CDMA2000: Leading 3G

Ewa Gawora, CDMA Development Group

ITU Sub Regional Seminar on IMT-2000 September 10, 2002 Moscow CDMA Development Group

CDMA Worldwide

CDMA2000: Leading 3G

2 CDMA Development Group

CDMA Worldwide

CDMA2000: Leading 3G

3 Charter

To lead the rapid evolution and deployment of CDMA-based systems, based on open standards and encompassing all core architectures, to meet the needs of markets around the world in an emerging, information-intensive environment

Information Technical Service Deployment Distribution Development Assistance Conferences System Testing Time-to-Market Emails Advanced Systems Int’l Roaming Website Evolution Interoperability Etc. Etc. Etc. Membership

The CDG is a consortium of over 113 member companies from around the world. Members are involved in many aspects of CDMA system deployment and support.

Subscriber Value-Added Operators Operators Equipment Services

Network Network Network Infrastructure Enhancement/ Interface & Optimization Access CDG Members

Lightbridge, Inc. Pele-Phone

Winphoria Networks

Willtech, Inc. ParkerVision Inc. Sony Electronics

News IQ Inc.

Reliance Infocom Ltd.

6 CDMA Development Group

CDMA Worldwide

CDMA2000: Leading 3G

7 CDMA is the present and future of advanced wireless services Code Division Multiple Access (CDMA) is a spread spectrum technology used in second and third generation wireless networks

cdmaOne™ identifies 2G and 2.5G cellular, CDMA2000 is an ITU-approved, IMT-2000 (3G) standard PCS and wireless local loop (WLL) services CDMA2000 1X can double voice capacity and delivers data based on the IS-95A and IS-95B CDMA air rates up to 307 kbps interface standards. IS-95A supports data delivery up to 14.4 kbps while IS-95B offers up CDMA2000 1xEV is optimized for high-speed data: to 115 kbps. CDMA2000 1xEV-DO (Data Only) uses a designated channel for data at speeds of up to 2.4 Mbps in a single carrier CDMA2000 1xEV-DV (Data Voice) integrates voice and data on a single channel with speeds of up to 4.8 Mbps 8 CDMA Benefits

As the most advanced digital technology, CDMA offers significant benefits to operators and their subscribers

Operators Subscribers

• Greater voice capacity • Better voice quality • Simplified system planning • Longer talk time through the use of the same • Improved privacy and security frequency in every sector • Advanced data services • Improved coverage characteristics resulting in fewer cell sites • Data ready; uses standard IP commands and protocols • The platform for 3G

9 CDMA technologies deliver superior capacity for voice and data 105-120 Number of users per 5MHz of spectrum

62-95 51-66

34 - 53

21- 23 24

8

AMPS GSM TDMA GSM FFR cdmaOne CDMA2000 1X WCDMA w/AMR IS-95A

CDMA is the most spectrally efficient technology • cdmaOne delivers 14x increase in voice capacity over analog and more than 2x more than GSM and TDMA • CDMA2000 doubles voice capacity of cdmaOne systems making it the most spectrally efficient technology available today

*Source: Deutsche Bank, May 2002 1 0 CDMA is the fastest growing technology, serving more than 127 million subscribers worldwide...

140,000,000

120,000,000

100,000,000

80,000,000

60,000,000

40,000,000

20,000,000

- Jun-02 Jun-01 Jun-00 Jun-99 Jun-98 Mar-02 Mar-01 Mar-00 Mar-99 Mar-98 Sep-01 Dec-01 Sep-00 Dec-00 Sep-99 Dec-99 Sep-98 Dec-98 Sep-97 Dec-97

Asia Pacific North America Caribbean & Latin America Europe, Middle East & Africa

Source: CDMA Development Group

1 1 …and it will continue to be the fastest growing technology platform

Technology Share 2001 Technology Share 2005E TDMA Analog Analog iDEN CDMA/CDMA2000 CDMA/CDMA2000 10% 4% 1% 4% 12% 20%

TDMA 10% GSMWCDMA iDEN GSM 68% 1% 70%

Source: EMC, Morgan Stanley, 2002

1 2 CDMA is one of the leading technologies with presence across all continents

Europe, Middle East and Africa 2 million subscribers

The first 3G technology launched in Europe

North America Asia Pacific 56 million subscribers 45 million subscribers

Dominant technology Birthplace of 3G with 47% market share Now deployed in China

Caribbean and Latin America 24 million subscribers

20% market share Growing at 7 million subscribers As of June, 2002 per year

1 3 The dominant 3G standards are based on CDMA

IMT-2000 Terrestrial Radio Interfaces

IMT-2000 IMT-2000 IMT-2000 IMT-2000 IMT-2000 CDMA CDMA CDMA TDMA FDMA/ Direct Spread Multi-Carrier TDD Single Carrier TDMA WCDMA CDMA2000 1X UTRA TDD & UWC-136/ DECT (UMTS) & 1xEV TD-SCDMA EDGE 3G CDMA

Although there are five terrestrial standards, most of the attention and energy in the industry has been directed toward the CDMA standards

1 4 CDMA Development Group

CDMA Worldwide

CDMA2000: Leading 3G

1 5 Dominates the 3G market

OffersOffers significantsignificant leadlead timetime andand serviceservice differentiationdifferentiation

Delivers services to consumers and revenues to operators

Why CDMA2000 is so successful

1 6 There are eighteen CDMA2000 1X and Europe / Russia two 1xEV-DO networks deployed today Romania – Telemobil – 4Q 2001 Russia – Delta Telecom – 4Q 2002 Russia – Moscow Cellular Communications – 2H 2002 Ukraine – CST Invest Limited – 2Q 2002

North America Canada – Aliant Telecom Mobility – 4Q 2002 Canada – Bell Mobility – 1Q 2002 Canada – MTS – 2H 2002 Canada – SaskTel Mobility – 2Q 2002 Canada – Telus Mobility – 2Q 2002 United States – ALLTEL – 2002 United States – Leap – 4Q 2001 Asia Pacific Australia – Telstra – 3Q 2000 United States – MetroPCS – 1Q 2002 China – China Unicom – 1Q 2002 United States – Monet Mobile Networks – 4Q 2001 Latin America / Caribbean Indonesia – PT Radio Telepon Indonesia – 3Q 2002 United States – NTELOS – 3Q 2002 Brazil – TCO – 3Q 2002 Indonesia – PT Wireless Indonesia – 1Q 2003 United States – Sprint PCS & Affiliates – 3Q 2002 Brazil – Telefonica Celular – 2Q 2002 Japan – KDDI – 2Q 2002 United States – U.S. Cellular – 4Q 2002 Brazil – Telesp Celular – 4Q 2001 Korea – KT Freetel – 2Q 2001 United States – Verizon Wireless – 1Q 2002 Brazil – Vesper – 2H 2002 Korea – KT Freetel – 2Q 2002 United States – Western Wireless – 3Q 2001 Chile – SmartCom PCS – 3Q 2002 Dominican Republic – Centennial Dominicana – 2H 2002 Korea – LG Telecom – 4Q 2000 Ecuador – BellSouth – TBA Korea – SK Telecom – 4Q 2000 Countries with CDMA2000 Guatemala – SERCOM (Telgua) –TBA Korea – SK Telecom – 1Q 2002 1X Commercial Jamaica – Centennial Digital Jamaica – 3Q 2002 New Zealand – Telecom Mobile Limited – 3Q 2002 1X Deployment Mexico – Pegaso PCS – 2Q 2002 Taiwan – Asia Pacific Broadband Wireless 1X Trial Puerto Rico – Centennial de Puerto Rico – 2Q 2002 Communications Inc. – 1Q 2003 1 1xEV-DO Commercial Venezuela – Movilnet – 3Q 2002 Thailand – Hutchison CAT – 4Q 2002 7 Venezuela – Telcel – 1H 2001 Vietnam – Saigon Postel – 2H 2002 CDMA2000 dominates the 3G market...

16,000,000

14,000,000

12,000,000

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

- Jul-01 Jul-02 Jan-01 Apr-01 Jun-01 Jan-02 Apr-02 Jun-02 Oct-01 Nov-01 Feb-01 Mar-01 Feb-02 Mar-02 Aug-01 Sep-01 Dec-01 May-01 May-02

• CDMA2000 has more than 99% of the 3G market • Over 15 million CDMA2000 subscribers as of July 2002 • More than 1.8 million are being added every month

Source: CDMA Development Group 1 8 … and will continue to lead the 3G market

1 9 CDMA2000 delivers greater value to consumers and increased revenue to operators

Applications Revenue per Subscriber (ARPU)

• Multimedia messaging $35.00 • Game downloads $30.00 $25.00 • Telematics $20.00 • Camera and motion video $15.00 $10.00 $5.00 $0.00 CDMA2000 1X CDMA2000 1X 2G Grayscale Color Display

Data 1.19 3.29 5.75 Voice 20.69 26.76 28.06

CDMA2000 delivers a nearly five-fold increase in data revenue and more than 50% higher total revenue per subscriber

2 Source: Morgan Stanley, June 2002 0 Why CDMA2000 is so successful

More than 120 CDMA2000 terminal products are available in the market

2 1 Why CDMA2000 is so successful (cont.)

…at competitive prices

Wholesale Prices, World Market 2000-2005 $500

$450 $450 $438

$400

$350 $338 $320 $328 $300 $310 $250 $253 $246 $227 $200 $228 $190 $185 $137 $150 $142 $114 $96 $134 $94 $100 $86 $72 $75 $58 $95 $88 $50 $77 $63 $57 $51 $0 2000 2001e 2002f 2003f 2004f 2005f

cdmaOne CDMA2000 1X GSM GSM/GPRS WCDMA Single Mode WCDMA Dual Mode

• cdmaOne phone prices will continue to decline and will reach $53 by 2005 • CDMA2000 1X phone prices will decline at a faster rate to reach $58 by 2005 • UMTS phones, especially dual mode, will remain at least 3 times more expensive than CDMA2000

Source: Shosteck, 2002 2 2 Why CDMA2000 is so successful (cont.)

CDMA2000 can be deployed in any existing cellular, PCS and IMT-2000 spectrum

CDMA2000 can be deployed in a small amount of spectrum

Current Spectrum Or New Spectrum CDMA2000CDMA2000 is is not not constrainedconstrained to to only only thethe IMT-2000 IMT-2000 band. band. It It isis defined defined to to operate operate AnalogAnalog 1X 1X 1X 1X in existing and IMT- in existing and IMT- ANSI-41 20002000 spectrum: spectrum: Based cdmaOnecdmaOne 1X 1X 1X 1X Systems • •450450 MHz MHz • •700700 MHz MHz 1X 1X 1X 1X • •800800 MHz MHz TDMATDMA • •900900 MHz MHz GSM-MAP • •17001700 MHz MHz Based 1X • •18001800 MHz MHz GSMGSM/GPRS or GSM/GPRS 1X 1X 1X Systems • •19001900 MHz MHz • •21002100 MHz MHz 1.25 MHz 5 MHz

2 3 Why CDMA2000 is so successful (cont.)

Requires only minor enhancements to the existing cdmaOne network...

NIU New 1X Channel Card BTS New Software

New Terminals (backward compatible) Software Upgrade BSC

PDSN Software Upgrade

MSC IWF

The network architecture is designed to deliver Internet and advanced services seamlessly, and without the need to build- IP out a new packet network Backbone PSTN WWW VPN Enterprise Network 2 4 Why CDMA2000 is so successful (cont.)

…and relatively small capital investment

Total CapEx (US$ billion)

Korea SKT (CDMA2000 1X and 1xEV-DO) 2.4

KTF (CDMA2000 1X and 1xEV-DO) 1.2

LGT (CDMA2000 1X) 0.4

Japan KDDI (CDMA2000 1xEV-DO) 2.5

DoCoMo (W-CDMA) 10.9

U.S. Sprint PCS (CDMA2000 1X and 1xEV-DO) 2.4

AT&T Wireless (GSM/GPRS/EDGE/WCDMA) 4.4

Sprint PCS will spend $8 per POP to migrate to CDMA2000 AT&T Wireless will spend $15 per POP for the GSM/GPRS overlay

2 Source: Morgan Stanley, June 2002 5 TDMA to 3G: Practical solution to CDMA2000

New off-the-shelf TDMATDMA to CDMA2000 Network 1X CDMA2000 Terminals BTS CDMA2000 BTS* New Equipment with 1X Channel Card

As with AMPS, benefits of BSC this path include: New Equipment • Re-use of the core network • Ability to deploy 3G in-band, without the cost of buying new spectrum • Ability to deploy 3G in only Software PDSN a small amount of spectrum Update MSC

Modem Pool

IP * Usually co-located with TDMA equipment, requires separate interface protocols PSTN Backbone

WWW VPN Enterprise Network 2 6 AMPS to 3G: Practical solution to CDMA2000

New off-the-shelf AMPSAMPS to CDMA2000Network 1X CDMA2000/AMPS Terminals BTS CDMA2000 BTS* New Equipment with 1X Channel Card

This path is particularly compelling due to: BSC New Equipment • Re-use of the core network • Ability to deploy 3G in-band, without the cost of buying new spectrum • Ability to deploy 3G in only Software PDSN a small amount of spectrum Update MSC

Modem Pool

IP * Usually co-located with AMPS equipment, requires separate interface protocols PSTN Backbone

WWW VPN Enterprise Network 2 7 GSM to 3G: Practical solution to CDMA2000

GSMAdding Network CDMA2000 1X New Terminals Upgrade to GPRS (CDMA2000 1X or multimode New Terminals GSM/GPRS/CDMA2000 1X) (GSM/GPRS) GSM/ BTS CDMA2000 GPRS BTS BTS* 1X Channel Card

Upgrade GPRS and CDMA2000 GSM/ BSCBSC GPRS BSC New Equipment are Complementary

Upgrade CDMA2000 A/lu New SGSN Interface BSC* Equipment MSC Commercial Server GPRS PDSN RADIUS Modem Backbone Pool Server IP Non-standard GGSN router Commercial IP Backbone PSTN Router Packaged by Vendor WWW VPN * Usually co-located with 2G/2.5G equipment, requires separate interface protocols Enterprise Network 2 8