Presented by: Paul Ferguson, Cizmic Consulting

1. EMERGING TRENDS AND TECHNOLOGIES Presented by: Paul Ferguson, Cizmic Consulting Atlantis, Paradise Island, July 2008

2. Topics • Industry Trends • Industry in Transformation - shift • New converged telecom and “infotainment” industry • Increasing complexity – all connected • It is all about the customer … • Emerging Technologies & Implications • IPTV and “triple play” • Fiber-To-The-x • VoIP • The Road to 4G: WiMAX versus LTE • Mobile TV • Fixed Mobile Convergence • Is there a new role of the Government ? • Regulatory • e-Government and e-Society

3. 1 Industry Trends Cizmic Consulting - BTC Strategic Considerations

4. Industry Transformation Late 2000’s Early 2000’s Early 90’s Late 90’s Connectivity Scale Post-Bubble Empowerment • Mobile 3/4G • Smart devices • Content anytime, anywhere • Convergence • Mobile 2G • Large network build-outs • Internet bubble • VoIP • Mobile 1G • Ethernet • IP starting • Internet takes a hold • Mobile 2.5G • Broadband ubiquity • Triple/Quad Play • Social networks

5. Industry Transformation New converged telecom and “infotainment” industry Integrated & Converged Bundles Old telecom industries Stand-Alone Services Connectivity Connectivity + Content Industry transformation well under way

6. Industry Shift Industry Ecosystem Ecosystem Shift Subscriber Subscriber Service provider type and service definitions determined by technology Subscriber and content moving closer together applies pressure to conventional model Content Content

7. From Kilobits….Megabits……Gigabits Yesterday Today e.g. 28Kbps – dial up e.g.5Mbps – ADSL (always on)

8. Speed matters <--Fibre-To-The-Home--> (FTTH) xDSL, 3G & WiMAX Dial Up & 2G 1st Gen Next Gen 10 Mbps 100 Mbps 1.5 Mbps 1 Gbps SIZE 0.5Mbps Photo 63s 3.2s 21s .3s .03s 4 MB .03s 4 MB .3s 63s 3.2s 21s Music – Download 10m 8s 1m 31 s 9.1s Podcast – News 30m 24s .9s 114 MB 1.6s TV Show – 40 min 200 MB 53m 30s 17m 46s 2m 40s 16s Movie – Apple TV 1.5 GB 6h 39m 20m 12s 2m 2h 13m 3m 20s 20s 33m 20s 3h 42m 11h 10m 2.5 GB Movie – Best Quality

9. Bandwidth Requirements: New Discontinuities Hundreds of Mbps Ultimate Broadband 30 Mbps and up Advanced Broadband 20 to 30 Mbps Tens of Mbps BANDWIDTH Competitive Broadband 10 to 15 Mbps Ones of Mbps 1st Gen Broadband 200 Kbps to 5 Mbps Hundreds of Kbps Narrowband 9.6 to 56 Kbps Tens of Kbps Mid 90s Mid 00s TIME Speeds offered world-wide now heading into 10’s Mbps (requirement for IPTV)

10. Basic Service Impersonal Single Service Best Effort Low Speeds Fixed Only Single Device Nice to Have Service Changing Role of Broadband “OLD” VERSUS “NEW” BROADBAND “NEW” BROADBAND “OLD” BROADBAND • Full Service • Personalized • Multiple/Blended Services • Guaranteed Performance • Very High Speeds • Fixed and Mobile • Multiple Devices • Must Have Service Broadband has evolved to be a necessity

11. “Three Screens of Life” • There is a recognition that more customers are seeking solutions that will allow them to move and share information seamlessly between their communication devices. • They want more control over how they experience content and they also want a compelling experience across their three primary “screens” - their television, personal computer, and mobile device, commonly referred to as “the 3 Screens of life”.

12. Consumer expectation is changing … what is at stake HIGH • “Triple/Quadruple Play” … a holy grail for carriers • Customers expect one bill for multiple services, with deep discounts for loyalty • Currently multiple individual solutions of voice, video, and data • Triple Play struggling to gain acceptance because the price is approximately 2 – 5x more what people at the bottom of the socio economic pyramid can afford LOW • Average Monthly Triple/Quad Play “connectivity” costs is approximately $120

13. … for Subscribers & Service Providers Speed, convergence and bundling of services leads to: Subscribers Subscribers Subscribers Service Providers Control Control Control Customer Loyalty Customer Loyalty Customer Loyalty Convenience Convenience Convenience Competitive Advantage Competitive Advantage Competitive Advantage Customization Customization Customization Churn Churn Churn + + + i.e. Market i.e. Market i.e. Market = = = Mobility Mobility Mobility Differentiation Differentiation Differentiation Operational Costs Productivity Productivity Productivity Profit Margins Profit Margins Profit Margins Satisfaction Satisfaction Satisfaction Revenue Revenue Revenue Savings Savings Savings Subscription Subscription Usage Usage Usage Subscription

14. 2 Emerging Technologies Cizmic Consulting - BTC Strategic Considerations

15. IPTV… The key to service provider Triple Play • IPTV (Internet Protocol Television) - the delivery of both broadcast and/or on-demand TV and video over an IP network (Ovum 2007). • How big will the IPTV market be? Estimates show that IPTV subscribers will balloon from 3.7 million in 2005 to over 40 million by 2010 (worldwide), with Europe leading the market. The industry's revenues could reach nearly US$12 billion by that time. • For residential users, IPTV is often provided in conjunction with Video on Demand and may be commercially bundled with Internet services such as Web access and VoIP for a "Triple Play" (adding mobility for a "Quadruple Play"). Example: AT&T is preparing to take on the big cable operators in major U.S. markets with its IPTV architecture, using fiber to the node (FTTN) technology, delivering at least 24 Mbps using ADSL 2+ and/or VDSL. Still, the battle is for more than just the television; it's a struggle for the single entry point into the home.

16. Building Blocks21st Century House • Cost vary depending on several factors: • Network Topology • Building Density • Aerial vs Buried Fiber • Construction/Labour Cost Homes Connected US$700 – 1,300 Broadband Modem WLAN Computer VoIP Homes Passed Security Monitor US$500 – 1,600 HDTV Careful evaluation of fiber based business case required

17. VoIP (Voice over Internet Protocol) • What is VoIP? • VoIP or Voice over Internet Protocol, also known as Internet voice, allows consumers to make voice calls over their broadband connection using a regular phone with an adaptor, an IP phone, or a PC • IP technology allows services such as voice and video to be treated exactly like data, namely as applications, that can be transmitted quickly and simultaneously over IP networks at significantly lower costs than those of the PSTN. Personal Computer Telephone Modem Phone Adapter Internet Telephone Personal Computer

18. VoIP … the Industry Hype • No telecom technology in recent history has been more disruptive to the telecom industry than VoIP. ..In 2004 it was VoIP over DSL with Vonage leading the way… in 2005 it was free voice from Skype, in 2006 was cable VoIP. • VoIP consumer users currently stand at about 4 to 5% of US and European households. • Business customers show strong demand for VoIP services, but it is not clear that all operators are ready to meet their requirements. • Although many consumers have heard of VoIP few are interested. Operators plan to capitalize on consumers’ desire to save money in the short term. • In the future, successful operators will use VoIP networks to deliver mass service customization and accelerate service development. Operators, vendors, and the media are hyping VoIP

19. The Road to 4G: WiMAX versus LTE • The Road to 4G: WiMAX versus LTE (long-term evolution) • WiMAX - Worldwide Interoperability for Microwave Access (WiMAX), as defined by the WiMAX Forum, is "a standards-based technology enabling the delivery of last mile wireless broadband access as an alternative to cable and DSL." In other words, WiMAX technology enables the transport and delivery of wireless data from point-to-point links, to full mobile cellular type access, in several formats, and across long distances. • WiMAX has a time to market advantage over LTE -- the standards are ratified and equipment is certified, a good two years ahead of LTE. Although, the reality is that (a) consumers will not have access to this technology via access points, laptops, dual mode cell phones, etc. for some time; (b) wireless access via 802.11b/g is more than sufficient for most users both in-home networking, internet access and even VoIP calls • Speed: tens of Mbps • Availability: 802.16 d/e now; • Frequency: various, most common 2.3 GHz to 3.5 GHz • Main Supporters: multiple vendors/operators(Sprint)

20. The Road to 4G: WiMAX versus LTE • LTE has the advantage being supported by a significantly larger mobile operator base allowing them to leverage some parts of their embedded infrastructure. LTE like WiMax, is a flat IP architecture and OFDM based (orthogonal frequency-division multiplexing), which have higher efficiency. It is planned to be deployed in lower-frequency bands (from 700 MHz to 2.6 GHz) which minimizes the number of base stations required for coverage and incrementally reduces capital and operational expenditure. • Speed: tens of Mbps (similar to WiMAX in terms of data rate) • Availability: general consensus - commercial deployment in 2010, but it likely will not gain significant traction until the 2013; mass adoption will occur around 2015 • Frequency: from 700 MHz to 2.6 GHz (incl. cellular and PCS bands, to be co-located with legacy networks) • Main Supporters: multiple vendors and operators (i.e. China Mobile, Vodafone, Orange, T-Mobile International, KPN Mobile, and NTT DoCoMo) WiMAX → Niche Underserved Markets LTE → Cellular Evolution

21. Mobile TV • Mobile TV - Broadcast TV on a mobile device • Around the world wireless carriers have been building their high-speed wireless network infrastructure, creating the scene for critical-mass mobile TV. • The real issue is not whether mobile TV will be disruptive, but which business model will win. The business models could take the shape of a cable model (different content packages with providers getting a percentage based on subscribers), an a la carte model (pick your own mobile TV channels), or an advertisement-based model (i.e. ESPN assembling all those sports fans for advertisers). Hardly any wireless service provider has a revenue management or assurance program in place for mobile TV revenue distribution

22. Fixed-Mobile Convergence • A killer app that's got all service providers' attention is fixed-mobile convergence (FMC). A particularly attractive spin is an integrated Wi-Fi/mobile wireless phone, using mobile wireless on cellular infrastructure when you are out and about, and Wi-Fi for free when you are in your home or office. • Here's the basic problem with this stellar vision: what's in it for mobile wireless providers? They get 30 percent of their revenue from users who are in reach of an office phone or are at home, often without wireline service to begin with. Besides, are mobile wireless providers going to end up subsidizing the dual-mode Wi-Fi cellular phone, only to see revenue shrink? Yes in some selected environments, and no otherwise.

23. 3 • Is there a new role of the Government ? • What are the options? • Stay out of the way • Regulate the telecom to ensure competitive parity • Eliminate the digital divide. Similar to roads… should Governments provide free basic communications infrastructure ? • Use technology to become more efficient e.geGovt initiatives Cizmic Consulting - BTC Strategic Considerations

24. e-Government and e-Society Attractive for Businesses • e-Government and e-Society The establishment of an e-government infrastructure is a proven catalyst to help create a business-friendly environment by streamlining the interaction and improving the interface between government and business. By cutting out redundancies in procedures and emphasizing immediate and efficient delivery of services, e-government creates the conditions that attract investors/ investment. Willingness of Government to consistently push e-Gov and e-Society agenda for increased efficiency, increased communications between the agencies and the citizen or a business, conducting transactions, governance, etc. requires a ubiquitous broadband, government backbone, new applications, human capital, among other.

25. e-Government and e-Society Examples from around the world Germany United Kingdom Canada Italy United States Singapore Trinidad & Tobago Dubai Switzerland

26. e-Government and e-Society How to deliver an e-Vision

27. Conclusion • Emerging technologies pose both a threat and opportunity to existing operators and vendors • The key to successfully deploying emerging technologies is the development of an investor grade business plan that addresses the need of the customers

28. Fiber-To-The-x FTTN – Fiber to the Node DLC FTTC – Fiber to the Curb DLC FTTB – Fiber to the Building FTTH – Fiber to the Home Need to match access to the target segment(s)