1. 1 Leading Market Drivers for Cable Telephony: Opportunities for Operators Brett Azuma – SVP Marketing May 2003

2. 2 Outline State of the Market Components of the Consumer Offering Evolution of the Bundle Bundles and the Triple Play Going Beyond The Here and Now Realizing the Opportunity

3. 3 State of the Market: The Market Awakens

4. 4 Challenges in the Consumer Market Basic Transport Services rapidly being commoditized –Decline in second lines –Dropping MOU rates Customer churn is increasing Services from different modes require the user to change behaviors based on the mode and device used making adoption more challenging Differentiation continues to be a challenge –Legacy infrastructures continue to limit new service alternatives and require massive adoption in order to be profitable Alternatives continue to proliferate and consumers are left with the integration task

5. 5 Components of the Consumer Bundle Local Services Caller ID Call Waiting Home Voicemail Home Unified Messaging Intelligent Call Screening Personal Privacy Screening Long Distance Services Family and Friends Audio/Web Conferencing Family and Friends Video Conferencing Prepaid Services Mobile Services Intelligent Call Screening Multimedia Messaging Personal Privacy Screening Personal Unified Messaging Personal Voice Mail Prepaid Services Text Messaging Voice Activated Voice Mail Entertainment Services Interactive Gaming High Speed Internet Services Web Mail

6. 6 Evolution of the Bundle 1st generation Volume Discounts One product Lower price based on volume purchase Key Customer Motivator: Price 3rd generation Integrated Product Offers Multiple products Key Customer motivator: Ease of Use Service Provider Benefits: Lower customer acquisition cost Lower provisioning cost Lower churn 4 th generation Integrated Offers Product elements blend into one unified offering Key Customer motivator: Ease of use and ease in ordering. Service Provider Benefits: Lower customer acquistion costs Lower provisioning costs Much lower churn 2nd generation Cross Product Discounts Multiple products Lower price based on purchase of the basket of services Key Customer Motivator: Price Service Provider Benefit: Lower customer acquisition cost Lower provisioning costs

7. 7 Fax IP Telephone PC Wireline Telephone Messaging: The Cornerstone Unified Messaging enables the bonding of a web presence, high speed access, and telephony service into one integrated package Messaging will be the key attractor to service provider portals By bonding the experiences and user touchpoints together, customer switching costs increase dramatically, thus reducing churn

8. 8 Going Beyond the Here and Now Video Presentation Mgr* Video Connection Manager* Entertainment Network Tivo Gaming Video Clips Managed Service Video Conference Video Mail VM, UM, Conference, IVR, Prepaid Voice/Web Applications Voice/Web Applications Voice Media Applications

9. 9 Realizing the Opportunity Traditional Circuit Switched Infrastructures are not up to the task of enabling networks for consumer’s choice By integrating packet based technologies for data, voice, and ultimately video, service providers will be able to build true fourth generation bundles –These architectures must be designed as multi-vendor networks from the start using standard interfaces The opportunity is to offer higher value service, not increasingly lower cost service

10. 10 Traditional Infrastructures: Huge Footprint, High Cost, Poor Scale Class 5 Switch Calling Card Other Aps Web Conferencing Unified Messaging

11. 11 A New Approach: Small Footprint, Low Cost, Highly Scalable Media Resources MTA CMTS CMS Unified Messaging Web Conferencing Calling Card Other Aps

12. 12 Harmony6000 Media Server Platform Voice Mail Grow Your Offering with One Platform Auto Attendant Audio/Web Conferencing Prepaid Services Privacy ScreeningUnified Messaging Build from VM Now Call CenterInteractive GamingMultimedia MessagingVoice Activated ServicesVoice Portals Video Conferencing Expand in the Future

13. 13  Scalable  Reliable  Future proof:  Multi-vendor support  Many services on one platform  Open standards  ROI in months  Low Cost of Entry  Intuitive user interface  Real-time Billing  Web enabled  Partitioning  Enable Service Expansion  Position for future technologies  Fast time to market IP Application Solutions Checklist

14. 14 Conclusion The market is starting to move The opportunity lies not in offering cheap commodity service, but to differentiate the offerings and to build on value not price A Packet Cable based services architecture lays the foundation for a highly differentiable network

15. 15 Backup

16. 16 IP Unity: The Commercial Bundle Voice Services Audio/Web Conferencing Auto Attendant Business Voicemail Call Center Intelligent Call Screening IP Centrex Prepaid Services Presence based Unified Messaging Privacy Call Screening Unified Messaging Voice Activated Voice Mail Audio/Web Conferencing Auto Attendant Business Voicemail Call Center Intelligent Call Screening IP Centrex Prepaid Services Presence based Unified Messaging Privacy Call Screening Unified Messaging Voice Activated Voice Mail Audio/Web Conferencing Auto Attendant Business Voicemail CALEA Call Center IP Centrex Persistence Messaging Prepaid Services Presence based Unified Messaging Privacy Call Screening Unified Messaging Voice Activated Voice Mail Voice VPNs, Deep Packet Inspection Mobile Services Intelligent Call Screening Multimedia Messaging Personal Privacy Screening Personal Voice Mail Prepaid Services Text Messaging Unified Messaging Voice Activated Voice Mail Voice Portals Intelligent Call Screening Multimedia Messaging Personal Privacy Screening Personal Voice Mail Prepaid Services Text Messaging Unified Messaging Voice Activated Voice Mail Voice Portals Intelligent Call Screening Multimedia Messaging Personal Privacy Screening Personal Voice Mail Prepaid Services Text Messaging Unified Messaging Voice Activated Voice Mail Voice Portals Video Services Video Conferencing Data Services Web Mail Small/Med BusinessEnterprise Government Legend Current Products Partner Products Future Products