1. Lucent Technologies Bell Labs Innovations Fifth Annual Conference on e-commerce (R)evolution Goes Mobile Sorabh Gupta Business Development Manager Service Provider Networks Lucent Technologies sorabh@lucent.com We make the internet mobile !

2. Outline State of the mobile market in US What is 3G? How will networks evolve to 3G? Lucent’s Game plan to assist the operator in the changing world of voice/data networks Our beliefs, our landscape and our product portfolio to make the internet mobile Conclusions

3. Mobile market in the US Wireless coverage not ubiquitous or consistent Migration from analog to digital handsets is not complete - approx. 30% analog base Differing technology standards (TDMA, CDMA, GSM) have slowed the release of phones and services in the United States Infatuation with PC is one of the biggest hurdle to wireless web Limited network bandwidth and device memory prohibits large downloads Circuit switched data technology does not allow microbilling Jupiter Communications * Yankee, Strategis

4. What is 3G? cdma2000 & DoCoMo WCDMA CWTS, TIA, ARIB & TTC ANSI-41 / WIN & GSM-MAP/CAMEL Asia/ Pacific UTRA GSM-MAP / CAMEL Europe ETSI A “Family of Systems” for IMT-2000 services, ensuring network standards interoperabil ity. cdma2000 & UWC-136 ANSI-41/ WIN/GSM-MAP T1 / TIA TR 45 North America ~2.048 Mbps~384 kbps~144 kbps ~9.6 kbps

5. Global Wireless Standards Evolution 199519992000200120022003+ PDC Voice cdma2000 3X MC High Capacity Voice 384+ kbps Packet Backward Comp. 2.4 Mbps Packet Backward Comp. 1xEV Data Only GSM Voice 9.6 kbps Ckt Data upto ~115 kbps Packet Backward Comp. GSM GPRS High Capacity Voice Up to 2Mbps New Radio Equipment W-CDMA (Japan) 384 kbps Packet EDGE (US) EDGE (Europe) W-CDMA (Europe) cdmaOne Voice 14.4 kbps Circuit Data TDMA IS-136 Voice 9.6 kbps Ckt Data 2G 2.5G 3G/ IMT-2000 Capable 2 times voice capacity 153 kbps Packet cdma2000 1X RTT Higher Cap Voice/ Data Backward Comp. 1xEV Voice/Data PDC-P 9.6 kbps Packet Data

6. How will we do this evolution ? 199519992000200120022003+ Voice 9.6 kbps cdma2000 3X MC High Capacity Voice 384+ kbps Packet RF Backward Comp. 2.4 Mbps Packet RF Backward Comp. 1xEV Data Only GSM Voice 9.6 kbps CSD upto ~115 kbps Packet RF Backward Comp. GSM GPRS High Capacity Voice Up to 2Mbps New RF W-CDMA (Japan) 384 kbps Packet EDGE (US) EDGE (Europe) W-CDMA (Europe) cdmaOne Voice 14.4 kbps CSD TDMA IS-136 Voice 9.6 kbps CSD 2G 2.5G 3G/ IMT-2000 Capable Twice voice capacity 153 kbps Packet cdma2000 1X RTT Data & Voice solution 2G networks UPGRADABLE OLD mobiles compatible NEW voice/data devices Higher Cap Voice/ Data RF Backward Comp. 1xEV Voice/Data SAME spectrum High infrastructure reuse New Mobiles Backward Compatible Data ONLY NEW infrastructure NEW data devices New Spectrum New Network New Air Interface New Mobiles No Backward Compatibility Data ONLY NEW infrastructure NEW data devices PDC

7. Our Gameplan The Operator Win –Maximize value of the network –Grow the size of the mobile internet opportunity The Lucent Approach –Delivering today 3G-ready network for mobile internet –Leverage partnerships to stimulate markets and innovation –Identify new opportunities for our customers to capture value

8. The Changing World of Our Customer Operations Services Back EndFront End Mobile Virtual Operator Service Bureau Mobile Operator Cyber Carrier Service Provider Network Operator Drivers: Data, Bandwidth, and Scale Today’s Model: Voice World Emerging Model: Converged Voice/Data World Changing drivers are causing specialization leading to segmentation by core competencies

9. Our beliefs Microbilling is the Killer Application –Billing and transaction settlement are cornerstones of extracting new revenue Connectivity and transport services are table stakes –Margins will be captured through higher value services Communities are sticky –Services engaging more people will drive usage (e.g., fantasy football, video gaming) and reduce churn The central theme is … Me! –Personalized services will dominate the application landscape. Leveraging customer information enables new revenue opportunities –Capturing the knowledge behind customer habits will drive innovation for boutique services and intelligent agents. Devices will grow muscles –Applications will leverage client/server architectures to optimize RAN traffic –Fat clients will drive innovation for “dark spectrum services” Speed will change the game –3G enhanced data performance drives new services, content, partnerships, and revenue sources

10. Our Landscape Terminal Range of Infrastructure Elements Cyber Centers Core Network Switching Centers Radio Access Network Reach of Revenue Opportunities Seamless Operations Sensory Networks Market Trust Services Anyone to Anyone Services New Media Services Services “breaking all the rules,” opening new revenue streams Interacting with anyone, anywhere, anytime – using any media Mobile commerce foundation unlocking the revenue potential It’s all about Me! … leveraging dynamic subscriber information Robust, reliable and high performance for flawless operations

11. Our Landscape is a Total Value Chain Terminal Range of Infrastructure Elements Cyber Centers Core Network Switching Centers Radio Access Network Reach of Revenue Opportunities Seamless Operations Secure the Pipe Network ManagementAvailabilityScalability Inter-Domain Intelligence Sensory Networks Location Dynamic Customer Information PresenceTimeContent SwitchingAuthentication Market Trust Services Micro-BillingCRMe-CareFraudT-settlementP-to-P ProfilingMicro-TransactionSecurityData MiningYield Pre-Pay Anyone to Anyone Services Speech-Text-SpeechSignallingDirectoryLanguage Translation E-mailSMSIMUnified MailboxVoice ServicesPIMGroupWare New Media Services Gateways GamingPortalTelemetry Streaming Video on Demand AlertAdServe Navigation Intelligent Agents Enterprise Technology Enablers Applications

12. Lucent Has A Broad Product Portfolio Terminal Cyber Centers Core Network Switching Centers Radio Access Network Lucent is prominent with products, services and market insights across the new mobility value proposition Seamless Operations Sensory Networks Market Trust Services Anyone to Anyone Services New Media Services Range of Infrastructure Elements Reach of Revenue Opportunities

13. The Breadth of the Lucent Offer Terminal Range of Infrastructure Elements Cyber Centers Core Network Switching Centers Radio Access Network Reach of Revenue Opportunities Seamless Operations Sensory Networks Market Trust Services Anyone to Anyone Services New Media Services Logica DataOnAir Spyglass Pedagog Compaq SignalSoft Infospace … Extended Systems MapInfo Oracle Purple Software Hotpalm Phone.com Brience BroadVision Strategy.com Sun Microsystems Argo … … … … n Lucent is prominent with products, services and market insights across every facet of the new mobile value proposition n The marketplace requires that we build an ecosystem of partners that we can bring to the table with customers and leverage for innovation n Lucent is prominent with products, services and market insights across every facet of the new mobile value proposition n The marketplace requires that we build an ecosystem of partners that we can bring to the table with customers and leverage for innovation PacketIN Arbor WaveStar ConnectVU WL NX64000 IP Navigator iCARE III Profilium RTS Wireless Wireless Solutions

14. A Focused Platform for Enabling Content Services –Location, Presence and Authentication –Mobile Internet Development Kit (MIDK) Support –Access to Third Party Applications Flexent Mobile Internet Gateway Benefits: Extending the Network Value –Easily Build Enhanced Wireless Internet Service utilizing the knowledge of the network Quick to Market using standard Internet protocols Built in Security –Secure architecture model: authenticating applications Applications WAP Gateway InternetIntrarnet Content Portal Media Gaming Location M-Commerce Messaging SESSIONMGMTSESSIONMGMT APIAPI MSC IWF SMSC I-HLR OMP Billing MobileInternet Gateway

15. Mobile Operator Mobile Operator MVNO Enabling the Mobile Virtual Operator Mobile Virtual Operator Mobile Operator MobileInternet Gateway Presence Location Subscriber data Service state Subscriber state Billing/Prepay Bearer Performance/QoS … Activation Provisioning Content Services Bearer IN Services QoS configuration n Lucent’s Flexent Mobile Internet Gateway enables secure information flow between the Virtual Operator and Mobile Operator

16. Conclusions Improvement in data speeds and user applications will enhance customer experience Global roaming is possible with: –SIM or UIM card –Multi-mode, and perhaps, a Multi-band mobile Interoperability is very complex –Huge investments have been made to build today’s networks –Standards bodies can salvage much of this incompatibility Capacity improvement and migration to digital networks Evolution and not revolution of existing networks to 2.5G will reduce the risk We have a history of wire-based Internet use with PCs and browsers Incompatible with Europe and Asia GSM 2G wireless Teleoperators –Several, well-financed companies with competing and incompatible 3G technologies Wireless coverage not consistent or ubiquitous Huge investments required to build 3G networks –Long payouts based on new-to-be- developed applications