern Europe, more systems integrators from other parts of Europe are likely to enter the market," explains Ms. Srinath. "Companies should consider strategic alliances with other participants to benefit from economies of scale and systems suppliers need to collaborate to create an interoperable system across Europe, as technological pioneers are likely to capture maximum market share."

If you are interested in a virtual brochure, which provides manufacturers, end users and other industry participants with an overview of the latest analysis of Strategic Analysis of the Road User Charging Markets in Eastern Europe, then send an e-mail to Magdalena Oberland, Corporate Communications, at magdalena.oberland@frost.com with the following information: your full name, company name, title, telephone number, e-mail address, city, state and country. We will send you the information via e-mail upon receipt of the above information.

Strategic Analysis of the Road User Charging Markets in Eastern Europe is part of the Europe Automotive Subscription, which also includes research in the following markets: Strategic Analysis of the European Transportation (Freight) Market, Strategic Opportunity Analysis of the Chinese Logistics and Supply Chain Management Market and European Trade Compliance. All research services included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants. Interviews are available to the press.

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. For more information, visit www.frost.com.

Strategic Analysis of the Road User Charging Markets in Eastern Europe

B872-18

www.frost.com

List of Keywords in this Press Release: eastern Europe, road user charging systems, RUC, tolling systems, western Europe, European Union, EU, infrastructure, electronic toll collection, manual toll collection, microwave-based/dedicated short range communication system, DSRC, satellite-based vehicle positioning system, VPS, standardisation, interoperability, legislations, systems integrators, systems providers, on-board units, OBUs, vehicle manufacturers

List of Key Industry Participants: GEA, Autostrade SPA - Italy, Kapsch/ Combitech Systems, Efkon, ITS Czech Republic, Alfold Koncesszios Autopalya, Druzba ZA Avtocestev Republiki Sloveniji d.d (Iskra Sistemi), Ertico, Logica CMG, Orange, Thales, T-Mobile Traffic, Connex Polska, IBM, Traficon, FELA Management AG, Q-FREE Electronic Toll Collection, Ascom, Bosch, CAT Traffic GmbH, Avenir, CS Route, Vodafone, WirelessCar Sweden, Siemens ITS, Damovo + ABD Group, A-WAY + AD Praha, Navteq, MBB SensTech Traffic GmbH, Vitrionic, Bilfinger Berger BOT GmbH (Build-Operate-Transfer), Hochtief, Impregilo s.p.a, Stavby Silnic a Zeleznic, Bouyegue, Skanska (Sweden), Strabag (Austria), Enka (Turkey), Vinci

Magdalena Oberland, Corporate Communications- Europe, P: +44-(0)-20-7915-7876, E: magdalena.oberland@frost.com; Tolu Babalola, Corporate Communications - Americas, P: +1-210-477-8427, F: +1-210-348-1003, E: tolu.babalola@frost.com; Donna Jeremiah, Corporate Communications - Asia Pacific, P: +603-6304-5832, F: +603-6201-7402, E: djeremiah@frost.com; Surbhi Dedhia, Corporate Communications - India, P: +91-22-2832-4705 Ext: 131, E: sdedhia@frost.com; Sharmin Jassal, Corporate Communications - Australia, P: +61-2-8247-8900, E: sjassal@frost.com