cdma2000cdma2000®® @ 450 MHZ @ 450 MHZ

cdma450cdma450

Aug 2, 2004

Vera Kripalani

QUALCOMM Incorporated

OutlineOutline“A Case Study of a Successful, but not “A Case Study of a Successful, but not well-known, TIA Standard’s Application”well-known, TIA Standard’s Application”

CDMA today

CDMA at 450?

Spectrum Allocation and Standards

cdma450 deployments

cdma450 vendors

3G services at cdma450

Breakout Discussion

Global CDMA Global CDMA Subscriber GrowthSubscriber Growth

Source: CDMA Development Group, www.cdg.org. Data through March 31, 2004

Over 200 Million subscribers in 55 countries

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20

40

60

80

100

120

Su

bsc

rib

ers

(M)

cdma2000 1X (103M)cdma2000 1xEV-DO (8.06M)WCDMA (6.59M)

Over 110 Million 3G cdma2000Over 110 Million 3G cdma2000®® Reported* Reported* Subscribers Subscribers (Tab N, as of June 2004)(Tab N, as of June 2004)

Source: www.3Gtoday.com

*Fifty of the 96 operators have reported 3G CDMA subscriber totals at some point. Nineteen of those operators have updated their 3G CDMA subscriber totals for May 2004. Thirty-two operators have yet to report 3G CDMA subscriber numbers.

cdma450cdma450

• cdma450 refers to cdma2000® technology deployed in the 450 MHz spectrum

• Key benefits:• All the advantages of third-generation CDMA All the advantages of third-generation CDMA

capabilitiescapabilities• PLUS:PLUS: Reduction in deployment costs due to Reduction in deployment costs due to

frequency allocation, frequency allocation, i.ei.e., less cell sites for same ., less cell sites for same geographic areageographic area

Why deploy at 450 MHz?Why deploy at 450 MHz?• RF propagation advantage at 450 MHz results in fewer cell

sites for a cellular network

Therefore, deploying at 450 MHz is more cost-effective than deploying at higher frequencies.

• When regulators allocate 450 MHz spectrum for cellular

– New operators can enter the market

– An existing operator that is running out of capacity on its existing networks can deploy additional networks in the 450 MHz band

• Furthermore, if the frequency range allocated matches the 450 MHz band allocations elsewhere e.g., Eastern Europe and Russia

– Operators can benefit from the economies of scale afforded by being part of the larger cdma450 community

Applicable StandardsApplicable Standards

• cdma450 is part of TIA Interim Standard IS 2000

– Band Class 5 Band Class 5

– 1x EV-DO is an evolution of IS 2000 and also supports Band 1x EV-DO is an evolution of IS 2000 and also supports Band Class 5Class 5

• cdma450 is the basis for the European CDMA-PAMR standard

– System for Public Safety using cdma2000System for Public Safety using cdma2000®® in the 410-430, 450- in the 410-430, 450-470 and 870-876/915-921 MHz bands, which are allocated to 470 and 870-876/915-921 MHz bands, which are allocated to PAMR in EuropePAMR in Europe

RomaniaRomania

Zapp Mobile Zapp Mobile (Telemobil(Telemobil))

Opened service December 2001, first operator to launch cdma450 in Europe

200,000 subscribers, December 2003

85% corporate users

ARPU $33-$34

Launching BREW services

Romania• 22 M POPs• 7 M total subscribers (32% pen.)

RussiaRussia

Russia• 145 M POPs• 39 M total subscribers (27% pen.)

Russian Ministry of Telecommunications granted cdma450 federal status in 2002

The first commercial network under the Skylink brand was launched by Delta Telecom in December 2002 in St. Petersburg with Lucent equipment

40,000 subscribers end 2003

ARPU of 3G Subscriber 7x 1G Subscriber $10 ARPU NMT

$70 ARPU cdma450

Voice MoU of 3G Subscribers 17x 1G Subscribers 60 MoU NMT

In excess of 1000 MoU cdma450

Moscow Cellular Communications (now part of SkyLink holding) launched cdma450 service in Moscow in November 2003, with 9,000 subs

the end of March 2004

RussiaRussia (cont’d) (cont’d)

Kuzbasskaya Cellular Communications (KCC) launched cdma450 service in March 2004 with 64 base stations.

Network infrastructure vendor: ZTE

Bashkortostan Cellular Communication (BCC) launched in September 2003 with 24 BTSs; will expand to ~80 BTSs. Network infrastructure vendor: Huawei

Other NMT Operators who received license to provide cdma450 mobile cellular services

Rostov Cellular TelephoneUralvestcom Novosibirsk Cellular Communications

BelarusBelarus

Belarus• 10 M POPs• 1.1 M total subscribers (11% pen.)

BelcelBelcel the local NMT operator launched cdma450 services in February 2003. The network consists of 60 BTSs and a switch from Huawei and covers nearly 80% of the population.

30,000 subs end of March ‘04

Skylink in St. Petersburg and Belcel have a roaming agreement.

Czech RepublicCzech Republic

Czech Republic• 10.2 M POPs• 9.7 M total subs (94.7% pen.)

cdma450 EV-DO at 450 MHz

Eurotel has signed a contract with Nortel Networks to deploy the first cdma2000® 1X EV-DO network operating in the 450 MHz radio spectrum.

The network will help Eurotel introduce broadband Internet and other advanced services to wireless subscribers

The official EV-DO launch is expected August 2nd ‘04

Network deployment is nationwide

Gtran EV DO Module

GeorgiaGeorgiaIberiatel

Iberiatel the local NMT operator launched cdma450 services in April 2004.

The network currently covers the capital, Tblisi. Network will cover rest of the country by the end of the year.

Iberiatel’s BTSs and switch are provide by Huawei.

LatviaLatviaTelecom Baltija

Telecom Baltija, an NMT Operator, was awarded a cdma450 license in October 2003. Network infrastructure vendor: Nortel Telecom Baltija expects to launch the service in 2Q ‘04 with 20 BTSs and then cover 90% of the country by the end of 2004.

Latvia• 2.3 M POPs• 1.3 M total subs (55% pen.)

South East South East AsiaAsia

Indonesia• 240 M POPs• 12 M total subscribers (5% penetration)

Vietnam• 80 M POPs• 1.9 M total subscribers (2% penetration)

Source: EMC World Database March 2003

• Indonesia• MSI (previously Mobisel) is deploying a

cdma450 network

• Vietnam• ETC launched a cdma450 network in 2003

Many PeopleMany PeopleWaiting for aWaiting for a

Better ServiceBetter Service

http://www.anatel.gov.br/Universalizacao/inclusao_digital.asp

As a compliment to the public consultations of the regulation on Digital Communications Services, ANATEL’s Superintendency of Universal Services (SUN) is coordinating a field trial on Digital Communications Services.

The experiment involves various companies working together and utilizing their distinctive specialties including terminal equipment, wireless networks, routers, management service billing and tariff platforms, free software and applications highlighting the theme of digital inclusion.

The demonstration is often conducted at Anatel’s headquarters in Brasilia and in numerous places in and outside of the city.

ANATEL will publish a public consultation on the 450 MHz band (ANATEL Press Bulletin, June 2, 2004)

Pilot Project by ANATEL in Brazil: Digital Inclusion

 

Comparative Analysis of Coverage Area

Source: Presentation given by Antonio Valente, Vice President of ANATEL, Brazil, May 2004.

FrequencyFrequency

(MHz)(MHz)

Cell Radius (km)Cell Radius (km) Coverage Area Coverage Area (km(km²)²)

Relative Number Relative Number of Base Stations of Base Stations

450450 48.948.9 75217521 11

850850 29.429.4 27122712 2.82.8

950950 26.926.9 22692269 3.33.3

18001800 14.914.9 618618 12.212.2

19001900 13.313.3 553553 13.613.6

25002500 10.010.0 312312 24.124.1

Pilot Project by ANATEL in Brazil: Digital Inclusion

Infrastructure VendorsInfrastructure Vendors• Lucent

– Actively promotes cdma450 worldwide

– First ever cdma450 commercial system

– Commercial systems in Romania and Russia

– Supports 1X EV DO

• Huawei

– Commercial system in Belarus

– Trial systems in Russia and Chin

– Supports 1X EV-DO

• ZTE

– Trial and Commercial systems in China

• Hyundai Syscom

– Trial systems in Romania

• Nortel Networks

• Ericsson

• Motorola/Winphoria

Handset VendorsHandset Vendors• Hyundai/Curitel and Synertek were the first handset

vendors– First commercial products for Inquam – Sales in Romania, Russia, China and Belarus

• New vendors are entering the market– ZTE– Huawei– GTRAN products– Compal– Giga– AnyDATA

Fixed Terminals

Mobile Point of Sale IPAC Streaming Video

AnyDATA Application ProductsAnyDATA Application Products

Mobile Data Terminal e CHECK

i PORT EM series (800,Dual)

i LAB CDK II

DT2000-Dual DTGS-800 DTG-2000/450

AnyChecker : AMP-100

cdma450 offerscdma450 offers

• High-Speed data rates with 1xEV- DOHigh-Speed data rates with 1xEV- DO

• Rich functionality in the chipsetsRich functionality in the chipsets

• The BREW platform that allows for new and The BREW platform that allows for new and customized applicationscustomized applications

Framework for service creation & execution in cdma450 systems

1xEV-DO

Internet Launchpad

ServicesServices

The Application Platform The Application Engine

Fast, fat pipe

An Exciting Set of ApplicationsAn Exciting Set of ApplicationsPosition Location ServicesPosition Location Services

Push-To-TalkPush-To-TalkMobile Instant MessagingMobile Instant Messaging

Public SafetyPublic SafetyInfotainmentInfotainmentTele-MedicineTele-Medicine

Multiplayer GamingMultiplayer GamingMobile CommerceMobile Commerce

Audio / Ringtone DownloadsAudio / Ringtone DownloadsMobile Video StreamingMobile Video Streaming

Camera and Camcorder ApplicationsCamera and Camcorder ApplicationsAsset managementAsset management

TelematicsTelematics

more being devised …more being devised …

From Now On The Killer App is: From Now On The Killer App is: ChoiceChoice

Device-specific Applications Will Drive Wireless GrowthDevice-specific Applications Will Drive Wireless Growth

9lbs 2 oz.

Push to Talk

Photo Sharing

Email

Position Location

Video Monitoring

Entertainment

Ring Tones

News

Multiplayer Gaming

Sports

Source: KTF Q1 FY2003 Earnings Release, SKT data - Global Mobile, Sept 10, 2003

19.05

0.90

24.50

1.80

27.73

4.04

28.30

7.58

43

12

$0

$5

$10

$15

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cdmaOne 1X +B&W

1X +Color

1X +BREW

1xEV-DO

Voice

Data

USD

Operators are looking for ways to increase ARPUOperators are looking for ways to increase ARPU1X, BREW, gpsOne and 1xEV-DO have met the challenge!1X, BREW, gpsOne and 1xEV-DO have met the challenge!

KTF ARPU by Type of Handset

Mobile Data PerformanceMobile Data Performance

$2.06

$2.55 $2.62

$3.87

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

2001 2002 2003 2004e

EBITDA

(USD Billions)

KDDI net profit more than quadrupled in only 6 months after launching 1X servicesKDDI added 714K 1X subs in Q4’03, ending with more than 11.8M cumulative 1X subsKDDI is posted a larger net increase in mobile phone subs than NTT DoCoMo in 2003KDDI raised its FY2004 ARPU estimate from $69.33 to $70.47

cdma2000cdma2000®® Standard’s Impact on Earnings: KDDI Standard’s Impact on Earnings: KDDI auau Service Service

KDDI predicted its profit for the year ending March 2004 would rise by more than 65% to US$857 million. KDDI's share price is up by about 70% in 2003, far outpacing its rivals.

(Fiscal Years, ending in March)

cdma450 – A TIA STANDARDcdma450 – A TIA STANDARDfor cost-effective Broadband servicesfor cost-effective Broadband services

Skylink saw its ARPU jump 700% Skylink saw its ARPU jump 700% after it deployed cdma450after it deployed cdma450

And so it was no surprise that ……

Thank You !Thank You !