CTIA 2004: MetroPCS Helps Customers to Help Themselves

Event Summary
March 22, 2004 - VeriSign, Inc. (Nasdaq:VRSN), the leading provider of critical infrastructure services for the Internet and telecommunications, and Telespree Communications, the leading provider of self-service solutions for wireless carriers, announced MetroPCS has chosen to use VeriSign and Telespree’s joint Self-Service Set-Up service. Self-Service Set-Up is a state-of-the-art, network-based, self- service solution that intuitively guides end users through wireless device activation or reactivation, and ongoing account maintenance using only the mobile device itself without the aid of a sales clerk or call center. MetroPCS will offer automated reactivation and rate plan change features via the handset to its customers.

Analytical Summary

Current Perspective: Positive on MetroPCS’s decision to implement the combined Telespree/Verisign Self- Service solution as this will allow MetroPCS to provide a greater quality of customer care at a more manageable price; key for a carrier that offers unlimited local calling for a fixed monthly rate. Vendor Importance: High to MetroPCS as the solution will increase the overall efficiency of the carrier’s customer care and activation functions. The deal is also a key breakthrough for Telespree and Verisign as it is the first North American deal for the two companies’ Self Activation solution · Market Impact: Low to moderate on the U.S. wireless market, as MetroPCS remains a small player in a market dominated by six national providers. However, all carriers should keep a close eye on the success of this solution and consider similar solutions if the MetroPCS implementation proves to be a success.

Current Perspective       Positive
We are taking a positive stance on MetroPCS’s installation of the joint Telespree/Verisign Self-Service solution, as the carrier should benefit from increased efficiencies in re-activating and managing existing customers. Furthermore, the self-service solution will potentially enable MetroPCS to widen its current distribution solution, providing an off-the-shelf purchase solution suitable for Walmart and other retail outlets. The Self Activation solution means that the carrier does not have to actively touch new activations, but rather can leverage a Web- based GUI to run a credit check on potential new subscribers - or on previous subscribers that have allowed their service to expire. The self- service solution can further be used to allow customers to add new features to their service as they become available. An example of this could be to allow customers to upgrade their service to include the unlimited long distance calling feature: an SMS can be sent to all customers informing them of the new offer, and the customer could use the self activation solution to activate this new service, all without having to involve customer service reps.

For many carriers, such a solution is a love-hate concept. On the one hand, all carriers want to improve margins and reduce costs, and a more efficient customer service solution is certainly a good place to start. But on the other hand, stepping away from human interaction with the customer can limit the ability of a carrier to gain key customer feedback and potentially save clients - and even upsell them - before a disconnect becomes inevitable. As a result, carriers will watch MetroPCS’s progress carefully. One company that should consider jumping onto the bandwagon is Leap Wireless, which has a very similar wireless solution to MetroPCS. As Leap struggles to reorganize its way out of Chapter 11, any solution that ultimately reduces operating costs should be very closely considered.

Competitive Positives

The Self Service solution will allow MetroPCS to reduce its operating costs, and will provide a consistent look and feel to its overall activation service. MetroPCS can expand its retail distribution solution outside of the traditional wireless outlets. The carrier can now sell off-the-shelf phone solutions in supermarkets or other local stores, without requiring these stores to manage the activation process. For Verisign and Telespree, the MetroPCS win is a significant boost as it is the first North American win. If this initial solution is successful, the two companies should benefit, with other carriers considering adopting a similar application.

Competitive Concerns

Self Service solutions mean less direct communication with the end customer. This means that there are fewer opportunities to detect - and pre-empt - disgruntled customers before they decide to disconnect their service. A customer win is not the same as a customer implementation. As a result, it is too early to start celebrating the success of the MetroPCS Self Service solution.

 

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