1. It’s All about the Killer User Experience Olivier Frelot Vice President – Professional Services Alcatel-Lucent

2. All Rights Reserved © Alcatel-Lucent 2009 Killer User Experience | Sept. 2009 Global Market Trends End users expectations have changed drastically … Control has shifted to the end-users…  Always-on, freedom  Mobility, simplicity & productivity  Personal content sharing, social and business networking  Seamless and personalized service experience  High-speed connection to the contents from their preferred devices  Network Technology Agnostic (wirless, wireline …) Games, SW, etc 27% Audio 11% Video 62% Mix of file formats by volume of traffic generated over 4 main P2P networks Always connected to the content and people I care about

3. All Rights Reserved © Alcatel-Lucent 2009 Killer User Experience | Sept. 2009 $ Bill. Revenue Trends of Telco Service Providers, TV Broadcasters and Over-the-Top Providers Over-the-top-providers  Google’s growth rate was 30% in 2007 (90% in 2005) (3)  Google generates 98% of its revenues from advertising  Apple’s revenue in 1Q08: $9.6bn, a plus of 35% YoY (4)  iPod + iTunes = 50% of total revenue  Skype  Skype-to-Skype (free) international traffic = 4.4% of total (2) Infonetics, 2007(1) Ovum, 2007(3) IDC, 2007(4) ALU CS, 2008 ILEC Annual Voice Telephony Revenue Forecast 2006-2011 (US$ in Thousands) Telco Service Providers (2)  Single digit growth rate of worldwide service provider revenue  Voice Revenue Declining  Service bundling alone is not sustainable  Marginalization of network assets with “over-the-top” applications Traditional TV Broadcast  Advertising Revenue Saturating

4. All Rights Reserved © Alcatel-Lucent 2009 Killer User Experience | Sept. 2009 Devices are becoming smarter for sophisticated user experience Devices are Evolving to be Multi-Service and IP Capable Media Server Game consoles, MP3/Video Players Entertainment Photo Albums Communications Home Control Power Control of Appliances, Lighting, Heating, Air conditioning etc Power, Water, Gas Meters Security/ Surveillance Telecare Personal Captors Child safety Security & Care Store & Transfer Smart Metering

5. All Rights Reserved © Alcatel-Lucent 2009 Killer User Experience | Sept. 2009 Operator are uniquely positioned for value migration Services providers unique position combining the best of both worlds Dynamic Subscriber Information (Location) Subscriber Knowledge 2-way communication to Enhance Interactivity Rating and Billing Capabilities Enhanced Productivity (Open Presence)

6. All Rights Reserved © Alcatel-Lucent 2009 Killer User Experience | Sept. 2009 Campaign Library Personalization Engine Preferences Demographics Usage Segment Behavior Statistics Data Mining Predictive Analytics Location – Presence Query Event Correlation Transcoding Personalized user experience Example – Targeted advertisements Target campaigns 125 Ad Selection/ Campaign Management Engine Content Management/ Ad Insertion Engine 34 Mobile Internet GW IN/Billing Presence HLR/HSS CRM Content SMS/MMS Location SMSC/ MMSC USSD Email WAP TV

7. All Rights Reserved © Alcatel-Lucent 2009 Killer User Experience | Sept. 2009 Alcatel-Lucent: Global End-To-End Multi-vendor integration MICROSOFT End-User Devices xDSL, Wimax, 3G, FTTH, PLC, BPL Access WDM, SDH, PDH, MWV, IP-MPLS Backbone & IP connectivity Session Control & Network applications & Enablers Content & Internet application providers EML: One per sub-domain Network inventory, Fault & Performance Service Management Service activation, impact analysis BSS

8. All Rights Reserved © Alcatel-Lucent 2009 Killer User Experience | Sept. 2009 Value for the End-user Changing the way the world communicates is about: User-centric experience Quality and Security Productivity Increase Participation Anywhere, Anytime, Any Device Entertaining Personal Value Migration and Monetization of assets Rapid blended services creation and deployment Leverage Data Growth for new services Subscriber data for new Content-rich services New Business Models for revenue Value for the Provider Key Takeaways – User-Centric Communication

9. All Rights Reserved © Alcatel-Lucent 2009 Killer User Experience | Sept. 2009 Back Up

10. All Rights Reserved © Alcatel-Lucent 2009 Killer User Experience | Sept. 2009 Exploit Assets to Monetize communities, content and brands … Monetize Communities  reduce churn: individuals cannot easily move  cross sell to communities  target advertising Monetize Content  generate direct revenue from content (users are willing to pay for content)  attract subscribers through user- generated content  sell interactive content apps  create attractive bundles Monetize Brands  promote own brand to grow subscriber base  generate revenue from advertising  attract users with their favorite brands  Exploit Your Assets  Turn TV and mobile to an bi-directional interactive experience\  Fuel a wave of productive applications with open presence information  Create a set of applications for targeted social networking and adverting  Target campaigns based on profile, relevance and context  Be the “one-stop-shop” for billing Don’t Imitate the OTTS – Create you own offer based on unique assets