Press Release

Wireless Alliance Awards $350 Million Bulk Contract to Qualcomm Personal Electronics

Jun 20, 1996DALLAS

Qualcomm products mentioned within this press release are offered by Qualcomm Technologies, Inc. and/or its subsidiaries.

PrimeCo Personal Communications L.P. and the national wireless alliance of AirTouch (NYSE: ATI), Bell Atlantic (NYSE:BEL), NYNEX (NYSE: NYN) and U S WEST Media Group (NYSE: UMG) today announced they have awarded a bulk contract valued at approximately $350 million to Qualcomm Personal Electronics, a joint venture between subsidiaries of Qualcomm Incorporated, (NASDAQ: QCOM) and Sony Electronics Inc., for Code Division Multiple Access (CDMA) digital cellular and personal communications services (PCS) portable phones. Commercial shipments will begin in 1996 and extend through 1998.

For PrimeCo, this announcement marks the first contract award for PCS handsets for service the company will offer at the end of this year. The PCS phones will be available in all of PrimeCo's 11 markets, and will be distributed through retail stores and direct sales channels. The cellular units of AirTouch, Bell Atlantic, NYNEX and U S WEST will receive Sony/Qualcomm cellular handsets under the contract. The alliance partners already hold contracts with other cellular handset manufacturers and those contracts will remain in place.

The phones are co-developed by Qualcomm and Sony, using CDMA technology, developed by Qualcomm, and are manufactured by Qualcomm Personal Electronics. The phones deliver extended talk and standby time, and use Sony's Lithium Ion battery technology. The phones can support enhanced features such as incoming caller ID, short messaging service and voicemail alert. Users are easily guided through the phones' operations through a user-friendly interface and soft-key menu. The phones' five-line liquid crystal display (LCD) uses icons to indicate signal strength, battery status, transmission mode, roaming status and other functions.

"In choosing Qualcomm and Sony, we've ensured our customers will have the latest advantages of digital CDMA technology, including enhanced voice quality, long-lasting battery life, more secure conversations and fewer dropped calls," said Benjamin L. Scott, president and CEO of PrimeCo Personal Communications. "The joint purchasing agreement ensures that all the national alliance partners will realize the economies of scale we had hoped to leverage."

"Last year, PrimeCo chose CDMA technology for its nationwide network. Today, they have chosen the product which best satisfies their customers' needs," said Dr. Irwin M. Jacobs, chairman and CEO of Qualcomm. "PrimeCo customers will experience all of the benefits of CDMA in the near future—wireline-quality voice, mobile fax, data transmission, short messaging service and more. Our lightweight portable CDMA cellular and PCS phones will deliver these benefits literally to the customers' fingertips."

"We're pleased to be selected as PrimeCo's CDMA phone provider in support of their launch effort, and we look forward to providing significant quantities of phones as PrimeCo and its partners expand their services in the years to come," said Carl Yankowski, president and chief operating officer of Sony Electronics Inc. "We continue to invest with Qualcomm in joint capacity expansion and design innovation to support our customers with the technology and product expertise needed to create a consumer-friendly family of products."

The phones will be purchased through Sony/Qualcomm CDMA Sales, a division of Qualcomm Personal Electronics. Qualcomm Personal Electronics will manufacture the phones on multiple production lines in the company's new 400,000 square foot facility in San Diego, Calif. Qualcomm Personal Electronics manufactures Qualcomm's QCP-800 cellular and QCP-1900 PCS phones and Sony's CM-D500 cellular and CM-D600 PCS phones.

Based in San Diego, Calif., Qualcomm Personal Electronics is a joint venture of subsidiaries of Qualcomm Incorporated and Sony Electronics. Qualcomm Personal Electronics, which manufactures CDMA portable phones for cellular and PCS applications, leverages both companies' product, technology and manufacturing expertise. The phones are marketed and sold in the U.S. through Sony/Qualcomm CDMA Sales, a division of Qualcomm Personal Electronics, and throughout the world by Qualcomm and Sony.

The four-way wireless alliance was formed by AirTouch Communications, BellAtlantic, NYNEX and U S WEST in October 1994 to create the broadest market coverage in the industry. In addition, the partners formed PrimeCo Personal Communications, which successfully bid $1.1 billion for new PCS licenses in 11 major markets. Combined, the wireless alliance players serve nearly seven million domestic customers, operate in 19 of the top 20 U.S. markets, and cover a population base of nearly 170 million in 46 states and the District of Columbia.

Except for the historical information contained herein, this news release contains forward looking statements that are subject to risks and uncertainties, including timely product development, change in economic conditions of the various markets that Qualcomm serves, as well as the other risks detailed from time to time in Qualcomm'S SEC reports, including the report of Form 10-K for the year ended September 24, 1995 and most recent Form 10-Qs.

CMD-500 and CM-600 are trademarks of Sony Electronics Inc. Qualcomm is a registered trademark of Qualcomm Incorporated. QCP-800 and QCP-1900 are trademarks of Qualcomm Incorporated