CDMA - Maximizing Spectrum Resources. John Hannan Senior Manager Global Technology Marketing

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1 CDMA - Maximizing Spectrum Resources John Hannan Senior Manager Global Technology Marketing jhannan@qualcomm.com

2 Slide 2 Agenda Discuss the impacts that advances in CDMA capacity have had on the adoption and uptake of wireless voice and data services Growth in CDMA wireless voice capacity Understanding wireless economics Drivers of CDMA data services

3 Slide 3 Capacity and Coverage Suburban Sites Rural Sites Urban Sites A county the size of San Diego might require ~300 cell sites to provide adequate wireless coverage

4 Slide 4 Why is Capacity Important? Allocated Spectrum Each user utilizes a portion of the radio spectrum Adding more channels allows more users to be supported Once the available spectrum is used up the only way to add capacity to the network is to add more cell sites

5 Slide 5 Wireless Capacity Evolution CDMA enables more calls in a given amount of spectrum FDMA TDMA Power CDMA Power Time Frequency (MHz) Power Time Frequency (MHz) Time Frequency (MHz)

6 Slide 6 CDMA Capacity Evolution Voice Capacity Per Sector (5 MHz) Erlangs/Sector AMPS cdmaone IS-95 QCELP 13k EVRC EVRC CDMA2000 1X SMV Dual Receive Diversity 1980s X Capacity Improvements X with EVRC Vocoder 2003 SMV Vocoder 2004 Dual Receive Diversity

7 Slide 7 Voice Capacity More subscribers per site. CDMA capacity 1X Voice Capacity in 5 MHz continues to lead the industry. Subscribers Supported Per Cell Site 12,000 10,000 8,000 6,000 4,000 2,000 0 EVRC SMV Diversity Assumptions: Minutes of Use / Month / Sub 2. 12% Busy Hour Traffic Active Days/Month 4. 80% Network Utilization

8 Slide 8 Cost Drivers Operations Utilities Radio/Network Equipment Capital Depreciation Backhaul Other Op Ex Installation Site Acquisition The cost for providing a wireless minute of use is driven largely by per site expenses Site Engineering Operating Expense Site Rental Network Expense = Operating Expense + Capital Depreciation

9 Slide 9 Network Loading The more subscribers and minutes that can be driven over a cell site the lower the cost per minute to an operator Cost per MOU MOU Per Cell Site

10 Slide 10 Voice Service Trends US Wireless Voice Usage and ARPU/MOU MOU/Month/Sub $0.60 $0.50 $0.40 $0.30 $0.20 $0.10 $0.00 ARPU/MOU ($) MOU/Month ARPU/MOU ARPU/Month $61.59 $52.42 $55.75 $56.75 $56.50 $56.33 Source: EMC 97 99, Merril-Lynch 00-02,

11 Slide 11 Wireline Data Experience Average MB/User/Month Web Sites in 93 Average Web Page size 10 kb Web Browser Traffic per Subscriber Average Web Page size 100 kb Internet Households kbps 28.8 kbps 56 kbps 128 kbps >1 Mbps 22M Web Sites in 00 $2K for Pentium 800 MHz PC $2K for 286/15 MHz PC Streaming Video # of U.S. Internet Households (Millions) Source: AT&T Labs Research, Internet growth: Is there a Moore s Law for data traffic?, July 2000 Source: Veronis, Suhler & Assoc., Wilkosfsky Gruen Assoc., Forrester Research, U.S.

12 Slide 12 Wireless Data Drivers Bandwidth, Device Capabilities, And Content Will Drive Usage MP3/MPEG-4 Camera Phone Peak User Data Rates (kbps) X xEV-DO 2,400 2,400 2,400 3,100 XML Wireless Color PDA Wireless Laptop

13 Slide 13 CDMA Data Capacity Evolution Avg Sector Throughput (kbps) 5,000 4,000 3,000 2,000 1,000 0 Data Capacity per Sector (5 MHz) X Assumptions X and 1xEV-DO xEV-DO Dual Antenna Mobile Diversity X Dual Antenna Mobile Diversity xEV-DO Release A + Equalizer 1xEV-DO Source: QUALCOMM Simulations

Slide 14 The Bottom Line - Will It Make Money? KTF Mobile Data Performance ARPU By Type of Handset $30 $25 USD 24.8 27.67 27.

14 Slide 14 The Bottom Line - Will It Make Money? KTF Mobile Data Performance ARPU By Type of Handset $30 $25 USD $20 $15 $10 $5 $0 Source: KTF Q Earnings Release cdmaone 1X 1X + BREW xEV-DO Voice Data Operators are looking for ways to increase ARPU CDMA has met the challenge!

15 Slide 15 The Opportunity News Position Location Ring Tones Push to Talk Entertainment Photo Sharing 9lbs 2 oz. Sports Multiplayer Gaming Video Monitoring VERSATILITY Now Drives Wireless Growth

16 Slide 16 Thank You!

Luigi Gasparollo. Status. Opportunity provided by CDMA wireless technologies. Considerations on the way forward. Conclusions !

Luigi Gasparollo. Status. Opportunity provided by CDMA wireless technologies. Considerations on the way forward. Conclusions ! ! " #$% $ Luigi Gasparollo VP Business Development MENA luigig@qualcommcom Status Opportunity provided by wireless technologies Considerations on the way forward Conclusions 1 The evolution of wireless