Subject: [NEXTEL-1] Cell phone usage costs continue to fall

From: Marcel <[email-masked]>
Date: Thu, 12 Dec 2002 11:46:58 -0500

12/12/2002

Cell phone usage costs continue to fall

The cost of using a cell phone in the USA declined 4.0% in November, according to the
consultants Econ One. The decline in November followed a 1.4% price reduction reported in
October. Cost reductions by several of the major national carriers were responsible for
the sizable cost decline in November. The overall cost decline from the previous month
amounted to US$1.50. Cost declines were witnessed in all of the Top 25 markets.

In November, Verizon Wireless introduced more competitive price plans through an add-on
option which offered additional anytime minutes, as well as off-peak and mobile-to-mobile
minutes. During October, Verizon offered a similar optional package which only included
off-peak and mobile-to-mobile minutes.

T-mobile offered a new plan, which included 1,000 anytime minutes for US$39.99. Sprint PCS
also introduced new competitive price plans with an increased number of included minutes
and AT&T adjusted a number of its price plans, which resulted in lower cost in the 500
minute bucket.

In addition, US Cellular entered the Chicago market (taking over the PrimeCo network). US
Cellular introduced new rate plans, which lowered the average cost in Chicago to under
US$35. The average cost of service across our four buckets for US Cellular was under US$30
due to a promotional deal, which gave 50% off the access fee for 12 months with a 24-month
contract on all local plans above US$40.

The largest cost drops occurred in San Diego and San Francisco (-5.8%), Pittsburgh
(-5.6%), Phoenix (-5.2%), and Minneapolis (-5.1%). Costs dropped the least in Cleveland
(-0.5%), Houston (-2.0%) Atlanta, Miami and Tampa (-2.8%).

"Consistent with years past, all of the carriers appear to be gearing up for this season's
holiday push," said Charles Mahla, Senior Economist for Econ One. "Since we started this
survey in 1999, we've seen steep cost declines around the holidays," he said. "This year
is no different-if consumers are waiting for a "sale" for wireless services, I'd say that
it's here."

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