Frost & Sullivan: Critical Infrastructure Security Booming in New EU Member States

LONDON, July 8, 2010 - The critical infrastructure security market is booming in EU accession
states as these countries build new power plants and race to modernise air-
and sea-ports. The market will grow steadily, reaching US$2.2 billion by
2017, with peaks in 2011 and 2013, due to EU funding and procurement for
energy and airport projects in the region.

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New analysis from Frost & Sullivan (www.aerospace.frost.com),
Critical Infrastructure Security Market Assessment EU-Accession States, finds
that market growth is fueled by government funds and private investments. EU
security regulation compliance requirements and the need for a common
security strategy are other contributing factors.

"The construction of new power plants in Poland, the Czech Republic and
Bulgaria as well as upgrades of security systems for airports in Poland,
Romania, the Czech Republic, Bulgaria and Slovakia are expected to gain
momentum," says Frost & Sullivan Consulting Analyst, Abdallah Binmadhi. "New
surveillance systems and perimeter detection technology will be necessary to
comply with EU regulations."

However, the economic downturn has sapped budgets for critical
infrastructure security, so technology spending will be constrained by the
delay of key infrastructure projects. In addition, there is a lack of state
incentives encouraging foreign company ventures. Because the procurement
process is highly complex, especially for new competitors, local or
well-established companies are preferred during the tender.

"Tenders can become complex and entangled in the bureaucratic process,"
says Binmadhi. "Savvy participants can manage the tenders with the help of
local experts familiar with the language and regulations."

Although the market is highly fragmented, with a few dominant players in
some areas but not in others, numerous interesting opportunities do exist. To
gain a competitive edge, companies should emphasize accelerated output in
their existing product line. Also, upon entering new markets, companies must
thoroughly analyse the distribution chain and create partnerships between
local participants and system integrators.

"Companies seeking to penetrate challenging foreign markets should
consider the acquisition of local companies," says Binmadhi. "Tier 1
companies are already consolidated in the market, but Tier 2 and Tier 3
companies can outsource many of their products to companies that already
operate and have a better understanding of market dynamics."

Focus should be placed on aftermarket services like maintenance,
replacements and upgrades. Also, long-term contracts will be more favorable
than ad hoc contracts thanks to increased revenues on the service side.

If you are interested in more information on this study, please e-mail
Monika Kwiecinska, Corporate Communications, at monika.kwiecinska@frost.com,
with your full name, company name, title, telephone number, company e-mail
address, company website, city, state and country.

Critical Infrastructure Security Market Assessment EU-Accession States is
part of the Defense Growth Partnership Service program, which also includes
research in the following markets: Middle East Oil & Gas Infrastructure
Security Market, European Sea Port Security Market, Indian Land-based Live,
Constructive and Virtual Training and Simulation Market, and European Sea C2
Markets. All research services included in subscriptions provide detailed
market opportunities and industry trends that have been evaluated following
extensive interviews with market participants.

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     Critical Infrastructure Security Market Assessment EU-Accession States
                                      M42B

    Contact:
    Monika Kwiecinska
    Corporate Communications - Europe
    P: +48-22-390-4127
    F: +48-22-390-4160
    E: monika.kwiecinska@frost.com

www.frost.com

Monika Kwiecinska of Frost & Sullivan Corporate Communications - Europe, +48-22-390-4127, fax, +48-22-390-4160, monika.kwiecinska at frost.com