NORTEL NETWORKS CONFIDENTIAL Nortel Fiber Services Finding Fiber to Deliver Total Solutions August 2000

Nortel Fiber Services - 1 NORTEL NETWORKS CONFIDENTIAL Outline What is Nortel Fiber Services? –Definition and overview –Objectives –Range of Services Value propositions –Customer benefits –Marketplace differentiation What do Nortel Fiber Services cost? –Customer –Nortel Networks The Nortel Fiber Services Team How do you request for Dark Fiber? Proposal Boilerplate

Nortel Fiber Services - 2 NORTEL NETWORKS CONFIDENTIAL What is Nortel Fiber Services? A value-added service to our customers whereby we locate dark fiber for customers’ short- and long-term needs through our extensive relationships with fiber providers But that’s not all…combined with other value added services, such as collocation, fiber characterization and network planning, Nortel Fiber Services provides a one-stop shop to help customers roll out their networks faster and easier

Nortel Fiber Services - 3 NORTEL NETWORKS CONFIDENTIAL Fiber Services Objectives Ensure Nortel is the ‘partner of choice’ to work with for fiber providers and equipment customers in the dark fiber and optical internet solutions market Be the Nortel Center of Excellence, and the central contact, for dark fiber Develop revenue-enhancing alliances in metro and long-haul spaces with regional, national, and global reach Educate, internally and externally, about dark fiber opportunities with revenue potential Prime partnerships with Professional Services, Market Development, Network Planning, Brand Management and Strategic Marketing to enhance customer proposals, differentiate Nortel Networks in the marketplace and win sales!

Nortel Fiber Services - 4 NORTEL NETWORKS CONFIDENTIAL Range of Fiber Services Provide names of companies selling or leasing fiber in specific markets Introduce fiber provider to customer Solicit custom build bids Provide fiber prices Qualify collocation sites Fiber & colo ‘broker’ Managed RFP service Identify collocation partners Recommend collocation sites Range of Services SimpleComplex tomorrow today Negotiate DF deals for customer Characterize legacy fiber Identify “anchor tenants” or joint-build partners Obtain maps and routes

Nortel Fiber Services - 5 NORTEL NETWORKS CONFIDENTIAL Value Proposition To the Account Team Enhance customer proposals –Service highly valued by customers offered at no charge to the customer Sets Nortel Networks apart from the “box” sellers –Competitive marketplace differentiator Extends our market penetration and reach –Customer referrals from fiber providers = more equipment business –Broadens geographic reach of Nortel Powered Networks Aids in equipment and network exclusivity –When you buy Nortel equipment, have your network planned, including fiber routes, optimized, and managed…all in one stop Aids in selling other value add services –Professional Services –Collocation –Network planning & optimization Supports future growth and expansion plans of the customer –Builds in a future relationship and customer loyalty Another ‘tool’ to “get the sale”

Nortel Fiber Services - 6 NORTEL NETWORKS CONFIDENTIAL Value Proposition To the Customer Accelerates time to revenue and profit –Find fiber faster where it’s needed = Network up and running sooner with revenue generating traffic Capital, time, resource cost savings –Nortel resources, not customer’s, used at no charge early in process Offers more options, boosts bandwidth availability –Use of Nortel’s extensive network of fiber providers increases number of viable routes that can be used Enables future growth and expansion plans Part of one-stop shopping experience with Nortel Networks (convenience, excellence and services all in one) –Extensive product portfolio (best-in-breed box) –Professional Services, including business planning and strategizing, joint marketing and financing available –Collocation, Dark Fiber consulting and characterization –Network design, planning, optimization and management Extends market penetration and geographic reach faster

Nortel Fiber Services - 7 NORTEL NETWORKS CONFIDENTIAL What does this service cost? To accept, costs Customer nothing –at present there is no charge for this service To decline, “costs” Customer: –lost market opportunity, –delayed time to revenue generation, –slower market penetration / reach, –increased resource costs, –increased marketing and sales costs, –potential future business, –potentially increased infrastructure costs if they can not find DF where they need it, or, due to limited knowledge and partnerships, miss fiber in desired location and build in alternate locations

Nortel Fiber Services - 8 NORTEL NETWORKS CONFIDENTIAL What does Fiber Service cost? Three Price Models 1.Service provided free to customer, with value statement of service in proposal 2a.Customer pays in advance, but is reimbursed via product credits upon purchase of Nortel Networks equipment 2b.Service initially free, but if customer purchases from competitor, they pay Nortel for fiber services (hard to collect?) 3.Service charged separately as Professional Service, regardless of equipment purchase Price model depends on the customer and account strategy Price model depends on the customer and account strategy

Nortel Fiber Services - 9 NORTEL NETWORKS CONFIDENTIAL What does Fiber Service cost? Fiber Service Proposals Fiber Services Team can develop technical and cost proposal information to include in full customer proposals Nortel’ costs increase with complexity and project scale. A close working relationship between the Customer, Account Teams and Fiber Providers is essential to minimize our costs. Nortel’ costs increase with complexity and project scale. A close working relationship between the Customer, Account Teams and Fiber Providers is essential to minimize our costs.

Nortel Fiber Services - 10 NORTEL NETWORKS CONFIDENTIAL Potential New Revenue Sources Service fees paid by customer to Nortel Service fees paid by fiber providers to Nortel upon successful sale, or lease, of their fiber with commission to Nortel sales team for selling provider’s fiber.

Nortel Fiber Services - 11 NORTEL NETWORKS CONFIDENTIAL Fiber Services are VALUABLE! Commercial fiber brokers charge both buyer and seller up to 2% or charge the seller alone up to 7%. For example, a $20M IRU would cost $800,000 to $1,400,000! Brokers justify this because they are viewed as an “outsourced sales force” for the fiber provider.

Nortel Fiber Services - 12 NORTEL NETWORKS CONFIDENTIAL Initiating Dark Fiber Requests Your name, contact info, organization Definition of deliverables, including level of detail desired Date you need deliverables Customer name and market segment Geographic locations desired, including termination points and boundaries Business application and objectives Technical requirements (fiber type, line rates, equipment and technologies desired/actual in network) Customer schedule for all fiber routes About the Nortel Requestor About the customer Please submit a “Dark Fiber Request Form.” It asks…

Nortel Fiber Services - 13 NORTEL NETWORKS CONFIDENTIAL The Nortel Fiber Services Team Steve Drenker, Senior ManagerESN James Puzan, Fiber SpecialistESN Brian Walker, Fiber SpecialistESN Aniqa Tariq, Business SupportESN & Order Entry Andres Rojas (starts Sept. ’00)

Nortel Fiber Services - 14 NORTEL NETWORKS CONFIDENTIAL Proposal Boilerplate #1

Nortel Fiber Services - 15 NORTEL NETWORKS CONFIDENTIAL Proposal Boilerplate #2

Nortel Fiber Services - 16 NORTEL NETWORKS CONFIDENTIAL Proposal Boilerplate #3