1. 1 © 2003 Cisco Systems, Inc. All rights reserved. 111111 Next Generation Services Redefining Interpersonal Communication Robert Lloyd President, EMEA Operations Cisco Systems, Inc.

2. 222 © 2003 Cisco Systems, Inc. All rights reserved. 222 The Evolution of SP Networking The Network as a Platform Next Generation Voice Services SP Move to Converged Services Agenda

3. 333 © 2003 Cisco Systems, Inc. All rights reserved. 333 A Future Outlook for Service Providers I2NI2NI2NI2NI2NI2N Internet VPNs Transport Content Voice & Video Mobility EnterpriseConsumer Small Business Service Provider of The Future Connecting Customers with Services, Services with Networks, and Networks with Each Other © 2003 Cisco Systems, Inc. All rights reserved.

4. 444 444 Cisco Strategy for Enabling SP Success ACCELERATE Demand Accelerate Demand by Connecting SMB and Enterprises to SP Services and Leverage Cisco Routes to Market ACCELERATE Demand Accelerate Demand by Connecting SMB and Enterprises to SP Services and Leverage Cisco Routes to Market BUILD Networks Extensible and Efficient Carrier Class Packet Infrastructures for Lower TCO BUILD Networks Extensible and Efficient Carrier Class Packet Infrastructures for Lower TCO OPTIMIZE Business OPTIMIZE Business Expertise to Support Business & Network Transitions and Improve Operational Efficiencies Expertise to Support Business & Network Transitions and Improve Operational Efficiencies DEPLOY Services Layer Existing and New Services for Revenue and Profit Growth, Faster Time to Market DEPLOY Services Layer Existing and New Services for Revenue and Profit Growth, Faster Time to Market

5. 555 © 2003 Cisco Systems, Inc. All rights reserved. 555 Service Provider Network Evolution Packet Consolidation Past: Circuit Leased Line PSTN Mobile Dial-Up Internet Present: Hybrid Broadband Services PSTN Mobile Optical FR/ATM High-Speed Internet Future: Packet Next Generation Packet Architecture Mobile PSTN Broadband 555 © 2003 Cisco Systems, Inc. All rights reserved.

6. 666 666 SP Move to Converged Services 666

7. 777 © 2003 Cisco Systems, Inc. All rights reserved. 777 What is Driving Operators to Migrate to Packet Voice Infrastructure? Source: Yankee Group 2003 Competitive Advantage for New Service Offerings Customer Demand for New Services TDM Switch Exhaust Corporate Strategy to Converge Voice and Data Networks Yankee Group Survey, Autumn 2003

8. 888 © 2003 Cisco Systems, Inc. All rights reserved. 888 Today 3 years < 12 months 1-2 years 2-3 years 3+ years Evidence that operators are combining lab and pilot activities Pace of wide-scale migration peaks Timeline to Convergence… Yankee Research Source: Yankee Group 2003

9. 999 © 2003 Cisco Systems, Inc. All rights reserved. 999 Benefits Operators Expect from Packet Voice Source: Yankee Group 2003 Cap ex reduction Phasing out legacy equipment New Features Available Op ex reduction

10. 10 © 2003 Cisco Systems, Inc. All rights reserved. 10 Which Converged Services are Offered Today or Will Be Offered Within Three Years? Source: Yankee Group 2003 Service Provider – managed IP Telephony Video Services Unified Messaging IP Contact Centres Broadband DSL

11. 11 © 2003 Cisco Systems, Inc. All rights reserved. 11 Voice Internet Data Center Data Center Security Storage Video Mobility IP-VPN Services Resulting from Next Generation Packet Architecture © 2003 Cisco Systems, Inc. All rights reserved. Broadband

12. 12 © 2003 Cisco Systems, Inc. All rights reserved. 12 The Network as a Platform 12

13. 13 © 2003 Cisco Systems, Inc. All rights reserved. 13 Lasting Lasting Architecture Generational Approach Investment Protection Faster Routers and Switches Silicon, Hardware Lower cost Smarter Quality of Service, Availability Security, Manageability, Convergence The Intelligent Information Network…

14. 14 © 2003 Cisco Systems, Inc. All rights reserved. 14 New Demands on the Network Enterprise, Government & SMB Dynamics Business Imperatives IT Applications Network Implications Network Implications Collaborative apps B2B Applications Web services IP telephony Consolidation Storage / back-ups Content distribution Distributed data centers Collaborative apps B2B Applications Web services IP telephony Consolidation Storage / back-ups Content distribution Distributed data centers Reduce cost Increase productivity Enable BPR Improve customer responsiveness Increase citizen centricity Build resilience Reduce cost Increase productivity Enable BPR Improve customer responsiveness Increase citizen centricity Build resilience Any-to-any Scalable bandwidth Convergence QoS Security Availability Mobility Web integration Manageability Any-to-any Scalable bandwidth Convergence QoS Security Availability Mobility Web integration Manageability 8379_07_2003Copyright Cisco Systems, Inc. 2003

15. 15 © 2003 Cisco Systems, Inc. All rights reserved. 15 Network as a Service Delivery Platform Packet Layer Services Network- Embedded Services Voice Security Wireless Storage Single point of control Ubiquity of implementation Services are end-to-end Cost advantage

16. 16 © 2003 Cisco Systems, Inc. All rights reserved. 16 Packet Layer Services Increased Complexity Database Routing, Multicast Classification Content Awareness Transformation Encryption, Filtering Queuing QoS Traffic Shaping

17. 17 © 2003 Cisco Systems, Inc. All rights reserved. 17 Secure Converged Network PBX and Key Systems Firewall and VPNs Storage Virtualization Software Storage Virtualization Software Mobility Management Mobility Management Service Beyond Packets: Network-Embedded Applications

18. 18 © 2003 Cisco Systems, Inc. All rights reserved. 18 Managed Service—Phase 3: Enhanced Services Managed Service—Phase 3: Enhanced Services Managed Service—Phase 2: Convergence Network Integration Managed Service—Phase 2: Convergence Network Integration Managed Service—Phase 1: Managed LAN Services Managed Service—Phase 1: Managed LAN Services Managed CPE IP VPN CPE Resale Bundled Managed Services Strategy Connectivity Revenue Customer Churn © 2003 Cisco Systems, Inc. All rights reserved.

19. 19 © 2003 Cisco Systems, Inc. All rights reserved. 19 Partnering to Deliver Blended Mobility Experience

20. 20 © 2003 Cisco Systems, Inc. All rights reserved. 20 Next Generation Voice Services 20

21. 21 © 2003 Cisco Systems, Inc. All rights reserved. 21 Internet Data Center Data Center Security Storage Video Mobility IP-VPN © 2003 Cisco Systems, Inc. All rights reserved. Broadband Services Resulting from Next Generation Packet Architecture Voice

22. 22 © 2003 Cisco Systems, Inc. All rights reserved. 22 SP Voice Strategy and Segmentation Residential Voice over Broadband Residential Voice over Broadband Transit / Class 4 Replacement Transit / Class 4 Replacement Local Class 5 Replacement Local Class 5 Replacement SP VOICE SP VOICE Data and Voice Convergent Services TDM to Packet Transformation Greenfield Voice Infrastructure and Applications Greenfield Voice Infrastructure and Applications Managed Business Voice Managed Business Voice New Revenue Services New Revenue Services Inside Out OPEX savings driven Inside Out OPEX savings driven Outside In Profitable revenue growth Outside In Profitable revenue growth 22 © 2003, Cisco Systems, Inc. All rights reserved. Convergence & Replenishment Convergence & Replenishment

23. 23 © 2003 Cisco Systems, Inc. All rights reserved. 23 TDM to Packet Transformation Gathering Momentum Telecom Italia leads the way 17 billion voice minutes a year 100% of all Telecom Italia’s national voice traffic will be over IP by end of 2003 66% OPEX saved Majority of EMEA Service Providers employ converged services infrastructure today.

24. 24 © 2003 Cisco Systems, Inc. All rights reserved. 24 Fastweb: Residential Voice & Video over Broadband About Fastweb EMEA’s first true broadband operator Over 220,000 signed subscribers and 35,000 buildings passed Converged Services Portfolio Fiber to the Home Single high-speed fiber connection for integrated voice, Internet and video Services... ‘future Proof’ technology IP integration enables second generation Internet applications: i.e., high quality interactive video, telephony and data Value Add of this Approach Unique network assets… large-scale deployment in key metropolitan areas: >30% market share in selected areas and >10% overall Non-replicable network assets Unique service offering, welcomed by the market, business model copied by others About Fastweb EMEA’s first true broadband operator Over 220,000 signed subscribers and 35,000 buildings passed Converged Services Portfolio Fiber to the Home Single high-speed fiber connection for integrated voice, Internet and video Services... ‘future Proof’ technology IP integration enables second generation Internet applications: i.e., high quality interactive video, telephony and data Value Add of this Approach Unique network assets… large-scale deployment in key metropolitan areas: >30% market share in selected areas and >10% overall Non-replicable network assets Unique service offering, welcomed by the market, business model copied by others © 2003 Cisco Systems, Inc. All rights reserved.

25. 25 © 2003 Cisco Systems, Inc. All rights reserved. 25 Customer Deployment Options Service Provider Services Cisco CallManager (CCM) Remote CCM IP Phones (SRST) Cisco CallManager Express (CCME) <120 seats SP Business Voice Infrastructure Site-to- Site Voice PSTN Access Enhanced IP Services Unified Communications Remote Network Management and Operations Call Accounting PSTN Connectivity Regulatory LNP, LI.. Regulatory LNP, LI.. Security, QoS Security, QoS Scalability VPN Call Routing VoIP GW with Legacy PBX A IAD with Analog Phones Business Telephony Services Managed Business Voice Services

26. 26 © 2003 Cisco Systems, Inc. All rights reserved. 26 Cisco’s Service Provider Strategy Broad Service Creation Portfolio New Services, Expanded Market New Services, Expanded Market Unique Position to Accelerate Demand Partnering for SUCCESS! Managed Services Migration Increase ROI, Decrease OPEX 26 Faster, Smarter, Lasting Packet Infrastructure © 2003 Cisco Systems, Inc. All rights reserved.

27. 27 © 2003 Cisco Systems, Inc. All rights reserved.

28. 28 © 2003 Cisco Systems, Inc. All rights reserved. 28

29. 29 © 2003 Cisco Systems, Inc. All rights reserved. 29