Access for today. Connected for tomorrow. Challenges for Network Providers during Transitional Periods Tod Brinkerhoff Director – Sales Engineer Tod.Brinkerhoff@tellabs.com 908-964-2855

Network Transformation NFV/SDN CO M D F Class5 Switch The Transition – What is it??? The Last Mile The Network Virtualized Management Funding Regulatory © 2018 Tellabs Access LLC All rights reserved.

Network Transformation Copper Elimination Switch Elimination Tellabs BFAP CO Remote Service Terminal Switch Local Exchange Terminal GR-303 Ocx / GbE Eliminate Copper Drops Add Transitional Equipment Apartment / office (MDU) Tellabs BFAP Receiving CO Collapsing CO Switch Service Drops Ocx / GbE Remote Service Terminal Local Exchange Terminal Add Transitional Equipment The Network Transformation Initiative Network Operators are Transforming to all fiber networks Eliminates aging copper plant Cost Savings Increased reliability Improved resiliency to harsh environments Quicker repair times Revenue Generation Opportunity for new high bandwidth, higher revenue generating services Modernizes the network in preparation for IP-Centric deployments Eliminate 40+ year old Switches, RTU fees, CO tech presence Reduce, Reuse, MD’d Equipment Parts Reduce OPEX, Real Estate Holdings, Property Tax © 2018 Tellabs Access LLC All rights reserved.

Network Transformation Why Collapse / Replace / Modernize – the Challenges Lack of Support: No new parts are available; systems/equipment are Manufacture Discontinued and most of the OEMs are out of business Lack of Expertise: As personnel retire, service providers are faced with significant cost to retain or develop technical support capabilities without the manufacturer’s support Greater Liability: As systems near end of life, component and system failure rates increase Increased Operational Expense: Relative to newer softswitch and IP solutions, Class 5 switches use significantly more power, HVAC and occupy more real-estate Legacy Services Remain: Huge loss of traditional copper served lines leading to 50% or less capacity and still need to support that PON just can’t handle today This initiative is a step forward but not a final, overall solution for complete TDM removal © 2018 Tellabs Access LLC All rights reserved.

Network Transformation The Issues There is no cost like a sunk cost with no additional revenue coming in Service Providers are positioning to move to a network that is Ethernet / IP enabled Logistical hurdles (i.e. copper & Class 5) are present that prevent complete migration to an IP switch environment Legacy NEs do not provide for a seam-less transition or require that many legacy elements be left in place Still require Emergency Standalone service for intraoffice calls to local emergency services FCC has been looking at TDM sunset for sometime but with no real solutions to support funding What other equipment can/should be replaced while modernizing the network? Replacing platform MUST be able to support, POTS, Coin, ISDN, Ground Start, CLASS features, and many Special Service Circuits including xDSL © 2018 Tellabs Access LLC All rights reserved.

Network Transformation Objectives / Quantifiable Benefits Eliminate Class 5 Switches Use for spare parts for MD’ed switches Eliminate RTU fees, CO tech presence Eliminate Legacy Transport Equipment Migrating specials to D4s continues TDM deployment Evolve to an IP / Ethernet Centric Network Decouple voice switch upgrades from access network upgrades © 2018 Tellabs Access LLC All rights reserved.

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Network Transformation Objectives / Quantifiable Benefits OSP Copper Elimination CO Bypass; TDM Collapse Removing Hosts and/or Remotes Reduce Power, OPEX, Real Estate Holdings, Property Tax Collapse, Converge, Connect the Network Reduce, Reuse, Recycle Equipment Parts for the Network Depreciate A$$et$ by Retiring Equipment Class 5 Switch, D4 Channel Banks, Misc. Equipment © 2018 Tellabs Access LLC All rights reserved.