Communications Regulatory Authority

Also with reference to the offering of converging services, Verizon Wireless has
recently stated that next year it will launch mobile television services, complementary to
the 3G services, and provided by means of Qualcomm’s MediaFLO network.
MediaFLO is a technology used for the supply of television programmes to cell phones,
an alternative to DVB-H, specifically created for “multicast” content reception on
mobile terminals, and which envisages the use of the cell phone network for the return
channel. The service will be available on EV-DO cell phones that support the
MediaFLO technology. Qualcomm intends to develop a national MediaFLO network on
the 700 MHz band, investing 800 million dollars for its creation and subsequent
management. National coverage is ensured by the radio spectrum that Qualcomm
purchased on the occasion of a tender held two years ago; it then continued to purchase
additional spectrum to arrive at a national coverage by the service. Verizon will be the
first US mobile operator to develop services based on MediaFLO technology. On the
other hand, with regard to the alternative DVB-H standard, common especially in
Europe, the Crown Castle company is conducting experiments in Pennsylvania;
however, as of today, no commercial development plans have been announced for the
service.
If the residential segment (with the development of the 3G and mobile television
services) continues to be that most reached by the mobile network VAS, there are broad
development prospects (not only in terms of the number of subscribers, but also and
above all in terms of revenues) as far as business customers are concerned. As is the
case in the European market, the use of mobile network value-added services by
business customers is still limited by the presence of obstacles connected with the
complexity of implementation, within the company, of value-added mobile solutions.
For this reason, Cingular and Sprint Nextel have created special divisions to serve this
customer segment.
The wide growth margins of the mobile market are confirmed by the user
forecasts: at the end of 2005, in the US market, mobile services had 203.9 million
subscribers, a figure that should reach 240 million by the end of 2007. Calculated on the
total US population, the penetration of the service should thus grow from the current
71% to 82% in the coming year, and the highest growth rates are expected in the
business customer segment.
Lastly, with regard to the corporate structure of the mobile operators, as has been
pointed out previously, the mobile market has also been undergoing a profound
restructuring process. Last year the merger between Sprint and Nextel was completed,
after which the market appears characterized today by the presence of three major
national infrastructured mobile operators: Cingular, Verizon Wireless, and
Sprint/Nextel. As for the smaller operators, also in 2005, Alltel, a regional operator
(ranking sixth by market share) acquired Western Wireless, an operator ranking twelfth
in terms of number of subscribers. The competitive picture is completed, as has been
said, by the presence of mobile virtual operators.
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