Lucent Technologies – Proprietary Use pursuant to company instruction Lucent’s Convergence Strategy Lucent Technologies – Proprietary - Use pursuant to company instruction VoIP

Lucent Technologies – Proprietary Use pursuant to company instruction Lucent’s Convergence Strategy Lucent Technologies – Proprietary - Use pursuant to company instruction Value over IP™

Lucent Technologies – Proprietary Use pursuant to company instruction Agenda Market Overview The Convergence Story Lucent’s Converged Value Proposition – Value over IP ™ Lucent IMS Architecture Lifestyle Services Active Phone Book Conclusions

Lucent Technologies – Proprietary Use pursuant to company instruction Market Trends – Seamless Communications!  Users want access to their communications and entertainment services from many places… –Home, office, on-the-go …using several different devices… –PC, telephone, mobile phone, PDA …without having separate accounts –Single sign-on, common contacts, information/content delivery  New family of intelligent, interactive, location-based broadband services –Anytime, anywhere access to messages, contact lists, calendars and conferencing –Live video to handheld devices –Mobile access to speech-enabled web services With seamless communications, a service provider can gain larger share of the “telecom wallet”

Lucent Technologies – Proprietary Use pursuant to company instruction Service Providers’ Challenges Revenue Replacement: offset decline in traditional revenue, commoditization of Voice over IP services with new service revenues Brand Extension: address substitution of services by end users to non-traditional competitors Operational Efficiency: operate networks more efficiently and deliver consistent quality Speed to Market: rapidly introduce profitable services and bundled service offers Customer Relevance: address user’s ‘blended lifestyle’ requirements for telecom services … top-line growth, new services, reduced operating expenses

Lucent Technologies – Proprietary Use pursuant to company instruction End User Service Demand Mobile High Speed Data VoIP Next-Gen Optical Broadband Access Local Loop Unbundling VoIP Local Number Portability Privatization New Players Service Bundling Consolidation Market Scenario for Service Providers Residential/Consumer Enterprise/Professional Competition New Technology Regulatory Changes Prosumer CONVERGENCE Access both wireline and wireless service bundles with service transparency, lifestyle voice and data applications

Lucent Technologies – Proprietary Use pursuant to company instruction True convergence encompasses all of these themes to deliver blended lifestyle services to the end user What is Convergence in the market? Enterprise and Service Provider Voice over IP Enterprise and Consumer Personal and Professional Circuit and Packet Wireline and Wireless Voice, Video and Data Voice and Data Optical and Ethernet Voic and Collaboration Multi-function Devices CUSTOMERCUSTOMER APPSAPPS NETwORKNETwORK IMS vs. UMA Consumer

Lucent Technologies – Proprietary Use pursuant to company instruction Market strategies for achieving service convergence VALUE Legacy NetworksLucent Next Generation Networks Convergence of network elements Cap-ex and op-ex control MPLS enabled network Leverage existing networks Network “IP” Access network agnostic True services convergence Blended Lifestyle services SIP Deployed New revenue and service stickiness Value over IP™ End user demand for one stop shop Top-line growth via brand extension B/Office Integration Dependent on access, network, and device Virtual Bundling Each provider’s strategy will differ, but their end goal is the same: service convergence for a competitive edge

Lucent Technologies – Proprietary Use pursuant to company instruction New Paradigm: IP Multi-Media Subsystem What is the IP Multi-media Subsystem (IMS) ? IP-based multimedia and telephony core network that enables two-way voice, data, and video across multiple access technologies and devices, at the high quality and reliability expected by an end-user today IMS is defined by industry standards organizations –3G Partnership Project –IETF (internet) protocols, e.g. SIP, VoIP Standardized interfaces between applications, network layers, and back-office systems Same framework for any kind of access (wireless or wireline) and any kind of traffic – VoIP, data, multimedia –Supports IP sessions over Ethernet, cable, DSL, 802.xx, 3G/2G –Session Initiation Protocol (SIP) enables multimedia session control IMS cost-effectively enables service providers to offer lifestyle services, positioning the operator to “own” the subscriber regardless of how they access the network

Lucent Technologies – Proprietary Use pursuant to company instruction IMS Architecture – Invest in the Application Once ENDPOINTS SESSION APPLICATION Portals & Content VoIP … Common Back Office Resources Common Session Control Policy Management Privacy and personalization Single sign-on Sharing of common data across applications Common Session Control Policy Management Privacy and personalization Single sign-on Sharing of common data across applications Access Agnostic Downloadable SIP client Seamless mobility Common user experience Access Agnostic Downloadable SIP client Seamless mobility Common user experience Simplified Converged Applications Utilize existing and newly developed applications Simplified Converged Applications Utilize existing and newly developed applications Multi-Media Converged services providers can build and launch services faster, efficiently adapting to market changes …

Lucent Technologies – Proprietary Use pursuant to company instruction Next Gen Convergence Model: IMS Access Network & Device-Independence IMS brings services seamlessly to you across all networks IP/MPLS Core IP Network Media Resource Server (eMRS) Application Servers Session Manager MiLife™ ISG Network Gateway Unified Subscriber Data Server Cable Internet 2G/3G 802.xx Access Packet Mobile Network Circuit Mobile Network IP Network

Lucent Technologies – Proprietary Use pursuant to company instruction Next Gen Convergence Model: IMS Access Network & Device-Independence IMS brings services seamlessly to you across all networks Cable Internet 2G/3G 802.xx Access Packet Mobile Network Circuit Mobile Network IP Network Active Phone Book Presence and Location Unified Messaging Video Communications Mobile / BB Roaming iLocator Multicast Service People simply want services that fit their lifestyle and are available anywhere, anytime.

Lucent Technologies – Proprietary Use pursuant to company instruction IMS brings services seamlessly to you across all networks Cable Internet 2G/3G 802.xx Access Packet Mobile Network Circuit Mobile Network IP Network Active Phone Book Presence and Location Unified Messaging Video Communications Mobile / BB Roaming iLocator Multicast Service People simply want services that fit their lifestyle and are available anywhere, anytime. Innovations Complete NGN Eco-System Demand Generation Trusted Advisor Program Management Knowledge Management Business Strategy Business Strategy Solution Architecture Solution Architecture Solution Implementation Solution Implementation Operate & Maintain Operate & Maintain Solution Integration is as important as the building blocks IMS Beyond the Technology A Significant Multi Vendor Integration Challenge

Lucent Technologies – Proprietary Use pursuant to company instruction IMS Benefits For Service Providers And End Users For the service provider “Value over IP™” Reduces cost, faster time to market Investment Protection Across Access Technologies Leverages core across variety of access – wireline, wireless, or converged Protects relationship with subscriber and controls services Increases revenue: new “lifestyle” services For the end user “Fast, seamless communications” Maintains common contacts and "buddies" across multiple services Adds multimedia information to enrich communication and collaboration Enables data applications to be enriched with voice Simple and consistent communications across applications IMS – Next Generation Networks Personal experience of lifestyle services with common look and feel

Lucent Technologies – Proprietary Use pursuant to company instruction Market Trends - Applications Drivers  Access independent telephony services (includes IP-PBX, IP-Centrex, VoIP, VoWLAN, features…)  Blended Services Building Blocks –Presence and location (including identity/ security / policy management functionality/subscriber data management) –Active PhoneBook –Unified Messaging (IM, VM, PoC, short video service, multimedia video services and SIP- enabled messaging services) –Video communications (includes instant video messaging, video telephony, video conferencing

Lucent Technologies – Proprietary Use pursuant to company instruction ARPU Increases With Lifestyle Services New Services = New Revenues For Service Providers Lifestyle Services Rich media entertainment Interactive Context sensitive Highly personalized Lifestyle services help the operator maintain relationships with subscribers, regardless of how they access services $1.70 $1.23 $3.34 $5.47 INCREMENTAL MONTHLY ARPU Source: Lucent Primary Market Research and Modeling, $1B $2B $3B $4B FEATURE DRIVEN LIFESTYLE DRIVEN Instant Messaging Media/ Content Push-to- Talk Location-Based Service Unified Communications IP TV Portable Travel Agent Live Wire 40% increase in revenue-per-year Activity Agent

Lucent Technologies – Proprietary Use pursuant to company instruction Sign-up Intent for Value Added Services Tier 1 Broad Appeal Tier 2 Moderate Appeal Tier 3 Niche Appeal US Survey Results, November 2002 End user research indicates sign up intent is highest for services that offer convenience, time efficiency and control Percent

Lucent Technologies – Proprietary Use pursuant to company instruction Today’s Communication Paths Users access multiple devices… –Fixed Phone, PC, Mobile, PDA …from multiple locations… –Home, office, on-the-go …supported by independent applications …requiring separate accounts… –Different sign-on, directories, contact lists, information content delivery PDA DIRECTORY DIRECTORY INSTANT MESSAGING

Lucent Technologies – Proprietary Use pursuant to company instruction Wouldn’t it be nice? CORPORATE DIRECTORY INSTANT MESSAGING PERSONAL DIRECTORY VOICE MAIL SOFT PHONE ? ? ? ? Each service has a different interface look & feel No integration across services Information can not be shared across services  Consistent look and feel across services  Provisioning for any endpoint, anywhere  Services gracefully transition to blend communication methods (IM to Voice to video call)  Correspondences sorted by contact not method ( vs call log)

Lucent Technologies – Proprietary Use pursuant to company instruction Active PhoneBook CORPORATE DIRECTORY INSTANT MESSAGING PERSONAL DIRECTORY VOICE MAIL SOFT PHONE ? ? ? ? Each service has a different interface look & feel No integration across services Information can not be shared across services

Lucent Technologies – Proprietary Use pursuant to company instruction One Simple Interface Tom User Search Mail and Messages Missed Calls Prefs PAB Logs CallsContacts Buddy Voice Video IM Collaboration DEMO

Lucent Technologies – Proprietary Use pursuant to company instruction Lucent Steps to Customer’s Success Demand Creation Programs Identify and Drive Traffic to the Customer Demand Creation Programs Identify and Drive Traffic to the Customer Bell Labs DNA Unique Innovation Franchise Bell Labs DNA Unique Innovation Franchise Complete NGN Eco-System Anchored in our World Class Portfolio Complete NGN Eco-System Anchored in our World Class Portfolio True Strategic Partnership “Trusted Partner” True Strategic Partnership “Trusted Partner”

Lucent Technologies – Proprietary Use pursuant to company instruction THANK YOU! More Information about Lucent IMS Javier R. Falcon