Victor Stan
CTO Telemobil/Zapp
1

l l l
First cellular license in Romania (1993) granted to Telemobil -
Telefonica (60%), Radiocomunicatii (20%), Romtelecom (20%)
–
Nation-wide use of 450 MHz spectrum (453-457.5 & 463-467.5) for NMT
– 4.5 MHz of spectrum with 10 MHz duplex distance and 25 KHz channel space
–
900 MHz spectrum conditional allowance
Launch - High Power balanced Network (1994-1995)
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–
1 switch in Bucharest (30K) and several cities covered from remote Base
Stations collocating with Radio TV broadcast sites (20 BTS)
Transmission support – analog leased lines
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–
15 Watt Portable Class terminals
Maximum 1,000 capacity offer (no frequency reuse)
Rollout - Medium Power balanced Network (1995-1998)
– Second switch in Constanta (10K) and in-city new Base Stations (60 BTS)
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–
–
–
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Transmission support – both analog and digital leased lines plus own MWs
1.5 Watt Handheld Class terminals
Maximum 18,000 capacity offer (up to 80% congestion, 5% allowed)
60% of the country covered with Outdoor Level of Service
Frequency reuse in Bucharest (Stockholm model) limits offered capacity to
10K.
l l l
Telemobil fails to obtain a GSM900 license (1996)
–
Monopoly being lost, the profit drops dramatically (1/3 ARPU) starting the 2 nd quarter
1997, after the GSM900 begins the price war.
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–
–
Customer base remains almost stationary until the end of 1997 (15,000 subs) when starts dropping due to aggressive migration towards GSM services (-5K/year)
First Voice Mail system (30K) was introduced in ‘97 before GSM.
Network Rollout tries accelerating but much slower than GSM expansion (over 10 times faster).
Telefonica seeks to sell its shares to Romtelecom (1997)
–
–
Romtelecom diverts Telefonica’ shares to RDT – Balli, Racebrook and 450 Wirefree
Fund (JP Morgan) since was granted with a GSM/DCS1800 license for privatization.
Consequently to RDT’s capital investment, Romtelecom and Radiocomunicatii shares have decreased accordingly while the license has been extended w ith 10 years, technology agnostic.
RDT vision focuses on LEMS roadmap (1998-2000)
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–
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Both Passive & Active Intelligent Antenna (analog) solutions were the steps proposed by Radio Design AB (Sweden) to introduce a competitive Low Power Emission Station
(0.15 Watt) handset.
Telemobil chooses a lower cost alternative to introduce the LEMS on Romanian
Market – the High Gain Antenna (HGA) together with Low Noise Amplifiers (LNA).
New Rollout – Low Power balanced network to support 0.1 Watt terminals within the same coverage footprint as for the Medium Power handsets transmitting with 1.5 Watt.
Additional sites (50 BTS) were required to provide a seamless GSM-equivalent coverage offer.
The entire NMT network was upgraded, sectorized and optimized during 1999 and
2000.
2

l l
RDT/Telemobil seeks after digitalization options (2000)
–
Entire NMT community was looking after vendors proposals to introduce a digital standard into 450 spectrum.
–
Three proposals for a digital standard were submitted to the NMT MOU in 2000: l GSM400 – supported by Ericsson and Nokia.
l Cdma450 – supported by Qualcomm and Lucent.
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–
–
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– l DNMT (replaced by TETRA) – supported by Radio Design & others.
Both GSM400 & cdma450 were adopted by the operators and vendors were encouraged to continue the standardization and manufacturing work.
Inquam acquires RDT – Qualcomm (45.7%), Omnia (45.7%), RDT parts (8.6%)
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–
After RDT’ decision to follow CDMA2000 technology roadmap, Qualcomm and Omnia starts funding Inquam for new licenses acquisition and for the f irst cdma450 network rollout in Romania.
Starting point - the NMT450 network and license with no constrains related to digitalization.
The NMT coverage baseline (on the next slide - outdoor level of service), indicates
60% geographical coverage and 40% covered population (in-building).
In 2001 the NMT network consists in two switches, 125 Base Stations and 30
Transmission & Repeater sites.
At the same time, each GSM900 network have 9 switches, 1,500 Base Stations and
300 Transmission & Repeater sites.
The rollout plan targets to match the GSM coverage footprint which requires approximately 500 Base Stations operating at 450 MHz.
3

4

5

l l
Three key factors to consider while comparing different wireless technologies:
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–
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Coverage offer – in terms of link budgets comparison
Capacity offer – in terms of spectral efficiency
Supported Services – in terms of differentiators for the end user
Comparing CDMA against NMT and GSM results in:
– Superior Coverage based on better Maximum Allowed Path Loss
–
–
Superior Spectrum Efficiency based on 1:1 frequency reuse factor
High Speed Packet Data capability as a strong differentiator/advantage
Additional advantages:
- increased optimization flexibility (trading coverage for capacity)
- higher transport efficiency (packet based)
- high capacity & throughput for data based services (ATM based
QoS)
- VoIP ready: 1x supports PTT (half duplex) and 1xEV-DV (full duplex
Telephony & Simultaneous Data)
Based on the Free Space Loss calculations, 450 offers 4x larger coverage comparing to 900 for the same technology.
CDMA capacity operating only 3 carriers
(3.75MHz) is up to 4x higher than
GSM capacity operating 62 channels
(12.5MHz).
CDMA link budget is better than GSM even for the same band.
This results in a 4x better efficiency allowing the operator to provide more cost effective services to the end user.
Zapp experience demonstrates the ability to decrease the average investment for the same coverage & capacity to
900 MHz
450 MHz
6

l CDMA2000 can operate in multiple bands l l l l
CDMA needs only 1.8 MHz of spectrum for the first carrier (1.25 MHz plus the guard bands) while 450 MHZ spectrum can host up to three
CDMA carriers
Based on its cost efficiency, CDMA2000/450 can cover and serve all the NICHE markets left underserved by GSM due to its capacity and/or coverage limitations (on both mobile voice & data markets).
Due to the poor fixed infrastructure available in Romania & CEE countries, CDMA2000/450 can provide the most cost effective solution for the “Universal Service” initiative.
Broadband data capability allows CDMA2000/450 to substitute equivalent fixed data solutions (ISDN, CATV, xDSL etc) where these
l CDMA2000 Chipsets Evolution – Global Roaming
Support
7

%
- Phase 1 & 2 Sites
- Phase 1 & 2 Roads
8

%
- Phase 1 & 2 Sites
%
- Phase 3 Sites
%
- Phase 1 & 2 Sites
%
- Phase 3 Sites
%
- Phase 4 Sites
9

PHASE I (2001/2002)
• BTS: 180
• DCS: 3
• Population Coverage: 30% (Indoor level of
Service)
• Geographical Coverage: 30% (Outdoor
• 60% Urban Population covered
PHASE II (2002/2003)
• BTS: 305
• DCS: 4
• Population Coverage: 60% (Indoor level of Service)
• Geographical Coverage: 60% (Outdoor level of Service)
• 85% Urban Population covered
PHASE III (2003/2004)
• BTS: 430
• DCS: 5
• Population Coverage: 80% (Indoor level of
Service)
• Geographical Coverage: 80% (Outdoor level of Service)
• 98% Urban Population covered
PHASE IV (2004/2005)
• BTS: 490
• DCS: 5
• Population Coverage: 90% (Indoor level of
• Geographical Coverage: 85% (Outdoor level of Service)
• 100% Urban Population covered
10

l l l
The roll-out plan is based on a socio-economic analysis, considering multiple factors: population, employment rate, turnover etc and focuses on the broadband data demands
1xEV-DO users can roam onto 1x national coverage layer while traveling
Providing up to 2.4Mbps peak data rates in all major cities and 153.6kbps nationwide l Phase A – Bucharest
(Q1/04) l Phase B – other 40 cities
(Q2/04)
11

Z710
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1. Z710i handset
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•
•
Manufacturer: Giga Telecom - Korea
Market positioning: High – end
Launch date: end of February
•
•
Physical Characteristics:
Weight: 80 g
Size: 45.8 x 84 x 19.9
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-
-
LCD: 262K color TFT
MSM: 5100
Battery: Li -ion
•
•
•
•
•
•
•
•
•
Main functions:
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BREW
Browser
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-
-
-
-
-
Build in modem
GPS One
SIWA Telespree OTA
Polyphonic ringtones
Speaker phone
Phone book: 500 entries
T9
1. Z510/Z510i handset
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-
-
-
-
Manufacturer: Giga Telecom Inc. – Korea
Market positioning: Middle high
Launch date: available now
Physical Characteristics:
Weight: 78 g
Size: 83 x 43 x 20 mm
LCD: Gray scale
MSM: 5105
Battery: Li-ion 600 mAh
Main functions:
–
BREW*
–
–
–
–
Browser*
Build in modem
SIWA Telespree OTA
Polyphonic ringtones
–
–
–
Phone book: 200 entries
Speaker phone
T9
* Available February 2004
Z510
12

3. Z330i handset
Manufacturer: Curitel Communications Inc. – Korea
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-
-
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-
-
-
-
-
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Market positioning: Middle low
Launch date: end of May
-
Physical Characteristics:
Weight: 92.5 g
Size: 108.8 x 47 x 19.6
LCD: 4096 CSTN color
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-
Main functions:
MSM: 5000
Battery: Li-ion 900 mAh
BREW
Browser
Build in modem
SIWA Telespree OTA
Polyphonic ringtones
Phone book: 200 entries
Speaker phone
T9
Z330i
Z315/325
4. Z315i/Z325i – PTT handset
Manufacturer: Ubiquam - Korea
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-
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Market positioning: PAMR
Launch date: end of July
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Physical Characteristics:
Weight: 115 g
Size: 118 x 44 x 20 mm
LCD: 65 000 color, STN
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-
-
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MSM: 5100
Battery: Li-ion 1000 mAh
-
Main functions:
BREW
Browser
Build in modem
SIWA Telespree OTA
PTT
GPS
Polyphonic ringtones
Phone book: 500 entries
Speaker phone
T9
13

-
-
-
-
5. Z110 handset
Manufacturer: Gtran Inc. – Korea
Market positioning: Low end
Launch date: end of August
Physical Characteristics:
Weight: 100 g
Size: 103 x 44.5 x 17.5
LCD: STN with blue color backlight
MSM: 5105
Battery: Li-ion 950 mAh
Main functions:
Build in modem
SIWA Telespree OTA
Polyphonic ringtones
Phone book: 100 entries
Z110
6. H150 handset
Manufacturer: Curitel Communication. – Korea
Market positioning: Low end
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-
-
Launch date: available now
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Physical Characteristics:
Weight: 145 g
Size: 124 x 50 x 20 mm
LCD: STN with blue color backlight
MSM: 5000
Battery: Li-ion 950 mAh
Main functions:
Build in modem
Browser
Phone book: 100 entries
H150
14

S200
7. S200 – handset
Manufacturer: Synertek Wireless. – Korea
Market positioning: Low end
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Launch date: available now
Physical Characteristics:
Weight: 120 g
Size: 110 x 44 x 21 mm
LCD: Gray scale
MSM: 5000
Battery: Li-ion 850 mAh
Main functions:
Build in modem
Browser
Phone book: 200 entries
1. Z010 – EV DO modem
Manufacturer: Gtran Inc. – Korea
Market positioning: High speed data users
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Launch date: end of March
Physical Characteristics:
Weight: 96 g
Size: 116.2 x 47 x 22.2 mm
LCD: Gray scale
MSM: 5500
Battery: Li-ion 1000 mAh
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Main functions:
Wireless connectivity: - up to 307 Kbps in 1xRTT
- up to 2.4 Mbps in 1xEV-DO
Built in GPS
Voice
Simple SMS
Z010
15

Mobilink – Topex WLL
Voice and HSPSD capability
Standard Interfaces:
POTS RJ11
Serial RS232C
USB
DC in (9 V)
Optional
Ethernet module
Web Server module
Handset inside or removable
External antenna
16

ZAPP Subscribers
SUBSCRIBERS
180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
Jul-02 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Apr-03 May-
03
Jun-03 Jul-03 Aug-03 Sep-03 Oct-03 Nov-03
Jul-02 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03 Oct-03 Nov-03
SUBSCRIBERS 18,380 26,021 31,971 40,733 54,134 65,583 76,342 87,505 98,707 106,109 115,382 126,685 134,644 144,439 151,385 161,146 170,754
ZAPP – Traffic/Subscriber Voice & Data
30
Traffic per Subscriber [mE] voice traff per Sub data traff per Sub
25
20
15
10
5
0
Jul-02 Aug-02 Sep
-02
Oct-02 Oct-02 Nov-02 De c-0
2
Jan-03 Feb-03 Mar-03 Apr-03 May
-03
Jun-03 Jul-03 Aug-03 Sep
-03
Oct-03 Nov-03 De c-0
3
17

ZAPP – Traffic Voice & Data
Traffic CDMA [E] - Network voice traffic data traffic
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
Jul-02 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03 Oct-03 Nov-03
Network Voice & Data - Busy Day of the Month
Traffic Voice (E) Traffic Data FCH (E)
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23
18

ZAPP International Traffic
International Traffic [E] Incoming Outgoing
35
30
25
20
50
45
40
15
10
5
0
Jul-02 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03 Oct-03 Nov-03
Traffic Distribution Nov-03
Mobile to Mobile to NMT to Mobifon to Mobilrom to Cosmorom to PSTN TZE to International to Voice Mail
Incoming External to MT
19

ZAPP – Minutes Of Usage
Minutes Of Use
Voice Data
Millions 40
30
60
50
20
10
80
70
0
Jul-02 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03 Oct-03 Nov-03
ZAPP – Call Performance
Calls & Handoff Success Rate [%] Calls Handoff
100
99
98
97
96
95
94
93
92
91
90
Jul-
02
Aug-
02
Sep-
02
Oct-
02
Nov-
02
Dec-
02
Jan-
03
Feb-
03
Mar-
03
Apr-
03
May-
03
Jun-
03
Jul-
03
Aug-
03
Sep-
0 3
Oct-
0 3
Nov-
03
20

ZAPP – Drop Call Rate
Drop Call Rate [%]
1.0
0.8
0.6
0.4
1.4
1.2
1.8
1.6
0.2
0.0
Jul-02 Aug-02 Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03 Oct-03 Nov-03
ZAPP – Mean Hold Time
300
270
240
Mean Hold Time [sec] voice data
210
180
150
120
9 0
6 0
3 0
0
Jul-02 Aug-02 Sep-02 Oct-02 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03 Oct-03 Nov-03 Dec-03
21

Monthly Gross Additions
10000
8000
6000
4000
16000
14000
12000
Launch
Re-Launch
Management
Change
Easter Holiday
Summer
Holiday
2000
0
Jan '02 Feb '02 Mar '02
Apr'02 M ay
'02
Jun'02 Jul'02 Au g'0
2
Sep'02
Oct'02 Nov'02 De c'0
2
Ja n'0
3
Feb'03 Mar'03 Ap r'0
3
May'03 Jun'03 Jul'03
Au g'0
3
Sep'03
Oct'03 Nov'03
High-season
22

Mobile Market Evolution
Growth in Customer Base (Postpaid+Prepaid)
+ 60.6%
3,749,921
2,112
107,209
1,637,000
4,029,999
17,799
112,700
1,719,000
4,306,306
21,114
91,192
1,857,000
4,614,739
37,038
95,201
2,020,000
5,014,560
68,898
99,362
2,211,000
5,243,470
100,671
93,099
2,377,000
5,547,329
127,729
6,022,382*
153,182
79,500
83,500
2,878,000
2,590,000
2,003,600
2,180,500
2,337,000 2,462,500
2,635,300 2,672,700 2,746,100 2,911,700
Q4 '01 Q1 '02 Q2 '02 Q3 '02 Q4 '02 Q1 '03
Connex Orange Cosmorom Telemobil
Q2 '03 Q3 '03
*Estimation
Mobile Postpaid Market Evolution
Market Share – Net Addition ( total market )
6
60%
50%
40%
30%
20%
10%
0%
100%
90%
80%
70%
11
41
48
Q1 '02
55
30
9
37
52
17
42
42
24
44
33
23
56
21
Q2 '03
14
54
32
Q3 '03* Q2 '02 Q3 '02 Q4 '02 Q1 '03
Connex Orange Cosmorom Telemobil
Source: TIW, ORANGE and OTE quarterly financial reports
23

100%
90%
80%
28.3
Mobile Postpaid Market Evolution
Market Share – Net Addition
( Postpaid with monthly fee >10 USD )
17.3
30.6
40.1
14.3
50.8
51.1
63.3
4.9
70%
60%
50%
40%
30%
20%
10%
30.2
41.5
41.3
27.2
25.3
39.1
27.5
32.4
26.1
23.2
35.3
14.3
22.1
14.5
0%
Q1 '02 Q2 '02 Q3 '02 Q4 '02 Q1 '03 Q2 '03 Q3*
Connex Orange Cosmorom Telemobil
Starting from Q3 2002, Zapp has always acquired over 30% of the post paid market growth ( tariff plans over 10 USD )
Source: TIW, ORANGE and OTE quarterly financial reports
Sales by Products
All Products
16000
14000
12000
10000
8000
6000
4000
2000
0
Jan '02 Feb '02 M ar
'0
2
Apr'02
May'02
Jun'02 Jul'02 Au g'0
2
Sep'02
Oct'02 Nov'02 De c'0
2
Ja n'0
3
Feb'03 Ma r'0
3
Apr'03
May'03
Jun'03 Jul'03 Au g'0
3
Sep'03
Oct'03 Nov'03
Z Online Z Share Free Bundled Products Business Products
24