Selling the Broadband Wireless Advantage A Nortel Networks / Star21 Networks Case Study Craig Clary, Director Account Marketing Broadband Wireless Access, Nortel Networks Broadband Wireless World Forum February 19, 2001 San Francisco, California

The Broadband Access Technology Landscape FS Optics P-P Radio PMP Radio wDSL Optics fT1/T1/DS3 xDSL Cable Modem Dial Access ISDN Multiple Technologies Competing For a Wide Variety of Users – All Open Up The First Mile In Their Own Way

Selecting a Technology Wireless FS Optics P-P Radio BWA (LMDS) wDSL Generally, Solutions Are Hybrids Because No One Technology Breaks Through All Constraints Optics xDSL Copper Cable Modem Wired High Sustained Rate Access User Distance from POP Line of Sight Access Cost / User Business Class QoS Legend N/A or very low barriers Some barriers exist Issue may block implementation Time to Deploy

Broadband Wireless Value Proposition Speeds deployment time Provides high-speed connectivity to the optical core Delivers scalability Extends the reach of fiber loop Reduces recurring operational expenditures Increases service provider control

Service Growth Projections Value Added IP Services Lead The Way * Various sources

Business Class Services Legacy Services/ Leased Line Replacement N*T1/E1 (fractional T1/E1) Frame Relay/T1(E1) and X.21 High Speed Internet (from T1(E1) to OC-3 & 10- and 100-BaseT) Legacy Services/ Leased Line Replacement N*T1/E1 (fractional T1/E1) Frame Relay/T1(E1) and X.21 High Speed Internet (from T1(E1) to OC-3 & 10- and 100-BaseT) Must support traditional services with business class QoS Advanced IP Services IP-VPN (RAS and Site-Site) Dedicated Web Hosting Application/ Hosting Advanced IP Services IP-VPN (RAS and Site-Site) Dedicated Web Hosting Application/ Hosting Allows the Service Provider become the Ethernet Service Provider

Business Class Services The BWA Challenge Is To Ensure Seamless Support and Speedy Delivery Of High Value Services Managed Services End-End with Differentiated SLA Network Based Security (e.g. Firewalling) Single Point Billing for Bundled Service Managed Services End-End with Differentiated SLA Network Based Security (e.g. Firewalling) Single Point Billing for Bundled Service Once an Ethernet Service Provider – Managed Services become the up-sell In-Building Distribution Solutions BWA/xDSL bundling Switched Etherent/VLANs on CAT5 Wireless LAN In-Building Distribution Solutions BWA/xDSL bundling Switched Etherent/VLANs on CAT5 Wireless LAN Access is not the end- game – need integrated solutions to solve the last 500 ft

Broadband Wireless Access A Global Market? -Absolutely Source – Strategis Group Interpreted by Nortel Networks The Globe is Equally Divided in 4 Years Despite The Head Start in North America

BWA Year 2000 Market Expansion North America CountriesSpectrumPop MHz273M Europe CountriesSpectrumPop MHz380M CALA CountriesSpectrumPop MHz49M Asia CountriesSpectrumPop MHz229M Additional 24 Countries Covering 931M Pops

As the Core Expands So Must the First Mile We Haven’t Seen Anything Yet Source – Ryan, Hankin, Kent Nov-2000

BWA Flexibility Rides Global See-Saw Wireless Culture Services Auction Spectrum Acquisition Grant IP BasedLegacy High Low Rapid Spectrum Use Covenants Over Time ChannelizedBlock Spectrum Channelization Operators CAPILEC EuropeAsiaN. AmericaCALA

Star 21 Timeline March 1999 – STAR 21 (formerly Star One) founded August 1999 – STAR 21 gains 3.5 and 26 GHZ licenses in Germany April 2000 – STAR 21 Networks and Nortel Networks partner to build end-to-end data network January 2001 – STAR 21 doubles bandwidth efficiency of base stations with dual carrier solution February 2001 – STAR 21 wins national license in Austria November 2000 – Raised US$500 million in tight financial market January 2001 – Commercial launch 150 base stations December 2000 – Wins National Romanian 26 GHz license April 2000 – Acquisition of national 26 GHz Swiss licenses March 2000 – Acquisition of national 26 GHz licenses in Spain September 2000 – Acquisition of national 26 GHz licenses in Czech Republic