Business Proposition for Push-to-Talk

1. Business Proposition for Push-to-Talk David J. Sinkula

2. Cellcom Markets Pops. • Brown County (Green Bay) 230K • WI 4 (Shawano County) 125K • WI 10 (Door County) 131K • Wausau 125K • Appleton 102K • Total Pops. Served 713K

3. Demographics • Wisconsin is a state that encourages small business and fosters an entrepreneurial climate • Small Business Development supported by University of Wisconsin • Eleven SBDC throughout Wisconsin • Provide consulting services and management education • Northeast Wisconsin heavy in paper industry • Service industry to support paper manufacturing • Small manufacturing innovation is prevalent • Heavy service industry is within Cellcom geographies

4. Timing • Cellcom business customers were asking about PTT feature for their wireless programs. • Longstanding Cellcom customers began carrying two plans: • Cellcom CDMA voice • Nextel IDEN PTT • 2003 market research showed a growing share of wireless market was moving to PTT • Two way radios are a significant part of business communications market.

5. Target Market • Brown County Homebuilders Association • Cellcom is official BCHA provider of wireless service • 1,200 members • Manufacturing support to paper industry • Beverage distributors • Cleaning companies • College maintenance staffs • HVAC service providers

6. Product • Kodiak Networks Platform • PTT – One way, half duplex real-time voice application • Uses existing wireless voice networks • Fastest call set-up time (Non IDEN) • Lowest intra-call latency in the industry • Kyocera 3250 • Bar phone • First phone available on Kodiak platform

7. Price • Handset • Kyocera 3250 bar phone $99.95 • Monthly Access • PTT 200 $10.00 (Additional calls $.15) • PTT Unlimited $20.00

8. Requirements for Success • PTT service comparable to Nextel • Call setup latency of 1.5 seconds or less • Ease of programming PTT contacts • Handset that was perceived as rugged • Pricing comparable to Nextel • Handset price • Promotion • Sales/service support

9. Experience - - Year One • 1,000 subscribers in BCMSA in first 6 months • PTT Access Breakdown • 200 calls / month 30% • Unlimited 70% • Incremental ARPU - - $17 per PTT user

10. Challenges - - Year One • Handset – Kyocera 3250 Phantom • Durability in harsh environments • Chirp volume limitations: Did not know they were getting a call. • Market demand for clam shell form factor and more rugged • Kyocera PTT Slider • Slow sell through due to small size • SMSC • Did not have SMS roaming/roaming gateway • SMS traffic from text messaging & PTT SMS overloaded the SMSC. • Inability to Roam • Could not sell to customers on fringe of Cellcom network • Could not sell to customers that covered large geographies Kyocera Slider

11. Year Two - - Relaunch • Handsets • Kyocera 440 Phantom • More Durable & Rugged • Louder chirp • Clamshell form factor still a challenge • Installed roaming gateway (now can originate PTT call off network) • Launched SMS Roaming • Switched to digitally optimized PRL – ubiquitous SMS coverage • SMSC upgrades, includes redundancy and scale improvements.

12. Year Two – Projected • Grow subscriber base 200% with new users • Bring back subscribers lost to SMS and handset inadequacies • Growth will continue based upon existing Kyocera bar phones • Explore consumer proposition • Anticipate decline in PTT ARPU due to competitive pressures