2. Voice SMS Merging VoIP & Mobile to Create A Compelling Service Brough Turner, SVP & CTO, NMS Communications

3. 3 Why should I care? Voice short message service (SMS) is a highly successful new service Leading solutions built on NMS technology Broad lessons for any new mobile service

4. 4 What is Voice SMS? Similar to SMS text messages, except with voice –Sender records a short voice message –Recipient gets a text alert: “You have a Voice SMS from … ” –Recipient clicks and hears the voice message *0* ERIC LEE 28/08/05 23:30 Hi, I Have sent U a BUBBLE dial *0* to hear it (FREE) Source: Bubble Motion Pte Ltd

5. 5 Not “Multi-Media Messaging” MMS a fully specified 3G service –Includes voice messaging Ovum forecasts US$3.8B in 2005; $13.8B in 2010 –$2.9B to $9.5B picture mail (all kinds – MMS & otherwise) –$0.8B to $3.8B video messages –$94M to $496M audio messages But MMS slow to take off –Awaiting ubiquitous handset support and interoperability MMS-based “Voice SMS” also starting slowly –Example: Sprint’s “Voice SMS” in US – only MMS handsets can send messages, few deployed, few messages sent

6. 6 Voice SMS Unique Advantages Over text messages –Easier to use –Voice conveys more emotion –Don’t have to be literate Versus Push-to-Talk –Works when recipient is unavailable –Good when you just want a message, not live conversation Compared with voice mail –Easier, more immediate; not a live conversation Compared with MMS –Works with any handset, any network (2G, 2.5G, 3G)

7. 7 Subscriber Benefits New, highly personal way to communicate Costs less than a voice call Easy to use –Overcomes text usability issues –Available in all languages –Does not require literacy Works with current handset Send messages to any handset

8. 8 Operator Benefits No handset software — target entire subscriber base Application overlay — no changes to existing infrastructure, works on 2G, 2.5G, and 3G No capital investment; extremely rapid deployment Little customer education Popular — rapidly adopted Commands 50 to 100 percent premium over SMS Proven money maker

9. 9 New Voice SMS Revenues Advertising Jokes Premium content: –Celebrity messages –Audio clips Ask an expert Voice alerts: –Sports –News –Weather Voice Reply to Text Voice Blogs Dating Voice information services Ringtones –Ringback tones Contests International Voice SMS

10. 10 Voice SMS History Ideas date back at least a decade Jan. 2005: Digi (Malaysia) launches “BubbleTalk” by Bubble Motion Sept. 2005: GrameenPhone (Bangladesh) launches “Voice SMS” by Kirusa Widely adopted today: –Over a dozen vendors with announced platforms –15+ networks offer Voice SMS service –>300 million mobile subs have access

11. 11 Digi (Malaysia) Case Study GSM network with 5.6 M subscribers (9/2006) Bubble Talk launched late January 2005 –Two month promotion: subscribers offered 10 free messages per day –50 percent premium over text messages Greater than 35% penetration in six months Over 200,000 messages per day by 8/2005 All other operators in Malaysia forced to react within first year

12. 12 #1 mobile operator in Bangladesh –5 M subscribers (9/05) to 10 M subs (11/06) Voice SMS launched September 2005 –Based on Kirusa platform –Supported with newspaper & TV advertising –Priced 25%-66% over text messages Rapid adoption –6% first week; 16% first month –Over 40% (3.6 million users) by August 2006

13. 13 How does it work? Dial short code & then normal mobile number –Typical handsets support prefixing numbers in your contacts directory Prefix causes call to be routed to IVR system IVR receives call with caller & called numbers –Beep, record message (& optionally other options) –Bill caller –Send SMS to called party saying “You have a Voice SMS from. Press green “send” key to hear your message. ”

14. 14 Receiving a Voice SMS Called party receives text message Presses green or “send” key Phone dials IVR system IVR system sees caller ID, looks up messages for that party IVR plays message(s) immediately –No prompts or dialog required At end, offer options –“To listen again press one, to reply press two, otherwise just hang up”

15. 15 Billing System Issues One Voice SMS needs two voice calls! Price point needs to be more than text SMS but less than a voice call –“Cost” not an issue except during busy hour –Focus is maximizing revenue! All billing systems support special billing numbers (premium rate and free numbers) –IVR assigned short code or other special number

16. 16 Not Restricted to Operators Mobile network integration –Facilitates recruiting and enrolling subscribers –Dial codes facilitate sending messages Not essential –Only need PSTN voice and SMS connectivity US example: Pinger –PSTN & SMS connectivity purchased wholesale –Speech technology overcomes lack of dial codes Import friends names/numbers to Pinger Dial Pinger Speak name of person to receive Voice SMS

17. 17 Voice SMS Integration Mobile Network Voice SMS Platform Billing Admin Message Processing Voice Platform prepaid postpaid SMSC MMSC OA&M Operator Help Desk MSC Subscriber Administrator Firewall Event based billing Billing & Mediation Source: Kirusa Inc.

18. 18 Voice SMS Platform Vision VoiceXML Server Mobile Network Application Server Content Server VoiceXML HTTP SS7 SMSC MSC Vision Signaling Server Voice SMS Speech Resource Servers MRCP, RTP IP Connectivity PSTN Alternative

19. 19 Any Handset, Any Network A prime application success model –Worth consideration by any application developer Don’t need critical mass for service to take off –No wait for “network effects” Other services with comparable characteristics: –Voice mail — takes messages from any caller –Ringback — ringback tones heard by all callers

20. 20 Conclusions Winning Applications –Ideal: work with any handset, any network –If not: provide bridge – partial functionality with any handset NMS Vision VoiceXML Server –Complete deployment platform for Voice and Video applications (VoIP or PSTN) –Carrier grade Signaling Services (SIP, SS7, ISUP, ISDN) –VoiceXML extension APIs for outbound dialing, authorization, and SMS voice messaging

21. Questions? PDF version to be posted today Recorded version to be posted tomorrow Brough Turner rbt @ nmss.com Blog: http://blogs/nmss.com/communications/