Verizon Wireless to Invest More Than $3 Billion in Its Network in 2000; Will Introduce Coast-to-Coast Short Messaging - Company Business and Marketing

Cambridge Telcom Report, April 10, 2000

Verizon Wireless, the new company formed by the U.S. wireless interests of Bell Atlantic Corporation (NYSE: BEL) and Vodafone AirTouch Plc (NYSE and London: VOD), Tuesday unveiled plans to continue to strengthen its network to provide the nation's best wireless service for its rapidly growing customer base. The two companies Tuesday begin operating as one company along with PrimeCo Personal Communications. Later this quarter, when Bell Atlantic and GTE Corporation (NYSE: GTE) are targeting the close of their merger, Verizon Wireless will be further strengthened by the properties of GTE Wireless. At that time Verizon Wireless will serve nearly 90% of the U.S. population and 96 of the top 100 U.S. wireless markets.

The new company, including GTE Wireless, plans to invest more than $3 billion in its nationwide network in 2000. This capital investment, one of the largest ever announced in the industry, will further expand the digital footprint and increase capacity for wireless voice and data services provided to the new company's more than 24 million customers. Planned network enhancements, technology trials and new services include:

* Introduction of the nation's first wireless two-way short messaging service

* Testing of third generation network technology through field trials

* Rapid expansion of its CDMA digital network

* Wireless network support for General Motors' OnStar personal calling feature

* Deployment of Over-the-Air provisioning via its CDMA digital network

According to Richard Lynch, executive vice president and chief technical officer of Verizon Wireless, the new company plans to leverage its scale and maximize the value of its $3 billion investment in volume network equipment purchases to accelerate the rapid deployment of CDMA service and to lay the groundwork for third generation (3G) services.

"Continued investment in our CDMA network will enable Verizon Wireless to extend CDMA digital voice and data services to areas in the footprint where they aren't available today," said Lynch. "In addition, this investment will allow the company to quickly introduce new services including two-way short messaging capabilities. In June, we are scheduled to begin testing the next generation of wireless technology through field trials with our infrastructure vendors. In these trials, we will demonstrate data access speeds of 144 kbps."

New Services and Revenue Opportunities In collaboration with infrastructure vendors Lucent Technologies and Nortel Networks, Verizon Wireless will be the first wireless carrier in the country to offer nationwide two-way short messaging service (SMS). Initially, the service will be delivered using Kyocera and Motorola handsets. The service introduction is planned for the third quarter of 2000. Advanced two-way messaging enables mobile users to send text messages to other compatible mobile handsets or other Internet users. Messages can even be sent while the subscriber is on a voice or data call. Subscribers have the ability to either compose their own messages using the keypad or to select a standard message that is stored in their handset.

Other features associated with two-way SMS include Delivery Confirmation indicating that a message has been received and User Acknowledgement which allows the subscriber to respond to common inquiries (i.e. Press 1 for Yes and Press 2 for No). The new service will extend mobile communications to more interactive applications that benefit from two-way messaging, such as "email-on-the-run" to keep in close contact with friends, family and business associates.

General Motors' OnStar will be one of the first national customers to take advantage of the new company's coast-to-coast network when OnStar extends its portfolio of market-leading, in-vehicle services this year to include a personal calling feature. Verizon Wireless has an agreement with General Motors to provide the backbone wireless network for the personal calling feature, which OnStar estimates will be carried by more than four million vehicles nationwide within the next three years.

Over the next few months, Verizon Wireless expects to implement plans to accelerate the deployment of Over-The-Air (OTA) provisioning via its CDMA digital network. OTA provides for remote activation and telephone number and area code changes. It will soon be enhanced to provide updates to the software in wireless phones, ensuring that Verizon Wireless' customers remain on the company's preferred network as they travel. Future enhancements will allow the company to perform diagnostics and software upgrades on wireless phones.

Comprehensive Suite of Data Services Verizon Wireless offers easy-to-use wireless access to the Internet via its CDMA digital network. Featuring Web-enabled digital wireless phones that have built-in modems, Verizon Wireless customers can surf the Web, send and receive e-mail, get real-time stock market analysis and quotes, and set up customized personal Web pages. Delivered over Verizon Wireless' network, customers also gain menu-driven wireless connectivity to Web-based content providers on demand, such as on-line travel information and reservations, real-time airline flight status reports, and door-to-door travel directions.