© 2007 Level 3 Communications, LLC. All Rights Reserved. 1 Beyond SIP Trunking What’s Next ? September 11, 2007 Michael Remacle

© 2007 Level 3 Communications, LLC All Rights Reserved. 2 What’s Going On with the Communications Market Today? Application Convergence End point Convergence Network Convergence Horizon 1Horizon 2Horizon 3 Today IP/ TDM End points Applications Network Transport Distributed Architecture Yesterday PSTN End Point Application Network Transport Integrated Architecture The communications environment has seen a lot of change over the past 10 years with the advent of VoIP / SIP Significant changes on the horizon as applications, networks, and end points converge to a pure IP environment Tomorrow

© 2007 Level 3 Communications, LLC All Rights Reserved. 3 Current Communications Environment Wireline Communications Environment Transitioning from Vertical Communications Environment to a Horizontal Communications Environment 2G/2.5G wireless business model still vertically integrated –Enhanced Services –Feature Server/Class 5 –Application Server –SBC –Media Server –Gateway Customer Support Value-Added Services Switching Long-Distance Network Local Access Traditional Communications (Vertical Integration) CASPs –Hosted Applications –Access/Service Delivery –Customer Support –Sales & Marketing ISVs / IHVs Wholesale Carriers –E911 –PSTN Connectivity –Nationwide DIDs –Multiple Peering Partners –IP Transport IP Centric Communications (Horizontal Integration) VoIP Technology

© 2007 Level 3 Communications, LLC All Rights Reserved. 4 Horizon 1: Application Convergence Applications and call control transition to a SIP core Primary line applications integrate with enhanced service applications to create business communications solution sets  Conferencing, unified messaging, and contact center End points interact via media gateways as IP edge and end points Majority of end points still interact via IP / PSTN gateways Wireless and wireline networks still independent of each other Service providers deliver incremental value to their customers while end users obtain greater productivity and simplicity Marketers are moving away from wireless and wireline to business and consumer Example: Packet 8 Application Convergence Waves WirelineWireless TDMIP Frame Relay Primary Line Conferen cing Contact Center Unified Messaging

© 2007 Level 3 Communications, LLC All Rights Reserved. 5 Horizon 2: Network Convergence Integration of wireless and wireline networks leveraging SIP core Single identity or phone number possible across wireless and wireline networks Can be marketed as stand alone wireless or integrated communications End points are either TDM and/or IP Messaging services ubiquitous across end points Leverages IP routing core Service providers able to offer bundled solutions while providing integrated and universal messaging, billing, and feature set Example: Jitterbug Application Convergence Waves Wireline End Points Wireless End Points Frame Relay Network Convergence

© 2007 Level 3 Communications, LLC All Rights Reserved. 6 Horizon 3: End Point Convergence Application Convergence Waves Network Convergence End Point Convergence Ubiquitous IP environment Wireless and wireline end points are all IP based Directly interacts with native IP-based application servers Access provided by reliable IP-based wireless last mile network Will be initially launched in campus environments

© 2007 Level 3 Communications, LLC All Rights Reserved. 7 Summary Innovation is rapidly changing the communications market Migration to IP technology is the core to this change Change will start at the application layer and move to the edge Innovation will come in waves and we need to focus our business strategies to leverage each business and technical horizon Innovation is improving end user experience while helping to improve the overall telecom market