| The deregulated segment of the Norwegian bus market is anticipated to increase from the current 26 percent to approximately 40 percent by the end of 2009. During the next few years, traffic corresponding to 500-1,000 buses will be tendered each year. Today the market is characterized by many small players, which is due to a large part of the traffic not yet tendered being driven by local companies on concessions. These players are finding it difficult to survive deregulation and competition is consequently on the rise. Consolidation is probable. In the markets that have been tendered, four operators dominate contracts - Nettbuss, Norgesbuss, Veolia and CBN. The criteria for contract allocation are based almost solely on lowest price, and the difference between the highest and lowest price is often very large. A heated Norwegian labor market and relatively low driver salaries risk driving up the operators' personnel costs when new salary agreements are signed.
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