title of presentation second line of title subheadings (if needed)

Monetizing Mobile Broadband Networks and driving consumer adoption

A. Sethuraman, CMO

15 October, 2008

2 | Broadband Open Access Networks | October 2008 All Rights Reserved © Alcatel-Lucent 2008, CAR7526080906

The mass broadband challenge

Consumer Adoption Curve

Relative weight of broadband Internet expenses compared to the GDP per capita on one year

Mass broadband is the next stage of growth


How to accelerate broadband adoption in emerging markets

Addressing customers’ issues to delivering broadband to the mass market

Stimulate usage

Capture usage

AccesAccesss

Network Network and and

transportransportt

ApplicationApplications and s and

service service deliverydelivery

ContenContentt

Entry user

Internet user

Advanced user

Value propositions across end-to-end solution


2007 2008 2009 2010

Outlook

WiMAX: enabling universal broadband

From early launches

From early launches

to full scale services

to full scale services

High-speed Internet and

voice

and mobile mass marketand mobile mass market

PDA

Express cardOutdoor

Indoor

PCMCIA

Low-cost indoor

UMPC

Laptop

Multimode handsets

and smart phones

PMP, gaming

Low-costphone

Bridging of the digital divide in high-growth economies,Enabling mobile broadband in mature economies

Mobile Internet,Interactive multimedia


Who will pay for WiMAX services

ENTRY USERS INTERNET USERS ADVANCED USERS

Increase Mobile & Broadband Penetration

Enable Mass-Market Broadband

Deliver a User-Centric Experience

Broadband & VoIPCommunity Centers

Affordable Broadband Services

Personalized and Blended Services


Services Transformation

Innovative Services for Each User Segment





Broadband & VoIPCommunity Centers

ICT ApplicationsUser Generated

Content


A first Step before Personal Broadband

Public – Private Partnership

Broadband & VoIP Community Centers using WiMAXReady for expansion to small cities and rural areas

Description•Mobile or fixed location with access to commercial & public services using internet or voice•Charging: per public service transaction, per application use, per time…

Business Model •Commercial services = internet café, on-line gaming, phone booth, movie/audio theatre, publishing…•e-learning services: remote education, digital libraries …•e-government services: pay tax, id-photos, birth certificate...

In-building

Mobile

Benefits•No move to administration for public services•Low-ARPU Voice•Provides communications to develop SMEs & local commerce•Business opportunity for entrepreneur

Alcatel-Lucent Solution•Broadband Wireless Access•IP transformation if required•ALU end-to-end integration •Full eco-system:

•low cost PCs / CPEs•ICT Applications•Convergent Payment suite

•Business consulting


E-Governement Enhance services to citizens

Alcatel-Lucent End-to-end Integration

Provide access to key government services remotely

Description

•Public information broadcast in unserved areas

•Single interface to all public services:

•Digital Libraries,

•Info-kiosks,

•Birth certificates…

Business Model

•Web based system government sponsored

•Access is usually from a broadband community center

•Public Private partnership

Benefits

•Reduces the number of civil servants needed to dispense services

•Saves citizens time & money

•No need to travel to capital cities

Alcatel-Lucent Solution•Broadband access wireline/wireless•Data transport infrastructure (IP)•IT Application servers (voice, data)•Turnkey services, Financing, Consulting

Example of Reference:Fiji Islands: e-Gov project - Alcatel prime contractorFiji government estimates cost savings of up to US$5.2 million per year; Reduction – by half -- of annual telecom expenses (from 9M Fiji Dollars to 4.5M).Chinese EXIM bank loan + Government investment: US$20M


E-Education Broadcast a multimedia learning experience

Take the social and economic benefits of ICT

Make educational services accessible for anyone, from anywhere

Description

•Set-up a virtual classroom thanks to WiMAX wireless capabilities

•Bring educational material in rural areas & small cities

•Connectivity of schools/universities/ professional training

Business Model •Web based system government sponsored•Access is usually from school but could be done from broadband community center

Benefits•Enriched learning experience (video, audio, collaborative learning, digital library...)

•Integrate broadband as part of youth’s life style to drive pervasive adoption•Key pillar of advanced education policy within the country

Alcatel-Lucent Solution•Broadband access wireline/wireless•Data transport infrastructure (IP)•Integrator role•Portal offering access to course material, forums, search engines •Multimedia portal for training(e.g partnership with SET Fasttrack)

•Example of Reference: Jordan: 3000 schools / 8 universities - US$ 70M Public Policy •1.5 Million students and faculty with access to reliable E-learning•Indirect benefit: Increased broadband coverage to country overall


E-Health Improve people’s quality of life

Connectivity, business models, ecosystem partnership

Deploy efficient telemedicine and Improve Diagnosis

Description

•Allow underserved areas to benefit from remote medical skills

•Share medical information between hospitals, labs, etc.

Business Model

Benefits•Provides access to experts to facilitate diagnosis and to monitor health•Reduces the cost of providing healthcare – no excessive travel costs

Alcatel-Lucent Solution•Broadband access wireline/wireless•Complete group of healthcare solutions•Integrator role

Some References:•US: Verizon 24/7 home health care •Applications: e-mail and patient record synch•Time savings: 57 min/day per nurse; Patient record synch. 87% higher

DIAM Project in Senegal

Medical imaging transfer for

tele-diagnosis of tuberculosis

Pilot in West Africa (2006)

Technology: DSL and WiMAX

Sustainable business case

(savings on films) in addition

to public health benefits


E-Business Boost Economic Development

Creates business opportunity for entrepreneurs

E-Trade / E-Agriculture

Description

•Acquire real-time market information and knowledge

•Facilitate business transactions and commerce

Business Model

•Government sponsored systems – where government hosts web site.

•Subscribers get information free of charge, but pay for access

•Public Private Partnership Benefits

•Create adequate communications environment for local entrepreneurship

•Lowers travel costs, widens access to new sales channels

•Real-time market information for small entrepreneurs enable savings

Alcatel-Lucent Solution•Broadband access wireline / wireless•Turnkey services, Financing, Consulting

•Messaging (SMS, push technology)

•GPS, GSM.. (localization), Presence

•Integrator role Some references•Manobi, e-Trade for Micro-Business Senegal and South Africa: Manobi claims that farmers are able to increase their income by at least 30 percent, •Café Malongo / Comcel (WiMAX + RFID + Services) - Cap Rouge Haïti (2007)


Alcatel-Lucent User Generated Content service...Better Serve Communities

User Generated Content

ease the creation and

broadcast of local content

Photo/video/RSS Feed

Create adequate communications

for developing local communities:

SMEs, Villages, NGOs, farmers,

fishermen, school, hospitals,

administrations, sport clubs,

internet shops...

Benefits:

Boost social & economy

Widens access to new channels:

sales, education, health... On

several channels: PC, mobile,

mobile TV

e-Health

SchoolsVillages SMEs

Generated Content


Alcatel-Lucent User Generated Content service

6020 Cross Media Hosted Multimedia Services

A white-label service for personal & community generated content, premium content and distribution, transaction enablement and advertising, offered in revenue sharing model

Corporate & Consumer services:

Internet over GPRS/EDGEGPRS/EDGE, CDMA 1xRTT/EvDO, WiMAX, WCDMA/HSPA; wireline DSL/PON) Premium services :SMS, MMSMultimedia Content ManagerMobile e-mail, address book, agendaMobile TVUser Generated Content PortalVideo & Music

5 modulesMobile interactive TV - HOSTED version of 5910 Mobile interactive TVMultimedia Content Manager – HOSTED version of 5920 MCMInternet Video Video on Demand service to broadband users on PC & Portable Multimedia Player (Archos, PC, Smart Content Dist, Content neg)

Personal & Community Sharing User generated content, Private, public and visitor portals, Videos, images and RSS mgmt,

Advertising: multi media campaign management, accurate targeting








Affordable Broadband Services

•Broadband Internet packages•Low-cost calling services

•Flexible billing and charging•QoS differentiation


How can I offer affordable broadband packages to the mass market?Alcatel-Lucent offering a market advantage to define your packaging

Customer’s Demand Increased uptake of broadband

services Services and payment packages

valued for the targeted end-user segments

Access to low-cost devices

Premium broadband$25 US for 1 Mb/s

Internet (home zone/unlimited)

plus voice offer

Broadband starter$15 US for 512 Kb/sInternet (home zone)

Unlimited time(download limit: 1 G/Mb)

Prepaid 256 Kb/s with cards

starting at $5Internet (homezone)

(per minute plus download limits by card)

Examples of package proposals:

Triple play$40 US for 2 Mb/s

Internet (home zone/unlimited)

plus voice offer and VOD

Pro/office$90 US for 2 Mb/s

Internet (home zone/unlimited) plus SLA plus

multi-user voice and Web hosting

Pro/nomadic$65 US for 512 Kb/s

Internet (nomadic/unlimited) everywhere plus voice offer

AdvancedUser

Entry User

InternetUser

Market Advantage Program Packages definition: Number of packages, speed

(up/down), volume cap, CPE-type, number of users

Fast Forward: over 5 years of practices/more than 50 operators Consultative Marketing Program to optimize the

broadband business of the service providers1.Broadband strategy – Increase profitability2.Broadband marketing – Educate your customers3.Broadband operations – Operational excellence4.Broadband network economics – Access

optimizatione.g Sistema, Innove, Telkom South Africa, Telkom Austria, PLDT,

Telemar, Telmex, Svyaz Invest, KA3AKTENEKOM,Telkom Indonesia








Broadband services for residential users•Video/music•Mobile TV/IPTV•Advanced communications and messaging•Multimedia content manager•Video on demand

Broadband services for business users•Managed communication services•Advanced communications experience anytime, anyplace•Mobile office


How to monetize broadband network to residential high-end users?

End-to-end content delivery to multi-screen

End-to-end integration to maximize quality of experienceEnd-to-end integration to maximize quality of experience

Content provider

s

End users

Unicast Multicast Interactivity

Mobile broadca

stnetwork

Mobile broadca

stnetwork

Mobile networ

k

Mobile networ

k

2.5G/3G/HSPA/EvDOWiMAX/LTE

IPTV networ

k

IPTV networ

k

Roaming

Partners

IPTVPlatfor

m5900

AmigoTV

IPTVPlatfor

m5900

AmigoTV

Mobile TV

Platform

5910MiTV

Mobile TV

Platform

5910MiTV

Internet

Internet

Web TV

6020 CrossMedia

Web TV

6020 CrossMedia

Com

mon

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nab

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m5350 AS

5060 ICS

IMSPlatfor

m5350 AS

5060 ICS

TPSDA

META

DSL/PON

Broadest experience and in-house catalog of solutions to deliver multi-screen experience


How to monetize broadband network to business users?

Three major components

1.Differentiated broadband connectivity

Premium download speed Symmetric bandwidth Multi-user CPEs Nomadic options Managed security

2.Differentiated Customer Relationship Management

Dedicated help desk On-site assistance Service Level

Agreements

3.Dedicated applications: communications

Voice over IP and hosted communications

Hosted collaboration Mobile office Video surveillance

Managed LAN/WAN Managed IP-VPN Managed security Hosted data services

Employee and customer

interactions

Employee and customer

interactions Communications CommunicationsNetworkingNetworking

Voice VPN Hosted/virtual PBX Video surveillance

Mobile e-mail, Unified Messaging and PIM

Conferencing and collaboration

Presence and location-based services

Hosted applications: recommended model to address small businesses


$$$IMS over WiMAX Enables

IMS over WiMAXTo go beyond initial interest delivering rich multimedia applications

CommodityInternet Service

$B/W-based

Tiered Services

boost

Legal download

Parental control, firewall

Carrier VoIP, P2P control

On-demand bandwidth

E-mail, browsing

flat rate

“The IMS piece is just so critical,” said Raoul Fontanez, CEO of Onemax GreenField in Dominic Island. “We needed a system that is fundamentally built to handle the

sophisticated interaction in a fast growing multi-vendor environment.”

WiMAX Enables

Rich Context Aware Communication ServicesMultimedia Applications

VoIP Plus

Business services for enterprises

Blended services


WiMAX Can be deployed easily and rapidly (wireless and IP)

Emerging new applications with WiMAX

Application Using WiMax - Vertical Markets

MetropolitanMetropolitanSecuritySecurity

AirportsAirports

High-Voltagepoles

Utilities

High-Voltagepoles

Utilities

Airports, Harbors, Railways• Improve tracking capability for

containers, luggage

• Increase productivity/responsiveness of onsite workers

• Improve security and surveillance

• Larger coverage and more security than wireless fidelity (WiFi)

Homeland Security and Law Enforcement

• Temporary networks (e.g., for recovery after disasters, such as earthquakes, for troopers/police)

• Emergency rescue (e.g., 911)

• Security (e.g., video surveillance/identification) and radar reports

Large Enterprises• Increase

productivity/responsiveness of onsite workers

• Bypass the public service provider if several locations spread across one metropolitan area

• Superior security/authentication vs. WiFi

Power Utilities, Oil & Gas Cies

• Telemetry

• Increase productivity/responsiveness of onsite workers

• Penetrate the public telecom market

• Can reuse existing assets: poles, fiber


SPsThink B2B – Think partnership & advertising

RENT Mbps to companies devoid of spectrum

Think B2B with WiMax Wholesale Opportunity

Description• Wholesale allows the spectrum

owner or NAP to share a WiMAX infrastructure between several NSPs

• The Network Service Provider (NSP) provides IP connectivity and WiMAX services to WiMAX subscribers with a Service Level Agreement

• The Network Access Provider (NAP) provides WiMAX radio access infrastructure to one or more NSP

Benefits• Enhance value to your sites to attract

business partners• Control the access in hot spots

business zones with High QoS• Dramatic reduction of subscriber

acquisition costs• Exploiting assets from non-telcos

brands• High usage of Value-Added Data

Services in hot spots

Alcatel-Lucent Value Proposition• Take full benefit of your spectrum

owner’s position i.e. “Negotiation power”

• One stop shopping with Alcatel’s best-in-class WiMAX solution

• From site survey, design, installation up to optimization and maintenance

Possible Business models• Video camera surveillance on

demand• Telemetry (building, control

systems...)• In-building public and private

WiMAX• Agreement with other SPs• Public safety services• Opportunity for advertising

company to ensure that as many people as possible have a chance to see their online ads.

Cities

Non Telco

Brands

Airport

Malls


Faster and Safer to Profits with Alcatel-Lucent end-to-end WiMAX Solution

Alcatel-Lucent has developed unique End-to-end WiMAX solution to help carriers to renovate their network while profitably accelerate

mass broadband adoption

Residential

Business

DSL covered areas

Specific market segments (price-sensitive households, students…)

Nomadic Premium Leveraging Wireless

households trend

Nomadic Premium (vs. 3G/HSDPA)

Convergent offers

Underserved areas

Non-equipped households

Bypass incumbent fixed line subscription fee

Wireless premium for broadband in rural & remote areas

Price competitive IP Access for SMEs

Nomadic Premium (vs. 3G/HSDPA)

Main Business Models


Field-proven access solution and technology leadership

Field-proven access solution and technology leadership

Best-in-class WiMAX Rev-e

Access: Early commitment behind market’s number one Rev-e offer

Already in commercial service with multiple networks deployed

Hardened, industrialized equipment in mass production

All key frequencies Strict Rev-e standard compliance

Advanced Antenna Technology: Beam forming – larger cells means 40

percent fewer sites MIMO – higher link quality, data ratesDiversifying base station portfolio Compact, light form factors Remote radio solution (distributed) To optimizing coverage cost and capacity

Since January 2007

30Commercial

networks deployed or

being deployed

Over5000

base stations produced in

2007 (to triple in

2008)

Since January 2007

30Commercial

networks deployed or

being deployed

Over5000

base stations produced in

2007 (to triple in

2008)Over 70Trials

Worldwide

Over 70Trials

Worldwide


THANK YOU

www.alcatel-lucent.com

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