The document outlines a strategy and execution plan for SMS services at a wireless carrier. It identifies five early adopter customer segments and recommends prioritizing text messaging, alerts, and ringtones. A three-phase promotion strategy is proposed to generate awareness, stimulate adoption, and increase usage. Interoperability is identified as critical for growth. The plan forecasts growing SMS revenues from $4.9M in 2002 to $18.1M in 2004 through increased penetration and usage. Success fees are tied to revenue milestones.

1. SMS Strategy Development and Execution Plan Telecom Day April 12th, 2002

2. Agenda SMS Opportunity Strategy and Execution Competitor Analysis

3. SMS Opportunity SMS is a global phenomenon SMS is a global phenomenon and contributes a significant portion of wireless network operator revenues in several countries. Global SMS Messages Total Messages by Region Source: GSM World, EMC, Merrill Lynch, DCI. Billions per Month Source: Merrill Lynch. SMS Usage and Revenue Contribution CAGR:243% Source: GSM World, EMC, Merrill Lynch, DCI. % of Total Revenue Messages per Mobile Sub per Month

4. SMS Opportunity Interoperability is Critical Overseas experience indicates interoperability and bill per message are key milestones to ignite SMS growth. Selected SMS Market Ramp-up Source: EMC, Merrill Lynch. Million Messages per Month Interoperability Prepaid SMS Portugal UK Germany Interoperability agreements implemented across all of Europe enabling SMS messaging across all GSM networks in Europe Pricing schemes to reduce barriers to entry Pay per message sent (i.e. CPP) Pre-paid SMS offers 100% of handset base is 2-way SMS enabled Benefits of SMS proactively communicated SMS focused promotions Key Success Factors

5. SMS Opportunity US lags in adoption and usage Until now, US operators have not been able to enjoy the same amount of success . Europe vs. US Benchmarks (2001) Europe US # users 160M 6.5M # message/Month 12B <1B Youth Mobile Penetration 70% 37% SMS Enabled Handsets 100% <50% Source: Merrill Lynch, GSM Association, CDG, DiamondCluster analysis. Carrier interoperability for message exchange not consistently implemented; mobile coverage less consistent Calling-party-pays regulation and limited availability of pre-paid offers limits penetration of low income and youth segments first adopters of SMS Mobile penetration at 39% still low compared to >60% in Europe and 2-way SMS enabled handsets are at <50% of US base vs ~100% in Europe. Carriers have only begun to actively promote SMS High penetration of computers and low cost for landline internet access in US favors use of Instant Messaging Why the US Lags? Europe US Europe US UK US

6. SMS Opportunity Where is the Money?! Source: GSM World, EMC, Merrill Lynch, DCI. Peer to peer messaging is expected to have the highest business impact in the short run, but content should play an important role in generating awareness and driving adoption. SMS Revenue Breakdown Europe - 2001 Source: JP Morgan/Arthur Andersen—Wireless Data, Feb 2001, DCI research. SMS Revenue Breakdown Forecast Europe - Revenue Forecasts Other Services 10% Text Messaging 90% SMS revenue in Europe is driven by simple person to person text messaging US mobile services adoption lags Europe by 2 years

7. Agenda SMS Opportunity Strategy and Execution Competitor Analysis

8. Strategy and Execution Strategic Guidelines Leverage Points Action Steps Customer Segments Interoperability Content & Applications Pricing Promotions & Communications Target high potential SMS users within USC’s customer base Focus on text messaging as the primary revenue generator Develop selective content offering through partnerships Simplify pricing plans Develop Mass education and awareness program Develop Targeted Promotions Implement inter-carrier interoperability at national level

9. Strategy and Execution Work Tracks DiamondCluster has been primarily involved in the development of the business case, design and implementation of marketing initiatives and in the co-ordination of SMS dependent activities across all areas of the organization. Program Management Cares Integration SMSC Technical Implementation Sales and Customer Care Training Handset Strategy Construct and Monitor Business Case Marketing Initiatives Inter- Operability

10. Strategy and Execution Project Team Project Lead Marketing Initiatives SMSC Roll Out DCI David Benson Steering Committee Subject Matter Experts As Needed USC DCI USC USC Billing System Roll-Out USC Interoperability USC Handset Strategy USC Sales and C.Care Training USC Business Case DCI John Ronn Eduardo Job Ryan Lanier Carolina Aguilar Sarah Cannizzo John Ronn Janet Vink Peter Cremer Parks Hisey John Ronn John Ronn Kara Joiner Sander Den Hartog PMO DCI John Coyle Project Areas Alan Ferber DiamondCluster team was deployed in the marketing initiatives, business case development and program management execution work tracks.

11. All BAN’s/CTN’s identified with family members between 11-17 (from MARS) Subsegment: the intersection of all BAN’s in a non-business shared plan with family members between 11-17 Users with higher than average “on-net” mobile to mobile calls All BANS/CTN’s identified between 18-25 (from MARS) (above merged with) lowest 25% of ‘minutes included’ pricing plans for the individual (<=200 minute plans) Users with higher than average “on-net” mobile to mobile calls Teens Students Young Professionals Business Users Families All BANS/CTN’s identified between 26-34, and all ‘self motivated professionals (from MARS) (above merged with) highest 25% of ‘minutes included’ pricing plans for the individual (>=1000 minute plans) Users with higher than average “on-net” mobile to mobile calls More than (2) 12am-3am calls during the preceding month. All BANS/CTN’s identified between 35-59, and all ‘Power callers’ and ‘talking tradesmen’ (from MARS) (above merged with) all business plan customers Users with higher than average “on-net” mobile to mobile calls Five potential early adopter segments were identified. Strategy and Execution Early Adopters Target Segments STEP 1 All BAN’s/CTN’s identified with family members between 11-17 (from MARS) Users with higher than average “on-net” mobile to mobile calls STEP 2 STEP 3

12. Strategy and Execution Offer Design Methodology A short list of SMS services was tested with focus groups to define the final offer. Long list Short list Final Offer Benchmark: List with all the different SMS services that are being offered by European and US players Business impact: Prioritize offers with fastest take up rates and highest potential for revenue generation Technical feasibility: Billing Platforms Customer Service Includes services that have passed the first filter Potential promotions Potential pricing structures Final definition of the service offering Communication strategy Focus groups: Test the services, promotions and pricing structures Brainstorming Generate ideas of new innovative SMS services Filter Filter

13. Strategy and Execution Services Priority List Results from focus groups indicate text messaging, push/pull information alerts and ringtones should be prioritized. Text Messaging Closed-User Group Content (2) Communication (1) Other applications are Palm-to-SMS, Operator-to-SMS. (2) Only available for Nokia handsets. (2) Includes the description of the recommended offer for launch. Description Send and receive SMS messages to/from handset, e-mail, IM, Web, pager, etc... (1) Group service that allows a mobile subscriber to send and receive SMSs to/from a predefined user groups Downloads: allows user to download ringtones, logos and games into his handset SMS Push/Pull basic well formatted information (news, sports, stocks, ...) Priority Revenue Impact Implementation Complexity Focus Group Interest Positive Negative

14. Strategy and Execution High Level Promotion Phases The promotion campaign for launch has three distinct phases to generate awareness, stimulate adoption and usage. Phase 1 (Mass) Phase 2 (Targeted at segments) Phase 3 (Targeted at users) Objective Dependencies Rationale Promotion Description Raise awareness Convert users Stimulate Usage Turn on users Capture text message responses New SMSC Interoperability Downloads etc. Bill per message, Sweepstakes to all segments asking customers to send a text message to win a prize (can respond via web or mail too) Targeted promotions to selected segments: free for one month, free gift etc. Heavy users: free games, other usage promotions Non/low-users – free anytime voice minute for each text message sent Encourages trial Takes advantage of competitor category build Communicate new features Promotes adoption Generates more revenue from heavy users Generates revenue from non- users

15. Strategy and Execution High Level Promotion Schedule 04-Feb-02 11-Feb-02 18-Feb-02 25-Feb-02 04-Mar-02 11-Mar-02 18-Mar-02 25-Mar-02 01-Apr-02 08-Apr-02 15-Apr-02 22-Apr-02 29-Apr-02 06-May-02 13-May-02 20-May-02 27-May-02 03-Jun-02 10-Jun-02 17-Jun-02 24-Jun-02 01-Jul-02 08-Jul-02 15-Jul-02 22-Jul-02 29-Jul-02 05-Aug-02 12-Aug-02 19-Aug-02 February March April May June July August Purchase Installed Bill per message Enable all users to send SMS Communicate interop and New Pricing Plans Legacy pricing plans Per message pricing Task Phase One - Mass (Sweepstakes) Phase Two - Targeted (Gift/free SMS) SMSC rollout & dependencies Prep Launch Launch Billing for non-plan usage Free month/TBD Launch Prep Phase Three – Targeted (Usage Stimulation) TBD Prep Extend if Successful

16. Strategy and Execution “Mobile Messaging Moola” The Mobile Messaging Sweepstakes will use a Mobile Messaging outbound campaign reinforced by bill inserts and Web site content to raise awareness and educate the customer base about the service. Objectives Raise awareness Remove barriers for adoption and stimulate image Gather customer data Expected response Response Rate: 4% Total responses: 93,627 Take up rate: 1% New Mobile Messaging Subscribers: 23,407 Media Mix Mobile Messaging outbound campaign Bill inserts Web content and entry form Target segments Mass Market Promotion: Except subscribers younger than 18, due to legal restrictions Number of potential customers: 2,3M Timeline Weekly sweepstakes from May, 1 st to June, 24 th Marketing Objectives Company Confidential

17. Strategy and Execution Revenue model: Goal Scenario Key Revenue Drivers Revenue Forecast Source: Gartner Group, Cahners In-Stat, US Cellular, DCI analysis. Users (*) Msg/User (**) Revenue/ Message (*) We conservatively estimate SMS revenues will grow from $4.9M in 2002 to $18.1M in 2004 driven by expected increases in penetration from 1.5% of the base today to 7.4% by the end of 2004. Messaging user base grows from current 1.5% of network subscribers in January 2002 to 7.4% in December 2004 Downloader user base grows from 1% to 5% of network subscribers in 2004 Users SMS Usage Pricing Messaging usage climbs from 15 messages per SMS user per month in January 2002 to 60 in December 2004 Downloads grow from 1 to 2 per downloader per month in 2002 to 2 in 2004 Service Offering (*) EOP. (**) Per month. Assumption: 1) Advanced Mobile Messaging: $4.95/mth 2) Mobile Messaging: $2.95 /mth 3) Pay Per Message: $0.10/msg Download price is set at $1 and 50% revenue share is assumed Interoperability introduced in June 2002 with InphoMatch and migration over time to direct connections with other operators Per message billing product introduced in August 2002 Downloads are introduced in August 2002 for both CDMA and TDMA markets Cahners In-Stat US penetration forecast. 4,900 11,156 18,106 Revenues Penet. 180 K 255 K 332 K 23 45 60 $0.18 $0.12 $0.09 Downloads revs (000s) Messaging revs (000s) Messaging penetration (% of base)

18. Strategy and Execution Revenue model: Goal Scenario (cont.) We expect penetration and revenue growth to accelerate in 2002 driven by interoperability, bill per message and improved functionality of new SMSC. Revenue and Penetration Forecast- (2002) Note: usage is presumed to stay constant at current level for 2002, increasing by 50% once interconnection is realized. # Messages per user per month 15 15 15 15 15 23 23 23 23 23 23 23

19. Strategy and Execution Success Fees *Based on forecast from USC business plan Skin in the game was a key selling point for this project and we remain on target for the 100% milestone in either August or September (or both). Time-frame Milestone Incremental Annualized Revenues* Success Fee Maximum Fees to DCI Q3 2002 SMS revenue 100% above current USC forecast July US $2,474,000 US $96,666 US $540,000 August US $2,569,000 US $96,667 September US $2,662,000 US $96,667 Total Success Fee US $290,000  SMS revenue 150% above current USC forecast July US $3,712,000 US $136,667 US $660,000 August US $3,854,000 US $136,667 September US $3,994,000 US $136,667 Total Success Fee US $410,000  SMS revenue 200% above current USC forecast July US $4,949,000 US $176,666 US $780,000 August US $5,139,000 US $176,667 September US $5,325,000 US $176,667 Total Success Fee US $530,000  SMS revenue 300% above current USC forecast July US $7,423,000 US $256,667 US $1,020,000 August US $7,708,000 US $256,667 September US $7,987,000 US $256,667 Total Success Fee US $770,000

20. Strategy and Execution Interoperability Usage Impact ( * ) AT&T experience CHECK (SMS Forum) Opportunity Cost of Delaying Interconnection Million Messages per Month Million Messages per Month 200% 150% Sources: EMC, Merrill Lynch, MobileSpring, DiamondCluster analysis. Sources: DiamondCluster analysis. June 2002 December 2002 ? Illustrative $M Revenue Shortfall Due to Delay In Interoperability Inter-operability Impact on Usage/Revenues Australia UK Interoperability is critical to drive SMS adoption with immediate impact on revenue/usage of up to 200%. Interoperability

21. Strategy and Execution Third Party Deals Interoperability Update Six of top 10 carriers representing 70% of US subscriber base have already signed up with InphoMatch and or MobileSpring. AT&T Wireless Nov 01 17.1M InphoMatch Century Tel Mar 02 0.8M InphoMatch Cincinnati Bell Nov 01 0.5M InphoMatch Cingular Apr 02 21.3M MobileSpring PrimeCo NA NA InphoMatch Sprint Apr 02(?) 12.4M MobileSpring Verizon Wireless Apr 02 28.7M InphoMatch VoiceStream July 01 6.3M InphoMatch Date # of Subs * IC Provider Total US 123.0M 69.85% *3Q01

22. Strategy and Execution Critical Dependencies and Recommended Actions Technical timelines provide the greatest risk to the success of the SMS promotions. Risk Mitigation Recommended Action SMSC implementation Interoperability Bill per message SMSC implementation is delayed Interoperability is delayed Bill per message is delayed Complete integration and test by end of April Complete agreement, connectivity, and test in parallel with new SMSC: complete by end of April Accelerate Bill per message capabilities in CARES Facilitate PR and PO Consider hiring full time SMS network engineer Begin negotiations and connectivity as soon as PO for SMSC complete Consider raising the priority of BPM over other CARES issues

23. Agenda SMS Opportunity Strategy and Execution Competitor Analysis

24. SMS Offer Pricing Promotion Communi-cation Target Segments Product Name The basic SMS offerings are very similar between operators but they all have different ways for marketing and pricing the service. 25 ¢ a day regardless of usage or volume Free to receive Text Messaging Prepaid SMS Information alerts Ringtones Interoperability Started by targeting teens but now also targets college students Text messaging includes voicemail SMS communication incorporated into overall branding Pay-per-use or monthly fee Free to receive 2-way Text Messaging Information alerts Ringtones and graphics AOL IM over SMS Interoperability Business and consumer users Not available Incorporates SMS in mLife campaign Text messaging brochure included with bill Pay-per-use or monthly fee Pay to receive Interactive Messaging Information alerts Ringtones and games Interoperability Consumers No teen/college distinction Free NCAA basketball alerts Reinforces self-expression brand attribute Markets SMS as part of wireless data offering Pay-per-use or monthly fee Pay to receive Mobile Messenger/ Spk ‘n Txt Prepaid and Postpaid SMS Information alerts Interoperability Consumers Teen/College separately Online SMS typing game SMS considered a “Calling Feature” Different communication for teens/college Bundled inbound Monthly fee Pay to receive Ping Pong Information alerts Ringtones and graphics AOL IM over SMS Interoperability Business and consumer users without deep segmentation Free LOTR rings and graphics Marketing SMS as a wireless e-mail solution Not hyping Interoperability Two pricing plans with unlimited messages Mobile Messaging Information alerts (for 1-way subscribers only) Business and consumer users Not available Clear, direct language No SMS sales pitch on Web site Competitor Analysis Summary

25. Competitor Analysis I-Wireless (Cincinnati Bell) Prepaid Offer and Pricing:“Text Messaging” Although prepaid SMS is treated as a standard feature of the prepaid product, subscribers must proactively sign up for SMS because of its fee Only one available handset (Nokia 5165) and it is two-way SMS-enabled Ensures SMS compatibility and facilitates instructing users about SMS Two-way interoperability with Cincinnati Bell Wireless and AT&T Uses InphoMatch as a third party provider for all other operators Free local high school basketball scores alerts Partnering with local news channel and Web site to provide alerts Information alerts Ringtones Supplied by Sonera Zed Pricing: Two-way SMS: 25¢/ day, regardless of use or volume Receive only: free Ringtones: $1.00 deducted from prepaid balance for each download Text messaging is incorporated into the overall I-wireless product and marketing instead of promoted as an add-on feature. Sources: Company Web site and promotional literature. I-Wireless Communication and SMS Promotions I-WIRELESS COMMUNICATION SMS is incorporated into overall I-wireless branding and communication strategy Does not promote a particular benefit or reason for using SMS Focuses SMS educational text on teaching users how to send/receive messages The text messaging “Tips” page instructs users about shortcut keys and handset functionality instead of icons and SMS vernacular Language directed at youth market “ Show me the goods” “ It’s way easy” Communicates ideas that appeal to teens Immediate gratification: “I-wireless is freedom. Now.” No Hassles: ”I have no monthly bills” Egocentric: Uses “I” in all product names (e.g. “I get free text messages) and in section headings of the online guide (e.g. “I need talk time”) Control: “I live by my terms” Originally targeted teens, now expanding to include college students Newer advertising campaigns include drink coasters with pick-up lines and commercials set in bars Gee, Jeffery & Partners is the Advertising firm and Canadian firm Medium One designed web-site and CD-ROM interactive demo for launch SMS PROMOTIONS For a limited time text messaging price includes voicemail

26. Competitor Analysis I-Wireless Marketing Case Study I-wireless has successfully positioned itself on the fine line between trendy non-conformity and socially unacceptable deviance to attract its target segments. Sample Print Ads I-Wireless Marketing All communication materials include an “I” statement which reflects back to the brand name and maintains brand consistency I like to score I hate greek week I deserve I-wireless I am not to be underestimated The product is presented as one that upholds key ideals of the target segments (teen/college students): Independence Non-conformity Social success/acceptance Marketing materials reinforce brand attributes “ I live by my terms” is repeated in most communications Commercials depict characters who are both unique and socially accepted individuals Communication materials are distributed to hotspots of the target segments Drink coasters function as print ads in bars

27. I-wireless started as a teen brand but has started to expand its base by targeting college students as well. Teens Teens Teens TEXT MESSAGE #1: Party 10:00. Matt TEXT MESSAGE #2: Meet at 6:30 our spot. Jen GIRL: Hey. How was your day? [also said in sign language] GUY signs a response. END TEXT: Send and receive text messages with your phone. Two way Text Messaging now available. Competitor Analysis I-Wireless Marketing Case Study: Teen Commercials TEEN: Hey wait man. You can’t forget this. I like your shoes. Those are shiny shoes. Later, man. May I help you cross the street? ELDERLY LADY: Let go of me. Let me go! TEEN: People say I’m a good person and you know what, I believe them. Have a nice day. Elderly lady : Wha- Chippy, where are you dear? TEEN: I’ve been good. I deserve I-wireless. TEEN: Oh I’m popular now. It all changed pretty quickly. People just need to get to know the real me…. So, Saturday night then. You just gotta know how to present yourself. Script/ Text “ SMS” “ I’ve been good” “ Popular” Ad Target

28. College College/Teens College/Teens BOY: Hey guys, guess who’s finally going out with me? Gretchen! [Tarzan-esque Cheers] FRIEND CALLING: Hey big stud. Did you get lucky yet? GRETCHEN:That depends on how fast you can get here…. I am not to be underestimated. Competitor Analysis I-Wireless Marketing Case Study: College/Teen Commercials TEXT: I have free caller I.D. Your ex-boyfriend will hate this. I have digital prepaid. His complaints will come in clear. I have free text messaging. He’ll even put it in writing. I have 10 ¢ minutes evenings and weekends. In case it takes awhile…to get him to stop…crying. I live by my terms. GIRL: I live by my terms. IVR: Welcome to the I-wireless telemessaging service. To identify yourself as a subscriber, please press #. Please enter your password. Dana Raven, you have new messages. First new message GUY: Hey it’s Chad. Call me. Message deleted. Hey Dana, it’s Chad, the captain of the football team?! Last night was fantastic. Why don’t you give me a— Message deleted. Hey Dana, me again. Uh, maybe, uh, you lost my number or something. It’s 555-653— Message deleted. H ey— Message deleted. Look if you’re not— Message deleted. NARRATOR: I-wireless comes with free voicemail and caller I.D. for those calls you’d rather not pick-up. GUY: I thought you said I was special. Message deleted. NARRATOR I-wireless affordable prepaid digital service. Ad Script/ Text Target “ The Date” “ Ex-boyfriend” “ Quarterback” Radio Ad

29. Competitor Analysis I-Wireless Marketing Case Study: Coasters Target College Students in their “natural habitat” by incorporating pick-up lines into the “I” campaign Drink Coasters

30. Competitor Analysis AT&T Offer and Pricing: “2-way Text Messaging” Interoperability with almost all US carriers First to offer SMS interoperability in the US (as of November 2001) Uses InphoMatch as a third party provider Information alerts AOL Instant Messaging over SMS Online Message center for sending messages Ringtones and graphics Supplied by Sonera Zed Pricing: No monthly charge: receive unlimited messages; 10¢ for every messages/IM sent; 10¢ for every IM command (e.g. Sign On or Sign Off) $4.99/month: receive unlimited messages; send up to 100 messages/month (additional messages: 10¢ each); 10¢ for every IM command (e.g. Sign On or Sign Off) Ringtones and graphics : $0.99 (standard) or $1.99 (premium) AT&T is not targeting one group in particular but marketing text messaging to all segments as an alternative way to communicate. Sources: Company Web site and promotional literature. SMS Communication and Promotions COMMUNICATION Incorporated into mLife campaign on Website and in a TV commercial One mLife commercial (friendly speed skating rivalry) features text messaging as an alternative way to communicate SMS section of Web site has mLife logo Treats SMS as an add-on feature “ Express yourself without saying a word” Detailed instructions on Web site for sending and receiving messages Language emphasizes ease of use Text Messaging brochures included in some bills Cover has a young woman wearing a suit but the short glossary is not business-related (includes Hugs and Kisses, How cool is that, football and beer) Includes functional instructions as well as “Handy Abbreviations” Selling SMS as an alternative way to reach people and stay connected Attacking the perception that text messaging is difficult by using the tag line “It’s Fun. It’s Easy” on the cover. Targeting Business and Consumer users SMS PROMOTIONS Not available

31. AT&T is not only selling wireless services, but it also markets lifestyle that is made possible by the communication options it provides. Competitor Analysis AT&T Marketing Case Study: Lifestyle Branding Sample SMS Ads AT&T Marketing mLife Campaign Pre mLife Markets its services as enabling customizable connections for every situation or need “ Your world. Close at hand.” Targets the broad wireless market, including business users, but it differentiates itself from the other mass market operators by positioning itself as a premium provider relative to the other operators As AT&T is not targeting as specific segments as I-wireless, its key brand attributes must be concepts that appeal to a wider range of people: Personalization Adaptability/Flexibility Trustworthy The new mLife campaign reflects the same brand attributes of previous campaigns but with a new emphasis on the way these services can be integrated into existing lifestyles “ We are meant to live a wireless life.” Wireless services, including SMS, are linked to popular media events such as the Olympics and the daily MTV show Total Request Live (TRL) These associations reinforce the connection the AT&T brand establishes between its wireless services and the lifestyles of potential and existing customer base 2-way text messaging is treated as one more way to communicate– another medium in the range of options provided by AT&T “ Talk or Text. It’s your request.” “ Sometimes text says more than talk.”

32. Competitor Analysis AT&T Marketing Case Study: Lifestyle Branding AT&T Wireless Services AT&T Wireless Services 2-way Text Messaging NARRATOR: We are meant to lead a wireless life. Now we truly can. Welcome to mLife from AT&T Wireless. NARRATOR: Why do we leave? Why do we keep coming back? Why do we seek adventure, yet long to return? Why do we look forward to reunions when we couldn’t wait to get out of school? Why do we want to be alone sometimes but never lonely? Why do we say there’s no place like home and why can’t we always stay there? Why do we travel to distant places and look for familiar faces? Why can’t we stay connected, yet be free? Can’t we have both? Now we can with mLife, where we will be connected in new and better ways to the people and things we care about. Welcome to mLife from AT&T Wireless. TEXT MESSAGE #1: Beat this: 1:47:10 NARRATOR: Sometimes text says more than talk. Welcome to mLife from AT&T Wireless. TEXT MESSAGE #2: No- beat this! 1:47:05 Script/ Text “ Why?” “ Friendly Rivalry” Ad Product “ Belly Button”

33. Competitor Analysis Cingular Offer and Pricing: “Interactive Messaging” “ Info Alerts” Interoperability using InphoMatch On-Demand Ringtones and On-Demand Games (also available in Wireless Internet form) For SMS versions must subscribe to Interactive Messaging and DirectBill Ringtones provided by PWS Games platform provided by Mforma Pricing: Pay-as-you-use: sent and received messages: 10¢ $2.99/month: 100 messages; additional sent/received: 10¢ $5.99/month: 250 messages; additional sent/received: 10¢ $9.99/month: 500 messages; additional sent/received: 10¢ Ringtones and On-Demand Games: $0.99 each Cingular’s SMS communication materials reinforce the self-expression component of its quirky, casual brand. Sources: Company Web site and promotional literature. SMS Communication and Promotions COMMUNICATION Cingular’s overall branding is focused around expression: both self-expression and communicating with others Tag line: “What do you have to say?” SMS communication is consistent with overall expression branding Ringtones enable self-expression and text messaging is another way for customers to “yackety-yak” Treats SMS as a Wireless Data service, part of My Wireless Window Product 2G Wireless Internet monthly rate ($4.00/mon.) requires the purchase of Interactive Messaging 100 plan or higher All Wireless Internet GPRS plans include Interactive Messaging bundles Promotes individualization “ They’re playing my song” “ Why have an identity crises every time a wireless phone rings?” “ Choose a ringtone that tells the world what you like, what mood you’re in or what season it is” Casual language “ Info Alerts” instead of “Information Alerts” Detailed instructions for sending/receiving messages by handset model number but no SMS vernacular glossary Targets all consumer segments (not teen/youth specific) Cingular Interactive is the Business provider SMS PROMOTIONS Free NCAA basketball alerts

34. Competitor Analysis Verizon Offer and Pricing:“Mobile Messenger/Spk’nTxt” Information alerts Interoperability using InphoMatch Online Messaging management ( www.vtext.com and www.msg.myvzw.com) Manage addresses, send individual or group messages, receive messages and delivery confirmation, assign nicknames, set-up personal/calendar alerts, request information alerts Pricing: $0/month: 2¢ received, 10¢ sent $2.99/month: 100 messages; additional: 2¢ received, 10¢ sent $7.99/month: 600 messages; additional: 2¢ received, 10¢ sent Prepaid: 5¢ sent or received Verizon is marketing SMS differently to appeal to distinct youth and business/adult segment characteristics and values. Sources: Company Web site and promotional literature. SMS Communication and Promotions COMMUNICATION Two different names: Called “Mobile Messenger” in regular VZW communications Called “Mobile Messenger-Spk ’nText” on youth (teen/college) Web site www.free2tlk.com and in communication for prepaid product (called FREE^UP) Highlighted benefits on regular site: fast, fun, discreet, and inexpensive Treated as a “Calling feature” not as a Wireless Data feature (unlike Cingular) Very little instructional information on regular site Hype the Web management of SMS (send, create group SMS, receive, build address book, assign nicknames, calendar alerts, information alerts) with an online demo (the only VZW SMS demo) Prepaid brochures contain instructions and explanations of SMS capabilities as well as SMS glossary Regular Web site has not updated its 2-way coverage information It says 2-way SMS is only available in parts of Washington state and Oregon More emphasis on SMS on Free2Tlk.com youth site Targets teens and college students by positioning SMS as trendy SMS is marketed as giving its users freedom SMS vernacular used extensively throughout site (e.g. most section headings on home page are written in SMS vernacular) SMS PROMOTIONS “ Play Mouth Off” Free online game to test users’ speed in typing text messages

35. Competitor Analysis Voicestream Offer and Pricing: “Ping Pong” Interoperability with almost all US carriers Uses InphoMatch as a third party provider (as of January 2002) Information Alerts Power Messaging through online Message zone Group SMS, customize filters, create e-mail alias, assign nicknames AOL IM over SMS One handset has AOL IM embedded (Nokia 3390 Gold) Ringtones Ringtones (provided by PWS) on MyVoicestream.com are for Nokia handsets only Motorola handset users must go to Motorola’s Web site Pricing: National and regional plans include 50 incoming messages; 5¢ each add’l incoming message and 5¢ for each outbound message Talk and Text plans includes 500 in/outbound messages or 1Mb of data (GPRS); additional in/outbound messages: 5¢ PingPong add-on plan: $2.99.mon. for 500 in/outbound messages; additional in/outbound messages: 5¢ AOL IM on Nokia 3390 Gold: $2.99/month Signing into or off of AOL IM (unlike AT&T) does not reduce message bank or cost overage charges Ringtones from MyVoicestream.com: $1.00 each Voicstream is pushing its AOL Instant Messaging capabilities as well as the e-mail functionalities of SMS. Sources: Company Web site and promotional literature. SMS Communication and Promotions COMMUNICATION Markets SMS as an e-mail service for handsets “ Speak your mind, anytime, anywhere, with anyone who has an e-mail address” Call SMS “short e-mails” Emphasis that every subscriber has an e-mail address based on her 10-digit phone number Not hyping interoperability because it is not an obstacle for e-mail Highlights SMS capabilities such as group SMS, forwarding, nicknames Emphasis on ease of use in online Ping Pong demo Web site does not clearly explain that messages bundled in voice plans (except with the Talk and Text plan) are incoming only; brochure make that distinction more clearly Markets ringtones as” cool” and a way to personalize wireless handset and service Vague send/receive functional instructions Tips for AOL IM are more detailed than Ping Pong instructions Web site includes a separate SMS/IM glossary Targets: Business and Consumer users without a deeper segmentation SMS PROMOTIONS Free Lord of the Rings ringtones, graphics, and screensavers (deal between AOL, Voicestream, and PWS)

36. Competitor Analysis ALLTEL Offer and Pricing: “Text Messaging” Information alerts All digital phones are two-way SMS enabled Also sell “2-way Messaging” for non-phone devices (Motorola) Pricing: $5.00/month Unlimited two-way messaging Although ALLTEL has clearly segmented its market, it is not proactively selling SMS. Sources: Company Web site, Customer Care. SMS Communication and Promotions COMMUNICATION ALLTEL is not pushing SMS services No description of the service is included on the Web site No pricing information available online Handset descriptions do not mention SMS capabilities Web site has “Shop by Lifestyle” feature but SMS is not highlighted in any group description or in any of the segments’ plan and handset combinations Segments: Today’s Communicator Business Traveler Hometown/Around town Family Ties Young Adult Safety and Security SMS PROMOTIONS Not available

37. Competitor Analysis Ringtone Providers Download with Mobile Browser Only available for 1xRTT-enabled handsets Ringtone Providers Comments Download with Mobile Browser Deals with Sony/ATV Music and EMI Uses Openwave’s Download Fun platform Openwave does not provide the content AT&T also has a direct relationship with Sony Music Cingular also has a direct relationship with Sony Music Cincinnati Bell uses Zed AOL, PWS, and Voicestream had exclusive “Lord of the Rings” deal including ringtones Note: PWS is owned by Vivendi. Sources: Company Web sites, news releases.