CDMA – USA MARKET

Alltel confirms US$6 billion Western Wireless merger
U.S. regional CDMA operator Alltel announced this morning that it has reached an agreement to purchase AMPS/TDMA player Western Wireless in a cash and stock transaction valued at around US$6 billion.
Through the deal, Alltel will gain approximately 1.4 million domestic wireless customers in 19 states that are contiguous to the operator's existing properties, giving the company 10 million domestic wireless customers and making it the nation's fifth largest wireless carrier. Western Wireless operates the Cellular One brand and under the deal, Alltel will also add 1.6 million international customers in six countries.
The transaction between Alltel and Western Wireless, expected to close by mid-2005, will be accretive to earnings in 2006. The agreement requires approval from Western Wireless shareholders and regulatory authorities, with each share of Western Wireless stock to be exchanged for .535 shares of Alltel common stock and US$9.25 in cash. Alltel said it would issue approximately 60 million shares of stock and pay approximately US$1 billion in cash, and would also assume estimated net debt of US$1.5 billion.
Alltel said the merged company would have nearly US$10 billion in annual revenues and operating income before depreciation and amortization of about US$4 billion. The company expects the net present value of operating synergies, interest and tax savings to be approximately US$800 million.

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TELECOMUNICATIONS EQUIPMENT - AUSTRALIA MARKET

Ericsson wins US$78 mil. Australian 3G deal
Ericsson announced today that Australian operator Telstra has chosen the Swedish vendor to supply WCDMA equipment for the next five years, in a framework agreement worth more than US$78 million. Ericsson will supply layered architecture core and radio access network equipment, including WCDMA and HSDPA, and network rollout services. The deal compliments the existing agreement between Telstra and Hutchison to share WCDMA network infrastructure in a A$450 million (US$344 million) joint venture.

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TELECOMUNICATIONS LAW - MEXICO MARKET

Mexico moves to stimulate competition
The Mexican federal antitrust agency yesterday announced that it will limit the amount of radio spectrum that wireless phone operators can accumulate to 35MHz in any one region, in an effort to encourage the entry of new participants in the market. Next week, the regulator, Cofetel, will auction four block of 10MHz spectrum in the 1900MHz frequency band in each of the country's nine regions, with new participants, NII Holdings, fixed-line operators Axtel and Maxcom, and Cingular Wireless expected to acquire spectrum. Mexico's existing operators are America Movil, Iusacell, Unefon and Telefonica Moviles.

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UMTS – EUROPEAN MARKET

UMTS subscribers reach 16 million
The strong growth in demand for UMTS phones from European customers and continuing network rollout has contributed to a surge in worldwide WCDMA customer numbers during the 4Q04 with global subscriptions to UMTS networks reaching 16 million on more than 60 networks by start 2005. This is a significant increase on the 10 million customer milestone passed in September 2004. The accelerating growth has been particularly pronounced in Europe, where a number of major operators aligned their Christmas marketing plans with the widespread availability of a choice of attractive WCDMA terminals. There are already more than 100 WCDMA devices available, including handsets and PC card products from Asian, European and U.S. vendors.

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MOBILE MARKET - INDIA

Indian mobile subs approach 50 millions
The mobile subscriber base in India reached 47.3 million at end-2004, following net additions of 190,000 in December, according to the Association of Unified Service Providers of India. Total CDMA subscribers reached 9.9 million, after adding 510,200 new users in the month, while the GSM subscriber base increased by 1.4 million in December to 37.4 million year-end.

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MVNO MARKET – TAIWAN

China Motion seals MVNO license in Taiwan
Hong Kong operator China Motion Telecom (CMT) announced today it has been awarded a license to operate as an MVNO in Taiwan. CMT's MVNO operation will piggyback on Taiwanese operator Far EasTone's network and is targeting business customers. During the promotional period CMT said it will charge NT$3.8 (US$0.11) a minute for calls to Hong Kong or mainland China. CMT's MVNO service will offer price packages ranging from NT$133 to NT$1333.

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MOBILE MARKET - AFRICA

African cellular operator secures further financing
Celtel International, the pan-African mobile communications group that operates in 13 countries and which recently announced it has over five million managed customers, has successfully raised a US$190 million loan. This will be used partly to finance further growth and partly to refinance existing loan facilities.

The funds raised comprise a US$190 million commercial bank loan with a mix of three - and six-year maturities.

Barclays Capital, Citibank International plc, ING Bank NV and Standard Bank London Limited were mandated lead arrangers for the facility with ING Bank and Standard Bank London as bookrunners.
The mandated lead arrangers were joined in the facility by Emerging Africa Infrastructure Fund Limited, Sumitomo Mitsui Banking Corporation, Nedbank Limited, ABSA Bank Limited, KBC Finance Ireland, Banque Belgolaise, Ghana International Bank plc, Investec Bank Limited and Investkredit Bank AG.

Celtel International said "We were delighted by the support for the commercial bank facility which was oversubscribed. The new funding and refinancing further strengthen Celtel's balance sheet, provide flexibility with longer-term tranches, and include medium- and long-term revolving acquisition lines. This loan provides us with additional capability to consolidate our position as the premier pan-African mobile communications group by both growing our business and acquiring additional value-generating assets and licences across Africa."

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TELECOMUNICATIONS LAW - BRAZIL

Brazil President Appoints Interim Head for Telecom Regulator
Brazilian President Luiz Inacio Lula da Silva has appointed Elifas Chaves Gurgel do Amaral as interim chairman of telecoms regulator Anatel.

Amaral replaces Pedro Jaime Ziller, whose one-year appointment expired Jan. 6.

President Lula is expected to meet with Communications Minister Eunicio Oliveira later Monday to discuss a permanent replacement for Ziller.

Lula must pick from the college of five directors who run Anatel. Gurgel and Plinio de Aguiar Junior, who both took office in November 2004, are the most widely tipped, as they were both appointed by Minister Oliveira.

Ziller remains on the board of directors, with four years left to run on his five-year term. The two remaining members of Anatel's board are Jose Leite Pereira Filho, who is halfway through his second term as Anatel director, and Luiz Alberto da Silva, who was appointed in May 2002.

The choice of a permanent chairman has become caught up in the political dispute within the Brazilian Democratic Movement, or PMDB, which is split over whether to continue supporting President Lula's governing alliance. The PMDB is one of the largest political parties in Congress.

Oliveira is a senior member of the PMDB and wants to continue backing the government, but others within his party want him and other PMDB cabinet members to resign.

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MOBILE – USA MARKET

US SMS use continues to grow, especially among youth
SMS use continues to grow in the US market. According to Forrester Research, Americans sent 2.5 billion SMS messages per month in mid-2004, almost three times the number sent in mid-2002. According to a survey from Pew Research, 38 percent of all teenagers who use the Internet have sent a text message. Teen SMS use is also a source of high cell phone bills for their parents. Industry insiders argue that pre-paid wireless service will catch on with the teen market precisely because it allows parents to cut their children off after they use up their minutes and messages.

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MOBILE DEVICES – SOUTH KOREA

LG Debuts 3-D Gaming Phone
LG Electronics announced a new wireless gaming phone with three-dimensional graphics using a chip capable of processing data five times faster than currently available chips. The phone, which features increased screen quality with a 2.2-inch LCD screen, will be available in South Korea during the first half of 2005.
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WIRELESS MARKET – GERMANY MARKET

KPN's German Unit Reached More Than 9.5 Million Customers
Dutch telecommunications company KPN announced its German wireless unit, E-Plus, had more than 9.5 million customers by the close of the fourth quarter 2004. Its customer base had increased by 440,000 compared to the third quarter 2004. E-Plus will continue to focus on acquiring high-yielding customers.

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WIRELESS CARRIER - JAPAN

KDDI Gains More New Subscribers than Larger Competition
Japan's second largest wireless carrier, KDDI, signed up more subscribers in 2004 than its larger rival, NTT DoCoMo and the local Vodafone unit. 2.7 million Subscribers joined KDDI in 2004, which now offers wireless service to 22.4 million users. DoCoMo added 2.2 million subscribers in 2004 for a total 47.9 million. Vodafone added 437,000 new subscribers, bringing its total to 15.2 million.
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