Thomas J. Sugrue

Opening RemarksAugust 3, 2000

Fifth Annual CMRS Competition Report

Total US Commercial Wireless Subscribers: 1992 to 1999

0

30

60

90

120

1992 1993 1994 1995 1996 1997 1998 1999

Mil

lion

s of

Sub

scri

bers Paging/Messaging

DispatchMobile Telephone

Source: Federal Communications Commission

Charting the Growth in the Mobile Telephone Industry: 1993 - 1999

UP437%

From 16 Million

Subscribers in 1993

UP291%

From 39,810 Jobs in 1993

DOWN33%

From $61.48per Month in

1993

UP411% From $14

Billion as of 1993

DOWN68% From 24

Months for Comparative

Hearings

Subscribers Jobs CapitalInvestment

AverageSubscriber

Bill

Wait forLicenses

86 MillionSubscribers in 1999

156,817 Jobs in1999

$71.3 BillionInvested as of 1999

$41.24 Dollars PerMonth in 1999

7.8 Months From Application to GrantSource: Cellular Telecommunications Industry Association

BTAs with MobileTelephone Competition

BTAs with > 2 OperatorsBTAs with < 2 Operators

MTAs and BTAs are based on Material Copyright (c) 1992 Rand McNally & Company.Rights granted pursuant to a license from Rand McNally & Company through anarrangement with the Personal Communications Industry Association. There are 51MTAs and 493 BTAs.

Source: Federal Communications Commission estimatesbased on publicly available information.

Estimated Nextel Communications Inc. Digital SMR Network Coverage Using iDEN Technology

Markets with More Than Two Mobile Telephone Providers: December 1994

BTAs with > 2 OperatorsBTAs with <= 2 Operators

BTAs with MobileTelephone Competition

Mobile Telephone Operatorswith Coverage in a BTA

4 Operators3 Operators2 Operators

Mobile telephone operators included in analysis are cellular, broadband PCS, and Nextel Communications.MTAs and BTAs are based on Material Copyright (c) 1992 Rand McNally & Company.Rights granted pursuant to a license from Rand McNally & Company through anarrangement with the Personal Communications Industry Association. There are 51MTAs and 493 BTAs.

Source: Federal Communications Commission estimatesbased on publicly available information.

Estimated Mobile Telephony Service Deployment: Number ofOperators in Each BTA with Some Level of Coverage

Markets with More Than Two Mobile Telephone Providers: December 1996

Mobile Telephone Operatorswith Coverage in a BTA

7 Operators6 Operators5 Operators4 Operators3 Operators2 Operators

Mobile telephone operators included in analysis are cellular, broadband PCS, and Nextel Communications.

MTAs and BTAs are based on Material Copyright (c) 1992 Rand McNally & Company.Rights granted pursuant to a license from Rand McNally & Company through anarrangement with the Personal Communications Industry Association. There are 51MTAs and 493 BTAs.

Source: Federal Communications Commission estimatesbased on publicly available information.

Estimated Mobile Telephony Service Deployment: Number ofOperators in Each BTA with Some Level of Coverage

Markets with More Than Two Mobile Telephone Providers: November 1999

Mobile Telephone Competition

87.8%79.8%

68.5%

34.6%

4.4%

0%

20%

40%

60%

80%

100%

3 or more 4 or more 5 or more 6 or more 7

Number of Competitors in a Market

Per

cent

of U

.S. P

opul

atio

n

Source: Federal Communications Commission

Historical and Projected Average Price Per Minute for Mobile Telephone Service

$0.45

$0.53

$0.58 $0.57 $0.56$0.54

$0.43

$0.35

$0.28

$0.24$0.22

$0.20 $0.19 $0.18 $0.17

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Ave

rage

Pri

ce P

er M

inut

e

Source: The Strategis Group, 2000

Entry Level Pricing for DOR-Type Plans (1998 vs 2000)

$89.99

$39.99

$59.99

$29.99

$35

$19.99

0 20 40 60 80 100

Sprint - 2000

Sprint - 2000

Verizon - 2000

Voicetream - 2000

AT&T - 2000

AT&T - 1998

Price Per Month

20 minutes

180 minutes

150 minutes

300 minutes

300 minutes

600 minutes

Source: Company Web sites.

The Sugrues “Graduate” to a “Share-a-Minute” Plan

$0

$10

$20

$30

$40

$50

$60

$70

$80

1998 1999

To

tal M

on

thly

Ex

pe

nd

itu

re

$0.00

$0.25

$0.50

$0.75

$1.00

Pri

ce

Pe

r M

inu

te

??

Source: Sugrue family budget Monthly Expenditure Price per Minute

64¢/min

19¢/min

Separate Plans$45 for

70 mins. CombinedPlan$40 for

210 mins.

1999 Wireless Penetration

Source: Dennis H. Leibowitz, et al, The Global Wireless Communications Industry, Donaldson, Lufkin & Jenrette, Winter 1999-2000, at 62 and 75.

65%57%

52%

41% 38% 37% 35% 32%28%

0%

10%

20%

30%

40%

50%

60%

70%

Finl

and

Swed

en

Ital

y

U.K

.

Spai

n

Japa

n

Fran

ce

U.S

.

Ger

man

y

Change in Wireless Penetration (1998-1999)

Source: Dennis H. Leibowitz, et al, The Global Wireless Communications Industry, Donaldson, Lufkin & Jenrette, Winter 1999-2000, at 62.

111%

86% 84%

65%

49%

28% 27%12% 12%

0%

20%

40%

60%

80%

100%

120%S

pain

UK

Fra

nce

Ger

man

y

Italy

U.S

.

Jap

an

Fin

lan

d

Sw

eden

Average Minutes of Use Per Month - 2000E

221204

186 182

145 137 132 132 123

0

50

100

150

200

250

U.S

.

Sw

eden

U.K

.

Fra

nce

Eur

o A

vg.

Spa

in

Ital

y

Fin

land

Ger

man

y

Ave

rage

MO

U P

er M

onth

Source: Michael I. Rollins, The Wireless EDGE, Salomon Smith Barney, May 23, 2000, at 5.

Average Annual Price for Basket of Digital Mobile Service for Personal Use (August 1999)

$447 $480

$658 $684$765

$837 $886

$1,081

$0

$200

$400

$600

$800

$1,000

$1,200

Fin

land U.S

.

U.K

.

Ave

rage

Fra

nce

Swed

en

Ger

man

y

Ital

y

Source: OECD, Cellular Mobile Pricing Structure and Trends, May 2000, at ??.

U.S. Subscribers vs Total Subscribers Abroad

0

20

40

60

80

100

U.S. Japan UK Sweden Finland

Mill

ion

s

Source: Dennis H. Leibowitz et al, The Global Wireless Communications Industry, Donaldson, Lufkin & Jenrette, Summer 2000, at 64.

Total Mobile Telephone Subscribers - 1999