1. IT International Buyers and Global Export Forum 2012, Toronto March 20, 2012 Five Trends and Opportunities in the U.S. Telecom Market

2. Agenda 1. Five Telecom Trends/Opportunities ▫ Unified Communications ▫ Cloud Communications ▫ Mobile Applications ▫ Business Model Disruption for Operators ▫ The New End-User Experience 2. Opportunity Matrix Summary for IT March 20, 2012J Arnold & Associates

3. Unified Communications Trends and Opportunities Telecom vendors need to move on from hardware IT wants to get away from capital-intensive spending Telecom-centric value proposition outmoded now UC provides a framework for multimodal needs Presence is the secret sauce Allows IT to leverage their resources Concept not well understood – it’s a service Great opportunity when properly positioned March 20, 2012J Arnold & Associates

4. Cloud Communications Trends and Opportunities Cloud is gaining acceptance for communications Great way to support virtualization/globalization Confusing language – ASP, hosted, managed, etc. Many variations – IaaS, PaaS, CaaS, etc. Undermines need for physical networks Big driver for data centers and software vendors Giving rise to another major opportunity – Big Data Opens the door for more OTT/free providers March 20, 2012J Arnold & Associates

5. Mobile Applications Trends and Opportunities Device-driven market is unprecedented Ripple effect accelerating need for 4G/LTE, WiFi, etc. Operator’s worst nightmare – everyone wants it Consumer expectations driving business needs BYOD creating new challenges for IT New business models needed to monetize apps Operators are now in the apps/experience business GPS, LBS, mobile search, mobile commerce, mobile video, voice activated apps will surpass telephony March 20, 2012J Arnold & Associates

6. Business Model Disruption for Operators Trends and Opportunities Network traffic growth outpacing revenue growth Video poised to become the biggest traffic driver Web is already the biggest traffic driver on the LAN Voice traffic is growing, but most is free VoLTE will have similar impact as VoIP, but faster Many alternatives now to bypass incumbents With cloud, anyone can be a carrier – MSO, utility… Operators only have 2 assets that matter – subscribers and phone numbers March 20, 2012J Arnold & Associates

7. The New End User Experience Trends and Opportunities Everyone wants/likes/expects free Smartphones not actually used much for voice Quality and reliability of mobile calls still poor Smartphones poised to become the only device used Subscribers want moments, not minutes Subscribers will pay for services that deliver value Opportunities for both content creation and content consumption Need to protect that experience – mobile storage, privacy apps, content filtering, DRM, etc. March 20, 2012J Arnold & Associates

8. Opportunity Matrix Summary for IT March 20, 2012J Arnold & Associates Imminent Emerging IT Impact: High IT Impact: Low Timetable New End User Experience Cloud Comms Operator Biz Models Unified Comms Mobile Applications

9. Questions/Discussion Jon Arnold Principal J Arnold & Associates P: 416-907-8659 E: jon@jarnoldassociates.comjon@jarnoldassociates.com W: www.jarnoldassociates.comwww.jarnoldassociates.com B: http://jonarnold-analyst.blogspot.ca/http://jonarnold-analyst.blogspot.ca/ March 20, 2012J Arnold & Associates