1. ©2010 AT&T Intellectual Property. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property. Mobile Wireless 101 PA Broadband Conference September 2010 Carl Povelites, AT&T

2. Presentation Overview - Historical Trends in Market - What is the Wireless Network? - Evolution of the Network - Demand, Capacity and Impacts on the Network - Economic Impact and Broadband - Current Issues and Where are we Going 2 ©2010 AT&T Intellectual Property. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property.

3. Tech Cycles Tend to Last 10 Years 3 Mainframe Computing 1960s Mini Computing 1970s Personal Computing 1980s Desktop Internet Computing 1990s Mobile Internet Computing 2000s Entered Mobile Internet cycle about 3 years ago

4. The Last Five Years in Mobile  From Keypad to Touchscreen  From Text to Twitter to Facebook: The Socialization of Mobile  From 2G to Broadband in Your Pocket  There’s an App for That! The Future: Faster and more efficient wireless networks and devices will supplant the laptop and desktop as dominate technology. 4 ©2010 AT&T Intellectual Property. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property.

5. 5 Fundamental Components of a Wireless Network 5  Wireless Device  Cell Site/Tower  Radio Spectrum  Wireless Switch  Backhaul Lines and Transmission Facilities

6. 5 Fundamental Mobile Network Components 1st level text, Verdana 18pt 2nd level text, Verdana 18pt –3rd level text, Verdana 17pt 4th level text, Verdana 15pt –5th level text, Verdana 15pt 6 Radio AccessCore NetworkBackhaul

7. Examples of Cell Towers 7 ©2010 AT&T Intellectual Property. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property.

8. Spectrum 8 ©2010 AT&T Intellectual Property. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property. - Provides the wireless link between the device and the cell site’s antennas. - May be the only part that is truly “wireless” (the remainder may be handled by wireline facilities such as fiber and copper transmission networks, or by microwave radio. - Various frequencies used (e.g., 850 MHz, 1900 MHz, 700 Mhz, etc.)

9. Wireless Switch 9 ©2010 AT&T Intellectual Property. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property.

10. Backhaul Backhaul is the network connection between the cell tower and the operator’s core network. Depending on traffic volumes, the backhaul connection can be:  Copper (1.544 Mbps per DS1)  Microwave (~50 Mbps)  Fiber (virtually unlimited) 10 ©2010 AT&T Intellectual Property. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property. Source: FCC’s 14 th CMRS Competition Report - 2010

11. Wireless Networks Are Beginning Their 4 th Rebuild 11

12. 4G: Long Term Evolution (LTE)  Greater Capacity/Lower Cost per Bit ~10Mbps per subscriber is up to 4x speed of 3.5G technologies 1/10 th the cost of 3.5G technologies  Simple IP Core Architecture Allows common applications and services across multiple/disparate fixed and wireless access technologies  Spectrum Flexibility Can be deployed across 450MHz-2600MHz bands Scalable between 1.5MHz and 20MHz channels 12 ©2010 AT&T Intellectual Property. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property.

13. Consumer Demand for Mobile Data is Surging 13 ©2010 AT&T Intellectual Property. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property. Cisco Forecasts 3.6 Million Terabytes per Month of Global Mobile Data Traffic by 2014 108% CAGR 2009 - 2014 90,000 Terabytes 3,600,000 Terabytes North America: U.S. and Canada Source: Cisco, VNI Mobile, 2010

14. Typical Data Applications 14

15. Putting Data Traffic in Perspective  The Library of Congress (LoC) contains about 33 million books. Each book is approximately 1 megabyte (MB). The LoC thus contains about 33 terabytes (TB) of books. One exabyte is therefore equal to about 30,000 Libraries of Congress.  In 2009, world Internet traffic was approximately 10 exabytes per month, or 300,000 LoCs.  By 2015, the U.S., Europe, and Asia could each transmit the equivalent of two Libraries of Congress every second for the entire year. 15 ©2010 AT&T Intellectual Property. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property.

16. Video Driving Rapid Growth in Mobile Data Traffic 16

17. Network Demand vs. Capacity 17 ©2010 AT&T Intellectual Property. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property.

18. Meeting the Mobile Broadband Bandwidth Demand 18 ©2010 AT&T Intellectual Property. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property.  Increasing Available Spectrum  Accelerating Network Efficiencies  Capitalizing on Wi-Fi and Femtocells  Ensuring Application Efficiencies

19. The Mobile Wireless Ecosystem 19

20. U.S. Wireless Cumulative Capital Investments : 1986-2009 20 ©2010 AT&T Intellectual Property. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property. Source: CTIA’s Wireless Industry Indices, Year-end 2009

21. Consumers Have Choice Among Providers 21 ©2010 AT&T Intellectual Property. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property.

22. U.S. Mobile Virtual Network Operators (MVNO) Carriers  There were at least 60 MVNOs (mobile resellers) operating in the U.S. in the first quarter of 2010  Tracfone is the largest MVNO with over 14 million subscribers at year end 2009  Virgin Mobile, another large MVNO, was acquired by Sprint Nextel in 4Q2009  Most MVNO are privately held, and do not report their subscriber numbers 22 ©2010 AT&T Intellectual Property. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property. Source: FCC’s 14 th Mobile Wireless Competition Report - 2010

23. U.S. Ranks 1 st in World in Mobile Broadband Subscribers 23 ©2010 AT&T Intellectual Property. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property. HSPA: High Speed Data Access. EV-DO: Evolution – Data Optimized

24. Emerging Devices Taking Off and Expected to Maintain Growth 24 ©2010 AT&T Intellectual Property. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property.

25. Economic Impact of U.S. Wireless Industry - Jobs  More than 2.4 million jobs are either directly or indirectly dependent on the U.S. wireless industry  Wireless jobs are compensated more than 50% more than the national average of other production workers 25 ©2010 AT&T Intellectual Property. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property. Source: CTIA Semi-Annual Survey

26. Economic Impact of U.S. Wireless Industry - Investment Wireless service providers have spent more than $229 billion from 1999-2009 to build, expand and upgrade wireless networks  This does not include the $33 billion paid to the U.S. Treasury to acquire spectrum in just the last 2 spectrum auctions U.S. wireless companies generated more than $95 billion to the U.S. GDP in 2007  The economic contributions of the U.S. wireless industry outpace the economic impact of the motor vehicle, airline, railroad and water industries As of December 2009, U.S. wireless providers deployed more than 247,081 cell sites 26 ©2010 AT&T Intellectual Property. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property.

27. Snapshot of Wireless Industry in PA 27 ©2010 AT&T Intellectual Property. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property. PA Subscribers December 1999: 2.76 million June 2008: 9.89 million PA Employees 4,915 (carriers, not agent staff) PA Annual Wages $305 million FCC Competition Report May, 2010

28. Future: AT&T Labs has a Piece 28 ©2010 AT&T Intellectual Property. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property. AT&T is working with other companies to develop new and innovative accessibility applications for mobile devices. Many rely on previous AT&T Labs inventions such as AT&T Watson (voice-to-text) and AT&T Natural Voices (text-to-voice). Under Development  Miracle: Automatic transcription, indexing and retreival of video  iWalk: Walking directions for people with low vision or blindness Currently Available  Vlingo: Speech control of your phone  Video Relay Service and IM Relay

29. Future: Public Policy and Regulatory Initiatives impacting Broadband 29  Net Neutrality for Wireless  Title II Classification of Wireless Broadband  Spectrum Policy  Wireless Data Roaming Proposals  FCC Wireless Competition Docket  Siting

30. Summary Q:How does the wireless industry benefit the consumer? A:Competition, Investment, Jobs and Affordable and nearly ubiquitous mobile broadband are closing the digital divide. 30 ©2010 AT&T Intellectual Property. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property.

31. Questions? Carl Povelites cp5191@att.com Dave Kerr dkerr@att.com 31 ©2010 AT&T Intellectual Property. All rights reserved. AT&T and the AT&T logo are trademarks of AT&T Intellectual Property.