3. Challenges of Delivering Rural VoIP (SP-04)  What is the compelling reason to offer VoIP?  High cost of entry into VoIP..  Technical staff learning curves  Expected return on investment  Class 5 Legacy issues  Poor voice quality & reliability of VoIP transport..  Access gateways, E-911, LNP, 1-800, Operator Services  Costs to upgrade network to provide expected high QoS broadband access - what flavor DSL?  Rapid technology evolution – life cycle?

4.  Telcos’ core business shifts from POTS to IP services carried on ultra-broadband PIPES…….POTS-To-PIPES (P2P)  People moving off ‘wireline’ as a must have connection Cheaper LD with VoIP and Better mobility with cellular Directions – Existing Telcos

5. Telecom Evolution for Rural VoIP  New signaling protocols will be more effective than existing AIN and ubiquitous (SIP)  Corporate sponsors will pay for transport, offer free public phone calls  listen to a 15 second message from the sponsor  IXCs role will change  IP centric QoS transport, network management,  Core network application service providers and LECs will prosper if IP enabled  LECs will benefit by providing transport access and specialized applications at the network edge.  Local peer to peer switching,  Core applications for network intelligence;  E911, routing, LIDB,  Turnkey solutions available for Rural Telcos

6. Core/Satellite Options for Rural Telco Core Configuration PSTN Tandem Remote PSTN Class 5 Satellite Configuration PBX/Keysystem IA D Out-of-Region Area - 1 Satellite Configuration PBX/Keysystem IADIAD Out-of-Region Area - 2 VoIP Termination Carriers Regional traffic stays in region Avoids backhauling LD routed to maximize profitability Ability to maintain Access/Termination fees Backhauled cost reduced via IP Local Gateway Utilized for pure LD plays Local PSTN Class 5

7. Trends in Long Distance Voice Transport  Voice over Internet becoming extremely inexpensive means to transport voice and data..  Long distance commoditized, charges becoming inconsequential…or zero  Commercialization of voice transport, “free ride” Sponsors pay for transport Users pay for access.  New DWDM technologies will continue to keep supply of transport high and prices low.  Bandwidth expanding rapidly  Inherent QoS improvements for VoIP  Innovative applications leveraging embedded intelligence in IP and PSTN gateways..  Applications readily customizable for specific client needs  Pay as you go for specialized access and features / utility  Video conferencing will lead way to Video over IP  But, Do not overlook Basic Engineering Requirements

8. Network Engineering is critical for VoIP to deliver expected QoS to subscriber Network Engineering Considerations

9. Other Rural VoIP Challenges  1) VoIP results in bypass of access/termination fees  Use existing CLASS 5 and TDM Carrier terminations  2) 911 service to VoIP subscribers must be provided  Configure system to use existing PSAP connections  Outsource E911 management available for VoIP  3) DSL speeds are a big factor in VoIP quality  Low speeds in the 120kbps range do not support VoIP protocols that take up to 100kbps  VoIP can be compressed to a lower quality 33kbps  SIP based DLC/DSL can also solve VoIP bandwidth issues, and reduce OAMP and backhaul costs  4) Rural carriers must deal with TDM, ATM and IP networks  Operational cost of technical resources, infrastructure components & test/diagnostic equipment  Consider solutions that evolve to a pure IP network infrastructure  5) PSTN subscribers are dropping in the USA  VoIP dial tone service includes CLASS and V/M features @ 1/3 rd the Price  Cellular services can be bundled w/PSTN and VoIP to attract users  New SIP enabled “sticky” services retain customers

10. Compelling Reasons to deliver VoIP  Competitive offering to prevent subscribers from changing service to “Vonage” type, IM type, VoIP  Access to IP- LD networks for reduced operating costs, and customer retention..  Supply and Demand – Economics of high supply of IP bandwidth  Technology obsolescence – VoIP will reduce overall value of legacy transport systems to basic commodity.  Relocation of network intelligence to the core and edges of the network to provide revenue generating applications.  Potential “Sticky” services

11. Ringback Tones  Create a globally recognized BRANDED ringback tone  Revenue generating Subscribers customize sounds from your content Subscribers utilize ring interval to deliver personal voice messages. Provider of Subscriber uses interval as advertising time. ARPU = $1-3/month service fee plus per tone cost * Average airtime of 9 sec express yourself with…

12. Find me Follow me discover smart tracking with… Links locations and telephone devices to a single Directory Number and optional Voicemail  TDM and IP terminations.  Subscriber can change terminations.  Can be offered as part of a VoIP dial tone service or independently.  Inbound only or bi- directional. Hello? Hey Jack, where are you? Hi Kate, I’m already at the club!

13. CallPods experience instant call fusion… Differentiate Your VoIP service  Outgoing VoIP call rings at all “ Pod ” defined numbers  All sites that answer call are instantly conferenced  Connect your subscribers with friends, family, colleagues Hello? I’m there in about 15 minutes… meet you at the door I’m already here…you’d better hurry, it’s getting busy Hi guys, I’m leaving in 5

14.  Customer can seamlessly moves calls between Wi-Fi / VoIM / VoIP / PSTN, and cellular networks  Cellular network never takes control of the call  Auto Leap..QoS triggered Leap  Can be one number/ one voice mail By 2007 85% of all cell phones sold will be dual mode. Local PSTN Class 5 VoIP VoIM

15. Addressing Challenges of Delivering Rural VoIP (SP-04)  There is compelling reasons to offer VoIP  High cost of entry into VoIP can be minimized through turnkey solutions  Voice quality & Reliability of VoIP transport Requires Fundamental Engineering Practices available from Turnkey solution providers  LD charges being marginalized, Edge Intelligence key to Sticky Services  Rapid technology evolution – life cycle enhanced through SIP based VoIP