1. Rik Missault, VP Digital Media & Advertising V1 Mobile Entertainment & Advertising: Opportunities beyond Challenges

2. All Rights Reserved © Alcatel-Lucent 2008 2 | Mobile Entertainment & Advertising | February 2009 Mobile voice ARPU forecasted to decline over 26 percent worldwide by 2010 With new smartphones, such as the Apple iPhone, HTC G1, BlackBerry Storm, as catalysts, data revenue share expected to double by 2010, but will not offset the drop in voice revenue Mobile entertainment as starting point to avoid dumb wireless bit-pipe scenario Mobile industry market trends

3. All Rights Reserved © Alcatel-Lucent 2008 3 | Mobile Entertainment & Advertising | February 2009 Trendsetters in mobile entertainment StarhubTV (Singapore) — powered by Alcatel-Lucent Carrier/service StarHub, Singapore: Over 1.7 million subscribers 3G/HSDPA infrastructure Service name: StarHubTV Solution providerProvided and managed by Alcatel-Lucent Bundles $26.75/month for unlimited access (about 13 euro) $3.75/day for unlimited 24-hour access Programming Six live channels Mix of mainstream broadcast channels and an unlimited number of specialty unicast channels News and sports are among the most preferred types of programs Differentiators  Intuitive graphical user interface (Rich Media Client)  Full-featured Electronic Program Guide (EPG)  Fast channel changing  Interactive contextual teasers embedded in TV programs  Focused engagement at all levels of the company, a partnership Launch Activities Kick off service with Euro 2008 coverage, the UEFA European Football Championship series Offered free 2008 Olympics coverage Networks3G commercial deployment and DVB-H trial Telco mobile TV solution as foundation

4. All Rights Reserved © Alcatel-Lucent 2008 4 | Mobile Entertainment & Advertising | February 2009 Make business case for mobile entertainment work Opportunity and challenges  Consumers are interested in mobile entertainment  Willingness to pay for mobile TV is 5 to 10 euros  Ring tones and mobile ringback tones each outsell total iTunes sales worldwide  The associated costs are significant  Acquire compelling/premium content, spectrum, backbone, customers acquisition, customer education, integration project, application innovation

5. All Rights Reserved © Alcatel-Lucent 2008 5 | Mobile Entertainment & Advertising | February 2009 Four guidelines to make a compelling business case according to Alcatel-Lucent Mobile as part of multi-screen: ingest content once Upsell apps/content: develop interactivity once Tap into digital ad revenue: sell media once Open innovation: enable once 2 1 3 4 Apply a smart entry strategy for mobile entertainment and exploit your assets

6. All Rights Reserved © Alcatel-Lucent 2008 6 | Mobile Entertainment & Advertising | February 2009 Guideline reflection Alcatel-Lucent multi-screen portfolio for entertainment and advertisement Third parties Content delivery network (wireless, wireline) Digital media and advertising- enabling suite IPTV Mobile Broadband Targeted ad selection and serving (5931 ADSS) Content management and marketing (5920 MCM) Interactive TV application mgmt (5930 IMM) Media/ad agencies On-deck content providers xDSL DVB-H/SH 3G/LTE Off-deck content providers Media streaming (5910 MSS) Media servers (5900 MRF, SRP, PRBT) Consumer Real-time, conversation service delivery platforms Open APIs Behavioral profiling … 2 1 3 4 WiMAX FTTx

7. All Rights Reserved © Alcatel-Lucent 2008 7 | Mobile Entertainment & Advertising | February 2009 Alcatel-Lucent 5920 Multimedia Content Manager Use case: Orange Israel  Phase 1: Introduce MCM for mobile to reduce OPEX (ingestion time), and one system handling all assets (no silo)  Phase 2: Extend to second screen (PC), using same MCM backend ( limit OPEX ), and provide cross-product offers and promotions to subscribers Mobile 1 Online Single asset management and marketing solution for mobile and PC

8. All Rights Reserved © Alcatel-Lucent 2008 8 | Mobile Entertainment & Advertising | February 2009 2 Alcatel-Lucent 5930 Interactive Media Manager Use case: Telefónica Imagenio  Generate new revenue streams by enabling third-party content owners and/or advertising agencies to publish their own interactive TV services  Live since mid-December 2008 to 600,000 Imagenio IPTV subscribers  Features the first interactive advertising portals : microsites for brands and channels to promote their new products or shows (currently Ford and FOX)  Trigger mechanisms to launch the microsites: banner in the EPG and other portals or call-to-action graphic overlaid on the broadcast video stream  Alcatel-Lucent worked directly with the operator, broadcasters, media agency and branding to design, develop and deploy the interactive campaign. Enrich end-user experience Increase top-line with interactivity

9. All Rights Reserved © Alcatel-Lucent 2008 9 | Mobile Entertainment & Advertising | February 2009 Market Trends: The shift In advertising spending Digital channels (online, mobile, iDTV) are the most effective for advertisers because of their ability to target and interact Consumer Targeting Consumer experience LowHigh Low High  Direct mail  Yellow Pages  In-store  Newspapers  Magazines  Out of home  TV  Radio Traditional media compared to digital media Traditional Media (newspapers, magazine, TV) have a 5% CAGR from 2006-2011 Brands are shifting ad spend from traditional media to digital channels Digital media (Online, iDTV, mobile) have a 18% CAGR from 2006-2011 Source: PriceWaterhouse Coopers, Bear Sterns, Piper Jaffray, iSuppli, Shosteck Group, Alcatel-Lucent CMO analysis 3 $568.8 $593.4 $623.3 $647.1 $681.1 $712.2 20062007200820092010 2011 In Store Outdoors Yellow Pages Direct mail Radio Television Magazines Newspapers Total CAGR 5% 200620072008200920102011 Online31.740.649.557.865.673.1 Mobile1.11.62.64.57.612.3 IPTV0.00.1 0.20.51.0 Total 32.842.352.262.573.786.4  Online  Mobile  iDTV Shift in Ad Spending

10. All Rights Reserved © Alcatel-Lucent 2008 10 | Mobile Entertainment & Advertising | February 2009 Telco’s opportunity is to provide a single digital advertising touch point across any screen and play a unique role within the advertising value chain Fragmentation of media consumption Numerous formats within a single screen SMS/MMS IM e-mail MobileTV x Advertising industry is adapting because of fragmentation of media How do brands engage with end users across specific screens and individual telcos? RBT 3 Digital media Challenges and opportunities

11. All Rights Reserved © Alcatel-Lucent 2008 11 | Mobile Entertainment & Advertising | February 2009 Alcatel-Lucent 5931 Advertising Selection Server Use case: Tier-1 European mobile operator Reach = value (targeting) Richness = value (interactivity) Advertext MobileTV PRBT WAP Banner Consolidating fragmented telco ad inventory to reach minimum scale Hi Chris Gib mir einen Anruf vor 11 Uhr. John **Advtxt** In diesem Sommer - Reisen Karibik Real Adventures: Incredible Vacations & Großen Gateways www.caribbean.com LBS 3

12. All Rights Reserved © Alcatel-Lucent 2008 12 | Mobile Entertainment & Advertising | February 2009 Advertising case study for EMEA Alcatel-Lucent Advertising and Media Brokerage Solution Media agency (Seller) Alcatel-Lucent advertising application enablers (hosted) Telco business Alcatel-Lucent content delivery platforms and networks Brand/media buyer Open Innovation  Ecosystem — Alcatel-Lucent Advertising Solution includes the Alcatel-Lucent advertising portfolio, as well as partners to sell media inventory and third-party capability (in profiling and analytics)  App developers — In the case of the Alcatel-Lucent Advertising Solution, these are creative agencies who can access advertising inventory activated on a telco network to deliver brand campaigns  New services — Alcatel-Lucent Advertising Solutions enable telcos to deliver new ad-funded services such as free SMS, free MobileTV to retain subscribers Complimentary commercial model: clearing house Teaming up with local media sellers 3

13. All Rights Reserved © Alcatel-Lucent 2008 13 | Mobile Entertainment & Advertising | February 2009 Alcatel-Lucent empowers open innovation Enable open applications with superior network capability and fostering new revenue streams  Main mobile entertainment applications offered and branded by telco, owning the “first screen”  The long tail of applications are enabled by the telco but not made by the telco  Ecosystem, app developers, new services  Open APIs for application enablement in digital media and advertising: device management, mobile lookup, billing, user profile, DRM, quality delivery 4 Billions of end users Millions of websites 100,000s of developers 100s of Networks Over the Top Trust  Security  Reliability  Billing  Privacy Open innovation  Ecosystem  App developers  New services Better experience = more customers, more value Network Application Enablement Application Enablement

14. All Rights Reserved © Alcatel-Lucent 2008 14 | Mobile Entertainment & Advertising | February 2009 Conclusion Alcatel-Lucent has the software components, the integration skills and the know-how for making a compelling mobile entertainment business case 21 3 4 ExtendInteract AdvertiseOpen

15. All Rights Reserved © Alcatel-Lucent 2008 15 | Mobile Entertainment & Advertising | February 2009 … and we have done it before …  50+ Mobile TV references supporting unicast & broadcast  One content management & marketing system for all screens  Unique template based approach & 10 years of experience in interactivity for TV content  Innovate ad selection & deliver solution across all screens & across all applications  Leading integration capabilities  20,000 service professionals worldwide, 90+ Technical and Welcome Service Centers  12 Network Operations Centers (NOCs), 3 IP Transformation Centers (IPTCs), 1 IPTV Network Solutions Integration & Testing (NSIT) Lab

16. All Rights Reserved © Alcatel-Lucent 2008 16 | Mobile Entertainment & Advertising | February 2009 Come to visit us! Alcatel-Lucent booth Hall 8, stand 8A147 Live demonstrations of: Personalized content & advertising, Access and sharing of content everywhere, The future of mobile broadband Information station on Multimedia with advertising …and many more!