1. “Internet protocol virtual private networks (IP VPNs) configured over MPLS platforms allow the convergence of corporate applications with high quality of service (QoS), enabling service providers to control and manage the entire network transit and their performance.” Latin America VPN Markets Network-based Multi Protocol Label Switching (MPLS) Offers Great Opportunities to Global Telecom Service Providers Latin American Telecom Analyst Team Frost and Sullivan

2. IP development has occurred strongly in many countries, but customer awareness and acceptance hasn’t reached point of high adoption. Top new companies have made IP a core part of their market strategy, attempting to be prepared for development in that area (specifically in realm of managed enterprise solutions, VoIP) With a great portion of legacy networks expected to migrate to MPLS, IP VPN will become the standard model for these solutions. Network complexity will be defined by the segmented QoS offering whether it be for mission critical applications, for voice/video or for regular data Industry Trends

3. Pricing changing with increasing competition, dropping CPE costs (evolving towards subsidized set up costs), bandwidth commoditization, and local loop unbundling. As long as the competitive landscape will become more homogeneous in terms of offering, the definition of competitive factors to provide VPN solutions will shift to the additional features and capabilities the different offerings will have. Industry Trends (Cont’d)

4. “VPN promise in Latin America amid difficult economic times leads way to the corporate communications convergence” Technologies covered: IP VPN (MPLS, IP Sec), Legacy VPN (frame relay, ATM - Intranet/Extranet, Remote Access) Region Covered: Latin America roll up. Principal Topics Covered - Business models analysis - Key drivers & restraints affecting the market Key Features

5. - Market forecast (through 2007) of future clients & business sites connected via IP VPN, segmented by network/edge-based connections - Pricing parameters & ranges - Market & Technology trends (basic vs. advanced solutions, bandwidth & links contracted, geographic distribution) - Competitive structure & Strategic Assessment of key competitive tiers - Country market analysis (Argentina, Brazil, Chile, Colombia, Mexico & Venezuela) Key Features (Cont’d)

6. Secondary Research  Internal Frost & Sullivan reports & databases  Official country statistical sources  Other external sources (company web pages, articles, etc.) Primary Research  In-depth interviews with key participants in both regional and local levels, covering quantitative & qualitative aspects of market development as well as companies’ activities. Forecasting  Bottom up approach, models based on number of clients, pricing, bandwidth & links contracted, basic vs. advanced solutions  Cross-reference and benchmarking among all markets of the region and technologies covered What We Offer

7.  Migration  Migration from legacy infrastructure to IP MPLS offers strong potential and high flexibility for network integration spread down to lower end  IP Sec technology will allow VPN penetration to spread down to lower end business sectors due to its high cost effectiveness full convergence concept  IP VPN solutions will ultimately lead way to the full convergence concept (voice + data + VAS) source for product development  IP VPN will appear as an excellent source for product development allowing service providers to become the “owner” of the client’s network  Partnerships and alliances  Partnerships and alliances among carriers equipment vendors, system integrators and software developers will aid bringing the client a solid, unified solution geographic expansion strategy  Agreements between local operators and global carriers could certainly aid enhancing a geographic expansion strategy, bringing good perspectives to both of them to explore new market segments, as well as overcome lacking backbone and/or last mile capabilities. Who Will Benefit?

8. Top corporate and multinational sectors seeking to make communications among business sites more efficient enabling collaboration and sharing applications New comers to corporate network configurations will jump directly into IP VPN solutions IP VPN demand and penetration will hold hands with VoIP services and overall IP PBX equipment development Continuous product development to provide more cost- effective offering together with VAS will fuel medium enterprise sectors to enter the VPN space Partnerships and alliances among carriers equipment vendors, system integrators and software developers will aid bringing the client a solid, unified solution What’s Included

9. Key Market Participants Regional Players: AT&T LA Corp. Comsat International/ Comsat Corp. Equant Global Crossing Impsat Fiber Networks, Inc. Infonet Services Corp. Local Operators: Embratel Brasileira de Telecomunicações Entel Telefonica Data USA Telecom Argentina Telmex

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