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CTIA Show To Deliver New Data Opportunities To Carriers

Las Vegas – Wireless carriers are bent on driving up data
revenues to offset declining voice-plan prices, and suppliers here at
International CTIA Wireless 2010 will be more than willing to help by
introducing new 3G smartphones, messaging-oriented phones, netbooks and tablet

Many of the new devices are Android-based smartphones, including
the first model from Kyocera, while others, including handsets from Samsung for
AT&T, deliver new messaging, contact-management, and video- and
photo-sharing services to users of low-priced messaging phones.

For their part, Personal Communications Devices (PCD) plans to
show netbooks, a mobile Internet device (MID) and a tablet PC, all with
embedded 3G. Chip maker Nvidia plans to show white-label Android-based tablet
PCs incorporating its latest processor, and Isabella Products will show a
digital picture frame with embedded cellular (see page xx in accessories

“Device categories beyond handsets – e-books, netbooks, tablets
— will be a point of focus [at CTIA] as operators look to new segments to
drive network usage and revenues,” said analyst Alex Spektor of Strategy Analytics.
Distribution details of U.S.-bound versions of smartphones unveiled at the
Mobile World Congress in February will also likely be announced, he said.

Show attendees will also be on the prowl for updates on the
Windows Phone 7 smartphone platform and upcoming handsets, due in the fourth

Carriers wishing to make data-enabled handsets more attractive to
consumers might turn to the LG booth, where the company will demonstrate three
prototype cellphone models incorporating an Advanced Television Systems
Committee (ATSC) Mobile DTV tuner, which receives free over-the-air DTV
broadcasts while in motion. In the past, the company demonstrated only one
prototype, according to the Open Mobile Video Coalition (OMVC), which in May
plans to put handheld DTVs in the hands of more than 400 consumers in the Washington D.C.
area to evaluate demand and usage.

On the network side, operators will talk up plans to expand their
Mobile WiMAX and LTE (Long Term Evolution) data networks, with Clearwire planning
to expand its network by year’s end to 120 million people from a current 34
million people in 27 markets. For its part, Verizon Wireless said it’s on track
to deliver LTE to consumers in 25 to 30 markets with a population of about 100
million people by the end of the year, delivering field-test peak download
speeds of 40Mbps to 50Mbps and peak upload speeds of 20Mbps to 25Mbps, with 5Mbps
to 12Mbps average downloads and average 2Mbps to 5Mbps uploads.

For its part, T-Mobile is upgrading its existing 3G 7.2Mbps HSPA
network to support HSPA+, which is capable of tripling 7.2Mbps HSPA speeds to a
theoretical peak throughput of 21Mbps.

In all these rollouts, carriers see data as critical to their
future, as seen in the recent decisions by Verizon and AT&T to tie messaging-
and data-plan requirements to more devices, including feature phones, said IDC.
“With the continued commoditization of wireless voice and the resulting decline
in voice revenue, mobile operators are looking to boost their overall revenues
by driving revenue gains from messaging and data services and eventually by
shifting their revenue mix from voice toward data,” an IDC report said.

Carriers are already well on their way toward that goal with the
heavy promotion in the fourth quarter of last year of heavily subsidized
smartphones, most of which require data plans. ABI Research called the fourth
quarter “remarkable for the strength of smartphone shipment growth compared to
the rather lackluster preceding nine months.” Smartphone shipments rose 30
percent in North America from the third
quarter, ABI said.

“The good performance was driven in part by falling smartphone
prices and the introduction of entry-level smartphones generating greater
appeal for new buyers,” ABI said.

The fourth-quarter smartphone surge helped drive up U.S. handset
sell-through in 2009 by 3.7 percent to 164 million, Strategy Analytics said,
despite flat year-over-year sell-through in the first three quarters. The statistics
exclude cellular modems and might not include limited quantities of enterprise
shipments sold outside the carrier channel, the company said.

“U.S. sales volume grew in 2009
despite difficult economic conditions, and we expect the growth rate to return
to near-2007 levels in 2010,” Spektor of Strategy Analytics told TWICE.
“Drivers for the growth are coming from both the top and bottom of the market.”
At the bottom, he said, “growth is coming from aggressively priced prepaid
plans, while at the top, attractive smartphone offerings are drawing in
consumers looking for a compelling on-the-go Internet browsing experience.”