October 2009 Presentation by Patricio Northland C.E.O. Satmex BROADBAND FOR ALL

Presentation Objectives Background of international policies Fixed and mobile broadband penetration Broadband development in the Americas Mexican Broadband Market Mexican Broadband penetration by technology Key challenges for increase broadband penetration Satellite technology Social and development programs through Satmex satellites Conclusions

Background of international policies UN Millennium Development Goals In 2000 several nations adopt United Nations Millennium Declaration, with the purpose to reduce extreme poverty and setting out a series of time-bound targets “Target 8.5 of Millennium Declaration” establish -In cooperation with the private sector, make available benefits of new technologies, especially information and communications- All targets must be concluded before 2015, because of that some Governments are implemented social programs mainly in broadband platforms focused in remote communities As a result of the Millennium Goals, International Telecommunication Union ( ITU) realized World Summit on the Information Society creating “Geneva Plan of Action” who establish action lines to comply following targets: – The role of public governance authorities and all stakeholders in the promotion of ICTs for development – Information and communication infrastructure – Access to information and knowledge – Building confidence and security in the use of ICTs – Enabling environment – Cultural diversity and identity, linguistic diversity and local content – Ethical dimensions of the Information Society – International and regional cooperation

According with global environment and intention of comply the Millennium Goals, this year ITU Telecomm World will be focused in the following issues Accessibility Achieving equitable communication for everyone Confronting the financial crisis Climate Change and ITU Cybersecurity, Spam and Cybercrime Connecting the unconnected by 2015 Saving lives The networks of the future ITU Telecomm World 09 Background of international policies

Netherlands Norway Japan Chile Argentina Mexico Peru Ecuador Colombia Mobile Broadband Penetration Denmark United States Italy France UK Fixed Broadband Penetration Fixed and Mobile Broadband Penetration Latin America Source: The Competitive Intelligence Unit – “Agenda Digital para México” by Ernesto Piedras, June 2009

* Considers DSL, cable and wireless technologies Source: ITU & OECD Broadband Statistics 2008 Broadband development in Americas Terrestrial Broadband Coverage in Selected Countries* % of total households with access to terrestrial broadband technology Others: Minor to 5% Just considers penetrations above 5%

7 Mexican Broadband Market Broadband in Mexico since 1Q 2007 to 1Q 2009 Broadband connections (Thousands)Broadband Penetration Broadband connectionsBroadband penetration Source: The Competitive Intelligence Unit – “Agenda Digital para México” by Ernesto Piedras, June 2009

Source: Mexico - e Marketer Study 2009 Mexico has a 7.01% of Broadband penetration on its territory, distributed in the next technologies: Mexican Broadband Penetration by Technology

Key Challenges for Increasing Broadband Penetration Economically unfeasible to deploy terrestrial infrastructure in remote areas Low purchasing power of significant portion of the population in developing countries Lack of Competition in the Americas market (e.g. Mexico) Satellites are an excellent option to increase broadband penetration in the Americas

Key Challenges for Increasing Broadband Penetration Satellite Advantages Satellites are an excellent option to increase broadband penetration, specially in developing countries: Ubiquitous coverage Very short network deployment time Decreasing equipment costs Social connectivity projects based on satellite communications (C & Ku band) have been extensively deployed in Latin America Satellite technology allow Administrations to bring more services to isolated communities with low investment in infrastructure

Internet Teleport / Hub Household / kiosk / school / clinic DVB TDM/TDMA DVB TDM/TDMA 1 x n users (PCs) Satellite technology Typical network

Social and development programs through Satmex satellites e-Mexico program e-Mexico program integrate by Mexican Government in order to provide several services in rural communities according with the Society of the Information Education, health, telephony and internet are the principal services provided by e- Mexico More than 8,200 DDC’s (Digitally Communitarian Centers) covering more than 2,400 municipalities in Mexico, stages 2 and 3 with 8,000 places cursed through Satmex satellites Source: Programa e-México Gobierno Federal

COMPARTEL is a program integrate by Colombian Government in order to promote programs for internet access and connectivity for each community COMPARTEL program includes Telephony, and internet centers using satellite, fiber optic or submarine fiber technologies In 2009 COMPARTEL could reach 22,000 connected places, when more than 60% use satellite technology Social and development programs through Satmex satellites COMPARTEL – Colombian's Government program Source: Programa COMPARTEL - Ministerio de Comunicaciones de la República de Colombia

Social and development programs through Satmex satellites Fe y Alegría. is an educational program that was born in Venezuela 50 years ago, it’s intended to provide this kind of services to rural areas within 17 countries in the Americas More than 37,000 people are working on this effort, among hundreds of volunteers, and about 1.4 Million children receive the benefits of this program Satmex is trying to get resources through the ITU-D to support a satellite communications network to share new contents developed by ILCE As 2008 Fe y Alegría. program has 1.1 Million of students and 3,151 education centers

Alternative Models to Provide Satellite Broadband Solutions Social Developments to close the Technological gap for rural communities Countries would have to dedicate part of their budgets to develop this type of programs Governments shall promote regulations in order to open markets to the Competition Alternatives Government – sponsored projects Commercial NGO’s High Speed internet IP Solutions Voice and Data applications Equipment cost is still high to end-users High Speed Internet Services focused on closing the Technological Gap Tax benefits Comments Conclusions Satellites are an excellent option to increase Broadband Penetration