WCDMA Market Segment WCDMA Market Segment Review Review

Chris AckermannSalim Manji

Notice of Confidential Information

The information contained in this presentation is considered to be

confidential and proprietary information of Spirent Communications Inc. and is subject

to the terms and conditions of the Non-disclosure agreement (NDA) between the recipient(s) or recipient's organization and

Spirent Communications Inc.

Agenda

• 2005 Recap

• 2006 Market Drivers

• 2006 Market & Product Strategy

• 2006 Top-Level Roadmaps

• 2006 Revenue Projections By Solution

2005 Recap2005 Recap

2005 U-ATS Highlights

• Significant wins at key targeted ‘Must-Win’ accounts

Nearly $3M in U-ATS business with Nokia

Nearly $1M in U-ATS business with Cingular

• Launched ‘Must-Learn’ initiative to develop subject-matter expertise in testing of WCDMA UEs

Resulted in several White Papers exhibiting such expertise and highlighting Spirent’s testing solutions

• Achieved validation of U-ATS test cases in Bands I, II, and V by GCF and PTCRB

First to validate test cases 7.7.3 and 8.3.4

• Only vendor to achieve validation of all asymmetric test cases in TS 34.121

2005 ULTS Highlights

• Success in capturing some new accounts:

• …as well as repeat business from familiar faces:

• Participation in high-profile A-GPS technical trials led by Vodafone and China Mobile

• First-to-market coverage of OMA’s Secure User Plane (SUPL) technology

• Achieved approval of elusive Work Item within GCF for mandatory status of TS 34.171 for all A-GPS capable WCDMA devices

• Received 2004 Spirent Silver Innovation Award!

2005 Product Revenue

Product 2004 Revenue

2005 Budget

2005 Revenue

% Growth

U-ATS $1.8M $5.0M $3.7M 51.4%

ULTS $1.5M $6.0M $2.8M 86.7%

AirAccess $2.0M

Totals

2006 Market Drivers2006 Market Drivers

2006 U-ATS Market Drivers

• HSDPA deployments by major players are expanding throughout 2006

Cingular, Vodafone, NTT DoCoMo

• Deployments of new services built on top of HSDPA will begin to expose need to properly address performance-related issues

• Increasing number of handsets coming online from OEMs using QUALCOMM chipsets

• Strengthening relationship with leading network operator (Cingular), handset manufacturer (Nokia), and technology provider (QUALCOMM)

2006 ULTS Market Drivers

• Japanese government has issues mandate for all handsets to include A-GPS by April 2007

• Cingular will utilize A-GPS to meet E911 compliance with its WCDMA handsets

Will also face competitive pressures from upcoming Verizon & Sprint LBS launches

• GCF Work Item for TS 34.171 tests now in place and development of GSM equivalent of specification now underway

• A-GPS will begin to take hold in Europe as various operators begin to launch services

2006 Market & 2006 Market & Product StrategyProduct Strategy

2006 WCDMA Market Strategy

• Target market leadership (#1 or #2 position) through differentiation in:

LBS Test

Performance Test

Applications Test

• Continue to deliver conformance test cases that ensure our credibility and subject-matter expertise

TS 34.121, TS 34.171, OMA conformance tests

• Introduce application test capabilities that focus on ensuring the quality of end-user experience of next generation 3G services

Video telephony, video broadcast, VoIP, etc

2006 WCDMA Market Strategy

LBS Testing

Applications Testing

RF Testin

g

Performance

Production Test

Conformance (34.171)

Application Experience

Testing

Application Enabler

Performance Testing

Conformance (OMA

Application Enablers)

Performance

Conformance (34.121)

Leadership

Leadership

Key Enablers of Market Strategy

• Maximize our established leadership in LBS test by delivering first-to-market, validated 3GPP TS 34.171 A-GPS RF conformance test cases

First allowable validation cycle in GCF is April 2006

• Deliver on 2005 U-ATS commitments to existing customer base rounding out R99 Section 5-7 test coverage

• Establish competitive HSDPA conformance test coverage roadmap that supports HSDPA-oriented performance test strategy

Covering 10-12 test cases starting in 1Q06

• Introduce differentiating HSDPA performance test cases focused initially on test methodology affects data throughput

U-ATS 2006 Product Strategy

• Continue to deliver on existing TS 34.121 conformance test coverage that will enable us to secure key strategic accounts while pursuing growth and differentiation through a clear and unique performance test value proposition

• Key enablers: Complete existing TS 34.121 Section 5-7 commitments

Aggressively track competitive offerings in validated HSDPA test cases and establish leadership in advanced areas such as receive diversity

Establish clear value proposition on performance capabilities that focus on the real-world issues facing network operators deploying 3G/3.5G services

U-ATS Product Positioning

• Competitive RF conformance solution with complete TS 34.121 Sections 5-7 and 9 test coverage

• Cost-effective upgrade path to coverage of new operating bands, Release 5 signaling, and HSUPA on a single test platform

• Value-added performance testing capabilities that address real-world issues facing 3G deployments on same platform as conformance system

ULTS 2006 Product Strategy

• Further maximize our established leadership in GSM & WCDMA A-GPS device test through:

Continued high visibility participation in 3GPP and OMA standards bodies

Positioning of ULTS as a key enabler of 2006 A-GPS deployments worldwide

Delivering first-to-market validated A-GPS RF conformance test cases

Introduction of value-added A-GPS performance characterization test cases leveraging our unique subject-matter expertise

Expanding breadth of Spirent’s A-GPS testing expertise by enabling Professional Services (PS) to deliver solutions that address A-GPS technology suppliers

ULTS Product Positioning

• Comprehensive A-GPS RF conformance test solution for certification of GSM & WCDMA location-capable terminals

• Scalable platform to support industry-standard user plane technologies being chosen by the world’s leading network operators for their LBS deployments

• Feature-rich platform in the critical path of A-GPS technology development at the world’s leading chipset and handset manufacturers

• Flexible platform to fully characterize the performance of A-GPS terminals beyond conformance requirements leveraging Spirent’s unique subject-matter expertise

2006 Top-Level 2006 Top-Level RoadmapsRoadmaps

U-ATS 2006 Roadmap

Q1 Q2 Q3 Q4

March 2006 (Version 4.0)

• New HSDPA Tests (4)• 6.3A Maximum Input Level for HS-PDSCH Reception

• 9.2.1 Demodulation of HS-DSCH Single Link Performance

• 9.3.1 Reporting of Channel Quality Indicator – AWGN Conditions

• 9.3.2 Reporting of Channel Quality Indicator – Fading Conditions

• New Band V & VI RF Tests (3)• 5.11 Transmitter Characteristics / Spurious Emissions

• 6.5 Receiver Characteristics / Blocking Characteristics

• 6.6 Receiver Characteristics / Spurious Response

Release Highlights:

• Introduction of SR3420 enables completion of Section 5-7 tests

• First HSDPA test cases added to U-ATS portfolio

• Complete validation of Band V test cases with two handsets

U-ATS 2006 Roadmap

Q1 Q2 Q3 Q4

April 2006 (Version 4.01)

• New RF Tests (3)• 7.9.1 Downlink Compressed Mode – Single Link

Performance

• 7.10 Blind Transport Format Detection

• 7.12 Detection of Acquisition Indicator

Release Highlights:

• Additional three high-priority Section 7 tests progresses Nokia A1-A4 milestone approval

U-ATS 2006 Roadmap

Q1 Q2 Q3 Q4

July 2006 (Version 4.1)

• New RF Tests (3)• 7.6.1 Demodulation of DCH in Open Loop Transmit

Diversity Mode

• 7.6.2 Demodulation of DCH in Closed Loop Transmit Diversity Mode

• 7.11 Demodulation of Paging Channel

• New HSDPA Tests (3)• 5.2A Maximum Output Power with HS-DPCCH

• 5.9A Spectrum Emission Mask with HS-DPCCH

• 5.13A Error Vector Magnitude with HS-DPCCH

Release Highlights:

• Completion of all Section 5-7 WI-010 and WI-012 test cases!

• Transmit Diversity with SR3420

• Roughly 80% coverage of existing HSDPA test cases

• Complete port of test cases off of Agilent 8960

U-ATS 2006 Roadmap

Q1 Q2 Q3 Q4

November 2006 (Version 4.2)

• New HSDPA Tests (5)• 5.7A Transmit On/Off Power – HS-DPCCH

• 5.10A Adjacent Channel Leakage Power Ratio with HS-DPCCH

• 9.2.2 Demodulation of HS-DSCH – Open Loop Diversity Performance

• 9.2.3 Demodulation of HS-DSCH – Closed Loop Diversity Performance

• 9.4 HS-SCCH Detection Performance

• Receive Diversity Test Cases

Release Highlights:

• Completion of existing HSPDA conformance test cases

• Established industry-leadership in HSDPA Receive Diversity tests

ULTS 2006 Roadmap

Q1 Q2 Q3 Q4

March 2006 (Version 2.2)

• 3GPP TS 34.171 Test Cases• 5.2.1 Sensitivity Coarse Time Assistance

• 5.2.2 Sensitivity Fine Time Assistance

• 5.3 Nominal Accuracy

• 5.4 Dynamic Range

• 5.5 Multi-path Performance

• 5.6 Moving Scenario and Periodic Update Performance

• OMA SUPL 1.0 Support• TLS Secure Connections

• MT-LR Call Flow for WCDMA

Release Highlights:

• First-to-market validated TS 34.171 conformance tests!

• Introduction of SR3420 for TS 34.171 conformance tests

• Commercial release of OMA SUPL 1.0 enables handset development

ULTS 2006 Roadmap

Q1 Q2 Q3 Q4

July 2006 (Version 3.0)

• HSDPA (Release 5) Support

• UMTS FDD V & VI Support

• A-GPS Performance Characterization Test Cases

• OMA SUPL Application Enabler Test Pack 1

Release Highlights:

• Expands existing Pre-SUPL and OMA SUPL capabilities to HSDPA

• Increases coverage of new UMTS frequency bands

• Introduce SUPL Application Enabler conformance test cases defined in OMA

ULTS 2006 Roadmap

Q1 Q2 Q3 Q4

November 2006 (Version 3.1)

• A-GPS Interoperability Test Cases

• Handover & Cell Reselection Test Cases

• OMA SUPL Application Enabler Test Pack 2

Release Highlights:

• Demonstrates subject-matter expertise through value-added test cases

• Further coverage of new OMA test cases supplementing RF test foundation

2006 Revenue 2006 Revenue Projections By Projections By SolutionSolution

2006 Revenue Projections

Product 2005 Revenue

2006 Budget

2006 Target

% Target Growth

U-ATS $3.7M $7.0M $7.1M 91.9%

ULTS $2.8M $6.0M $6.2M 121.4%

UEPT $2.0M $2.2M

Totals $15M $15.5M

SummarySummary

Key Takeaways

• Forces driving market for WCDMA products throughout 2006

• Clear understanding of 2006 WCDMA market strategy and each the role of each product within the segment

• High-level product roadmaps supporting the underlying WCDMA market strategy

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