1. Competitive Business Case UBI – Dec/2003 Alex Cutrim / Suzana Roma

2. Layered, Multi-Player Mobile Industry Creates Complex Business Environment Corporate Personal Consumer Basic Components Processors, electronics, plastics,… Telecomm. Equipments Core network switching and transmission equip., wireless handsets, satellite equip.,… Service Provider s Vodafone, T-Mobile, …

3. Good Morning Electronic Information Taiwan based Supplies: Nokia, Ericsson, Motorola, Siemens Sanyo Battery maker: Nokia, Ericsson, Motorola Texas Instruments Bluetooth capabilities, wireless infrastructure, RF products Geo Tex Creative Plastics Components - No clear leaders, fragmented Nokia Motorola Telecommunications Ericsson Alcatel Siemens Information and Communications Cell phone - Dominated by Top 5 Service Providers - Abundance of Players Towering Service - Major Players American Tower Corporation 14600 towers, USA, Brazil, Mexico Crown Castle International Australia, P.Rico, UK, USA AT&T, Sprint Pinnacle Towers, Inc. 2300 towers. USA, Canada SBA Comm., Inc. 3700 towers. USA, P.Rico Spectrasite Comm., Inc. 8000 towers. USA, Canada Alltel AT&T wireless group Cellular One Cingular Wireless Centennial Comm. Century Tel. Dobson Comm. Dynamic Mobile Data GoAmerica MCI WorldCom Metricom Nextel Comm. Southern Linc Sprint PCS T-Mobile Triton PCS Vodafone VoiceStream Wireless Western Wireless Winphoria Networks

4. Visions of a Near Future… Estimate of 1 Billion mobile subscribers by 2003!

5. Visions of a Farther Future… Connecting OBJECTS with BUSINESS APPLICATIONS for added-value products and services Mobile Network Business House ERP CRM dB Car TV www.com Consumer Employee

6. The real challenge is connecting Business Interests to a Common Goal The Challenge Integrating the plethora of systems and protocols along the value chain Mobile Network Business House ERP CRM dB Car TV www.com Consumer Employee Cellphones, PDAs, smartphones, blackberry,… WLAN, bluetooth,… WAP, Windows, Linux,… Java, XML, XHTML, VXML,… GSM, CDMA, TDMA, GRPS, UMTS, EDGE, W-CDMA,… Microsoft, Symbian, Palmsource,…

7. … under a changing Technological Landscape 1G 2G 3G 1 st Generation: Analogue Limited to Voice Services Always-on: limited batt. life=> limited mobility Subject to cloning/fraud 2 nd Generation: Digital Voice and Data (SMS) Intel tracking: extended batt. life Limitation on # connecting users 3 rd Generation: Broadband Digital Voice and Extended Data (MMS) Higher connecting users => populated areas 2.5G GPRS (GSM) EDGE UMTS GSM TDMA (850 MHz) CDMA WCDMA CDMA2000

8. Opposing Strategies Will Slow the Expansion Process Profit Diversity in Technologies Complexity of Hardware Abundance of Equipment Types Increased Equip. Revenues Standardization of Technologies Synergies in value chain Efficiency, Lower Investments Increased Service Value Service Providers Telecomm. Equipment

9. In the End, Consumer will Decide Standardization of Technologies Diversity of Technologies Consolidation Faster Transmission, More Power Higher On-going Costs Proliferation of Devices / Providers Limited Transmission Higher Start-up Costs More Service “You Get What You Pay For” “You Pay for What We Have”

10. Rapid Expansion in Mobile Internet Use Will Test Capability of Providers to Keep Up MM

11. VodafoneT-Mobile Mission We help people find information, entertainment or assistance wherever they are. We will deliver the best customer experience in mobile communication – the true freedom to move- on a global scale. Vision Our vision is to be the world’s mobile telecommunication leader- enriching customer’s lives, helping individuals, business and communities be more connected in a mobile world. They will prefer Vodafone because the experience of using Vodafone will be the best they can find. We will lead in making the mobile the primary means of personal communication for every individual around the world. Through leadership,our scale, our scope and our partnerships, we will bring online mobile services to the world. Our core slogan is “Get More” more value for money, more freedom of choice, more options, more services; without more expenses. Objectives The Company’s objective is increasingly focused on voice and data revenue growth and margin improvement. Provide the best possible return for the shareholders. To extend our operational leadership of the industry. To extend service differentiation To provide our customers with safe, reliable products and services that represent good value for money. Global brand for global movers: customers are on the move round the globe and want to use their mobile phones everywhere. Transnational Company: be one team Individual Markets and Cultures

12. Competitiv e Assessmen t Research & Developmen t Global Presence Growth Strategy Products Market Image Organizational Structure

13. Growth Strategy VodafoneT-Mobile Increase marketing focus on our established high quality customer base Provide its customer seamless trans- Atlantic services Invest in delivering Vodafone branded, easy to use, customer propositions for mobile voice and data. One worldwide brand => Brand awareness => preference A recognizable brand, present on international markets, assuring the same high quality everywhere Maximize the benefits of scale and scope, through the use of partner network agreements, by increasing equity interests in business where the group has existing shareholdings Subsidiaries are still responsible for performance in their countries. They know best what their customers want and need, and will be the ones from whom the important ideas will come Understand, anticipate and respond to the needs of our customers and provide them with innovative products and services Make further acquisitions or disposals of business

14. Global Presence VodafoneT-Mobile 123 million customers spanning the key global cellular markets in 28 countries Deutsche Telekom and its subsidiaries and affiliates provide wireless services to approximately 82 million customers worldwide Still, its global strategy appears less than clear outside its European heartland, especially in the United States It is the first to operate a trans- Atlantic mobile network based on GSM In the United Kingdom, it carved out a position of market dominance against a powerful rival, partially owned by the former telecom monopoly, BT Its subsidiaries and affiliates are among the first operators to use the future oriented GPRS $300 Billion in acquisitions

15. Products VodafoneT-Mobile Vodafone Live!: bringing customers a world of colour, sound and pictures Acquisition of Vizzavi is expected to continue to drive a significant part of the Group's growth in future years Lifestyle and mobility:  The company is broadening its mobile multimedia services spectrum  Color displays, multitonal ringing, Java capability and GPRS connections have made many mobile multimedia services more attractive, faster and easier  T-Mobile t-zones are characteristic for this next content generation.  Six popular channels: t-info, t-sports, t-news, t-games, t-music.  More than 100 partners with over 500 services providing a wide variety of content Mobile Office from Vodafone: high speed data card enabling customers to access their normal business applications when out of the office A customised Vodafone branded GPRS data card provides optimal service on Vodafone network Making the Office Mobile:  The products provide secure, efficient communication between the mobile employees by optimizing essential office applications, such as e-mail and office Outlook.  Products already available: Mobile Access Portal, Mobile Service Portal, BlackBerry Solution or the T-Mobile MDA and Sidekick Wireless Office: replace desk phones or replace their entire PBX New technologies: Acquisition of UMTS licenses in six european countries Blackberry: advanced wireless handhelds, software and services Mobile messaging: The company launched GPRS in 2002 in Europe Connected by Vodafone: descriptor applied to mobile data solutions provided through partnerships between Vodafone and leading mobile device manufacturers

16. Market Image VodafoneT-Mobile For many early British mobile users, Vodafone became synonymous with the mobile phone, as in “call me on my Vodafone." As part of its brand philosophy, the company will strengthen its commitment to quality and a superior range of voice and data products Vodafone live!: Best Consumer Wireless Application or Service at the GSM Association Awards, and, most recently Best New Service at the World Communications Awards and Best Network Service at the Mobile Choice Consumer Awards The T-Mobile brands symbolizes reliability, attractiveness, and innovation throughout Europe and the United States. High profile sponsorship of Ferrari and Manchester United Spokestar Catherine Zeta-Jones Vodafone Hopes to Make Global Mobile Mean More Than Wireless Voice A recognizable T-Mobile brand, present on international markets, assuring the same high quality everywhere, is an important orientation.

17. Organizational Structure VodafoneT-Mobile It developed global functions for supply chain, IT and technology management. One team: Main activities, such as marketing, platform harmonization, procurement, and brand migration will be managed centrally in future Individual markets and cultures: Subsidiaries are responsible for performance in their countries

18. Research and Development VodafoneT-Mobile NTT DoCoMo and J-Phone (owned partially by Vodafone) launch 3G network Lucent Technologies and T-Mobile launched a joint pilot project to evaluate secure high-speed data services using 3G UMTS technology. Vizzavi is Vodafone’s 50/50 joint venture with media giant Vivendi. Essentially it is looking to be the Yahoo! of the mobile internet. Joined forces with Google to bring advanced search capabilities to mobile internet portal Signed agreements with content providers: MTV, Universal Mobile, AOL, Aspiro, CNN, Digital Bridges, E*Trade, MapQuest, NGame, Picofun, PocketBoxOffice, PocketThis, Sabre, TicketMaster & CitySearch, Upoc, ViAir’s, Zagata Vodafone made a joint-venture with Oracle to offer field workers access to key business systems. Vodafone partnerships with SAP and Hewlet- Packard to collaborate on Mobile Enterprise solutions Microsoft partners with T-Mobile HotSpot to promote Wi-Fi access for Windows Mobile Customers Vodafone and Microsoft join forces to create programming standards for software that will eventually link computers and mobile phones T-Mobile will deploy 3G Lab’s Trigenix product: the goal is to enable users to create their own personalized interface. Launches Global Blackberry Solution. Has worked closely with Research In Motion to deliver customized BlackBerry solution. Working closely with Research in Motion to offer Blackberry terminals supported by the operator’s GRPS and “push” e-mail services.

19. Competitiv e Assessmen t Research & Developmen t Global Presence Growth Strategy Products Market Image Organizational Structure

20. VodafoneT-Mobile Strengths Global reach, strategic executer, industry enabler Agile, opportunistic with current possibilities Weaknesses Technology base in US, “over focus” on global Brand strategy Lack of long-term focus Opportunities Leverage global capabilities to drive mobile standards Keep close distance to leader to avoid risks Threats Value for money of 3G derived mobile services, price paid for 3G licenses Value for money of 3G derived mobile services

21. Executive Summary Vodafone is well positioned to become the World’s true leader in Mobile services Focused, global, execution Focused, global, execution Leveraging global presence to drive mobile industry to deliver increased value Leveraging global presence to drive mobile industry to deliver increased value The real power of a global player is not in leveraging seamless global services T-Mobile has the technological global competitive edge to be in the forefront of the industry Does not appear to be committed to this Does not appear to be committed to this

23. Vodafone’s Choice for Verizon in the US appears to be driven by quality opposed to strategy Verizon is based on the CDMA platform Not one of Verizon Wireless services carry the Vodafone brand “Put option” on $10 billion 45% stake can be exercised by Vodafone AT&T Wireless and T- Mobile USA are GSM AT&T Wireless and T- Mobile USA are GSM

24. Reference Sources BIGresearch CeBit News CNET News.com Duke University GartnerGlobalWirelessNews GSM association gsm world Intermarket Group Microsoft MIT University MULTEX New York Times PMN Publications QualcommReuters Robert Kahn, “Father of the Internet” The Motley Fool This Is Money.com T-Mobile International Vodafone Wall Street Journal World Investment AK Yahoo! Finance

25. About the Authors Suzana Roma is a Statistician major She has broad experience with applied statistics to Marketing Intelligence She has worked in several consumer oriented companies such as Coca-Cola, Telemar (Telecom) and Fininvest (Bank) suziroma@yahoo.com Alex Cutrim is an Electronics Engineer major He has extensive practical background in Strategic Intelligence functions He has worked in several areas of The Coca- Cola Company and Sony alexc@domain.com.br