Lucent Technologies Bell Labs Innovations Fifth Annual Conference

Lucent Technologies Bell Labs Innovations Fifth Annual Conference on e-commerce (R)evolution Goes Mobile We make the internet mobile ! Sorabh Gupta Business Development Manager Service Provider Networks Lucent Technologies sorabh@lucent. com

Outline • • • State of the mobile market in US What is 3 G? How will networks evolve to 3 G? Lucent’s Game plan to assist the operator in the changing world of voice/data networks Our beliefs, our landscape and our product portfolio to make the internet mobile Conclusions

Mobile market in the US * Jupiter Communications • • • Wireless coverage not ubiquitous or consistent Migration from analog to digital handsets is not complete - approx. 30% analog base Differing technology standards (TDMA, CDMA, GSM) have slowed the release of phones and services in the United States Infatuation with PC is one of the biggest hurdle to wireless web Limited network bandwidth and device memory prohibits large downloads Circuit switched data technology does not allow microbilling Yankee, Strategis

What is 3 G? ~2. 048 Mbps A “Family of Systems” for IMT-2000 services, ensuring network standards interoperabil ity. ~384 kbps ~144 kbps ~9. 6 kbps North America Asia/ Pacific cdma 2000 & Do. Co. Mo WCDMA ANSI-41 / WIN & GSM-MAP/CAMEL CWTS, TIA, ARIB & TTC cdma 2000 & UWC-136 ANSI-41/ WIN/GSM-MAP T 1/TIA TR 45 UTRA Europe GSM-MAP / CAMEL ETSI

Global Wireless Standards Evolution 2 G 2. 5 G 3 G/ IMT-2000 Capable cdma 2000 3 X MC cdma 2000 1 X RTT cdma. One • 2 times voice capacity • 153 kbps Packet • Voice • 14. 4 kbps • Circuit Data • High Capacity Voice • 384+ kbps Packet • Backward Comp. 1 x. EV Data Only • 2. 4 Mbps Packet • Backward Comp. TDMA IS-136 • Higher Cap Voice/ Data • Backward Comp. EDGE (US) EDGE (Europe) • Voice • 9. 6 kbps Ckt Data • 384 kbps Packet W-CDMA (Europe) GSM GPRS GSM • Voice • 9. 6 kbps Ckt Data PDC 1 x. EV Voice/Data • upto ~115 kbps Packet • Backward Comp. PDC-P • Voice • 9. 6 kbps Packet Data 1995 1999 2000 2001 W-CDMA (Japan) 2002 • High Capacity Voice • Up to 2 Mbps • New Radio Equipment 2003+

How will we do this evolution ? 2 G 2. 5 G Data & Voice solution cdma 2000 2 G networks UPGRADABLE 1 X RTT OLD mobiles compatible NEW voice/data devices • Twice voice capacity • 153 kbps Packet cdma. One • Voice • 14. 4 kbps • CSD GSM Data ONLY NEW infrastructure NEW data devices GSM GPRS • upto ~115 kbps Packet • RF Backward Comp. PDC • Voice • 9. 6 kbps 1999 SAME spectrum • High Capacity Voice High infrastructure reuse • 384+ kbps Packet New Mobiles • RF Backward Compatible 1 x. EV Data Only 1 x. EV Voice/Data EDGE (Europe) • Voice • 9. 6 kbps CSD 1995 cdma 2000 3 X MC • 2. 4 Mbps Packet • Higher Cap Voice/ Data • RF Backward Comp. Data ONLY NEW infrastructure EDGE (US) NEW data devices TDMA IS-136 • Voice • 9. 6 kbps CSD 3 G/ IMT-2000 Capable 2000 2001 • 384 kbps Packet W-CDMA (Europe) New Spectrum New Network High Capacity Voice W-CDMA New • Air Interface • Up to 2 Mbps (Japan) New Mobiles • New RF No Backward Compatibility 2002 2003+

Our Gameplan • The Operator Win – Maximize value of the network – Grow the size of the mobile internet opportunity • The Lucent Approach – Delivering today 3 G-ready network for mobile internet – Leverage partnerships to stimulate markets and innovation – Identify new opportunities for our customers to capture value

The Changing World of Our Customer Today’s Model: Voice World Emerging Model: Converged Voice/Data World Services Service Provider Network Operator Service Bureau Mobile Virtual Operator Cyber Carrier Mobile Operator Back End Front End Drivers: Data, Bandwidth, and Scale Operations Changing drivers are causing specialization leading to segmentation by core competencies

Our beliefs • Microbilling is the Killer Application – Billing and transaction settlement are cornerstones of extracting new revenue • Connectivity and transport services are table stakes – Margins will be captured through higher value services • Communities are sticky – Services engaging more people will drive usage (e. g. , fantasy football, video gaming) and reduce churn • The central theme is … Me! – Personalized services will dominate the application landscape. • Leveraging customer information enables new revenue opportunities – Capturing the knowledge behind customer habits will drive innovation for boutique services and intelligent agents. • Devices will grow muscles – Applications will leverage client/server architectures to optimize RAN traffic – Fat clients will drive innovation for “dark spectrum services” • Speed will change the game – 3 G enhanced data performance drives new services, content, partnerships, and revenue sources

Reach of Revenue Opportunities Our Landscape New Media Services “breaking all the rules, ” opening new revenue streams Anyone to Anyone Interacting with anyone, anywhere, anytime – using any media Services Market Trust Services Mobile commerce foundation unlocking the revenue potential Sensory Networks It’s all about Me! … leveraging dynamic subscriber information Seamless Operations Robust, reliable and high performance for flawless operations Terminal Radio Access Network Switching Centers Cyber Centers Range of Infrastructure Elements Core Network

Reach of Revenue Opportunities Our Landscape is a Total Value Chain New Media Services Anyone to Anyone Services Market Trust Services Sensory Networks Seamless Operations Gaming Portal Streaming E-mail SMS Technology Enablers IM Pre-Pay Micro-Billing Profiling Telemetry Gateways Video on Demand Enterprise Intelligent Agents Group. Ware PIM Speech-Text-Speech Alert Ad. Serve Unified Mailbox Voice Services Language Translation Signalling Directory CRM e-Care Micro-Transaction Fraud T-settlement Data Mining Security P-to-P Yield Dynamic Customer Information Location Presence Availability Time Content Switching Network Management Secure the Pipe Terminal Applications Navigation Radio Access Network Authentication Scalability Inter-Domain Intelligence Switching Centers Cyber Centers Range of Infrastructure Elements Core Network

Reach of Revenue Opportunities Lucent Has A Broad Product Portfolio New Media Services Anyone to Anyone Services Market Trust Services Sensory Networks Seamless Operations Terminal Radio Access Network Switching Centers Cyber Centers Core Network Range of Infrastructure Elements Lucent is prominent with products, services and market insights across the new mobility value proposition

Reach of Revenue Opportunities The Breadth of the Lucent Offer Profilium New Media Services … Purple Software IP Navigator i. CARE III Strategy. com Infospace Anyone to Anyone Services Market Trust Services Sensory Networks Brience Oracle Logica Arbor … Data. On. Air Broad. Vision Packet. IN NX 64000 … Wave. Star … Wireless Solutions Phone. com Map. Info RTS Wireless Connect. VU WL … Signal. Soft Argo Compaq Extended Systems Spyglass Sun Microsystems Hotpalm Seamless Operations Pedagog Terminal Radio Access Network Switching Centers Cyber Centers Core Network Range of Infrastructure Elements n n Lucent is prominent with products, services and market insights across every facet of the new mobile value proposition The marketplace requires that we build an ecosystem of partners that we can bring to the table with customers and leverage for innovation

Flexent Mobile Internet Gateway • A Focused Platform for Enabling Content Services – Location, Presence and Authentication – Mobile Internet Development Kit (MIDK) Support – Access to Third Party Applications I-HLR S E S Billing S OMP I O SMSC N A P I M G M T Portal Benefits: • Applications Internet IWF Media Gaming Location M-Commerce Messaging Intrarnet MSC Mobile. Internet Gateway Content WAP Gateway Extending the Network Value – Easily Build Enhanced Wireless Internet Service utilizing the knowledge of the network • • Quick to Market using standard Internet protocols Built in Security – Secure architecture model: authenticating applications

Enabling the Mobile Virtual Operator Presence Location Subscriber data Service state Subscriber state Billing/Prepay Bearer Performance/Qo. S … n Mobile MVNO Virtual Operator Mobile. Internet Gateway Activation Provisioning Content Services Bearer IN Services Qo. S configuration Mobile Operator Lucent’s Flexent Mobile Internet Gateway enables secure information flow between the Virtual Operator and Mobile Operator

Conclusions • We have a history of wire-based Internet use with PCs and browsers • Incompatible with Europe and Asia GSM 2 G wireless • • Improvement in data speeds and user applications will enhance customer experience • Global roaming is possible with: – SIM or UIM card – Multi-mode, and perhaps, a Multi-band mobile Teleoperators – Several, well-financed companies with competing and incompatible 3 G technologies • • • Interoperability is very complex – Huge investments have been made to build today’s networks – Standards bodies can salvage much of this incompatibility Wireless coverage not consistent or ubiquitous • Capacity improvement and migration to digital networks Huge investments required to build 3 G networks • Evolution and not revolution of existing networks to 2. 5 G will reduce the risk – Long payouts based on new-to-bedeveloped applications