Global mobile Suppliers Association © 2005 Slide no. 1/32 Canto 2005 in St. Kitts GSM/3G MARKET UPDATE as per May 17, 2005 Global mobile Suppliers Association www. gsacom.com by Peter Reinisch Vice President GSA

Global mobile Suppliers Association © 2005 Slide no. 2/32 Canto 2005 in St. Kitts Many of the charts in this document are downloadable by registered site users at Worldwide GSM subscribers counter running 24/7 at IMPORTANT NOTE

Global mobile Suppliers Association © 2005 Slide no. 3/32 Canto 2005 in St. Kitts Open standardized technology Interoperability, roaming, competition, roadmap security, end-to-end efficiency Economies of scale  1.36 billion GSM users currently  GSM has more advanced learning curve  GSM has sustainable cost advantage Growth  GSM > 80% of all new users Source: EMC Millions Mobile subscriptions GSM CDMA (Feb) Business fundamentals driving GSM success

Global mobile Suppliers Association © 2005 Slide no. 4/32 Canto 2005 in St. Kitts Mobile technology growth, market share GSM/3G statistics and downloadable charts at

Global mobile Suppliers Association © 2005 Slide no. 5/32 Canto 2005 in St. Kitts Mobile subscribers growth – China, India

Global mobile Suppliers Association © 2005 Slide no. 6/32 Canto 2005 in St. Kitts Mobile subscriber growth - Latin and Central America

Global mobile Suppliers Association © 2005 Slide no. 7/32 Canto 2005 in St. Kitts cdmaOne GSM TDMA 2G PDC CDMA2000 1x First Step into 3G GPRS 90% 10% Evolution of Mobile Systems to 3G - drivers are capacity, data speeds, lower cost of delivery for revenue growth EDGE WCDMA WCDMA CDMA2000 1x EV/DV 3G phase 1Evolved 3G 3GPP Core Network CDMA2000 1x EV/DO HSDPA HSDPA Expected market share EDGE Evolution EDGE Evolution

Global mobile Suppliers Association © 2005 Slide no. 8/32 Canto 2005 in St. Kitts Performance evolution of cellular technologies

Global mobile Suppliers Association © 2005 Slide no. 9/32 Canto 2005 in St. Kitts Laptop Browsing ( Downloads)  CDMA – The average download speed was about 50 kbps.  EDGE – The average download speed was about 160 kbps. Internet Streaming (Live TV)  CDMA – The TV was not playing continuously but with breaks.  EDGE – The TV was playing continuously and smoothly. Video Streaming on Mobile (Live Videos)  CDMA – not possible at present.  EDGE – A smooth play of movie trailer. Practical performance of EDGE and CDMA2000 1X - Observations from a GSM/EDGE and CDMA market

Global mobile Suppliers Association © 2005 Slide no. 10/32 Canto 2005 in St. Kitts Wildstrom (columnist) I found downloads consistently hit speeds at a bit over 300 kilobits per second, at the low end of Verizon's claimed range of 300 to 500 kbps. No standardized QoS mechanisms Only best-effort services, e.g. bearers for video telephony or streaming not supported. Over-dimensioning of % required for delivery of real time services (e.g. streaming or video-telephony Typical speed for packet data services are kbps in commercial networks (includes reduction from packet overheads) Standardized QoS mechanisms for conversational, streaming, interactive and background services WCDMA delivers efficiently virtually any service, including video telephony QoS management and wideband signal deliver highest spectral and cost- efficiency EVDO WCDMA Performance of WCDMA and EV-DO

Global mobile Suppliers Association © 2005 Slide no. 11/32 Canto 2005 in St. Kitts First steps to 3G  270 commercial GPRS networks  141 networks deploying GPRS/EDGE  84 commercial EDGE networks (source: GSA, May 16, 2005)  121 commercial Cdma2000 1x networks (source: CDG, May 13, 2005) 3G  WCDMA: 134 licenses awarded  71 commercial WCDMA networks (source: GSAMay 12, 2005)  22 commercial CDMA 1x EV-DO networks (source: CDG, May 13, 2005) Adoption of different mobile standards Evolved 3G  HSDPA: all WCDMA operators expected to upgrade to HSDPA (SW upgrade to BTS)  CDMA 1x EV-DV: limited industry support

Global mobile Suppliers Association © 2005 Slide no. 12/32 Canto 2005 in St. Kitts Data revenue from mobile services Cumulative revenue from mobile data services earned by the 30 leading operators reached USD 10 billion during Q3/2004. Data services revenue is growing on a wide front. Source: Informa Telecoms and Media

Global mobile Suppliers Association © 2005 Slide no. 13/32 Canto 2005 in St. Kitts Global mobile data subscriber growth Source: Informa Telecoms and Media Mobile data subscribers millions

Global mobile Suppliers Association © 2005 Slide no. 14/32 Canto 2005 in St. Kitts Over 270 operators have launched MMS A dramatic shift towards camera phones in EMEA market in 2004, achieving 56% of the market. During Q3/2004, close to 40 million of 62 million phones shipped (Source: Canalys) i.e. two-thirds, were camera phones. Color screens on over 80% of devices in Europe (compared to 49% in Q3/2003). Almost three quarters of new European mobiles are camera- phones, according to IDC. Camera phones achieved year-on-year growth of over 600% to total 72% of phones sold (compared to 11% in Q3/ 2003). The volume of mega pixel camera phones also began to grow in Q3/2004.

Global mobile Suppliers Association © 2005 Slide no. 15/32 Canto 2005 in St. Kitts GSA research to April 12, 2005 confirms: 134 WCDMA licenses in 48 countries 71 commercial WCDMA operators in 31 countries 6 operators at pre-commercial stage WCDMA subscribers: 24.1 millions* 166 WCDMA/HSDPA devices models in the market *(WCMDA subs at March 31, 2005 source Informa Telecoms & Media) WCDMA - mature technology globally deployed in commercial service Registered GSA website users from suppliers who are member organisations of GSA and other qualified site users can download the list of commercial and pre-commercial networks Contained in 3G/ WCDMA Deployments Worldwide -

Global mobile Suppliers Association © 2005 Slide no. 16/32 Canto 2005 in St. Kitts 166 WCDMA models in the market Subscriber growth is now driven by a wider range of competitive service offerings, a wider variety of terminals in the market, and maturing technology

Global mobile Suppliers Association © 2005 Slide no. 17/32 Canto 2005 in St. Kitts WCDMA – 25 device suppliers Amoi BenQ Fujitsu Hisense HTC Huawei LG Mitsubishi Motorola NEC Nokia Novatel Wireless NTT DoCoMo (Raku Raku) Panasonic Pantech Samsung Sanyo Seiko Sharp Siemens Sierra Wireless Sony Ericsson Toshiba Vodafone (Option Wireless PC card) ZTE

Global mobile Suppliers Association © 2005 Slide no. 18/32 Canto 2005 in St. Kitts EDGE - strong take up globally 141 operators in 79 countries are deploying EDGE 84 commercial networks in 52 countries now on all continents

Global mobile Suppliers Association © 2005 Slide no. 19/32 Canto 2005 in St. Kitts EDGE devices shipping or announced 113 GSM/EDGE devices are in the market (May 1, 2005) EDGE is standard in most new data- enabled phones 21 suppliers are in the market

Global mobile Suppliers Association © 2005 Slide no. 20/32 Canto 2005 in St. Kitts EDGE (Enhanced GPRS) uses existing spectrum and sites Incremental investment for triple GPRS data rates, more voice capacity Natural evolution for all GSM operators - fastest path to 3G WCDMA in new IMT 2000 spectrum for highest rate 3G services/applications e.g. video calls WCDMA leverages GSM scale plus Japan/Korea markets for global service Gradual investment; step-by-step evolution; builds on existing applications/service portfolios GSM/EDGE/WCDMA for simple service migration, similar user experience, service continuity, roaming; high investment re-usability Integrated EDGE/WCDMA devices available; EDGE/WCDMA handover is commercial reality GSM Operators path to 3G – combining EDGE & WCDMA complementary proven mature open technologies

Global mobile Suppliers Association © 2005 Slide no. 21/32 Canto 2005 in St. Kitts Combined WCDMA-EDGE networks AIS, Thailand Ålands Mobiltelefon, Finland Batelco, Bahrain Cellcom, Israel Cingular Wireless, USA CSL, Hong Kong Dialog GSM, Sri Lanka Elisa, Finland EMT, Estonia Eurotel Praha, Czech Eurotel Bratislava, Slovak GPTC, Libya Maxis, Malaysia Mobilkom Austria Mobitel, Bulgaria Mobily, Saudia Arabia MTC Vodafone, Bahrain MTN, South Africa Netcom, Norway Orange, France Orange, Romania Orange Slovensko, Slovak Oskar Mobile, Czech Pannon GSM, Hungary Polkomtel, Poland Rogers Wireless - Fido, Canada Si. Mobil – Vodafone, Slovenia Swisscom, Switzerland Telenor, Norway T-Mobile, Croatia T-Mobile, Czech T-Mobile, Hungary T-Mobile, USA Telfort, Netherlands TeliaSonera, Denmark TeliaSonera, Finland TeliaSonera, Sweden TIM Hellas, Greece TIM, Italy VIP Net, Croatia At least 40 operators are delivering 3G services on combined WCDMA-EDGE networks. WCDMA and EDGE are comple- mentary technologies ensuring lower capital cost, optimum flexibility and efficiencies

Global mobile Suppliers Association © 2005 Slide no. 22/32 Canto 2005 in St. Kitts HSDPA (High Speed Downlink Packet Access) HSDPA performance improvements are achieved by: bringing key functions e.g. scheduling of data packet transmission and processing of retransmissions into the base station – i.e. closer to the air interface using a short frame length to further accelerate packet scheduling for transmission employing incremental redundancy for minimizing the air-interface load caused by retransmissions adopting a new transport channel type - High Speed Downlink Shared Channel (HS-DSCH) to facilitate air interface channel sharing between several users adapting the modulation scheme and coding according to the quality of the radio link.

Global mobile Suppliers Association © 2005 Slide no. 23/32 Canto 2005 in St. Kitts Backed by leading vendors including: Ericsson, Nokia, and Siemens Supported by leading operators including: Cingular Wireless, TeliaSonera Telecom Italia Mobile EDGE Evolution - first steps taken PRESS RELEASE March 10 th GSA announces its support for the new 3GPP study items on EDGE Evolution. EDGE Evolution is envisaged to bring on average 2 – 3 fold data speeds com- pared to EDGE rates today, higher voice and data capacity and improved spectral efficiency. The first standardization release, 3GPP Release 7, is envisaged to be ready in 2006 Operators have expressed strong interest and need !

Global mobile Suppliers Association © 2005 Slide no. 24/32 Canto 2005 in St. Kitts Market take-up Open standards & systems proprietary systems Note: conceptual illustration Terminal Server Open & Standardized interfaces Openness fuelling market growth and innovation

Global mobile Suppliers Association © 2005 Slide no. 25/32 Canto 2005 in St. Kitts In comparison, there are virtually no local developers for any single proprietary service standard, and only a maximum of a few thousands in each globally. Meeting the evolving consumer demands in all segments with a proprietary platform is not possible in practice Prohibitive cost and time required to recruit and maintain a proprietary developer community Over 4 Million Java-developers Over 500 Million Java-enabled GSM terminals Customers want locally relevant applications - enabled only with an open, globally adopted platform There are millions of application developers globally, using OMA - standardized development tools  This community is able to produce any service that is demanded from various local consumer segments

Global mobile Suppliers Association © 2005 Slide no. 26/32 Canto 2005 in St. Kitts Global average roaming revenue is today 4% Typically up to 25% of revenues may be contributed from roaming In the GSM community over 20,000+ roaming agreements are in place Indirect impact of roaming plays a major role in customer acquisition Virtually all potential data users require roaming as a basic part of service offering. Only GSM provides automatic roaming facilities globally  Service roaming globally is also required with 3G Service roaming globally possible only with GSM-family

Global mobile Suppliers Association © 2005 Slide no. 27/32 Canto 2005 in St. Kitts Improved performance, decreasing cost of delivery Typical average bit rates (peak rates higher) WEB browsing Corporate data access Streaming audio/video Voice & SMS Presence/location xHTML browsing Application downloading MMS picture / video Multitasking 3G-specific services take advantage of higher bandwidth and/or real-time QoS A number of mobile services are bearer independent in nature HSDPA 1-10 Mbps WCDMA kbps EGPRS kbps GPRS kbps GSM kbps Push-to-talk Broadband in wide area Video sharing Video telephony Real-time IP multimedia and games Multicasting Services roadmap CDMA EVDO CDMA EVDV CDMA x

Global mobile Suppliers Association © 2005 Slide no. 28/32 Canto 2005 in St. Kitts 3G is relevant today for all markets Capacity booster; operational and spectrum efficiencies Higher data speeds; all data services improve with speed  enhances user experience Revenue growth with new data-enabled services Key for competitive differentiation DGE: small upgrade to GPRS, big lift in performance, fast market entry WCDMA: in new spectrum at 2GHz (IMT-2000 core band) EDGE + WCDMA complementary and long term Evolved WCDMA (HSDPA/HSUPA) for mass market mobile IP multimedia

Global mobile Suppliers Association © 2005 Slide no. 29/32 Canto 2005 in St. Kitts About GSA - Global mobile Suppliers Association -representing GSM/EDGE/WCDMA suppliers globally GSA is the only representative body for the GSM/3G supplier industry, bringing together all views on GSM/EDGE/WCDMA Objectives to strengthen promotion of GSM world-wide in new and existing markets to support operators and promote the evolution of GSM as the platform for delivery of third-generation (3G) multimedia services GSA Executive Committee in 2005 comprises the leading GSM/EDGE/ WCDMA suppliers: Ericsson, Lucent, Nokia, and Siemens Benefits of membership/join GSA – see

Global mobile Suppliers Association © 2005 Slide no. 30/32 Canto 2005 in St. Kitts GSM/3G Resources - GSM/EDGE/WCDMA/HSDPA GMD™Newsletter GSM/3G Operators Zone for GSM-family operators register at Push to Talk on a Mobile Phone (Opinion Paper) GSM/3G Network Update Services/market/technology updates WCDMA Databank – deployments, devices EDGE Databank – deployments, devices, platforms