CANADIAN CELLULAR COMMUNICATIONS MARKET REPORT

2001 EDITION

NBI/Michael Sone Associates Inc.
193 Church Street
Toronto, Ontario
M5B 1Y7
Telephone (416) 360-0424
Facsimile (416) 360-7546
e-mail msone@nbicanada.com

August 2001

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Table Of Contents

Section			Page

About This Report			vi
A note on Accuracy			viii
The Canadian Cellular/PCS Market at a Glance			1

1.0 Executive Summary			2
2.0 The Canadian Cellular Equipment Market			14
	2.1 Cellular Handset Shipments		14
	2.2 Installed Base		18
	2.3 Handsets - Unit type and Technology		19
	2.4 Manufacturers - Handsets and Infrastructure Equipment		22
		2.4.1 Overview	22
		2.4.2 Audiovox	23
		2.4.3 Ericsson Canada	26
		2.4.4 Lucent Technologies	32
		2.4.5 Mitsubishi Wireless Communications	35
		2.4.6 Motorola Cellular	37
		2.4.7 NeoPoint	48
		2.4.8 Nokia	49
		2.4.9 Nortel Networks	55
		2.4.10 Panasonic	60
		2.4.11 QCP Inc. (Kyocera Wireless)	61
		2.4.12 Samsung	65
		2.4.13 Sanyo	67
		2.4.14 Sony	68
	2.5 Handset Pricing		70
	2.6 Additional Products and Services		72
		2.6.1 In-Building Wireless	72
		2.6.2 Handset Rental	72
3.0 The Canadian Service Providers			76
	3.1 Overview		76
		3.1.1 Rogers AT&T	83
		3.1.2 Bell Mobility	89
		3.1.3 TELUS Mobility	96
		3.1.4 Microcell	100
		3.6.5 Aliant Mobility	106
		3.6.6 MTS Mobility	109
		3.1.7 SaskTel Mobility	111
	3.2 Network Coverage		113
	3.3 Churn Rate		114
	3.4 System Usage and Usage Patterns		116
	3.5 Customer Acquisition Cost		118
	3.6 Cost of Service		119
	3.7 Revenues		121
	3.8 Distribution		122
	3.9 Spectrum Auction and Cap		127
4.0 Resale and Resellers			129
	4.1 Rogers AT&T		130
	4.2 Microcell Connexions		130
5.0 The Future of Cellular Services			133
	5.1 Towards Third Generation (3G) Wireless		133
		5.1.1 IP Wireless	138
		5.1.2 EDGE	140
		5.1.3 Towards 3xRTT	141
		5.1.4 Voice-Data Convergence	141
		5.1.5 Bluetooth Update	143
		5.1.6 WAP Update	143
	5.2 Telematics		144
		5.2.1 ATX Technologies	145
		5.2.2 OnStar	147

Exhibit
	1. Cellular/PCS Phone Shipments by Manufacturer (1999-2004)		152
	2. Cellular/PCS Phone Shipments by Manufacturer by Region (2000)		153
	3. Cellular/PCS Phone Shipments by Phone Technology (1999-2004)		154
	4. Typical Retail Price Ranges by Handset Type (mid-2001)		154
	5. Cellular/PCS Phone Installed Base by Manufacturer (2000)		155
	6. Cellular/PCS Phone Installed Base by Manufacturer by Region (2000)		156
	7. Cellular/PCS Phone Installed Base by Phone Technology (1999-2004)		157
	8. Number of Subscribers /Net Activations by Service Provider (1999-2004)		157
	9. Subscribers by Service Provider by Province (1999-2004)		158
	10. Subscriber % Share by Service Provider by Province (1999-2004)		159
	11. Subscriber % Share by Service Provider by region (2000)		160
	12. Activations by Distribution Channel by Service Provider (2000)		161
	13. Subscriber Penetration by Canadian Population (1999-2004)		161
	14. Subscribers by Service Type by Service Provider (1999-2004)		162
	15. Revenue, Minutes of use & Revenue per Sub. by Service Provider (1999-2004)		163
	16. Monthly Churn (%) and cost of Acquisition (COA) by Service Provider (1999-2001)		164
	17. Capital Expenditures ($000s) by Service Provider (1999-2004)		165
Figure
	1. Canadian Cellular/PCS Market - Number of Subscribers (1993-2004)		8
	2. Cellular/PCS Telephone Shipments - Manufacturers' Market Shares - 2000		9

About This Report

At 165 pages, NBI/Michael Sone Associates' Canadian Cellular Communications Market Report, 2001 Edition remains the most comprehensive study published on this industry. It examines in detail, for both the equipment and service segments, such topics as market size and growth, distribution strategies, pricing and technology issues and usage patterns. Section 1 consists of a detailed executive summary that provides an overview of the industry in Canada as well as an analysis of the key elements that will define the future of the industry. Section 2 is devoted to the handset and equipment manufacturers with reference to the latest technologies and particular strategies of the vendors. Also included are detailed profiles of the major manufacturers and discussions on their activities and future plans as the industry moves toward the next generation (3G) of wireless communications. Additional products and services including handset rental round out the section along with an update on pricing policies.

Section 3 provides an in-depth analysis of the re-alignment of the Canadian carriers and the prospects for increased competition in light of the TELUS acquisition of Clearnet, the westward push of the Bell Wireless Alliance and Rogers' adoption of the GSM platform. In turn, the market development plans and strategies of the service providers are examined. Particular emphasis is placed on recent developments in the marketplace and the effects of different airtime plans, pre-paid packages, value-added services, marketing programmes and distribution channels on revenues, subscriber growth, churn, usage patterns, acquisition costs and capital spending programmes. The section rounds out with a summary of the recent spectrum auction and changes to the spectrum cap.

Next, Section 4 examines the concept of cellular resale and discusses the current players in this market, while Section 5 looks at the future of all cellular services and place in the wireless mobile communications market. Included is an essay on IP-Wireless, an overview of 2.5G and 3G technology and latest developments in voice/data convergence and telematics. Discussion on Bluetooth, 802.11 and WAP will be covered in NBI/Michael Sone Associates' upcoming Mobile Data and Internet Services Market Report 2001 Edition.

The substantive and comprehensive discussion is supported by 17 detailed Exhibits and two Figures that quantify the industry along the multitude of parameters noted above. Seven Exhibits provide shipment and installed base data for handset manufacturers including projections to 2004, segmentation by province and by technology. Nine Exhibits illustrate subscriber data by service provider including projections to 2004 for customer and revenue growth, provincial and technology segmentation, penetration rates and distribution channel analysis. The final Exhibit provides detailed information on the service providers' capital spending with projections to 2004.

A Note on Accuracy

The accuracy of the information in this report cannot be guaranteed. The information contained herein is the most recent available at the time of writing, but is subject to change. Statistics and comments on specific companies should not be construed as official statements from those companies. Rather, such information represents the opinions and estimates of NBI/Michael Sone Associates. We will be pleased to publish any demonstrably and significantly more accurate information supplied to us.

As always, NBI/Michael Sone Associates welcomes comments on this report and suggestions for future editions. Please call us anytime at (416) 360-0424 or e-mail us at msone@nbicanada.com.

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