GSM/3G MARKET UPDATE as per May 17, 2005 G lobal mobile S uppliers A ssociation gsacom

Slide no. 1/32Canto 2005 in St. Kitts

Global mobile Suppliers Association © 2005

GSM/3G MARKET UPDATEas per May 17, 2005

Global mobile Suppliers Associationwww. gsacom.com

byPeter Reinisch

Vice President GSA



Many of the charts in this document are downloadable by registered site users at www.gsacom.com/news/statistics.php4

Worldwide GSM subscribers counter running 24/7 at www.gsacom.com

IMPORTANT NOTE



Open standardized technologyInteroperability, 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 2003

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Millions

1993

1994

1995

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1997

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2000

2001

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Mobile subscriptions

GSM

CDMA

9001000

2004

(Feb)

Business fundamentals driving GSM success



Mobile technology growth, market share

GSM/3G statistics and downloadable charts at www.gsacom.com/news/statistics.php4



Mobile subscribers growth– China, India



Mobile subscriber growth- Latin and Central America



cdmaOnecdmaOne

GSMGSM

TDMA TDMA

2G

PDC PDC

CDMA2000 1x

CDMA2000 1x

First Step into 3G

GPRSGPRS 90%

10%

Evolution of Mobile Systems to 3G- drivers are capacity, data speeds, lower cost of delivery for revenue growth

EDGEEDGE

WCDMA

WCDMA

CDMA2000 1x EV/DV

CDMA2000 1x EV/DV

3G phase 1 Evolved 3G

3GPP CoreNetwork

CDMA2000 1x EV/DO

CDMA2000 1x EV/DO

HSDPA

HSDPA

Expected market share

EDGEEvolution

EDGEEvolution



Performance evolution of cellular technologies



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



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 50-150% required for delivery of real time services (e.g. streaming or video-telephony

Typical speed for packet data services are 300-350 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

EVDOWCDMA

Performance of WCDMA and EV-DO



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

No. of commercial networks per mobile data standard

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EDGE/GPRS CDMA2000-1x WCDMA 1xEV-DO



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 data subscriber growth

Source: Informa Telecoms and Media

Mo

bil

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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.



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 technologyglobally deployed in commercial service

Registered GSA website users from suppliers who are member organisations of GSAand other qualified site users can download the list of commercial and pre-commercial networks

Contained in 3G/ WCDMA Deployments Worldwide - www.gsacom.com



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



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



EDGE - strong take up globally

141 operators in 79 countries are deploying EDGE 84 commercial networks in 52 countries now on all continents



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



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

complementaryproven

mature

opentechnologies



Combined WCDMA-EDGE networks

AIS, ThailandÅlands Mobiltelefon, Finland

Batelco, BahrainCellcom, Israel

Cingular Wireless, USACSL, Hong Kong

Dialog GSM, Sri LankaElisa, FinlandEMT, Estonia

Eurotel Praha, CzechEurotel Bratislava, Slovak

GPTC, LibyaMaxis, Malaysia

Mobilkom AustriaMobitel, Bulgaria

Mobily, Saudia ArabiaMTC Vodafone, Bahrain

MTN, South AfricaNetcom, NorwayOrange, France

Orange, RomaniaOrange Slovensko, Slovak

Oskar Mobile, CzechPannon GSM, Hungary

Polkomtel, PolandRogers Wireless - Fido, Canada

Si. Mobil – Vodafone, Slovenia

Swisscom, SwitzerlandTelenor, NorwayT-Mobile, CroatiaT-Mobile, Czech

T-Mobile, HungaryT-Mobile, USA

Telfort, NetherlandsTeliaSonera, DenmarkTeliaSonera, FinlandTeliaSonera, SwedenTIM Hellas, Greece

TIM, ItalyVIP 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



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.



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 10th 2005

www.gsacom.com/news/gsa_174.php4

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 !



Market take-up

Open standards & systems

proprietary systems

Note: conceptual illustration

TerminalTerminal

ServerServer

Open & Standardized

interfaces

Openness fuelling market growth and innovation



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 average roaming revenue is today 4%Typically up to 25% of revenues may be contributed from roamingIn 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



Improved performance, decreasing cost of delivery

Typical average bit rates (peak rates higher)

WEB browsingCorporate data accessStreaming audio/video

Voice & SMS Presence/location

xHTML browsingApplication downloadingE-mail

MMS picture / video

Multitasking

3G-specific services take advantage of higher bandwidth

and/or real-time QoS

3G-specific services take advantage of higher bandwidth

and/or real-time QoS

A number of mobile services are bearer

independent in nature

A number of mobile services are bearer

independent in nature

HSDPA1-10Mbps

WCDMA128-384

kbps

EGPRS80-160kbps

GPRS30-40kbps

GSM10-40kbps

Push-to-talk

Broadbandin wide area

Video sharing Video telephonyReal-time IPmultimedia and gamesMulticasting

Services roadmap

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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



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 www.gsacom.com/about/index.php4



GSM/3G Resources- GSM/EDGE/WCDMA/HSDPA

GMD™Newsletter

www.gsacom.com

GSM/3G Operators Zone for GSM-family operatorsregister at www.gsacom.com

Push to Talk on a Mobile Phone (Opinion Paper)

www.gsacom.com

GSM/3G Network Update

www.gsacom.com

Services/market/technology updateswww.gsacom.com/gmd/index.php4

WCDMA Databank – deployments, deviceswww.gsacom.com

EDGE Databank – deployments, devices, platforms

www.gsacom.com

GSM/3G MARKET UPDATE as per May 17, 2005 G lobal mobile S uppliers A ssociation gsacom

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