Thomas J. Sugrue

Opening RemarksJune 20, 2001

Sixth Annual CMRSCompetition Report

Charting the Growth in the Mobile Telephone Industry: 1993 - 2000

UP584%

From 16 Million

Subscribers in 1993

UP364%

From 39,775 Jobs in 1993

UP543% From $14

Billion as of 1993

DOWN64%

From $0.58 per minute in

1993

Subscribers Jobs CapitalInvestment

Price per minute

109 MillionSubscribers in 2000

184,449 Jobs in2000

$89.6 BillionInvested as of 2000

$0.21 Per Minute in 2000

Source: Cellular Telecommunications & Internet Association; The Strategis Group, 2001

UP82% From 140 MOUs as of 1993

Minutes of Use

255 Average Monthly MOUs in 2000

Total US Commercial Wireless Subscribers: 1992 to 2000

0

40

80

120

160

1992 1993 1994 1995 1996 1997 1998 1999 2000

Mil

lion

s of

Sub

scri

bers

Paging/Messaging

Mobile Telephone

Source: Cellular Telecommunications & Internet Association, Strategis Group

Mobile Telephone Competition

90.8%84.4%

75.1%

46.7%

11.9%

78.3%

65.5%

8.9%

0%

20%

40%

60%

80%

100%

3 ormore

4 ormore

5 ormore

6 ormore

7 ormore

Number of Competitors in a County

Per

cent

of U

.S. P

opul

atio

n

2001

1997

Source: Federal Communications Commission

Average Price Per Minute for Mobile Telephone Service

$0.53

$0.58 $0.57 $0.56$0.54

$0.43

$0.35

$0.28

$0.21

$0.45

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Ave

rage

Pri

ce P

er M

inut

e

Source: The Strategis Group, 2001

Average Local Monthly Bill1993 to 2000

$61.49$56.21

$51.00$47.70

$42.78$39.43 $41.24

$45.27

$0.00

$16.00

$32.00

$48.00

$64.00

1993 1994 1995 1996 1997 1998 1999 2000

Ave

rage

Loc

al M

onth

ly B

ill

Source: Cellular Telecommunications & Internet Association

Average Minutes-of-Use per Month1993 to 2000

140119 119 125 117

136

185

255

0

40

80

120

160

200

240

280

1993 1994 1995 1996 1997 1998 1999 2000

Ave

rage

MO

Us

Per

Sub

scri

ber

Per

Mon

th

Source: Cellular Telecommunications & Internet Association

Major Carriers Expanded Nationwide Networks

• Six nationwide or nearly-nationwide carriers – Acquisitions

– Mergers

– License swaps

– Partnerships

• Sprint PCS

• Verizon Wireless

• VoiceStream

• AT&T Wireless

• Cingular

• Nextel

Tom Sugrue Has Added Minutes and Lowered His Monthly Bill...

0

500

1000

1500

2000

2500

1999-2000 2000-2001

Min

utes

Per

Use

Per

Mon

th

$30.00

$35.00

$40.00

$45.00

$50.00

Mon

thly

Bill

210 Anytime Minutes

$40per

month

$35per

month

150 Anytime

+2000 Weekend Minutes

Source: Sugrue family budget

$0

$25

$50

$75

Mon

thly

Cos

tWireline Substitution in the

Wiener-Goldstein Household

Monthly Access(unlimited local calling,includes SLC)

3 Vertical Services(Call waiting, CallerID,Voicemail)

Long Distance(100 minutes@ 7¢/minute)

Wireline(3rd line, Maryland)

Wireless(Verizon Wireless DigitalChoice)

$22.00

$34.99

$16.49

$7.00

Monthly Access (200 peak and1500 off-peak minutes)

$0.42 Universal Service Fee$0.60 911 Surcharge$2.83 Federal & State Taxes

$0

Total Cost = $47.29

Total Cost = $38.84

Long Distance and Vertical Services

$3.62 Universal Service Fee$0.60 911 Surcharge$1.14 Miscellaneous Fee$1.85 Federal & State Taxes

International Comparisons:Wireless Penetration: YE 2000

Source: The Cellular Review, Bearn Stearns, Feb. 12, 2001, at 7 (Europe); Subscriber Count: Cellular Telephone Subscription by Country, Asiacom, at 12 (Japan & China); Cellular Telecommunications & Internet Association (December 2000).

76% 72%67%

58%50%

46%39%

7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Swed

en

Ital

y

U.K

.

Ger

man

y

Fra

nce

Japa

n

U.S

.

Chi

na

Prepaid as a Percentage of Total Subscriber Base

85%

68%

49% 48% 47%

11%

0%

20%

40%

60%

80%

100%

Ital

y

U.K

.

Fra

nce

Ger

man

y

Sw

eden

U.S

.

Mill

ions

Source: Mobile Matters, JP Morgan, March 2001, at 10 (Europe); Johnathan Burns, Tales Of The Tape:Prepaid Wireless A New Way Of Wireless, Dow Jones Newswire,

Jan. 29, 2001 (citing Knox Bricken of the Yankee Group).

International Comparisons:Total Subscribers: YE 2000

109.5

86.5

5848.2 42 40.1

30.2

6.3

0

20

40

60

80

100

120U

.S.

Chi

na

Japa

n

Ger

man

y

Ital

y

U.K

.

Fra

nce

Sw

eden

Mill

ions

Source: Mobile Matters, JP Morgan, March 2001, at 11-12 (Europe); Subscriber Count: Cellular Telephone Subscription by Country, Asiacom, at 12 (Japan & China); Cellular Telecommunications & Internet Association (December 2000).