February 26, 2002
Dave HeverlingNetwork Vice President-Northeast Area
Wireless Overview
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NO NEED TO BE SCARED
Proprietary and Confidential Information of Verizon Wireless
This presentation contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. For thosestatements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The following important factors could affect future results and could cause those results to differ materially from those expressed in the forward-looking statements: materially adverse changes in economic conditions in the markets served by us or by companies in which we have substantial investments; material changes in available technology; an adverse change in the ratings afforded our debt securities by nationally accredited ratings organizations; the final outcome of federal, state, and local regulatory initiatives and proceedings, including arbitration proceedings, and judicial review of those initiatives and proceedings, pertaining to, among other matters, the terms of interconnection, access charges, universal service, and unbundled network element and resale rates; the extent, timing, success, and overall effects of competition from others in the local telephone and toll service markets; the timing and profitability of our entry into the in-region long distance market; our ability to combine former Bell Atlantic and GTE operations, satisfy regulatory conditions and obtain revenue enhancements and cost savings following the merger; the profitability of our entry into the broadband access market; the ability of Verizon Wireless to combine operations and obtain revenue enhancements and cost savings; our ability to convert our ownership interest in Genuity Inc. into a controlling interest consistent with regulatory conditions, and Genuity’s ensuing profitability; and lastly, our accounting assumptions are subject to review by regulatory agencies, including the SEC, and changes in the assumptions as required by those agencies or any changes in the accounting rules or their application could result in an impact on earnings.
““Safe Harbor” StatementSafe Harbor” Statement
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Wireless devices will be
the centerpiece of information
and services for customers…
anytime, anywhere.
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Wireless Environment
• Economy
• Growth
• Consolidation
• Pricing
• Technology
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• OUR CORPORATE CULTURE IS INFORMAL
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Strategic Imperatives
Subscriber Growth
Revenue Growth
OCF Growth
Results-focused culture
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Strong Fundamentals
Quality of ...• Subscriber base
• Cost structure
• Customer value proposition
• Profitability
• Network
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Strong Fundamentals
Quality of Base• Digital subs
• Primarily contract
• Churn
• ARPU accretion
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Strong Fundamentals
Quality of the Network
• Capex: $4B
• Highly efficient: cost & capacity
• 90% POPs digital
• Lead in provision of new products
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Strong Fundamentals
Low Cost Structure• Merger integration
– Systems conversions– Procurement flexibility
• National Company– Branding– Standardization
• Distribution• Customer Service
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Strong Fundamentals
Value Proposition for the Customer• Pricing
– National, local– Simplified
• Products– Voice– Data
• Loyalty
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Cost of Roaming
3%
Handset2%
Billing2%
Call Quality30%
Customer Service20%
Corporate Capability
21%
Pricing Options22%
Customer Satisfaction Drivers
Source: 2001 JD Power Wireless Industry Study
We understand the key drivers of customer purchase decisions and satisfaction, especially among the high-end
segments.
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America’s Choice Plan
• Launched February 1, 2002.
• Leverage VZW/Preferred network.
• Increase profitability thru reduction in Off-Net subsidies.
• Improve customer perception of VZW as “National Provider”.
America’s Choice
Access Minutes
$35 300
$45 400
$55 550
$75 900
$100 1,200
$150 2,000
$200 3,000
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America’s Choice PlansKey Features
• Coverage across the expansive national America’s Choice footprint
• Domestic LD included when calling from the America’s Choice footprint
• National Mobile to Mobile option
• National Night and Weekend option
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America’s Choice PlansRoam Indicator
The Roam Indicator light will indicate important pricing information to the customer as follows:
Roam Indicator Status
Banner Display Status Network Status Billing/Feature Status
OFF Verizon Wireless Network
VZW Network Home Airtime rates; Included LD; Features follow
ON- Flashing Extended Network VZW Extended Network
Home Airtime rates; Included LD; Features may follow
ON-Solid Roaming Roaming off VZW/extended network
$0.65 per minute; includes LD; Features do not follow
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Effect of Aggressive Promotions
Digital Usage Hourly Growth
0
1 00,000
2 00,000
3 00,000
4 00,000
5 00,000
6 00,000
7 00,000
mid
-1am
2-3am
4-5am
6-7am
8-9am
10-1
1am
noon-1am
2-3pm
4-5pm
6-7pm
8-9pm
10-1
1pm
Ave
rag
e U
sag
e C
CS
Dec 2001 M-F
Dec 2001 Saturday
Jun 2001 M-F
Jun 2001 Saturday
Growth from June 01 to Dec 01 on
WEEKENDS for 4-5 pm is 10%
Growth from June 01 to Dec 01
on SATURDAY for 4-5 pm is 45%
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Note: Spectrum Inventory is prior to 1.9 GHz Re-Auction and does not include Price Communications Wireless properties or managed, but not owned properties.
10 MHz
25 MHz
35 MHz
45 MHz
30 MHz
Nationwide Spectrum
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Additional Capacity Opportunities
• 3G Implementation
• Cell Splitting
• NextWave Situation
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• KOLANOS SCORES THE WINNING GOAL IN OT AS BC BEATS NORTH DAKOTA FOR THE 2001 NCAA HOCKEY CHAMPIONSHIP
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Core Technology: CDMA / IS-41
Best Network as measured by ourselves, our customers, and third parties
Service Margin
Network Reach
Digital Network
S.O.E.
Drivers ofSuccess
Goal
Verizon’s Differentiator
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Best Network - Infrastructure
>17,000 Cells>145 MSCs
85% licensed POPs covered
AMPS, CDMA, CDPD, CDMA data
800 MHz, 1900 MHz
Lucent, Nortel, Motorola
2W SMS
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Technology Evolution
IS – 95(DIGITAL/CDMA)
CDMA 2000 - 1X(1XRTT)
PRE 1997 2002
• Voice (6-10X analog capacity)• 14.4Kbs Circuit Switched Data
• Voice (2X IS-95 capacity)•40-60 Kbs Packet Data• Backward Compatible to IS-95
Why 1XRTT?
• Provides greater voice capacity
• Enables higher speed data throughput
• Wholesale infrastructure change-out not required
• Positions us well for future technology decisions
ANALOG
SINCE THEN
• Voice
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Technology Evolution
1.25 MHz CDMA
5.0 MHz CDMA
Other
Technologies
IS-95 1XRTT
EDGE
GPRS
1Xev
WCDMA
GSM
TDMA
2002 2003 2004
Options for the future
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Peak Data Rates by Technology
2000 2001 2002
CDPD
IS-95A
1XRTT
1Xev
19.2 kb/s
14.4kb/s
144 kb/s
2.4 Mb/s
GPRS 56 kb/s
EDGE
115 kb/s
WCDMA
480 kb/s
384 kb/s 2.0 Mb/s
307 kb/s
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Lead in Provision of New Products and Services
PSTNCellsTDM
BSC
PDSN
Core IP Network
IP
Public Internet
Fixed Wireless802.3802.11xDSLCable Modem Enterprise
Network
VPN
Call Management Servers
Application Servers
Packet TDM
Develop Core IP Network
MSC
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Lead in Provision of New Products and Services
Core IP
Network
Circuit S
witched
Network
Messaging SMS, IM, Voice Portal, Unified Msg, Corp MWI
Telematics Voice, vehicle diagnostics, traveldirections, map updates
Int’l Roaming CDMA / GSM Inter-operation
Location Svcs Where am I, Advertising by locationFind Me, Location specific 411
IOTA Basic OTA, PRL updates, phone diagnosticssoftware fixes and upgrades, revenue downloads
WIN Pre-paid, CTX features, Group Calling
VPN Corporate connectivity
Compression 4 x data rates
Deploy Application Specific Platforms / Enablers
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2002 Products and Services
• Express network
– 3G voice and data services
– 144 kbps maximum burst rate
– 40-60 kbps average throughput
– Most major US markets covered by EOY 2002
• BREW
– Binary Runtime Environment for Wireless
– Supports downloadable applications to handsets
• Games
• Ringtones
• Vertical market applications
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• vText – Uses the SMS service platform– Web based system for SMS delivery– Information content delivery– Provides revenue sharing opportunities for content providers– Calendar and notifications– SMS broadcast
• Two way SMS – User friendly easy to use– Send and receive short messages to handsets– Current 160 character message– 200 character length later this year
• Mobile Web – Service based on the Wireless Access Protocol (WAP)– Interactive– Supported in all handsets
2002 Products and Services
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• Mobile Web – Service based on the Wireless Access Protocol
(WAP)– Interactive– Supported in all handsets
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Wireless Internet Via PDA
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Summary
•Much is changing in the wireless industry•Customers continue to be more demanding•Network Quality is a Major Differentiator•Data will be an increasingly important piece of the Wireless Pie