1. Wi-Fi, WiMAX, Why Care? Sandy Teger and David J. Waks System Dynamics Inc. sandy@system-dynamics.com

2. Wireless Technologies for Different Ranges LAN MANWAN PAN Wi-Fi WiMAX 3G UWB/ZigBee /Bluetooth

3. Telephony: Shift from fixed to personal Source: Personal Broadband Industry Association

4. Telephony Spending Shift to Wireless Balance of spending for telephony has now moved to wireless Wireless telephony is largest share of consumer wallet - and only one growing Is broadband next? Source: TNS Telecoms, 2 nd Qtr 2004

5. Personal Broadband Next Source: Personal Broadband Industry Association

6. Solutions For Personal Broadband Deploying Now Wi-Fi Hotspot Bundles –SBC: DSL adder for $1.99 –Dual Wi-Fi/cellular handsets from SBC/Cingular for hand-off to hotspots and “roam to home” “Pre-WiMAX” Risk From 2.5 GHz band holders –Clearwire and Nextel already launched 3G: Verizon, Sprint Municipal wireless using Wi-Fi –Chaska, MN; Cerritos, CA; Philadelphia, PA; …

7. WiMAX – 802.16 Broadband Wireless Access – Metropolitan Area Networks Fixed (and nomadic) access: 802.16-2004 (8/2004) Mobile access: 802.16e (expected 5/2005) Maximum cell size ~30 miles, 1.5 to 5 more typical Maximum speed 100 Mbps (64QAM/20 MHz)

8. WiMAX: Great Expectations Addresses deficiencies of previous BBW –Interoperability –Cost of base stations and CPE –Shared bandwidth up to 100 Mbps –Line of sight not required –Coverage 3-5 miles, more like cellular –Licensed and unlicensed spectrum Many DOCSIS-like features including QoS Milestone to “broadband everywhere”

9. WiMAX Bandwagon Effect WiMAX Forum: ~160 members and growing –Complete value chain –Many chip companies, including Intel, Fujitsu –Many major equipment companies, including Motorola, Alcatel, Siemens –Many service providers, including BT, France Telecom and Qwest Analogous to Wi-Fi Alliance for 802.11 –Product certification through formal conformance and interoperability testing against “profiles” –Promotion, promotion, promotion

10. WiMAX Status “Pre-certification” products shipping now –Based on earlier 802.16a standard –Expensive base stations and CPE – enterprise focus Certified products in 2005 –Based on 802.16-2004 –Licensed 2.5 GHz (U.S.) and 3.5 GHz (ROW) –License-free 5.8 GHz –“Plugfest” interoperability testing started 2004 –Formal certification testing ~1H05 “Mobile WiMAX” expected late 2006 –CPE bundled in laptops by 2007

11. Other Mobile Broadband Wireless Technologies Deploying Now FCC just restructured 2.5 GHz band from video to broadband service Band holders not waiting for WiMAX –Nextel running large-scale market trial in Raleigh-Durham –Clearwire launched in Jacksonville, FL and St. Cloud, MN –Sprint also owns spectrum, deferring decision

12. Nextel in Raleigh-Durham Flarion “Flash-OFDM” technology Mobile within RDU area Downlink 1.5 Mbps (burst to 3Mbps) Service starts at $34.99 (750/200) Combo Wi-Fi/Flarion device: Netgear & D-Link Developing technical & market knowledge

13. Clearwire in Jacksonville, FL NextNet “pre- WiMAX” technology “Up to 1.5 Mbps” Starts at $24.99 (512/128) Easy self-install Licenses in >80 markets

14. Metro Wi-Fi High-volume, low cost, low margin Based on off-the-shelf consumer Wi-Fi adapters Not “carrier class” service Disruptive to MSOs?

15. Wi-Fi Gaps Being Filled Issue –Spectrum usage –Security –QoS –Interference –Roaming performance –Throughput –Mesh techniques –Range –Connection persistence Progress –802.11a –802.11i/WPA, WPA2 –802.11e/WMM –802.11h, 802.11k –802.11r –802.11n –802.11s Specifics

16. City-wide “Hot Zones” Already deployed in some smaller cities Big cities preparing to deploy soon Public safety a major driver, “digital divide” another Near-term threat and opportunity for MSOs

17. Rapid Pace of Innovation and Market Entry Mesh Networking –Tropos Networks –MeshNetworks –PacketHop –Nortel –Motorola –… Smart Antennas –Vivato –5G Wireless –…

18. City-Wide Wi-Fi in Chaska, MN City operated, 16 square mile coverage area Public safety, low-cost residential broadband service 7500 homes passed, 1100 pre-registered 200 cells, <$500,000 CapEx

19. Is Metro Wi-Fi Disruptive? “Disruptive Technologies”* –Simple, cheap –Target lower performance markets –Commercialized in emerging market –Fast technological progress Subsequently become performance competitive against established products * The Innovator’s Dilemma, Clayton M. Christensen

20. Is Your City Next?