All rights reserved © 2005, Alcatel User-Centric Triple-Play : a New TV experience, an Industry Transformation IDATE, November 23, 2005

All rights reserved © 2005, Alcatel Presentation | Date | Page 2 What has happened since 2001 Source: IDATE, 2005 Broadband density (subscribers par 100 inhabitants) 1. Broadband has become mass market 2. TV over ADSL: a reality (IPTV) 3. New internet competition:

All rights reserved © 2005, Alcatel Presentation | Date | Page 3 The next steps for the industry Services Transformation Network Transformation Business Transformation An explosion of new services incl: A new TV experience IP broadband network to enable: Service differentiation Radical cost reengineering From Service Providers to Content Distributors From Box Vendors to Solutions Vendors, to Network and Services Integrators

All rights reserved © 2005, Alcatel Presentation | Date | Page 4 Services Transformation: a NEW TV EXPERIENCE

All rights reserved © 2005, Alcatel Presentation | Date | Page 5 A new TV experience at home Better TV Performance High-quality Towards HDTV Personal TV my my time finally made simple Community TV view together community-specific content

All rights reserved © 2005, Alcatel Presentation | Date | Page 6 Personal TV: proven growing demand (example of the US) VOD in US US households (millions) Source : Forrester, technographics My content DVR in the US Source : Forrester, technographics US households (millions) My time

All rights reserved © 2005, Alcatel Presentation | Date | Page 7 Communicate Community-specific content Community TV: the next step Todays TV Viewer Produce my content Make it available for my community to watch View together and interact with my community

All rights reserved © 2005, Alcatel Presentation | Date | Page 8 Market opportunities for the content and the telecom industries TV to keep me COMPANY TV to RELAX TV to ESCAPE TV to SHARE During daytime activities Presence > contents Concentration, captivation Chosen programs Floating concentration, zapping « Light » programs Emotion exchange > contents Chosen programs Source: Alcatel research, France, Germany, Italy, Spain Sept 05 Attitude Towards TV: «Follow the flow» Selective Better TV Personal TV Community TV

All rights reserved © 2005, Alcatel Presentation | Date | Page 9 Towards mobile TV: demand for entertainment on the go Access to home video libraries Remote PVR programming TV at home TV on the go 3G DVB-H+ Discovery (Short-form music & video) Immersion (Long-form video)

All rights reserved © 2005, Alcatel Presentation | Date | Page 10 Urban coverage National coverage Typ. 18 channels Typ channels DVB-H+: combining satellite and 3G Broadcast with satellite & repeaters: Same high-quality signal for all users 18 channels everywhere 54 channels when repeaters Unlimited number of users Unicast with 3G: One signal per user Unlimited number of channels Limited number of users Combination of both: transparent to the user unlimited offer, everywhere

All rights reserved © 2005, Alcatel Presentation | Date | Page 11 Network Transformation

All rights reserved © 2005, Alcatel Presentation | Date | Page 12 The IP broadband network: the engine for new TV experience Better TV experience Personal TV experience Community TV experience Towards 100Mbits Guaranteed QoS Unicast Video libraries IP search Single IP flow for entertainment and communications User-Centric Triple-Play

All rights reserved © 2005, Alcatel Presentation | Date | Page 13 The new book of rules for user-centric triple play networks: Bandwidth scaling Subscriber management & quality of service ( QoS ) Continuous service availability Network security Operational excellence Broadband, IP, Secure

All rights reserved © 2005, Alcatel Presentation | Date | Page 14 Going for transformation Two imperatives: Differentiated Services Cost reengineering Two imperatives: Differentiated Services Cost reengineering Two approaches: Progressive Radical Two approaches: Progressive Radical

All rights reserved © 2005, Alcatel Presentation | Date | Page 15 Universal Broadband Access Service Aware Edge & Data Aware Transport Alcatel leading partner for triple-play networking Content and Services Headend/ Encoders Video Server Application Server Open Service Delivery Consumer Environment 1. See track 2. Wallpaper 3. Buy Ring tone 4. Buy MP3 Leade r Eco-system of CPE partners Eco-system of Alcatel & partners applications

All rights reserved © 2005, Alcatel Presentation | Date | Page 16 Business Transformation:

All rights reserved © 2005, Alcatel Presentation | Date | Page 17 Universal Broadband Access Alcatel partner for triple-play network transformation Content and Services Headend/ Encoders Video Server Application Server Open Service Delivery Consumer Environment 1. See track 2. Wallpaper 3. Buy Ring tone 4. Buy MP3 Services Integration Network Integration Service Aware Edge & Data Aware Transport

All rights reserved © 2005, Alcatel Presentation | Date | Page 18 New partnerships with vendors: value shifting Eco-System BSS/OSS integration Interoperability Testing Service Assurance Service Aware IP Broadband Access Microsoft IPTV edition Capabilities required Vendors new role Benefits for Service Providers Faster to mass-market Attention on marketing & content Services Integration Network Integration Best-of-Breed Solutions

All rights reserved © 2005, Alcatel Presentation | Date | Page 19 Towards major network transformation… Alcatel and SBC: $ 1,7 Bn October 2004

All rights reserved © 2005, Alcatel Presentation | Date | Page 20 Towards major network transformation.. Alcatel and Ya.com: October 05

All rights reserved © 2005, Alcatel Presentation | Date | Page 21 Towards major network transformation… Alcatel and Telstra: 2,18 Bn November 2005

All rights reserved © 2005, Alcatel Presentation | Date | Page 22 The new TV, the new opportunity

All rights reserved © 2005, Alcatel Presentation | Date | Page 23