Gemplus (Nasdaq: GEMP; Paris Euronext: Euroclear 5768), the world’s leading provider of smart card-enabled solutions, today reviews its telecommunications business showing a marked increase within the telecom industry to adopt smart card-based solutions.

Since announcing a strategic move from being a smart card provider to being a SIM-based solutions provider at 3GSM World Congress in Cannes at the beginning of 2002, Gemplus has seen telecom operator take-up of SIM-based technology rise across all continents.

Over the last year, Gemplus’ strategy has been focused on helping operators maximise the potential of the SIM in order to increase ARPU in a highly competitive environment. By bringing operators closer to their customers, Gemplus was able to help secure the operator’s place in the value chain by offering a range of end-user value-added services. The aim was to position the SIM as an architectural control point helping operators enhance the end-user experience, provide secure mobile transactions and deliver mobile content.

The strategy has proven to be a success with operator adoption of SIM- based solutions on the rise since early 2002. The SIM’Xplore partners program was the result of Gemplus actively seeking partnerships with third party content and service providers in order to present operators with a range of solutions from location-based services to mobile entertainment.

Furthermore, MTS, Russia’s leading mobile network operator, has already seen the benefit of deploying SIM-based solutions. Their SIM-based services, MTS-Info, based on Gemplus technology and expertise, have already accounted for 5% of billable SMS traffic over the Russian airwaves.

In the area of 3G, Gemplus has been busy building on experience gained in 2001 with NTT DoCoMo and implementing this with KT ICOM for the launch of their 3G trial service during the 2002 FIFA World Cup. Operators in Europe are also pushing forward on 3G developments, with mobilkom austria adopting Gemplus USIM cards and its software development kit, GemXplore CASE for 3G, for their recent 3G launch.

Deploying Java Card(TM) technology remains high on Gemplus’ priority list in order to open up operators’ networks to the worldwide resource of Java(TM) technology developers. Orange UK and Vodafone Ireland are rapidly implementing their first Java SIM cards from Gemplus. The recent release with Vodafone Ireland outlined how the card was specially designed to act as a common platform enabling Vodafone to deploy a consistent set of services for end-users across the Group.

A key differentiator for Gemplus is in the ability to use the card for implementing customer management solutions preventing churn, increasing loyalty and reducing the cost of logistics for the operator. Gemplus P-CRM (Predictive-Customer Relationship Management) recently launched GemSuite InTouch, an application designed to help operators improve the acquisition and loyalty of their customers. Already deployed with TMN in Portugal, GemSuite InTouch works alongside GemSuite P-CRM, to offer a comprehensive customer management solution. In the same vein, GemSuite Churn solution enabled Telia to reduce the rate of churn for their fixed line service by 11% in just four months.

Enabling secure mobile transactions is a concept at the heart of Gemplus’ strategy. Therefore, the partnership with iPIN was an important milestone for Gemplus as proof of their commitment to mobile commerce. Signed in June 2002, this partnership is a strategic alliance to jointly offer the next generation of secure mobile payment solutions designed specifically for the pre-paid mobile market - called GemSuite Reload, powered by iPIN. In addition, Gemplus has teamed up with Orange Dominicana and Banco Popular to launch the first mobile banking service in the Dominican Republic and the first pre-paid reload services in Latin America.

Global results of Gemplus’ continuous efforts to maximize the value and effectiveness of the SIM have resulted in the company delivering over 500 million smart cards to the telecommunications industry and winning it the 2002 Frost & Sullivan Market Value Award.

“The last two years in the telecommunications sector has been turbulent with lower than expected uptake of new data services. This has put the entire smart card sector under pressure to show where smart card solutions have a direct role to play in helping operators reach their customers, personalize their service and generate customers that will demand higher value data services,” said Philippe Vallee, president of the telecom business unit at Gemplus. “The smart card has a crucial role to play in enabling a seamless and ongoing dialogue between the operator and customer. Our strategy will continue to focus on working with operators to identify and understand their diverse audience and deploying smart card-based solutions to enrich the relationship between the two.”

About Gemplus
GEMPLUS: the world’s leading provider of smart card solutions

Gemplus helps its clients offer an exceptional range of portable, personalised solutions that bring security and convenience to people’s lives. These include mobile Internet access, inter-operable banking facilities, e- commerce and a wealth of other applications.

Gemplus is the only completely dedicated, truly global player in the Smart Card industry, with the largest R&D team, unrivalled experience, and an outstanding track record of technological innovation.

In 2001, Gemplus was the worldwide smart card leader in both revenues and total smart card shipments (source: Gartner-Dataquest and Frost & Sullivan). Gemplus was also awarded Frost & Sullivan’s 2002 Market Value Award for its exceptional performance.

Gemplus trades its shares on Euronext Paris S.A. First Market and on the NASDAQ Stock Market as GEMP in the form of ADSs. Its revenue in 2001 was 1 billion Euros. Gemplus: Beyond Smart http://www.gemplus.com

For more information contact:

Gemplus
Jane Strachey
Gemplus Telecommunications PR Manager
Tel: +33 (0) 4 42 36 46 61
Email: jane.strachey@gemplus.com

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