Compete Finds Segment-Based Marketing Takes Center Stage in the Battle for Subscriber Growth.

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Business Editors/High-Tech Writers

CTIA Wireless 2004

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BOSTON--(BUSINESS WIRE)--March 22, 2004

Compete, Inc. Highlights Carrier Traction Within Key Segments

Resulting From New Marketing Campaigns

In the face of market saturation, carriers shifting their marketing focus from creating general market awareness to more targeted segment-based approaches have met mixed results, according to new analysis from Compete, Inc. Just as financial services companies focus on 'life-stages' and automakers focus on 'lifestyles', carriers are looking to create brand affinity within distinct user groups in new ways. This shift is most clearly evidenced by Nextel's $700 million quest for NASCAR consumers. But in the battle for untapped and underserved consumer segments, carriers have posted uneven performance.

"Voice services, the foundation of the mobile industry, promise to reach competitive and price parity in the near future, fundamentally commoditizing the industry," said T. J. Mahony, Compete's senior wireless analyst. "To attract and retain highly-valued consumers, carriers will need to move toward a segment-driven, relationship-based marketing approach," added Mahony. "In addition to traditional demographic characteristics, marketers will need to segment their marketing based on ethnicity and defining behaviors, such as consumers who interact with music download services and content."

In a new study, Compete analyzed the pre-purchase shopping behaviors of several million in-market wireless consumers over 13 months to determine brand preferences among five consumer groups: NASCAR Fans, Sports Enthusiasts, Hispanic Consumers, MP3 Consumers and Women Heads of Households. Compete evaluated the volume and intensity of pre-purchase interest that each carrier generated within the five segments relative to its level of interest among consumers overall. Carriers can use this new approach to assess changes in market traction within these segments as they invest in marketing initiatives to create new sources of subscriber growth. For example, Compete found that as a result of its NASCAR sponsorship, Nextel is 2.5 times more attractive to NASCAR Fans than it is to general wireless consumers, an early indication of the partnership's success.

Compete's findings showed that:

-- T-Mobile Strong Among Hispanic Consumers. Carriers have

launched Spanish version websites, offered Spanish brochures

in retail outlets and entered into international partnerships

in the Olympic and soccer communities to tap into the buying

power of this segment. T-Mobile shows particular strength

within the Hispanic consumer segment, outperforming its

interest among general wireless consumers by 20%. With a

Hispanic-oriented initiative launching last August, Nextel has

also increased interest among Hispanic consumers, particularly

during sponsored worldwide soccer events. In contrast, the

recent AT&T Wireless Spanish-language brand advertising

campaign has not resonated with Hispanic consumers.

-- MP3 Consumers Are In-Play. Although T-Mobile performs well

within this group due to its relatively young subscriber base,

no carrier has yet established a clear advantage among

consumers interacting with music download services and content

("MP3 Consumers"). Compete also found that MP3 Consumers

exhibit a 23% higher propensity to churn compared to the

average wireless consumer. Once mass-market MP3 phones become

available, the data revenue potential and the opportunity to

cultivate loyal relationships through personalized music

libraries will establish MP3 Consumers as a highly valued

consumer group.

-- Women Heads of Households Prefer to 'Add a Line' with

Cingular. Compete evaluated carrier traction among women who

manage their family's assets ("Women Heads of Households").

Cingular is the only carrier to over-index in this segment

compared to its interest among general wireless consumers.

Cingular outperformed relative to Verizon when it reduced the

cost of adding a new line from $16.99 per month to $9.99 last

June. Carriers who are successful in attracting this target

consumer group will not only position themselves well in the

Family Plan market, but will also reap the rewards of a more

loyal customer base; Women Heads of Households were found to

be 5% less likely to churn than the general wireless consumer.

-- Nextel Earns a Victory Lap with its NASCAR Sponsorship.

Nextel's recent $700 million NASCAR sponsorship is cultivating

brand affinity among NASCAR consumers ("NASCAR Fans"). In the

three months leading up to the Daytona 500, Nextel's ability

to attract NASCAR Fans rapidly accelerated; by January 2004,

Nextel was more than twice as attractive to NASCAR Fans versus

its overall market traction. Interestingly, despite its

partnerships with the NHL and MLB, Nextel is not as strong

among general Sports Enthusiasts.

"Carriers are investing significant resources in sponsorships, partnerships and segment task forces, but in the past, hard evidence into their net effect has been hard to come by. Successful organizations will implement an ongoing evaluation process, adjust campaigns and products as necessary to ensure their approaches are resonating with the desired audiences," said Mahony.

About Compete, Inc.

Compete gives clients the most complete view of consumers available to infuse marketing and product decisions with data-driven insights. Compete has proven that online data on consumer behavior is a predictive indicator of total demand and purchase intent - both offline and online. Compete leverages its data on the online shopping behavior and attitudes of millions of consumers to offer industry-specific Intelligence Services that are designed to meet the critical business issues of marketing professionals in industries such as automotive, retail banking and wireless. Since launching its services Compete has provided major auto manufacturers, banks and wireless carriers with a new and unique vantage point on their customers and competitors not previously available. For more information visit the company's website at www.compete.com.

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