Disney Stomps on Mickey's Phone, Kills Disney Mobile

On September 27th Disney Mobile announced that it would cease its wireless operations as of December 31, 2007. The MVNO has immediately ceased the sale of content and applications but will continue to provide voice, messaging and the Family Center services through December 31, 2007.

Analytical Summary

► Current Perspective: Very negative on Disney Mobile’s demise, although the announcement was hardly a surprise. As with Mobile ESPN, Disney Mobile was a flawed product from launch and these errors were never corrected, essentially assuring a short lifespan.

► Vendor Importance: Very high to Disney, as the company has now stumbled twice in the mobile market and is unlikely to risk a third try at the MVNO market. This is a decision that Disney may well come to regret two to three years from now as data services become a fundamental core of the wireless product.

► Market Impact: Low on the wireless market as Disney Mobile failed to make a significant impression. As such, its passing will be noted only by industry pundits, not the consumer market in general. However, there is clearly a ripple-on effect that impacts all remaining MVNOs, which will be looked at with increasing caution by consumers and investors alike.

| Client Access - Wireless Services - U.S. |

Sprint is First to Market with AIRAVE Femtocell, Addressing Coverage and Unlimited Calling

On September 17th Sprint introduced AIRAVE, a femtocell-based access point that uses PCS frequencies to provide for unlimited calling in two markets, Denver and Indianapolis. At $15 for individuals and $30 for families, it is an add-on option to voice plans. The AIRAVE femtocell hardware unit is priced at $49.

Recommended Competitive Responses

► T-Mobile should position its HotSpot @Home product in the Denver and Indianapolis markets as a less expensive service than Sprint’s, and one that has no geographic limitations.

► T-Mobile should note that if a HotSpot originated call is transitioned to the cellular network, the call continues to be rated as a free unlimited call, saving anytime minutes to the benefit of the consumer. Therefore, it’s more consumer friendly than AIRAVE.

► Verizon Wireless and AT&T should look into femtocells as a component of a fixed mobile convergence strategy with their wireline parents. Providing an unlimited calling option to wireline unlimited calling plans will have a place in the customer base.

► MetroPCS and Leap Wireless should note that unlimited calling is what their brands promise without the need of any additional hardware.

► Aside from also considering the above AT&T/Verizon Wireless recommendation above, Cincinnati Bell Wireless should continue to stimulate its CB Home Run offering with another handset.

► Alltel should continue to promote My Circle with unlimited calling as a built-in component of the My Circle plans. It should also promote the strength of its network that is based on its 800/850 spectrum assets in lay terms to highlight the lack of coverage issues.

| Client Access - Wireless Services - U.S. |

T-Mobile Grabs SunCom, Contributing to Mobile M&A Activity

On September 17th T-Mobile USA signed a deal that will allow it to acquire all outstanding common-stock shares of SunCom for about $2.4 billion. The $2.4 billion equates to $1.6 billion cash and the assumption of $800 million in debt.

Analytical Summary

► Current Perspective: Positive on T-Mobile’s proposed acquisition of Suncom, because the nation’s number four carrier is acquiring one of the few decent sized regional carriers left and getting into the consolidation and M&A game before other national rivals swoop in. Aside from the obvious benefit of acquiring a similar network infrastructure, subscribers, spectrum and revenue, T-Mobile enters a market that it previously had no presence. Moreover, the roaming savings and other $1 billion in projected synergies will help T-Mobile swallow the $2.4 billion price tag of which $1.6 billion is in cash, and the assumption of $800 million in debt.

► Vendor Importance: Very high to T-Mobile, because the acquisition of the SunCom markets provides an avenue for additional growth. This is particularly true in the large city markets in North Carolina, South Carolina and Georgia that SunCom offers, without trying to mine smaller and rural markets from the likes of Dobson and Rural Cellular that AT&T and Verizon Wireless have moved to acquire.

► Market Impact: High on the wireless services segment, because the SunCom markets were devoid of T-Mobile competition. SunCom was losing money and experiencing declining growth as the regional carrier fought off national competitors, regional carriers and the likes of unlimited regional carrier Leap Wireless. With T-Mobile added to the mix once the deal is complete, the competition can no longer use any regional service limitation arguments to win customers.

| Client Access - Wireless Services - U.S. |