1. © Copyright 2006. Yankee Group Research, Inc. All rights reserved. Camille Mendler Vice President Telecommunications Strategies cmendler@yankeegroup.com Where’s The Money? New Carrier Business Models In the Age of Declining Greenfield Markets

2. NetEvents Global Press Summit Hong Kong © Copyright 2006. Yankee Group Research, Inc. All rights reserved.Page 2December 1, 2006 The industry struggles to break the status quo and post-2000 doldrums Emerging ecosystems accelerate service innovation potential and disrupt traditional business models Uncertain market demands drive increased service velocity Need to shift from a communication to a media and application focus for innovation Lofty investments in new entrant web players increase market uncertainty What’s the way forward? The Market in Review

3. NetEvents Global Press Summit Hong Kong © Copyright 2006. Yankee Group Research, Inc. All rights reserved.Page 3December 1, 2006 Commerce Centric Amazon.com eBay Ad-Supported Search Centric Yahoo! Google CE Centric Sling Media Community Centric MySpace Craigslist Sina Media Centric BitTorrentYouTube News Corp Apple Network Communications Centric Vonage P2P Communications Centric AIM Google Talk Skype Network Centric Vodafone Verizon Wireless China Mobile Sprint Telecom Italia France Telecom Seeking Business Models in a Fluid Environment Digital Media and Internet Disrupt The Status Quo Comcast

4. NetEvents Global Press Summit Hong Kong © Copyright 2006. Yankee Group Research, Inc. All rights reserved.Page 4December 1, 2006 Fragmented Markets and Business Models Traditional Subscriber-Centric Models Are Under Attack ARPU or Equivalent Number of Users ARPU: $27 1.6 million subscribers (YE 2005) Vonage ARPU: $50 51 million subscribers (YE 2005) Verizon Wireless ARPU: $8.60 247 million subscribers (YE 2005) China Mobile ARPU: $2.70 402 million subscribers (YE 2005) Yahoo! Google ARPU: ~$0.20 75 million subscribers (YE 2005) Skype Pure Equipment Sell: ~$200 Sling Media Source: Company Annual Reports and Yankee Group Comcast ARPU: $53 21.4 million video subscribers (YE 2005) ARPU: Average revenue per user

5. NetEvents Global Press Summit Hong Kong © Copyright 2006. Yankee Group Research, Inc. All rights reserved.Page 5December 1, 2006 Where Does Value Lie? Perceptions Differ Sharply ARPU or Equivalent Number of Users Vonage Verizon Wireless Vodafone China Mobile Yahoo! Google Skype Sling Media Source: Company Annual Reports and Yankee Group Value in the Subscriber Value in the Community eBay MySpace YouTube Craigslist TIM H3G Sprint

6. NetEvents Global Press Summit Hong Kong © Copyright 2006. Yankee Group Research, Inc. All rights reserved.Page 6December 1, 2006 Determining the Future: Who’s on Top? Option One - The Imperialists Who: Telcos, wireless operators, cable cos Business Model: Subscription Primary Asset: Consumer context (location, services, profile, usage) The managed network Devices: Terminal handset, set-top box, home gateway Locus of Innovation: Internal Image Source: Flickr

7. NetEvents Global Press Summit Hong Kong © Copyright 2006. Yankee Group Research, Inc. All rights reserved.Page 7December 1, 2006 Determining the Future: Who’s on Top? Option Two – The Guerillas Who: Portals, Web 1.0 survivors, Web 2.0 entrants, CE vendors, PC vendors, venture capital firms, millions of consumers Business Model: Advertising supported, subscription, transaction, barter, no business model at all Primary Asset: Audience, community, open standards Devices: Laptops, PCs, game consoles, DVRs, web tablets, portable audio devices, portable video devices Locus of Innovation: The crowd, the visionaries, the startup, the dormitory Image Source: Flickr

8. NetEvents Global Press Summit Hong Kong © Copyright 2006. Yankee Group Research, Inc. All rights reserved.Page 8December 1, 2006 Conclusions Business models – take your pick in today’s market Quality vs. quantity in definition of value In the words of Cole Porter: “Anything Goes”

9. NetEvents Global Press Summit Hong Kong © Copyright 2006. Yankee Group Research, Inc. All rights reserved.Page 9December 1, 2006 Thank You Camille Mendler Vice President Telecommunications Strategies cmendler@yankeegroup.com +44 (0)207 307 1085 For schedules, please visit our web site: www.yankeegroup.com Come and visit us at one of our upcoming Live! events or tune in to one of our free webinars. NovemberDecember December 4-8 ITU Telecom Forum (event); Hong Kong November 21 The Anywhere Consumer (webinar) December 7 The Economics of Delivering Triple Play to the Home (webinar) December 19 Managing and Securing the Anywhere Network (webinar) January 8-11, 2007 First Annual Mobile Broadband and Content TechZone at CES (event); Las Vegas, NV January, 2007 January 12 Evolution of the Anywhere Enterprise (webinar)