Second Quarter 2006 interim report Petri Markkanen CEO Birdstep Technology

Agenda Second quarter 2006 Highlights Financial figures Birdstep strategy Market outlook

Business Highlights Quarterly laptop license activation increase with 21% from first quarter 2006, representing continuous year-on-year growth with more than 100%. T-Mobile and Birdstep sign two year Frame Contract on product Development, software license distribution and software maintenance Birdstep and Turkcell sign substantial agreement on client development and new Laptop Licenses.

Financial Highlights Second quarter consolidated revenue is NOK 12.0 million, an increase with 35% compared to second quarter 2005 Second quarter wireless revenue is NOK 8.0 million, an increase with 54% compared to second quarter 2005 Birdstep emits 3 million new shares to Vollvik Invest AS for additional funds of NOK 42 million

Income Statement

Balance Sheet 

Cash Flow Statement

Consolidated quarterly Performance

Wireless quarterly performance

Birdstep – positioned for growth 2002:Proof of concept phase (technology) First customers signed Smaller deployments 2004:Proof of concept phase (market adoption) Solid customer base Commercial deployments all over the world 2006:Growth phase Mobile Internet becomes main stream business Important tool for ARPU growth High growth with successful deployments

As demonstrated in the activation database

Business Model Operators Provide tailored solutions for seamless connectivity and mobility for all devices and all access technologies Work closely with strategic operators on both short term deliveries as well as longer term roadmaps Device Manufacturers Become the leading provider of seamless roaming and connectivity products to device manufacturers

Market Outlook Laptop Segment Smartphone Segment 2006: Growth phase Mobile Internet becomes mainstream business Important tool for ARPU growth Operators plan for mass market adoption 2007: Mainstream business Mass Market adoption More services & higher speeds Responsiveness & Support Quality of service User behavior statistics Smartphone Segment 2006: Proof of concept phase Smartphone manufacturers Mobile operators Smaller deployments 2007/08: Adoption & growth OEM relation with Smartphone manufacturers Commercial deployments with mobile operators

Industry Drivers Explosive 3G network deployment Flat rate data plans Growth Enablers Laptop Explosive 3G network deployment 77 M Subscribers  growing to 1 Billion By 2010* 110 Networks Flat rate data plans Operator Marketing Campaigns Embedded solutions for laptops Growth Enablers Smartphone Device availability Growing demand for high speed data services such as: Corporate E-mail and IM products Music and Video Mobile TV Voice over IP *Source: GSM Association, UMTS Forum, Wireless Intelligence

Laptop Market The laptop connectivity market is expected to grow with at least 450% by 2011 The number of embedded modems will exceed the number of PC-cards by 2009

Laptop Market

Smartphone Market The Smartphone market with built-in Wi-Fi capabilities is in an early proof-of-concept phase The Smartphone market will grow from 1.8 million phones 2006 to 152 million phones by 2011

Smartphone Market

In conclusion The market for laptop connectivity is becoming mainstream business for mobile operators with expected market growth of at least 450% by 2011 The Smartphone market with built-in Wi-Fi capabilities will grow from 1.8 million phones shipped 2006 to 152 million phones by 2011 Quarterly laptop client license activations increased with 21% compared to first quarter 2006 with year on year quarterly growth continuously above 100% Birdstep believes in revenue growth on a full year basis and in substantial revenue growth 2007

Safe Harbor Statement This news release contains forward-looking statements, including statements that are subject to certain risks and uncertainties, including, but not limited to, those associated with unpredictability and volatility of the price of the Company's Common Stock, the performance of and conditions in the Norwegian and world financial markets, the policies and actions of the Norwegian and other governments, and the general political, economic and business conditions in Norway and elsewhere. Actual results could differ materially, as a result of such factors, from those set forth in forward-looking statements

Thank you for your attention! Birdstep Technology www.birdstep.com Email:petri.markkanen@birdstep.com