Next Generation Network

MSV is building an integrated satellite-terrestrial network, which will provide ubiquitous wireless broadband services, including Internet access and voice services, in the United States and Canada. Using an all-Internet Protocol (''IP''), open architecture over a standard terrestrial cellular footprint, the network will provide significant advantages over existing wireless networks, including higher data speeds, significantly lower deployment and operating costs and flexibility to support a range of IP applications and services. MSV's planned open network, in contrast to legacy networks currently operated by incumbent providers, will allow distribution and other strategic partners to have open network access to create a variety of custom applications and services for consumers.

MSV believes that the changing dynamics of the telecommunications industry have created a compelling market opportunity for its planned next generation integrated network.

• Increased competition, industry consolidation, wireless substitution for wire-line services and the general convergence of media and telecommunications are driving consumer demand for an integrated bundle of: video, broadband data, voice and mobile wireless services.
• Demand for advanced portable and mobile data solutions, and content-related services such as video clips, location-based services, and mobile gaming and commerce is increasing.
• New technologies are emerging to deliver advanced broadband wireless services and applications to a potentially wide range of devices at price points MSV believes will be lower than those offered by incumbents' legacy networks.

Media and telecommunications players seeking an open, all-IP solution have been hindered by the "walled garden" approach of the existing national wireless carriers ("3G Players"), which limits the ability of new market entrants to control the service offering and customer experience, and dramatically reduces the potential economics to the new entrant. In contrast, MSV's network will provide distribution partners with significantly greater control over the user experience.

• Open-air interface provides complete control over applications run over the network and dramatically expands the universe of end user devices enabling the distribution partners to swiftly develop and deploy unique services and promotional offerings.
• Greater session monitoring and call control features provide the potential to disaggregate service pricing.
• MSV's hybrid architecture also offers the differentiation and increased coverage of a satellite system.

As a result of MSV's terrestrial network approach, MSV's partners will be able to offer their content, devices and services through a highly differentiated wireless platform.

For the satellite portion of MSV's integrated wireless network, MSV has engaged The Boeing Company to develop two satellites to serve the Western Hemisphere. Like their predecessors, MSAT-1 and MSAT-2, they are geostationary satellites. MSV-1 and MSV-2 will replace these satellites, covering North and Central America.

These satellites, among the most powerful commercial satellites ever built, will form the backbone of an advanced commercial telecommunications network being developed by MSV and its Canadian joint venture partner, MSV Canada. Covering the landmasses of North and South America with hundreds of spot beams, the satellites will use MSV's patented ancillary terrestrial component (ATC) technology, which will be made up of an ensemble of land-based cell sites, to deliver service to wireless devices that are virtually identical to cell phone handsets in terms of aesthetics, cost and functionality.

MSV was the first MSS provider to receive a license to operate an ATC network from the Federal Communications Commission (FCC). It was a major proponent of the FCC's February 2003 and February 2005 ATC and ATC Reconsideration Orders, both of which were adopted on a bipartisan, 5-0 basis. These ATC licenses permit MSV to use its L-band satellite frequencies in the operation of an advanced, integrated network capable of providing wireless broadband on a fixed, portable and fully mobile basis.