Subscribers, Market Share, Additions, and Churn

2Q CY2003

Analysis

Verizon continues to outpace the other carriers in terms of subscriber additions. Verizon also leads the pack in terms of the lowest churn. Verizon actually had lower churn for post-paid than Nextel (the churn statistics in the chart are a combination of pre-paid and post-paid; Nextel does not offer pre-paid). T-Mobile growth is slowing, they added 300,000 less subscribers in the second quarter of 2003 than in the first. High churn continues to haunt T-Mobile and Sprint.

In terms of market share, AT&T, Cingular, and Sprint lost market share from 1Q CY2003 to 2Q CY2003, while Nextel, T-Mobile, and Verizon gained market share.

These trends should continue for several more quarters as AT&T and Cingular continue to lose market share due to the coverage issues caused by their TDMA to GSM conversion. In late 2004 AT&T and Cingular should begin to turn around as their GSM networks are improved. Sprint may also be able to capitalize on the troubles at AT&T and Cingular, but Sprint faces problems due to the financial problems of their affiliates. Verizon's introduction of Push to Talk may affect Nextel's growth rate and churn, but that remains to be seen since the Verizon Push to Talk service is markedly inferior to what Nextel offers.