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Charles R. Mahla, Ph.D. Econ One Research, Inc. Sacramento, California 916 449 2860

Public Forum For the 7 th Annual CMRS Competition Report Federal Communications Commission Washington, DC February 28, 2002. Charles R. Mahla, Ph.D. Econ One Research, Inc. Sacramento, California 916 449 2860 www.econone.com www.wirelesssurvey.com. Econ One’s Wireless Survey.

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Charles R. Mahla, Ph.D. Econ One Research, Inc. Sacramento, California 916 449 2860

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  1. Public ForumFor the 7th Annual CMRS Competition ReportFederal Communications CommissionWashington, DCFebruary 28, 2002 Charles R. Mahla, Ph.D. Econ One Research, Inc. Sacramento, California 916 449 2860 www.econone.com www.wirelesssurvey.com

  2. Econ One’s Wireless Survey • Top 25 Markets Since September 1999. • Not a consumer questionnaire • It is a “Survey” of Wireless Plans • Data from Carriers’ Web sites • Survey Entails collection/analysis of over 2,500 • pricing plans each month. • Four usage levels analyzed: 30, 150, 300, • and 600 minutes per month. • Three different Peak/off-peak assumptions.

  3. Econ One’s Wireless Survey… • Does not estimate “average cost of service.” • Does not attempt to value roaming or long distance. • Does provide insight into service cost trends. • Allows for inter-city trend and intra-carrier cost • comparisons.

  4. Wireless Performance/Cost of Service Trends • Demand for Wireless Service Continues to Grow • Penetration and usage (MOU) continue to rise • Cost of Service Continues to Fall • Footprints are Getting Larger • Localized Pricing is being Replaced by • Regional/National Plans

  5. Wireless MonthlyMinutes of Use (MOU) Number of Minutes per Month Source:IDC, RCR News, May 15, 2000, “The Wireless Industry Scorecard,” Legg Mason, 3Q 2001.

  6. Wireless Pricing Continues Downward Trend From December 2000 to December 2001 average service rates based on the four usage buckets included in our survey fell by 7.3%. This decline followed a nearly 7% decline in 2000.

  7. Wireless Pricing Continues Downward Trend $ Monthly Cost +5.9% -4.5% -10.4% -11.7% Source: Econ One Research, Inc. Monthly Wireless Survey.

  8. Wireless Performance/Cost of Service Trends • The most expensive city was almost 34% more • expensive than the least expensive city in • December 1999. • The gap fell to 8% by December 2001.

  9. Difficulties in Calculating an Index of Cost of Service • MOU data are hard to come by. • City-specific MOU are even more difficult to find. • Time-of-day usage statistics are not publicly • available. • Distribution of users by plan type unknown. • Consumer surveys help—how accurate are they?

  10. Econ One’s Findings on “Rural” Market Service Costs • Conducted 25-market review in October 2001. • Market selection not “scientific.” • Average population: 95,611. • Versus 4.4 million average population in Top 25 markets. • Average number of carriers per market: 3.3. • Versus 4.9 per market in Top 25 markets.

  11. Presque Isle, ME Kalispell, MT 19 16 Dickinson, ND Plattsburgh, NY Fergus Falls, MN Bend, OR 1 24 7 Aberdeen, SD 18 Mt. Pleasant, MI 23 Eureka, CA Twin Falls, ID Mason City, IA Riverton, WY 13 Meadville, PA 20 21 5 14 6 Grand Island, NE Fairmont, WV Grand Junction, CO 11 17 10 St. George, UT West Plains, MO Dodge City, KS 9 25 Flagstaff, AZ 22 Dyersburg, TN 2 12 McAlester, OK 3 Roswell, NM El Dorado, AR 15 8 McComb, MS 4 25 Markets Used in “Rural” Analysis O mi 1000 200 400 600 800

  12. Econ One’s Findings on “Rural” Market Service Costs

  13. Econ One’s Findings on “Rural” Market Service Costs

  14. Questions and Comments Presentation Available for Download at: www.wirelesssurvey.com

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