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CDMA2000 CELEBRATES FIVE YEARS OF LEADERSHIP IN THE INDUSTRY’S TRANSITION TO 3G AND NEXT GENERATION WIRELESS SERVICES

CDMA2000 Operators Prove the Case for Advanced Data

HONG KONG, Nove mber 17, 2005 – In his keynote address at the 3G World Congress, Perry LaForge, executive director of the CDMA Development Group (CDG) (www.cdg.org) announced that with 200 million subscribers in 61 countries, CDMA2000® is the fastest expanding technology and delivers advanced voice and data services to people across all markets, creating new market and revenue opportunities for operators. CDMA2000 is the most advanced 3G technology deployed today and its evolution path offers operators at least two years’ lead in the introduction of enhanced capabilities and services.

“3G CDMA has been a tremendous success, now serving close to 12% of the wireless market and is on target to exceed one billon users in four years,” said LaForge. “CDMA2000 has been the driving force behind this success and will continue to lead the industry in the evolution to all-IP converged multimedia services across fixed and wireless technologies, changing the landscape of the wireless, telecommunications and content industries.”

CDMA2000 was first deployed in October 2000 by SK Telecom in South Korea, one year before DoCoMo launched the first WCDMA network in Japan. While CDMA2000 1X was rapidly expanding in Asia and then North and Latin America, the next WCDMA network was not deployed until one year later in Japan followed by a European deployment in March 2003. Today, CDMA2000 has a 2 to 1 lead in commercial deployments over WCDMA, with 131 operators in 61 countries across six continents, compared to 78 WCDMA operators in 38 countries in Asia, Europe and North America. There are 35 CDMA2000 operators in Asia, including the South East region, 31 in Latin America, 27 in Europe and Russia, 25 in North America and 13 in Africa and the Middle East; 29 additional networks are being deployed predominately in Africa and the Middle East, Latin America and Asia.

3G wireless technologies offer an opportunity to bridge the digital divide and many governments are considering CDMA2000 in 800 MHz and 450 MHz to bring telecommunication services to rural and underserved areas. Among all wireless technologies, CDMA2000 is best suited for this market as it offers both advanced voice and data services at the lowest cost of delivery.

The key competitive advantage of CDMA2000 that has enabled these rapid deployments is that it was designed for in-band migration and has allowed cdmaOne™, TDMA, NMT and Greenfield operators to upgrade their existing systems or deploy new networks in 450 MHz, 800 MHz, 1700 MHz, 1900 MHz or 2100 MHz. WCDMA commercial systems, on the other hand, are Greenfield deployments (except in the United States) in 2100 MHz and require new spectrum and new radio networks.

Another CDMA2000 competitive advantage is the availability of a wide selection of devices. Today, there are 900 CDMA2000 devices, including 150 for 1xEV-DO, and they range from low-tier phones with basic data functionality to devices with multimedia capabilities. Driven by economies of scale, the prices of CDMA2000 devices are significantly lower than for WCDMA models and in some markets are available for as low as $45-$50.

CDMA2000 grew faster than WCDMA and GSM in its first five years of commercial use. With 200 million subscribers, CDMA2000 now controls 85% of the 3G market and serves close to 10% of total wireless users worldwide. This makes CDMA2000 the fastest expanding wireless technology. The growth rate has been accelerating and in the past three quarters 65 million CDMA2000 subscribers were added, which translates to an average of more than 7 million new users every month. At this rate, CDMA2000 should reach 220 million users by the end of 2005.

CDMA2000 serves a broader base and has had a significantly greater impact than WCDMA in markets where these 3G technologies are deployed. Today, 21 million (>10%) of CDMA2000 subscribers reside outside of Asia and North America and this nu mber is growing rapidly, especially in Latin America. Most WCDMA subscribers, more than 52%, are in Japan, 44% are based in Europe and only 4% are in the rest of Asia, North America, South Africa and the Middle East co mbined. In Asia, with 92 million users, CDMA2000 commands 12% market share, compared to 2% controlled by WCDMA. In North America, CDMA2000 has 77 million subscribers, or 35% of the market share, and in Latin America, with 15 million users, the technology has captured 7% of the market. In Europe, where WCDMA is widely deployed, WCDMA has attracted only 15 million users, or 2% of the total wireless market in the region.

While the majority of CDMA2000 networks and subscribers use CDMA2000 1X technology today, operators are rapidly upgrading their systems to CDMA2000 1xEV-DO advanced data technology, with 22 systems already commercial and 30 more being deployed. In Septe mber, 18 million, or 9%, of all CDMA2000 subscribers used 1xEV-DO and this nu mber will increase to 250 million (55%) by the end of 2009.

Capitalizing on their first-to-market advantage, CDMA2000 operators were able to deliver affordable, high-quality voice and advanced data services ahead of their competitors. This allowed them to differentiate their services and drive subscriber growth. KDDI, for example, has expanded its subscriber base by 75% since the deployment of CDMA2000 and its share of net adds in Japan soared from 20% to 50-60%.

With 3G CDMA2000, especially 1xEV-DO, data has become a key revenue generator and a growing business for operators. While data services on 2G networks are limited to SMS, ring tones and simple web browsing, CDMA2000 operators have launched advanced services such as video and audio downloads and 3D games. They have also introduced enterprise and public applications, including broadband access to Intranets, m-health care and m-commerce. In many countries, CDMA2000 is used to extend Internet access to remote areas. Telstra in Australia is a good example of such an application.

For many operators, data revenue grows at 50-80% per year. In Asia, data ARPU for KDDI increased by 56% and now contributes 26% of total revenue, and data accounts for 31% of an SK Telecom’s 1xEV-DO subscriber’s monthly bill. In the United States, Verizon Wireless reported in Septe mber 2005 that 48% of its customers used data services and data contributed 8.4% of total revenue, up from 4.7% a year ago and 7% just 3 months ago, to generate $613 million in revenue. VIVO in Brazil is also seeing its data revenue grow; in the 12 months ending Septe mber 2005, it rose from 4.5% to 6.2% with a three-fold growth in the nu mber of downloads and a 170% increase in the use of enhanced services. Some operators forecast that data will contribute close to 50% of their total revenue by the end of the decade.

CDMA2000 technologies offer the highest network efficiencies and data throughput today and will continue to do so in the future. CDMA2000 1X delivers the highest voice capacity of any other commercially available 3G technology with data speeds comparable to WCDMA. CDMA2000 1xEV-DO Release 0, which provides 600-800 kbps in commercial networks and up to 3.1 Mbps peak rates, is the most advanced wireless broadband technology currently available, and will outperform HSDPA (High Speed Downlink Packet Access) when the technology is commercially introduced in 2006-2007. The next version of 1xEV-DO, Revision A, improves data rates on the reverse link and introduces Quality of Service (QoS) techniques, paving the way for full multimedia capabilities, including Voice over Internet Protocol (VoIP) and video telephony on an all-IP radio access and core network. When commercially deployed in late 2006, Revision A will provide operators at least two years’ lead in these capabilities. Revision B, targeted to be commercially available in 2008, introduces the concept of dynamic scalable bandwidth, which will allow operators to co mbine up to fifteen 1.25 MHz carriers in the forward and/or reverse link and thereby increase capacity and throughput of the network up to 73.5 Mbps.

LaForge said, “The past five years have been very exciting for CDMA2000. The next five years should be equally rewarding, as we take the industry into next generation services and further expand in markets around the world. CDMA2000 will continue to evolve, and the industry will go on to refine business models to meet the future needs of the markets.”

For more information on CDMA2000, please visit the CDG’s Web site at www.cdg.org.

About the CDG
The CDMA Development Group is a trade association formed to foster the worldwide development, implementation and use of CDMA technologies. The more than 100 member companies of the CDG include many of the world’s largest wireless carriers and equipment manufacturers. The primary activities of the CDG include development of CDMA features and services, public relations, education and seminars, regulatory affairs and international support. Currently, there are more than 500 individuals working within various CDG subcommittees on CDMA-related matters. For more information about the CDG, contact the CDG News Bureau at +1-714-540-1030 or visit the CDG Web site at www.cdg.org.

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