Mobile communication

Mobile communication is set to enter a new phase with faster access to data and massive growth in mobile applications. In 2010, Gemalto demonstrated again that it is at the forefront of these changes and is delivering significant returns from its ongoing investment in innovative technology.

The segmental review is based on adjusted financial information for ongoing operations. 'Ongoing operations' exclude the contribution from discontinued operations and from assets classified as held for sale to the income statement. The adjusted financial information are non-GAAP measures, where the key metric to evalulate the business and to take operating decisions is the profit from operations (PFO). PFO is defined as the IFRS operating result adjusted for all equity-based compensation charges and associated costs, amortisation and depreciation of intangibles resulting from acquisitions, and restructuring and acquisition-realted expenses.


Our performance(*)



(2009: €888m)

Up 5% year-on-year at constant exchange rates

Gross profit


(2009: €383m)

Gross margin


(down 490 basis points)

Profit from operations


(down 500 basis points)

Profit margin from operations


(down 500 basis points)

  • Growth was driven by success in software and services, whose revenue doubled to €152 million
  • Promising developments in new form factor products offset the slightly lower revenue from traditional SIM card business
  • Margin profile of traditional SIM card business remained unchanged
  • Year-on-year profit variation is essentially resulting from operating expenses investment in fast growing software and services areas, consolidation effects of acquired businesses and exceptional items
  • (*)
  • Adjusted financial information for ongoing operations.

Our products, software and services

More than 450 Mobile Network Operators (MNOs) worldwide benefit from our products, software and services. These include:

Digital Life Management: we help MNOs who want to expand their services onto the internet, and end-users who want to put their data onto any platform, whether their handset or PC. Our LinqUs Life Mobilizer lets them protect, organize, manage and share their data securely, and so enables the experience that both users and operators have been seeking.

Mobile Marketing Solutions: we help operators, content providers, advertising agencies and brands to deliver personalized, rich and relevant content and campaigns via mobile handsets, with unrivaled efficiency.

Mobile Financial Services: we provide mobile solutions for banking, payment and money transfer, so that banks and MNOs can offer innovative, high-value services at lower cost and with maximum security. LinqUs Mobile Banking also provides such services to millions of unbanked subscribers in emerging economies.

Roaming Services: LinqUs Roaming Director puts users onto the preferred network when abroad. This highly efficient traffic redirection steering system helps operators maximize revenues and deliver the optimum performance for subscribers. Our solutions help drive up profitable roaming traffic and give end-users a superior experience.

Trusted Service Manager (TSM): thanks to Near-Field Communication (NFC) technology, the mobile handset has become a mobile wallet for a wide range of applications. Allynis TSM helps mass transit operators, banks, businesses and MNOs deploy services seamlessly and securely.

Long-Term Evolution (LTE): Gemalto sits at the forefront of the roll-out of 4G – the long-term evolution of mobile broadband services, bringing all our expertise in digital identity and security to a vast range of new applications.

Our positioning

  • Some 1.8 billion(**) subscribers benefit from at least one of our solutions.
  • People increasingly access and manage many essential services via their mobile device. Since this involves their personal data, they need to trust the systems they use. Ensuring that sensitive information is secure is at the core of Gemalto’s expertise.
  • With a leading share in advanced markets, we are therefore firmly positioned to address fast-growing premium opportunities – such as mobile broadband, mobile contactless transactions, remote management and Machine-to-Machine.
  • We are also continuing to help narrow the gap between premium technology and worldwide accessibility, giving billions of users access to the advantages of a range of mobile services.
  • With our broad expertise across a range of markets we are in a unique position to serve customers with converging needs, such as those who want to use their phone as a payment device.
  • In order to offer the best user experience, our end-to-end technology stands both at the heart of the MNOs’ systems and in the hands of consumers, providing an unbreakable link and high interactivity between them.
  • We have strengthened our hand in the Mobile communication sector by making strategic acquisitions.
  • We are engaged in active partnerships with handset manufacturers to establish seamless solutions.
  • We have a strong involvement in organizations and bodies defining standards, setting trends and shaping the industry.
  • (**)
  • Source: Gemalto

Keeping the world in contact: mobile communication is a key domain for Gemalto, which has been providing products, solutions and software to the industry for more than 30 years. In 2010, we saw significant advances in all areas of this segment, including major contract wins, awards for our technology and plaudits for our innovations; and our performance reaffirmed our global leadership in this massive and growing market.

Digital Life Management: users now expect their digital content and services to be with them everywhere – particularly on their mobile handset. And our technology ensures that they can protect, manage, organize and share their personal data on any platform, whether it’s in their mobile, on their computer or in the cloud. Uptake of these offerings has been remarkable. In 2010, the number of contacts being managed by our Digital Life Management Services surpassed the 3 billion mark. Our solutions work on more than 1,000 different devices – which ensures that end users retain choice about every aspect of their digital lives wherever their data is and whenever they decide to change phones.

Not only are we constantly working to link the internet with the mobile, we are also striving to narrow the gap between premium technology and worldwide accessibility – as, for example, our solutions giving potentially billions of mobile users access to Facebook and Windows Live.

Mobile Marketing: both operators and major brands are keen to exploit mobile devices as a marketing channel – they’re the one thing that people never leave home without. In many markets, there are more handsets than people, and smartphones are rapidly increasing in market share. As a result, we’re seeing great interest in our LinqUs mobile marketing solutions that deliver personalized, targeted and relevant content and campaigns via the phone.

Our solutions offer wide reach and built-in interactivity – improving measurement of return on investment, profiling and targeting. Gemalto has a competitive advantage in this arena: we are the only company able to deploy interactive SMS messages that can pop-up on an idle phone screen. This makes them a valuable, extra direct-marketing channel to any CRM or ad server.

In 2010 we showed how we can blend the range of Gemalto solutions to maximize the impact of mobile marketing. When Belgian telco Mobistar wanted to get more subscribers to use its “ContactSave” service, we recommended our LinqUs traffic boosting solution to increase the discovery and usage rate. Then we targeted two million subscribers with a promotional interactive SMS campaign, which resulted in a five-fold increase of traffic generated. In February 2010, Mobistar confirmed that use of ContactSave had multiplied by ten over a four-month period.

Mobile Financial Services: the popularity of our Mobile Financial Services (MFS) offering continued to rise in 2010. Our expertise in strong authentication means our solutions meet the highest security standards. And because they work on all devices, MNOs and banks can offer these highly secure services without compromising on customer reach. This is particularly relevant in emerging economies, where most handsets are basic models. It makes Gemalto solutions a powerful driver of digital democracy. By opening up financial services to anyone with a handset, we’re helping give them significant life choices – especially if they’re one of the five billion people worldwide without a bank account.

We strengthened our MFS offering in 2010. In order to augment our solutions for enterprises, access management and identification, we announced in February that we had acquired Valimo, a world leader in mobile authentication. Valimo enables mobile phone users to securely sign digital documents simply by entering a password or PIN code.

Naturally, that commitment to strengthening our solutions is translating into new business. For example, in 2010 we announced that MTN Middle-East and North Africa had selected our LinqUs security solution to launch MFS in five countries, a potential new market of 30 million people. And in March, we agreed a deal with Texas Instruments to integrate our MFS capabilities into its mobile security platform (OMAP), helping manufacturers and operators roll out secure financial transaction capabilities more easily.

Roaming Services: Gemalto continues to provide Roaming Services to help operators optimize costs and increase revenues. This is more important than ever as people are increasingly using mobile internet services when abroad. Consequently, data roaming is rising sharply, and assigning users to preferred networks can make a real difference in cost for operators. Gemalto’s Roaming Director service delivers 90% successful traffic redirection – other technologies typically achieve just 60% – ensuring MNOs can connect subscribers to preferred partners seamlessly. It also means they can place a call or go online the moment they step off the plane.

That’s one of the reasons why, in February 2010, the Netherlands’ largest operator, KPN, started using our LinqUs Roaming Director to offer enhanced services to its eight million subscribers, as well as offering it new capabilities to fine-tune traffic redirection.

Trusted Service Manager (TSM): Near-Field Communication (NFC) technology has turned the handset into a versatile electronic wallet, capable of accessing an array of applications such as payments and ticketing systems. As a result, MNOs, banks and other providers are seeing new opportunities to bring together their services in one convenient device. To merge these functions securely and ensure only legitimate users access the right services, Gemalto provides a Trusted Service Manager (TSM) solution.

Our deal in May 2010 to provide Orange with Allynis TSM services for the “Nice, mobile contactless city” project illustrates how it works. This is the first commercial launch of contactless mobile services in Europe and allows citizens and visitors to Nice to use an NFC mobile handset to pay at restaurants, supermarkets and local stores, as well as ride city busses and trams – all with total digital security.

In June 2010, we announced that KDDI’s 31 million subscribers in Japan would be able to take part in their own NFC roll-out thanks to our TSM solution. Elsewhere, we agreed a deal in July with Kasikornbank, Thailand’s second largest bank, and Advanced Info Services (AIS), its largest telecommunications operator, to introduce their own NFC services using TSM.

Long-Term Evolution (LTE): we are also a driving force in rolling out the next generation of mobile networks, known as Long-Term Evolution (LTE) or 4G, helping MNOs deploy new value-added services using ultra-high-speed data access and IP connectivity. With our solutions, MNOs not only seamlessly overcome obstacles in their migration to these high-bandwidth data services, they can also transform their relationships with subscribers.

Gemalto is supplying Over-the-Air (OTA) services and Universal Integrated Circuit Card (UICC – multi-function SIM) solutions to a range of major LTE projects. In January 2010 we began deploying them for Verizon Wireless, the leading US 4G and 3G operator with 93 million customers. They help Verizon deliver a secure and reliable multimedia data connection, provide global roaming capabilities, and remotely add new UICC applications and services on its 4G LTE wireless broadband network.

Only two months later, MetroPCS, the fifth largest facilities-based carrier in the US, selected Gemalto to provide these solutions for its mobile broadband launch covering 6.6 million subscribers. This meant that by the end of 2010, it was able to offer LTE coverage in five major metropolitan cities, including Los Angeles and Dallas.

In October, Gemalto was shortlisted in three categories at the LTE North America Awards, reaffirming our position as a global leader in the drive to accelerate adoption of this critical new technology.





In January 2010, Gemalto increased its stake in Netsize S.A. to 85.65%. Netsize offers mobile payment solutions based on operator billing for 100 mobile operators in 28 countries, reaching over 1 billion billable subscribers, and provides mobile messaging with SMS and MMS delivery to over 200 countries. Netsize was founded in 1998. For further information see Netsize.


In August 2010, Gemalto acquired Trivnet, one of the leading players in Mobile Financial Services. Trivnet helps Mobile Network Operators and banks to increase their customer base, enhance loyalty and drive revenue by enabling mobile payments, mobile commerce, mobile wallet, “banking the unbanked” and mobile money transfer. Trivnet was founded in 1997.



30 million

MTN subscribers now use a wide variety of mobile financial services.

$65 million

The estimated value of the mobile financial services market by 2014.

Mobile financial services in the Middle East

Thirty million MTN subscribers in Africa and the Middle East now use a wide variety of mobile financial services thanks to Gemalto’s SIM-based security solution.

MTN’s MobileMoney service includes money transfer, mobile purchase, payment and balance checking, as well as the immediate purchase of airtime. The user-friendly interface makes it easy and convenient for subscribers to enjoy these services, which feature simple menus in English plus a number of local languages.

Gemalto’s SIM-based technology, with end-to-end encryption, guarantees the highest level of security for these transactions and gives subscribers the freedom to use the services from any type of handset by simply swapping the SIM card.

Mobile financial services are considered to be one of the world’s fastest-growing and dynamic wireless markets, set to be worth USD 65 billion by 2014(*).

  • (*)
  • Juniper Research, January 2010