Compete, Inc. Finds Consumers Take Wireless Plunge With GoPhone From AT&T Wireless.

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BOSTON--(BUSINESS WIRE)--July 21, 2003

Consumers' Shopping Activities Indicate GoPhone(R) Effective

at Appealing to New Segment

The number of consumers who are actively evaluating a mobile phone or service plan online from AT&T Wireless has climbed since the GoPhone debut, according to a new study from Compete, Inc. More importantly, GoPhone is appealing to two under-penetrated wireless market segments: consumers who are credit challenged and those seeking convenience. Further, Compete data indicates that the majority of interested consumers are potential new customers for AT&T Wireless. The bottom line is that the GoPhone appears to be contributing already to the AT&T Wireless vision of achieving profitable growth in a new market niche.

"The launch of the GoPhone signals an evolution of the wireless market," said T. J. Mahony, Compete's senior wireless analyst. "Nearly one third of consumers who want to purchase a mobile phone are currently rejected due to credit issues. In fact, AT&T Wireless rejected four million consumers last year turning away more than $1 billion in revenue," added Mahony. "The GoPhone has created an attractive option for consumers who have been denied a plan due to poor credit or no credit history, bridging the gap between the convenience of postpaid offerings and the flexibility of prepaid plans."

In the study, Compete examined overall interest in GoPhone (following its launch) using early online indicators of purchase intent and total demand to determine if the phone is appealing to consumers in the under-penetrated markets that AT&T hoped to acquire. Compete's findings showed that:

-- Interest in AT&T Soared. Since the GoPhone debut during the

week of May 4, AT&T has been successful at attracting

"deliberate" online consumers - those with intense shopping

activity and a relatively high inclination to purchase a

mobile phone or service plan. Indeed, AT&T's purchase interest

levels soared into first place and rose from 20% in early May

- on par with Cingular and Verizon - to a high of 28% at the

end of May. In other words, more than one quarter of consumer

interest in mobile phones or service plans was directed toward

AT&T Wireless during the week of May 25.

-- New Market Segments Were Attracted to GoPhone. GoPhone has

attracted a disproportionately high (versus AT&T Wireless

overall) percentage of young consumers making less than

$30,000 annually. GoPhone's appeal to young, lower income

consumers is an early indication that GoPhone has appeal to an

under-penetrated market. GoPhone has also attracted a

disproportionately high percentage of consumers over 55 years

old who make less than $30,000 appealing to a previously

untargeted more mature and price-sensitive market.

-- GoPhone Attracted Potential New Subscribers to AT&T Wireless.

In May, only 10% of interested GoPhone consumers were current

A&T Wireless subscribers, which suggests that to date GoPhone

has not cannibalized AT&T Wireless' highly-valued postpaid

customers with its new plan. In contrast, when Cingular

launched its Rollover Minutes campaign last August, about half

of the interested consumers were existing customers.

-- GoPhone Siphoned Interest from Both Postpaid and Prepaid

Plans. GoPhone consumers were ardent comparison shoppers,

evaluating prepaid offerings as well as postpaid plans.

Although GoPhone consumers were about two times more likely to

consider a traditional postpaid carrier (such as Verizon,

Cingular, SprintPCS, T-Mobile or Nextel) than a prepaid one

(such as Virgin Mobile, TracFone, FreeUp or BoostMobile),

their interest in prepaid offerings was significantly stronger

than the average wireless consumer. During their visit to

Cingular's website, GoPhone consumers were five times more

likely than the average Cingular visitor to evaluate the KIC 

prepaid plan. Similarly, GoPhone consumers at Verizon were

five times more likely to evaluate Verizon's prepaid plan

versus the typical Verizon consumer.

"Early indications are positive for GoPhone," according to Mahony. "AT&T Wireless has succeeded in capturing interest from under-penetrated market segments that are important for its long-term growth. For the wireless industry as a whole, it will be important to assess GoPhone's ability to sustain its momentum and determine if the lifetime value of GoPhone customers merit emulating the strategy that AT&T Wireless has adopted."

About Compete, Inc.

Compete, Inc. is pioneering the analysis of online consumer behavior to predict consumer purchasing - both offline and online. As a predictive analytics services firm, Compete delivers unique, actionable insights from 10 terabytes of data describing online behavior. Based on daily monitoring of 10 million consumers (the industry's largest commercial source of consumer behavior data), Compete delivers its analyses with the speed and frequency required to influence ongoing business tactics and to measure performance against competitors continuously. Typical applications of Compete's services include customer acquisition and conversion, cross-shopping analysis, customer loyalty, pricing and promotion optimization, demand forecasting, competitive market share monitoring, service cost reduction and marketing ROI management. Compete serves major consumer companies in the automotive, consumer banking and finance and wireless industries. Venture-backed by leading investors Charles River Ventures, St. Paul Venture Capital, North Hill Ventures and idealab! Visit Compete online at www.compete.com.

GoPhone is a registered trademark of AT&T Wireless.

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