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    Contents

    Reevaluating the 3G Possibilities 2

    Evolutionary Trends 2

    A New Pathway 2

    Real World GSM 3

    Understanding the Technologies 3

    WCDMA 3

    GPRS 4

    EDGE 4

    Tracking the Pathways 4

    GSM in the Americas 4

    TDMA 4

    CDMA 5

    Market Misconceptions 5

    Benefits of GSM 6

    Product Availability 6

    Standardization 6

    Superior Features 7

    Global Reach 7

    Summary 8 3G Evolutionary Imperatives 8

    With the decline in voice airtimerevenues and the explosive growthin data, 2G network operators must

    seek innovative evolutionarypathways to the IP-drivenmarketplace of tomorrow.

    This Nokia white paper examines theimpact of GSM 800 MHz on the 3Gmigratory routes of TDMA and

    CDMA operators. The paperexamines the underlying forces thatare driving the move from 2G to 3Gand evaluates the relative standingof current GSM, TDMA and CDMAwireless technologies. Advances intechnology, as well as crucialmarketplace and regulatory

    developments, have opened aninteresting new 3G pathway forTDMA and CDMA networks.

    This new route employs GSM/GPRSwith an evolutionary pathway toEDGE and WCDMA. When analyzing

    the comparative advantages of 3Galternatives, operators and othersmust consider the strengths andlimitations of all participatingtechnologies. They must understandthe details of each potentialevolutionary path and dispel variousmisconceptions associated with this

    evolution. Finally, this white paperexamines the benefits available from

    this GSM/GPRS with migration toEDGE/WCDMA route and offersinsights into those operatorsthroughout the Americas who havechosen the GSM pathway.

    1

    Executive

    Summary

    White Paper

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    White Paper

    Evolutionary Trends

    Voice revenues have begun todecline dramatically, while analystsindustry-wide are adjusting upwardtheir already expansive estimates ofrevenues from fast packet-switcheddata services. Voice servicescurrently account for more than 90

    percent of income, but by the year2005 it has been forecasted thatdata and other non-voice services

    will generate 50 percent of operatorincome.

    Meanwhile, the mobile

    telecommunications revolutioncontinues. Nokia recently increasedits estimate of mobile phoneownership to at least one billioncustomers by 2002, and Nokiaexpects mobile Internet terminals tomore than triple in number to 200

    million this year. The coming boomin mobile communications is driving

    significant advances in the race tothird-generation service capabilities.

    The International TelecommunicationsUnions (ITU) 3G recommendationsconfirm the growing importance of

    mobile multimedia services. Asnoted on the ITU website:

    "International Mobile

    Telecommunications 2000

    (IMT-2000) represents the global

    standard for meeting the emergingneeds of mobile telecommunications

    in the 21st century whereby mobile

    telecommunications subscribers will

    be able to access voice, data,

    Internet, and multimedia services at

    any time and at any place."

    The ITU has approved five distinct airinterfaces for IMT-2000, and ofthose five WCDMA, EDGE and tosome extent cdma2000 have gainedmeasurable backing from equipmentvendors and wireless operators.Global 3G consortiums andpartnerships are now being formed

    to leverage the more than 80 3Glicenses already granted and thehundreds more now under review.

    These dynamics are forcing operatorsto examine more closely than evertheir underlying technology and

    business strategies.

    Industry analysts estimate thatvendors are currently allocating from$200 billion in research anddevelopment resources to specify,design and manufacturing

    infrastructure for evolving 3Gnetworks. Of the 3G licensescurrently awarded, more than 90

    percent of those operators havespecified WCDMA as their core 3Gtechnology. Observers point outthat, given this expected dominanceof WCDMA as the 3G standard, this

    technology will undoubtedly receivethe majority of R&D funding and willyield the earliest, most extensive andmost reliable product availability.

    It is also estimated that from 2003through 2005, TDMA/GSM/WCDMA

    terminals will combine to accountfor more than 60 percent of theglobal terminal marketplace. TheGSM total in this estimate includesGPRS- and EDGE-capable terminals.

    Informed industry observers

    recognize that third-generationwireless communications will be

    driven by subscriber-orientedservices and not by provider-driventechnologies. In the mobile telecomlandscape of tomorrow, subscriberswill expect and demand seamlessanytime/anywhere access to voice,data, Internet and a growinguniverse of exciting new multimedia

    services.

    Current applications will evolve to3G, and the success of those newapplications will depend heavily on anetwork to deliver capacity, bit ratesand services. This growing reliance

    on data for revenue will drive themigration of current infrastructuresto the faster, high-capacitypacket-switched networks of thefuture. To meet those requirements,operators are searching for theclearest possible pathways to the

    third-generation.

    GSM and TDMA adopted known and

    accepted data routes for 3G sometime ago, while the CDMAevolutionary pathway remained lesscertain. But now shifts intechnology and the wireless

    marketplace have opened an excitingnew evolutionary possibility.

    A New Pathway

    Now wireless operators in theAmericas and elsewhere have a

    promising new pathway to the 3Gfuture. Nokia believes that asolution employing GSM and GPRSwith evolution to EDGE and WCDMAwill allow operators to maximizeboth market share and 3G margins.

    Reevaluating the 3G Possibilities

    2

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    3

    White Paper

    GSM and TDMA offer a path of 3Gmigration employing EnhancedData-rates for Global Evolution

    (EDGE). By deploying GPRS andEDGE technology, wirelesscompetitors can lay down a clear,logical evolutionary pathway toWCDMA, which is rapidly gainingacceptance as the de facto 3Gstandard.

    Given the changing dynamics of thewireless marketplace, we now expectthat GSM and TDMA operators willimplement EDGE to meet thegrowing demand for networkcapacity and data and multimediaservices.

    To fully appreciate the potential of

    this GSM/GPRS and migration toEDGE/WCDMA pathway, it may beworthwhile to examine in more

    detail the nature and performance ofthese technologies.

    WCDMA

    Wideband Code Division MultiplexAccess (WCDMA) is the radiofrequency technology indicated forall UMTS networks, and WCDMA iswidely expected to be the dominant

    technology for 3G networksworldwide. The current multi-billion

    dollar R&D investment in WCDMAensures this technology will producean extensive terminal portfolio.Informed observers now expectWCDMA to be the de facto standardfor data-centric terminals.WCDMA supports high capacity,

    multiple simultaneous services and

    bit-rate performance of up to2Mbit/s. But as a wideband (5 MHzchannels) technology, WCDMA

    presents deployment challengeswhen implemented on narrowfrequency allocations.When evaluating WCDMAinfrastructure, operators shouldconsider system solutions thatprovide well-established Third

    Generation Partnership Project(3GPP)-compatibility. WCDMA radio

    access systems that incorporateopen, supplier-independentinterfaces allow for faster, morecost-effective rollouts.WCDMA-enabled base transceiver

    stations will boost capacity by up to75 percent, while supporting up tosix sectors and as many as fourcarriers per sector. Using intelligent

    resource management techniques,

    these new BTS solutions will movecapacity to less-loaded adjacent cellsto handle sudden traffic spikes in

    growing networks. These resourceallocation capabilities follow UMTStraffic class guidelines and Quality ofService attributes, allowing operatorsto optimize service differentiation.Modular designs allow thesesolutions to scale quickly to meet

    escalating network traffic demands.These same design advantages will

    allow these WCDMA solutions to beadapted to meet the demand forlocation-based services, personalizedmessaging and packet data trafficvolumes that will define the coming

    wireless IP networks. These advancedWCDMA systems will also supportseamless integration with GSMnetworks.

    Understanding the Technologies

    Real World GSM

    The GSM pathway is rapidly

    becoming the worlds most popular3G evolutionary route. In what may

    have been the seminal event of this

    shift, AT&T Wireless Services has

    announced plans to deploy a

    GPRS-ready GSM network

    incorporating 3G capabilities with

    triple-mode (GSM/EDGE/UMTS) base

    station functionality. AT&T Wireless

    Services is one of the worlds premier

    voice, data and fixed wireless

    communications companies, serving

    more than 15 million customers.

    Under an agreement signed in

    November 2000, Nokia Networks will

    deliver a GSM/GPRS/EDGE/UMTS-

    ready base station radio solution as

    well as network planning and

    implementation services. The

    deployment will enable AT&T

    Wireless to implement 3G, or

    Universal Mobile Telephone System(UMTS), service in the United States.

    With this move, AT&T Wireless will

    become one of the first U.S. carriers

    to offer advanced mobile multimedia

    and data services.

    That decision, and the maturation of

    key evolutionary technologies,

    demonstrates the validity of the

    GSM/GPRS with an evolution to

    EDGE/WCDMA strategy.

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    4

    White Paper

    GPRS

    For many wireless operators, GeneralPacket Radio Service (GPRS) can be acrucial transitional phase on the

    evolutionary pathway to 3G and theall-IP future. GPRS brings IP-basedservices to the mobile marketplaceand supports the convergence of

    data networking and mobiletelecommunications. As non-voiceservices begin to predominate thewireless environment, the GPRS corerepresents a secure carrier investment,a basis for 3G services, and anoptimized transition step to 3G.

    A fully featured GPRS solutionshould also comply with ETSI andANSI standards and provides fullroaming support and vendorinteroperability. GPRS functions asan ideal bearer platform for WirelessApplication Protocol (WAP) services.

    Well-integrated GPRS billingsolutions provide optimized controlof revenues generated by the

    introduction of WAP services. Thesesystems support access- andcontent-based billing, prepaid billing,and the smooth migration to

    transactional-based micro-paymentmodels. Carriers should consider anyGPRS solutions ability to integrateinto their current service and billingarchitecture.

    EDGE

    Enhanced Data-rates for GlobalEvolution (EDGE) is a narrowband(200 kHz channels) radio technologythat allows operators to offer 3G

    services without the necessity of

    purchasing a 3G license. EDGE issuitable for narrower frequencyallocations, and can be deployed injust 2.4 MHz of spectrum with 4/12reuse. EDGE can support 800/900/1800/1900 MHz frequency bands. Byenhancing the capabilities of an

    existing TDMA or GSM network,EDGE creates a smooth,cost-efficient migration pathway

    towards an all-IP network. EDGEallows operators to leverage theconsiderable advantages of GPRS,including fast-connect set-ups, data

    rates to 473 kbps, and measurablyhigher bandwidth.

    Early adoption of EDGE technologyallows carriers to offer multimediaservices in 2001, and to positionthemselves to serve the estimated 60

    percent of global mobile subscriberswho will be EDGE/WCDMAcustomers by the year 2006. EDGEprovides enhancements to GSM andsupports the use of existing sites and

    frequency bands for 3G services.EDGE capabilities improve coverageand capacity and streamline to

    migration to a full-service 3Gnetwork. EDGE also complimentsWCDMA, which industry analystsagree is emerging as the de facto 3Gtechnology standard for new orre-farmed spectrum.

    The important first steps towards 3Ghave already been taken. Here arepotential deployment scenarios forthe major wireless communicationstechnologies.

    GSM. Considering the market andevolutionary advances made by thistechnology, GSM is now a viablealternative for operators throughoutthe Americas in both 800MHz and1900MHz. GRPS provides the corenetwork backbone for EDGE, whichwill be the 3G network standard for

    deployments in existing spectrum,and for WCDMA, which is recognizedas the 3G standard for new orre-farmed spectrum.

    Current-generation base stations canbe converted to EDGE and WCDMAwith the quick and easy replacementof a radio card, and Nokias GSM800incorporates native EDGEcapabilities. GSM coverage and

    roaming capabilities will beincorporated into WCDMA handsets.In the 2003 to 2004 timeframe,IP-based multimedia services will beavailable to operators throughoutthe Americas.

    TDMA . TDMA operators have two

    clear options available in the GSMenvironment: GSM/GPRS at 800 MHzand GSM/GPRS at 1900 MHz. Theseoptions give TDMA operators a

    springboard to packet-datatechnologies and will allow them todeploy data services to theirnetworks more quickly. Thesepathways allow TDMA operators toopen a clear evolutionary pathway

    to 3G and to use their new GSMcore as the basis for delivering 3Gservices.

    If an operator has built out all 800MHz properties and hasunder-employed 1900 MHz licenses,they can deploy GSM/GPRS 1900

    this year to gain immediate accessto the faster data speeds of thispacket-data infrastructure, and thenadd EDGE 1900 MHz capabilities as

    Tracking the Pathways

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    In the fast-moving landscape ofwireless communications, a numberof misconceptions have arisen

    regarding these various 3Gevolutionary options. To betterunderstand the pathway based onGSM/GPRS with evolution toEDGE/WCDMA, these misconceptionsmust be addressed and corrected.

    It has also been said that EDGE is adata solution only and does not offersignificant voice capacity. The truthis that any timeslot on a currentNokia EDGE TRX can be used in GSMvoice mode Full Rate, Enhanced FullRate or Half Rate codecs with Nokia

    EDGE TRX can support the dynamicallocation of GSM/GPRS/EDGE on aper time slot basis. This givesoperators the ability to flexiblydeliver voice and data services inaccordance with subscriber demand.

    Continued standardization ofAdaptive Multi Rate (AMR) isexpected to produce additional

    enhancements to the EDGE voicecapacity. Nokias EDGE TRX providesdynamic GSM/GPRS/EDGE support ona per-time-slot basis to giveoperators economic, customer-drivenvoice and data service capabilities.

    Narrowband CDMA performancedepends on multi-path channels.CDMA typically provides bettercapacity in long relay spreadchannels. Downlink fast powercontrol improves CDMA capacityperformance in short delay channels,

    but reduces capacity in long delayspread channels.

    While some believe it requires 8 MHzto deploy an initial EDGE solution,EDGE can be deployed in an existingGSM network with no additionalfrequency or infrastructure

    requirements. Even in a GSMgreenfield situation, EDGE can bedeployed in 2.4 MHz of spectrum.

    In some circles, it has been said thatCDMA 1xRTT delivers higher spectralefficiency than GSM/EDGE and thatthis difference translates into highercapacity and faster data rates. Themost recent implementation of GSMfeatures such as Adaptive Multi Rate

    (AMR) codec, Frequency Hopping andAutomated Planning that serve tomake GSM competitive with CDMAon these issues. GSM systems nowin development will also introduceDynamic Frequency ChannelAssignment for even greater spectral

    efficiency.

    Contrary to one popular industrymisconception, EDGE does notrequire high-dollar networkinvestments or the acquisition ofnew spectrum. One key advantageof EDGE is that it can be deployed to

    they become available near the laterpart of 2001. GSM/GPRS 1900 termi-

    nals, which will be available laterthis year, will be data-capable for

    1900 MHz markets and will deliverGSM data/voice roaming on 1900MHz networks. In the 800 MHzproperties the deployment ofGSM/GPRS/EDGE can start at theend of 2001.

    TDMA operators can elect to beginto implement GSM/GRPS/EDGE 800MHz solutions in selected regionstowards the end of 2001.GSM/GPRS/EDGE 800 and 1900 MHz

    terminals are expected to beavailable in 2002, as well as TDMAand GSM interoperable terminals.In either case, these operators may

    add WCDMA as a complimentary 3Gtechnology in new or re-farmed

    spectrum.

    CDMA. The CDMA marketplacereflects the previous dominance ofIS-95A at 14.4 kbps, and the adventof cdma2000 1x that will provideacceptable current-generationpacket data services. The 1Xev-DO

    (data only) CDMA standard isavailable now, and deployments maybegin in 2002. The 1Xev-DV (dataand voice) CDMA standard isexpected to be available by the endof 2001, with a number of

    technology options still underconsideration. A growing number ofindustry observers, however, pointout that as EDGE and WCDMA bring

    higher data speeds to the TDMA/GSMworld, fewer 3G service licensees will

    take the cdma2000 route.

    CDMA also does not offer the globalroaming or economies of scaleavailable from the GSM pathway.CDMAs advertised 2Mb/s data ratesapply only to short range and indoormodes that may or may not be

    supported by vendor solutions. Inreality, there may actually be onlyminor performance differencesbetween EDGE, WCDMA andcdma2000, because user experiencedepends heavily on cell engineering,

    location, power usage, sector loadand other variables.

    Market Misconceptions

    White Paper

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    enhance the strengths of an existingGSM network. A world-class EDGEsystem can be implemented through

    rapid and affordable softwareupgrades and the addition ofEDGE-capable TRXs to existing basestations. EDGE also uses the existingGPRS core infrastructure and doesnot require the deployment of newcore network elements.

    Because EDGE/WCDMA are based ona common GPRS core network,operators can plan a smooth andcost-efficient evolution fromGSM/GPRS to 3G capabilities. Inmost implementations, the spectrumrequired to deploy an EDGE TRX isthe same as adding an ordinary GSM

    TRX. Leading EDGE solutions offerbroad backward compatibility withexisting network hardware andsoftware systems.

    GPRS or EDGE solutions do notrequire the addition of a proprietary

    network core. The GPRS core is builton interfaces that are open and fully

    standardized. This approach allows

    carriers to seek competitive,multi-vendor solutions and tomigrate seamlessly from GSM to

    EDGE with no change to the GPRScore or interfaces. This opennessand interoperability has led to thesuccess of GSM as the globalwireless standard.

    Another misconception is that GPRSand EDGE offer identical data rates.

    In fact, EDGE offers data rates of~20 kbps per timeslot, compared to~10 kbps for GPRS even in poor C/Iconditions. In more favorableconditions, and when supported byintelligent radio enhancements,EDGE can deliver data rates of~50-60 kbps per timeslot, or up to

    three times the ~20 kbps rate ofGPRS under the same conditions.When deployed with eight full-speed59.9 kbps timeslots, EDGE canachieve maximum data user rates of473 kbps.

    Some have implied that EDGE is atbest an interim 2.5G solution, and

    that WCDMA will eventually

    supplant EDGE deployments. Inreality, EDGE can provide data ratesof up to 384 kbps as defined by the

    ITU for 3G services. EDGE candeliver an average of 40 kbps pertimeslot. With typical EDGE mobiledevices using three timeslots fordownlink, that adds up to 120 kbps,which is sufficient for the mostpopular data services such asstreaming. The EDGE solution is a

    proven, viable radio accesstechnology that can and will play apivotal role in future all-IP networks.

    Finally, contrary to someassumptions, EDGE is the idealchoice for 3G in existing bands,because it uses the same 200KHz

    channel as GSM. Operators whochoose EDGE for 3G will not dependon new spectrum auctions, and canevolve with confidence from aproven GSM foundation. WCDMA isthe ideal choice for new or re-farmedspectrum, and because EDGE and

    WCDMA are complimentary, theycreate a seamless pathway for

    greenfield opportunities.

    Benefits of GSMProduct Availability . Thanks inlarge part to the fact that GSM isthe largest 2G protocol, serving more

    than 450 million subscribers, andthat WCDMA/EDGE is emerging as

    the accepted 3G protocol, thisevolutionary pathway offers clearadvantages in the depth and qualityof its terminal, infrastructure andapplication portfolios. Theeconomies of scale associated with

    this global standard ensure goodselections and competitive prices forthese 3G products.

    Standardization. ETSI hasestablished comprehensive standardsfor GSM technology, ensuring the

    interoperability of terminals andinfrastructure. Similarly, the Third

    Generation Partnership Project(3GPP) has served in this same roleduring standardization activitiesaimed at UMTS, working to ensurethat global roaming andinteroperability can be provided

    through a highly standardized 3Gframework. These standards allowoperators to select base stations and

    other equipment offered by anumber of competing vendors. Anopen, standardized technology also

    ensures more reliable roamingperformance and the smooth

    compatibility of elements acrossnetworks and geographic regions.

    Superior Features. GSM was theincubating technology for many oftodays most popular value-added

    wireless services. In fact, featuressuch as location-based services,over-the-air provisioning and others

    White Paper

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    were originally specified for GSM,which is by far the largest deployedwireless technology in the world.

    Because GSM is a truly globaltechnology, value added servicessuch as SMS and voice mail canroam with the subscriber, greatlyincreasing operator revenueopportunities.

    Notable features available via GSM

    include:

    SMS chat, picture messaging,ring tones, logos/icons

    Circuit switched data (9.6 kbps to14.4 kbps to HSCSD x times14.4 kbps)

    WAP Packet data (GPRS and EGPRS) Location based services (E-OTD,

    Cell ID and TA and GPS) Accessories (handspring visor

    GSM module, telematics andmore)

    SIM card (security, M-commerce,SIM ATK, Class 2-SMS handsetconfiguration control, and

    distribution) GSM Supplementary Services Integration with SyncML, MMS,

    Java, EPOC terminals

    Global Reach. GSM is the mostextensively used digital cellularnetwork technology in the world,serving more than 450 million

    subscribers worldwide and withsuccessful deployments in over 100countries. This extensive deployedinfrastructure ensures the broadestpossible roaming coverage forGSM-based 3G services.

    White Paper

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    Figure 1. Global reach of GSM

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    Summary3G Evolutionary Imperatives

    Nokia offers a clear, logical vision of3G evolution for GSM, TDMA and

    CDMA networks. The operators whosucceed in 3G will be those who canreadily adapt to the shifting valuechain brought by mobile Internet.Because airtime profits are declining,creative thinking about how togenerate new revenue streams is

    needed. Nokia's objective is to

    increase operator ARPU (averagerevenue per user) by up to 100%through the incubation and deliveryof innovative 3G applications. Webelieve our success - and the successof our partners - will be based on

    three factors:

    Speed. Speed in building acost-optimized 3G network, speed indeveloping applications, and speed inanticipating and reacting toconsumer needs.

    Recognizing Value. Pinpointing the

    relevant applications among the hostthat will be launched. Creating abrilliant service portfolio and thenpromoting it to prompt greater usage.

    Cooperation. Sharing competenciesacross industry boundaries. Creating

    solid yet flexible partnerships thathelp all parties to profit whilenavigating the intricacies of 3G,end-to-end mobile applications, andrapid changes in the consumermarket.

    In short, success in 3G will comefrom the hundreds of leadingInternet content providers,application developers, and systemsintegrators working with Nokia toguarantee the richness of 3Gservices.

    The GSM-based evolutionary strategydescribed in this white paper studysupports this strategic, profit-drivenapproach to 3G evolution. By

    rethinking the migratory path, andby considering the GSM/GPRS with a

    migratory path to EDGE andWCDMA, operators throughout theAmericas can maximize both theirimmediate performance and theirlong-term 3G opportunities.

    Acronyms

    3G Third Generation Mobile Telecommunications

    3GPP Third Generation Partnership Project

    AMR Adaptive Multi Rate

    ANSI American National Standards Institute

    CDMA Code Division Multiple Access

    EDGE Enhanced Data rates for Global Evolution

    ETSI European Telecommunications Standards Institute

    GPRS General Packet Radio Service

    GSM Global System for Mobile Communications

    TDMA Time Division Multiple Access

    UMTS Universal Mobile Telephone System

    WCDMA Wideband Code Division Multiple Access

    White Paper

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    Copyright Nokia Networks 2001. All rights reserved.

    No part of this publication may be copied, distributed, transmitted, transcribed, stored in a retrieval system, or translated into any human or computer languagewithout the prior written permission of Nokia Networks.

    The manufacturer has made every effort to ensure that the instructions contained in the documents are adequate and free of errors and omissions.The manufacturer will, if necessary, explain issues which may not be covered by the documents. The manufacturers liability for any errors in the documents is limited

    to the correction of errors and the aforementioned advisory services.

    The documents have been prepared to be used by professional and properly trained personnel, and the customer assumes full responsibility when using them.

    The manufacturer welcomes customer comments as part of the process of continual development and improvement of the documentation in the best way possiblefrom the users viewpoint. Please submit your comments to the nearest Nokia sales representative.

    NOKIA is a registered trademark of Nokia Corporation. Any other trademarks mentioned in this document are the properties of their respective owners.

    White Paper

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    Nokia Networks6000 Connection DriveIrving, Texas, USA 75039

    Phone: 800-547-9810Fax: 972-894-5050www.nokia.com