1. skyline marketing Transforming the Network: Implications for Telecom Power Marketing Intelec 2004 Chicago September 22, 2004

2. skyline marketing Wireless/Wireline Parity

3. skyline marketing POTS to PIPES  Circuit switches to packet (C2P)  Narrowband POTS to broadband PIPES (P2P)  “Triple-Play” services: POTS + Internet + TV on unified networks  Reduce costs: redirect capex and reduce opex

4. skyline marketing Major Telco Priorities New Growth Businesses 26% Established Business 74% 2004e CapEx = $15.7 B New revenue streams to replace POTS Bundled services to boost ARPU and replace profits Significant and sustainable OPEX reductions Retain and win-back customers Shift CAPEX to new technologies … C2P and P2P

5. skyline marketing DC Power Systems Primary Distribution System Control Batteries Utility AC in -48 VDC out AC/DC Rectifiers -48VDC Loads DC/DC Converter DC/AC Inverter AC Loads Other DC Loads Secondary Distribution … only the packaging changes!

6. skyline marketing Local Exchange Carriers

7. skyline marketing ILEC Network Before C2P Local Exchange Business Residential NGDLC STP SCP STP SCP STP Tandem HEO PBX Tandem Long Distance Network SEO Local Exchange Business Residential NGDLC System REO PBX Local Exchange

8. skyline marketing ILEC Network After C2P Local Exchange Business Residential Key System Softswitch PBX Packet Network Local Exchange Gateway Servers Gateway

9. skyline marketing Access Network Infrastructure “Subscriber” MDF F1 “Feeder” Plant F2 “Distribution” Plant Service Drop F2 Service Terminal Tandem (via IOF) T1 trunks on copper or fiber DLC (COT) Central Office Service Drop F2 Service Terminal Building Entrance Terminal “Subscriber” MTU or MDU Class 5 Switch CO Loop ~ 296 M “Equipped” Loops in Major Telcos ~ 168 M “Working” Loops in Major Telcos DLC (RT) SAIC

10. skyline marketing Fiber-to-the-Node (FTTN) Remote DSLAM (300-500 Subs) 5,000 ft max. Copper distribution SAIC Voice (PSTN/TDM) Data (ATM/FR, IP/Ethernet) CO 12,000-18,000 ft. Fiber feeder cable Power Node Remote DSLAM (300-500 Subs) SAIC Softswitch 48/190 VDC

11. skyline marketing Fiber-to-the-Premises (FTTP) Circuit/Packet Switch Optical Line Terminal (OLT ) Splitter Central Office Residential Optical Network Terminal (ONT) ONT Ethernet N x POTS Small Office/ Home Office Upstream Data Rate = 155 Mbps Downstream Data Rate = 622 Mbps Separate Wavelength for Video = 1550 nm DC Power AC

12. skyline marketing In-Building/ Near Building Picocell Neighborhood Microcell Vehicular Macrocell Integration with Wireline Network Cell Site Trends Mobility Access

13. skyline marketing In-building/ Near-Building Picocells 2.5G/3G Neighborhood/ Pedestrian Microcells 2G/2.5G/3G Vehicular Macrocells 2G/2.5G Cell Site Deployments Wi-Fi Hotspots

14. skyline marketing DC Power System Trends Serving Area Small Power Plant (150-800 A) Customer Macro/Micro Power Plant (5-100 A) CEVs, Huts, Cell Sites ONUs, Fiber Nodes, Micro/picocells “Power plant on a pole; power plant in a cabinet.” CO/Hub Large Power Plant (2,000-10,000 A)

15. skyline marketing Global Telecom Power Market, 2008 5-Year CAGR = 6% Source: Skyline est.

16. skyline marketing Power Product/System Features Energy efficiency –90-92+%; thermal performance Power density –Smaller size, weight for same output Ease of handling –Installation, maintenance Improved system control –Remote operation –Short-interval provisioning/maintenance

17. skyline marketing Telco Decision Factors Packaging –Reduced size/weight in compact package Performance –Increased power density –High availability/reliability –Energy efficiency –Remote intelligence, hands-off operation Price –Competitive first costs –Lower life-cycle costs

18. skyline marketing Strategic Marketing Know your customers –Network topology, customer base, key issues/drivers Adapt to price pressures –Bigger carriers looking for capex, opex reductions Develop value-adds –Turnkey packages - Equipment + Services in one stop –Time = money - JIT, Inventory management Scope aftermarket opportunities –Equipment add-ons, site management/maintenance –Growing outsource opportunities

19. skyline marketing It’s a small systems market! –Access gateways/remote terminals closer to customers < 1 mile Small power plants will predominate Sell telco-by-telco –Each situation is unique Develop a USP for each Follow the money! –Focus on key accounts Need to assess opportunities/risks Develop OEM channels Strategic Considerations

20. skyline marketing Skyline Marketing Group www.skylinemarketing.com We help you make your numbers!!