Broadband For All3G CDMA Middle East and North Africa

Regional Conference Marrakesh, Morocco

Mr. Frank MulhollandHead of CDMA Sales, Alcatel-LucentMay, 2007

Agenda > Brief CDMA Overview

> Regional Requirements

> Services Transformation

> Network Transformation

> Business Transformation

> Conclusion

Brief CDMA Overview

Advantages of CDMA at any Frequency

> Available in every useful band:– 450, 850, 1800, 1900 and 2100MHz

Clarity:– CDMA filters out background noise, cross-talk, and interference.– Improved voice quality, eliminating the audible effects of multi-path fading.

> CDMA2000 1X offers unparalleled voice capacity today:– In excess of 26 Erlang of voice traffic per sector/carrier. – Plus peak data data speeds of 153Kbps.

> 1XEV-DO delivers unmatched data capacity today:– CDMA carrier dedicated to data with peak speeds of 3.1 Mbps. – Typical CDMA user experience: 60kbps – 80kbps (1X); 400 to 800 Kbps (1XEV-

DO).> CDMA is the most cost effective solution available:

– Easiest migration path with unequalled spectral efficiency.– 1XEV-DO Upgrade does not require new spectrum or new base stations;

implemented by adding channel cards and software.– Investment Protection: Leverages existing core network equipment.

> Excellent terminal availability.– Mobiles, Data cards/modems & Fixed Wireless

Why is the 450 MHz band so interesting?

Frequency (MHz)

Cell radius (Km)

Cell coverage (Km)2

Normalized cell count

450 49 7.521 1

850 29 2.712 3

1900 13 553 13

2100 12 312 16

1. The lower the frequency, the greater the coverage:Fewer base stations, Lower capital investments, Lower operating costs

2. Quality of voice is equal to or better than fixed lines3. Low technology risk: many vendors, established standards, economies of scale 4. Services beyond traditional voice:

1X Internet at 153 Kbps (3 times traditional dial-up) EVDO High speed internet at up to 3.1 Mbps (wireless DSL)

Spectral Efficiency5 Mhz

SpectrumPer Carrier

1.25 MhzSpectrum

Per Carrier

2.6 MhzSpectrum

Per Carrier

0.7x1.3x1.0

3.4x2.5x

1x 1x2x

1.3x

9.8x

17.5x

21.1x

3.7x

114k 384k 130k 153k 38k 153k 100k 2.4M 600k

2MFixed144k Mobile

187k0

5

10

15

20

Rat

es R

elat

ive

to G

PRS

GPRS EDGE 3G1X - Voice70% Data 30%

3G1X DataOnly

1X-EV DO UMTS

Peak Data Rates

Average Data Rates

50k

CDMA Evolution Key Customer Drivers

High capacity voice and medium speed packet data services

•Enables service flexibility & basic web access

CDMA2000 1xSymmetric forward and reverse linksBasic Web AccessSoft hand off for optimized voice and data performance

1xEV-DO Rev 01xEV-DO carrier is dedicated to dataFL peak data rates to 2.4 Mbps; RL at 1x speed

1xEV-DO Rev AFL increased (3.1 Mbps)RL greatly increased (1.8 Mbps)Improved throughput & Latency gainsQoSBroadcast/Multicast

Enhanced service flexibility and new revenue-generating servicesUnparalleled coverage with 1x

filling coverage holes

Improved speeds and latencies now support real-time packet

applications, such as VoIP, gaming, push-to-speak and IMS revenue-generating featuresUnparalleled coverage with 1xEv-DO Rev 0 and 1x filling

coverage holes

D0 Rev A extensions over DO Rev 0

The minimum delay of a packet delivery on the Forward Link remains at 1.67 ms (1TS)

The minimum delay of a packet delivery on the Reverse Link is shortened from 26.6 ms (1 Frame) to 6.7 ms

38.4 kbps

76.8 kbps

153.6 kbps

307.2 kbps

614.4 kbps

921.6 kbps

1,228.6 kbps

1,843.2 kbps

2,457.6 kbps

19.2 kbps

38.4 kbps

76.8 kbps

115.2 kbps

153.6 kbps

DO Rev 0

DO Rev 0

The

min

imum

del

ay o

f a

pack

et d

eliv

ery

on

the

Forw

ard

Link

rem

ains

at 1

.67

ms

(1TS

)

4.8 kbps

9.6 kbps

19.2 kbps

38.4 kbps

76.8 kbps

153.6 kbps

307.2 kbps

614.4 kbps

921.6 kbps

1,228.6 kbps

1,536 kbps

1,843.2 kbps

2,457.6 kbps

3,072 kbps

19.2 kbps

38.4 kbps

76.8 kbps

115.2 kbps

153.6 kbps

230.4 kbps

307.2 kbps

460.8 kbps

614.4 kbps

921.6 kbps

1,228.6 kbps

1,843.2 kbps

Rev ARev A

Rev 0Rev 0

Index

ULDL

CDMA can be overlaid gradually onto an Analogue network.

4.5 MHz

3rd CDMA RF Carrier35 Voice CH/Sector

2nd CDMA RF Carrier35 Voice CH/Sector

1st CDMA RF Carrier35 Voice CH/Sector

1st CDMA RF Carrier35 Voice CH/Sector

1st CDMA RF Carrier35 Voice CH/Sector

2nd CDMA RF Carrier35 Voice CH/Sector

21 AnalogControl

Channels(262.5 kHz)

338 Analog Voice Channels (4225 kHz)16.1 Voice Channels/Sector

21 AnalogControl

Channels(262.5 kHz)

21 AnalogControl

Channels(262.5 kHz)

185 Analog Voice Channels (2312.5 kHz)8.8 Voice Channels/Sector

85 AnalogVoice CH (1050kHz)--4 Voice

CH/Sector

1800 kHz

3050 kHz

4300 kHz

1 2 22 23 360

2 22 23 3521 361351208207

2 22 23 3521 361351108107

2 7 8 3521 361351

279

279179

179 27979

Un-used

Un-used

275 kHzGuard Bands

1250 kHz

1250 kHz1250 kHz

387 kHz

NMT AnalogOnly

Dual-mode:One CDMACarrier

Dual-mode:Two CDMACarriers

All-digital:Three CDMACarriers

Regional Requirements

Global Service Provider communication needs

> Last mile:•Residential access •Internet at low cost and mass market

> Increase productivity (enterprise and government):

•Electronic commerce: access to world markets from anywhere at anytime •Resource optimization and customer care: competitiveness

> Rural reach:•Increase telephony penetration in rural and suburban areas•Internet connection for public schools, rural enterprises and government entities

An architecture to deliver a compelling value proposition to each user segment

ENTRY USERS INTERNET USERS ADVANCED USERS

Increase MobilePenetration

Enable Mass-Market Broadband

Deliver a User-Centric Experience

The Challenge for Service Providers in the Regions Economies Need to Address 3 Different User Segments with 3 Distinct Value Propositions

Leapfrog to the latesttechnologies

Radical cost efficienciesMost innovative services

Leapfrog to the latest

business models

Beyond fixed and mobileInnovative economics

& partnerships

The Opportunity for Service Providers in the Middle East & Africa

Enable service, network and business transformation to address ALL

Services Transformation

Economic and Social Benefits of Broadband ApplicationsFrom World Summit on Information Society WSIS II Action Plan:

e-commerce for extended network of customers and suppliers

e-transactions (efficiency) for supply chain and payment

E-Business E-AgricultureInformation on market prices

Dissemination of agricultural information

Easier transactions through direct relationship with buyers

E-EducationWider and better access to knowledge

ICT literacy development

Distance e-learning

E-GovernmentEnhanced public services delivery

Public administration efficiency

Transparency

Additional Findings:

Available where they live? 15% of Internet caféusers say yes, 45% say no, 40% do not know

Affordable? 80% of Internet café users spend less than 10$/mth

95%+ of existing broadband users: for both personal and professional use

Alcatel-Lucent End-User Market Research in Kenya Unmet Demand for Broadband in Urban Centers

> Nearly 60% of Internet café users are interested in a broadband connection at home

> Question: How interested are you in having a broadband connection at home? (Sample: 303 Internet café users)

Quantitative Survey (Aug 06):400+ interviews in Monbasa, Kisumu and NakuruMix of Internet café users and existing broadband users

data in percentages (%)

ST Not Interested ST InterestedQuite interestedNot interested at all Not very interested Very InterestedDK

4 30 291720 5937

*This research study was conducted by Alcatelprior to merger completion

Next StepDemand in Rural Areas Broadband Community Centers Model in South and South-East Asia

>Leapfrog to E-Gov services for ALL:– Payment of taxes, vehicle registrations,

trade licenses, birth and death documents

>Leapfrog to E-Business for ALL – Payment of utility bills, reservations for

transportation, mail, desktop publishing…

Efficient Delivery Model:

Self-service (Internet literate) or staff-assisted (non-Internet literate)

Shared cost of devices (PCs and modems)

Business Model: Public-Private Partnerships

Public subsidies for building, PCs, staff, communications

User charges for private partner: per public service transaction + commercial services (Internet access, voice communications, desktop publishing…)

Mobile Broadband Computing Unit

Attractive value proposition and business modelReady for expansion to rural areas

Broadband Community Center

Network Transformation

Network Transformation Access Technologies to Increase Broadband Footprint

>One technology does not fit all situations. Differences in: – Existing infrastructure– Topology, such as outdoor/indoor and density– End-user demand– Regulation– Spectrum

>Need to optimize deployment strategy for every customer:– Leverage existing assets such as spectrum

and infrastructure– Prepare for end-user demand dynamics– Take advantage of the latest available

access technologies and devices– Plan for massive, cost-effective deployment

Need a wide range of broadband technologiesNeed solutions to combine them in a consistent, mass-market manner

GSMDeployments with 173 operators in 93 countries

GSMDeployments with 173 operators in 93 countries

Alcatel-Lucent Largest Portfolio of Broadband Access Technologies

The broadest broadband portfolio in the industry, wireless and wireline, with track record for massive deployment

CDMAIncludes CDMA 450

Deployments with 60 operator

CDMAIncludes CDMA 450

Deployments with 60 operator

WiMAXCommitment to 802.16e-2005 standard

(40+ trials, recent win * Santo Domingo)

WiMAXCommitment to 802.16e-2005 standard

(40+ trials, recent win * Santo Domingo)

WCDMAIndustry first HSUPA

Serve 1 out of 4 WCDMA operators

WCDMAIndustry first HSUPA

Serve 1 out of 4 WCDMA operators

DSL100M lines shipped as of Oct 06

DSL100M lines shipped as of Oct 06

FTTx40 projects worldwide

FTTx40 projects worldwide

* This customer reference was provided to Alcatel prior to merger completion

Business Transformation

Need for sustainable economics

Recognized economic and social benefits of broadband

Need for public-private partnerships

* Medical imaging transfer for tele-diagnosis of tuberculosis

Pilot in West Africa

Sustainable business case (savings on films) in addition to public health benefits

Business Transformation Innovative Business Models with Public Stakeholders

Need support to fund pilot projects to demonstrate sustainable economics

* E-Gov in ruralPilot in West Africa

Applications developed by university

* These customer references were provided to Alcatel prior to merger completion

Business Transformation Innovative Business Models with Vendors

Need for fast time-to-market

Need for differentiated services to attract/retain advanced users

Hosted and Managed Applications

Need to reduce risk

Example: Alcatel-Lucent Mobile Services Hosting Center in Dakar Offering innovative mobile services from day one (June 2006) with possibility to:

Share platform among several operators, across several countries

Benefit from pay-per-use business model

Example: *Orange CamerounLeading mobile service provider in Cameroun with 1.3M subscribers

Mobile data portal launched in summer 2006 to increase market share and reduce churn among advanced users

320 000 hits in very first days

Operational in just 3 months

* This customer reference was provided to Alcatel prior to merger completion

+

Business Transformation Innovative Business Models with Vendors

Need for fast time-to-market

Lack of experience in operating a network

Hosted and Managed Applications

Need to reduce risk

Track Record for Turnkey: Nationwide turnkey mobile & data network for 6M subscribers

A GSM/GPRS 900/1800 network powered by Alcatel-Lucent radio and core in 160 cities

Satellite, optical and microwave backbones and LMDS transmission solutions

A full fledged IN platform and first messaging suite (MMS/SMS)

A full ATM/IP broadband data network

Track Record for Network Outsourcing:

* These customer references were provided to Alcatel prior to merger completion

* E-plus, Germany

* Telecom, New Zealand

* Globacom, Nigeria

Conclusion

CDMA Market Applications

> Basic and Advanced:– High Quality Voice and Data applications.– SMS, WAP, Multimedia Messaging Services, Voice Mail, Pre-Paid, etc..

> Rural Access:– Voice & Data to areas currently underserved (eg rural Sweden, Africa, Brazil, India, China….)

> Last Mile Access:– Alternative to dial-up and similar to ADSL/Cable Modem type services.

> PTT (Press to Talk): – providing PAMR & Nextel type services.

> Private Enterprise Applications for Voice & High Speed Data:– Corporate, Small/Medium Enterprises and Small Office/Home Office.– Logistics & Public Transport Sector.– Railways.– Oil Fields and Mining sites.– Airports High Speed Data Network.– Large Factory Sites.– Police, Fire and Ambulance.– Military Applications.

VoIP – How to Make the Difference

> Basic Offering– Consumer Fixed-Wireless service (prepaid or postpaid)– User portal for service configuration and service access

> Differentiate from basic offering– Fully Integrate Mobile VoIP with Fixed wireless & wireline services– Provide ease of use and contact management

> Access Mobile services from PC Client– SMS, Voice, P2P Video ……………

> Shared contacts between Fixed & Mobile clients “Active Phonebook”– Single network hosted contact list– Shared presence and availability– Click to IM, Video & Voice

> Single Number using simultaneous ring capability

Mobile/portable data for the private/public sector

> private and public safety> police and fire protection > medical emergencies > remote data monitoring> tele-education> distribution of goods> Teletracking of assets

Mobile Hotspots Applications

Enterprise

Hot Spot

Homeland Security

Surveillance

Residential

Wireless ATM

Transportation

Push-to-Talk

> High Performance and reliable PTT experience– Multiple call types: Direct, 2 users, Predefined/Ad-Hoc Groups, Member lists, Chat

Room– Guaranteed Talk Permit and Optimistic Talk Permit

> Nationwide & Global calling > Invite Mode> Call restrictions> Add member> Talker arbitration> User Friendly Addressing> User authentication> Lawful Intercept> OTA Downloadable & Configurable Client

Highly interactive, low-latency "Walkie-Talkie" communications

Broadband For All- Digital inclusion: reach the people!

> Voice and/or data mobile and/or fixed> Internet access for rural and sub-urban areas (the key areas that need it) > Use the power of the internet for education, telemedicine initiatives