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ITU/BDT Regional Seminar on Broadband Wireless Access (BWA) for CIS, CEE and Baltic Countries (Russian Federation), 26-29 November 2007

CDMA450 status in and experience of promoting BWA on the base of EV-DO technology in SkyLink

Konstantin Kolomensky Network Development Director DELTA Telecom (SkyLink-St.Petersburg)

Contents

 Current status of SkyLink networks  EV-DO: results of commercial operation  Mobile Internet: marketing study results  Nearest future: Rev.A and dual band network in 450/2100 MHz  Conclusions

1 • Current status of SkyLink networks

SkyLinknetworksundercommercialoperation SkyLinknetworkstobelaunchedinY200 8 SkyLink ’s licenseterritory CDMA450networksundercommercialoperation(non SkyLink) Анадырь

Мурманск

Палана Магадан Петрозаводск Норильск Архангельск Псков Санкт Петербург Петропавловск Камчатский Новгород Дудинка Калининград Тверь Вологда Салехард Смоленск Ярославль Якутск Москва Сыктывкар Калуга Кострома Иваново Брянск Тула Тула Владимир Тура Курск Орел Рязань Липецк Рязань Н.Новгород Киров Тамбов Чебоксары Белгород Ижевск Пермь Ханты Мансийск Воронеж Пенза Казань Ульяновск Екатеринбург Южно Сахалинск Уфа Ростов Саратов Самара Волгоград Тюмень Красноярск Благовещенск Краснодар Челябинск Томск Хабаровск Оренбург Курган Омск Элиста Биробиджан Ставрополь Новосибирск Кемерово Черкесск Улан Удэ Нальчик Астрахань Владикавказ Иркутск Чита Грозный Абакан Владивосток Барнаул Кызыл Махачкала Горно Алтайск

Today SkyLink offers voice and data services in 31 regions of Russian Federation 4

2 Subscriber base distribution

50%

45%

40%

35%

30%

25%

20%

15%

10%

5% Percent of total base subscriber total Percent of

0% Moscow St.Petersburg Other regions 5%

4%

4%

3%

3%

2%

2%

1% Percent of total subscriber base subscriber total of Percent 1%

0% Kaluga Rostov Kuzbas Ryazan Vladimir Nizhniy Novgorod Krasnodar

Murmansk 5 Uliyanovsk Novosibirsk

ARPU distribution

70

60

50

40

30 ARPU(USD)

20

10

0 Tver Omsk Kaluga Rostov Kuzbas Ryazan Izhevsk Moscow Vladimir Nizhniy Voronezh Novgorod Krasnodar Murmansk Uliyanovsk Khabarovsk Novosibirsk Vladikavkaz St.Petersburg

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3 • EV-DO: results of commercial operation

SkyLink technology roadmap

2003 2004 2005 2006 2007 2008 2009 2010 2011 1X CDMA 1XEV-DO VoIP

EV-DO Rev A EV-DO Rev B

+ 17 regions during the year 2007 Ekaterinburg, Saratov, Chelyabinsk, Kaliningrad

Moscow, St.Petersburg, Dec. 2005

CDMA2000 1x EV-DO Revision 0 (Rev.0) – up to 2,4 Mbps in FL, up to 307,2 Kbps in RL. CDMA2000 1x EV-DO Revision A (Rev.A) – up to 3,1 Mbps in FL, up to 1,8 Mbps in RL. Support of QoS. CDMA2000 1x EV-DO Revision B (Rev.B) – up to 4,9 Mbps at single 1.25 MHz band. Composing 1.25 MHz frequency bands up to 20 MHz, up to 78 Mbps in FL.

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4 EV-DO coverage of Moscow and Moscow region

Light green: outdoor Dark green: indoor

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EV-DO coverage of St.Petersburg and Leningrad region

EVDOIndoorCoverage 1xIndoorCoverage

1x/EVDOOutdoorCoverage 10

5 CDMA450 terminals for SkyLink networks

Beginning of offering CDMA450 modems EV-DO services with only supporting EV-DO one handset available have become available (Ubiquam U300) only since Q2 2006

20022003 2004 2005 2006 2007

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Handsets supporting EV-DO

Ubiquam U-300 Ubiquam U-520

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6 Modems supporting EV-DO

Ubiquam Um-300

ADU-310A ADU-300A

AnyData CMOTech

CNU-550

ADU-E100A CNU-550PRO 13

Examples of EV-DO rate plans (1)

Turbo

MonthlyMonthly fee, fee, 00

DataData traffic traffic included, included, MB MB 00

Price per 1 MB Price per 1 MB RUBRUB 2.90 2.90 ~ ~ USD USD 0.12 0.12

Price per min for local PSTN calls Price per min for local PSTN calls RUBRUB 2.00 2.00 ~ ~ USD USD 0.08 0.08

Price per min for local SkyLink calls Price per min for local SkyLink calls RUBRUB 0.50 0.50 ~ ~ USD USD 0.02 0.02

St.Petersburg and Leningrad region, w/o VAT

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7 Examples of EV-DO rate plans (2)

Turbo 500

MonthlyMonthly fee, fee, RUBRUB 950 950 ~ ~ USD USD 39 39

DataData traffic traffic included included 500500 MB MB

Price per 1 MB beyond the limit Price per 1 MB beyond the limit RUBRUB 2.90 2.90 ~ ~ USD USD 0.12 0.12

Price per min for local PSTN calls Price per min for local PSTN calls RUBRUB 1.75 1.75 ~ ~ USD USD 0.08 0.08

Price per min for local SkyLink calls Price per min for local SkyLink calls RUBRUB 0.50 0.50 ~ ~ USD USD 0.02 0.02

St.Petersburg and Moscow, w/o VAT

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Examples of EV-DO rate plans (3)

Turbo 1000

MonthlyMonthly fee, fee, RUBRUB 1500 1500 ~ ~ USD USD 62 62

DataData traffic traffic included included 10001000 MB MB

Price per 1 MB beyond the limit Price per 1 MB beyond the limit RUBRUB 2.90 2.90 ~ ~ USD USD 0.12 0.12

Price per min for local PSTN calls Price per min for local PSTN calls RUBRUB 1.75 1.75 ~ ~ USD USD 0.08 0.08

Price per min for local SkyLink calls Price per min for local SkyLink calls RUBRUB 0.50 0.50 ~ ~ USD USD 0.02 0.02

St.Petersburg and Moscow, w/o VAT

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8 Examples of EV-DO rate plans (4)

Turbo Light

MonthlyMonthly fee, fee, 0 0

DataData traffic traffic included included 00

PricePrice per per 1 1 MB MB RUBRUB 4.00 4.00 ~ ~ USD USD 0.16 0.16

Price per min for local PSTN calls Price per min for local PSTN calls RUBRUB 4.00 4.00 ~ ~ USD USD 0.16 0.16

Moscow and Moscow region, w/o VAT

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Examples of EV-DO rate plans (6)

Turbo unlimited night

MonthlyMonthly fee, fee, RUBRUB 1500 1500 ~ ~ USD USD 62 62

DataData traffic traffic from from 0 0 a.m. a.m. to to 8 8 a.m. a.m. unlimitedunlimited

DataData traffic traffic from from 8 8 a.m. a.m. to to 12 12 p.m. p.m. RUBRUB 4.00 4.00 ~ ~ USD USD 0.16 0.16

Price per min for local PSTN calls Price per min for local PSTN calls RUBRUB 4.00 4.00 ~ ~ USD USD 0.16 0.16

Moscow and Moscow region, w/o VAT

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9 Examples of EV-DO rate plans (5)

Turbo unlimited

MonthlyMonthly fee, fee, RUBRUB 2800 2800 ~ ~ USD USD 115 115

DataData traffic traffic included included unlimitedunlimited

Price per min for local PSTN calls Price per min for local PSTN calls RUBRUB 4.11 4.11 ~ ~ USD USD 0.17 0.17

Moscow and Moscow region, w/o VAT

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Subscribers (actually using EV-DO services)

% of total subscriber base 35

30

25

20

15

10

5

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

2006 2007 20

10 Total EV-DO traffic growth

300% 247% 250%

191% 200%

143% 150% 100% 100% 65% 41% 50% 21% 2% 5% 10% 0% 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 F 1Q08 F 2Q08 F

Impressive rate of growth though prices of EV-DO terminals are quite high

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SkyLink services income structure

100% 90% 80% 70% 60% Voice 50% 40% 30% 20% 29% 24% 10% 16% Data+VAS 8% 0% 2005 2006 2007 F 2008 F Data services (especially EV-DO) implementation has noticeably influenced SkyLink income structure

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11 • Mobile Internet: marketing study results

Using mobile Internet (1)

65% At home 49% 16%* 42% 70% of users had In the country 13% 29% been using another 38% At work Internet access at 31% 7% the same places 27% During business trips in the country 17% before buying BWA 10% from SkyLink 27% In the car 19% 8%

25% During business trips in the city 8% 7%

13% In the restaurants 4% 9% 3% 3G is an alternative Other places 1% through SkyLink for fixed Internet before SkyLink Had not been using Internet where use access? SkyLink now 30%

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12 SkyLink Internet user portrait

 SkyLink mobile Internet user portrait :  Man (84%)  25 -44 years  Top manager, businessman

 36% of total number of respondents are SkyLink mono -users (not having another Internet access or switching to SkyLink) :  Women (24%) – more often than in general selection  25 years or less (28%) – more often  Students, technical and servicing staff (28%)  Top managers – rarely

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• Nearest future: Rev.A and dual band network in 450/2100 MHz

13 Rev A first test results (downlink)

HW/SW upgrade for transition to Rev A:

BTS HW: EV-DO Modem (Rev. A ready)

SW: RNC and BTS SW upgrade

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450/2100 Test Zone (1)

0 2 4 Call attempts Established calls kilometres 300 250 200 150 100 50 0 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 10 11 12 13 14 15 16 17 18 19 20 21 22 23 2 май 3 май

peak Walsh Codes Primary Traffic, Erl 128 80

96 60

64 40

32 20

0 0 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 10 11 12 13 14 15 16 17 18 19 20 21 22 23 2 май 3 май

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14 450/2100 Test Zone (2)

Kyocera KD-401

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Conclusions

 SkyLink is growing in terms of territory and total subscriber base

 EV -DO service is quite successful in terms of increasing subscriber base and data traffic

 SkyLink has launched the first CDMA450/GSM handset and is actively testing new types of CDMA450 terminals (including Rev. A modems)

 SkyLink is testing EV -DO Rev. A and going to put it into commercial operation in the beginning of 2008

 450/2100 MHz trial networks have been rolled -out in Moscow and St.Petersburg (50 BTS). SkyLink is going to be an applicant for IMT -MC 2100 MHz license in Russia an applicant for IMT -MC 2100 MHz license in Russia 30

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