Hybrid IP Platform proposal Targeting SMB “Hybrid IP” market ipLDK-100/300 replacement Enterprise PLM Mar, 2008

Business Case Template - LG-NORTEL Agenda Business Case Template - LG-NORTEL Market Dynamics Building the solution Feed back from PMs Product position and concept Introduction © 2006 LG-Nortel

Market Dynamics - Forecast Business Case Template - LG-NORTEL SMB Voice Market restructuring & IP Penetration as forecasted Conventional voice market evolution : IP/Hybrid, Pure-IP Emerging alternatives : IP-Centrex, Software based Market Forecast Regional IP Penetration (Under 100port) (Based on 1Q/`07 actual revenue) M$ CAGR : 2% IP Ratio in 1q/`07 : 26% (Pure-IP 12%, Hybrid IP : 14%) 2,290 2,349 2,184 2,208 2,243 * Gartner, Canalys, DellOro, Infonetics Combined Analysis (2007) Hybrid IP Market will remains dominant with the continuous IP penetration © 2006 LG-Nortel

Market Dynamics - Segmentation Business Case Template - LG-NORTEL Segmenting the SMB Market (Under 100 ports) Characteristics Key Values Price Pure-IP 0.4B$, 16% Mainly large distributed SMB - Multiple branch offices - Sophisticated features Productivity Lower TCO Scalability/Reliability Hybrid IP 1.5B$, 70% Balanced customer : Cost vs Benefit Not many multiple branches Small to Medium SMBs Flexible/Cost-Effective IP Capability Evolution capability Simplicity 0.3B$, TDM 14% Care the initial cost the most Basic telephony features Standalone business Small SMBs Simplicity Easiness TDM IP/Applications Flexible and Cost-effective IP capability with Simplicity is Key for Hybrid IP customers © 2006 LG-Nortel

Market Dynamics - Competitive Landscape Business Case Template - LG-NORTEL Competitive landscape 2-Tier Hybrid IP Offerings IP Hybrid IP-Centric TDM Application-centric Built-IP/Data Capability Very Compact/Simple IP-Enabled Avaya IP Office Cisco Price/Capacity Nortel BCM Avaya IP Office, `02 NEC Aspire, `04 OmniPCX Alcatel Mitel Siemens Hipath Nortel BCM50/200/400, `02 Panasonic TDA 100/200/600, `04 Toshiba CIX Alcatel OmniPCX Office, `02 Toshiba CIX, `04 Aspire NEC Panasonic KX-TDA Siemens Hipath 3000, `03 LG-Nortel ipLDK-100/300/600,`02 ipLDK LGN Siemens NEC Panasonic Market Share (Hybrid-IP, ~100port) LGN Software based IP-Centrex TDM IP/Applications Highly pre-occupied competitive landscape ; 6 players between 8% and 11% market share 2-tier Hybrid IP Platform Offerings © 2006 LG-Nortel

Market Dynamics - Challenges around “ipLDK” Business Case Template - LG-NORTEL 2-Tier Hybrid IP Offerings Challenges around ipLDK Very Compact & Simple Apps/Network Centric Platform Market Performance limitation in applying new demands from the market Approaching to the end of life Competitors Old and bigger hardware platform - No smooth fit to 19” rack Lack of IP/Apps capability Internal Issue Continuous discontinued parts Too many hardware parts - not manageable at Thai factory Panasonic KX-TDA,`04 Alcatel Omni-Office, `02 ipLDK NEC Aspire, `04 Siemens Hipath 3000, `03 Simplification Flexible IP Architecture Collaborative Remote manageability ipLDK has been competitively positioned and continuously enhanced However, starting to have challenges and limitations for the new demand © 2006 LG-Nortel

Business Case Template - LG-NORTEL Feedback from PMs. Business Case Template - LG-NORTEL Product line up ipLDK 300 should be replaced as well Why still two different line ups.. Product Positioning New product should be most enhanced one. Platform should be strong enough to support various applications. Feature requirements Built in Application : 2~3 Free licenses for basic function. 1’st party CTI Fax server / UMS server VMS, Call recording IVR, Call Center…. Higher IP Capability Specification Structure : Modular Connection with 1 to 1 Use iPECS G/W module for remote office within the new system. Need more slot or give more function to MPB. © 2006 LG-Nortel

Product Position and concept. Revised Idea for new Hybrid system. Considering both ipLDK and iPECS. Address both Renewal of ipLDK and Covering iPECS’s current drawback at the same time. Resolve current / expected challenges for ipLDK100/300 Resolve cost issue for TDM interfaces inside iPECS. Build up the Corner stone to support application Much higher performance than ipLDK Relatively easy to focus on securing application with single S/W base. Should be efficient way for both development and marketing sides to take Product portfolio alignment with iPECS Enhance ipLDK platform to iPECS Single line up with various combination between call servers and gateways.

Product Position and concept. Matrix : Call servers .vs. Gateways / Applications * : Under development Call servers => iPECS50 * iPECS100 New 100 iPECS300 New 300 iPECS600 iPECS1200 * iPECS G/Ws Extension Modules Function Modules ● New H G/W 100 NA New H G/W 300 UCS NMS Phontage AIM Others Gateways Applications

Business Case Template - LG-NORTEL Product Position and concept. Business Case Template - LG-NORTEL Benefit 1. Reinforcing ipLDK 100/300 lines with Feature enhancement Higher performance to support applications. Simplicity Compact and new cabinet. … 2. Lower the cost for TDM configuration from iPECS stance. 3. Easy address toward install based customers : Able to let customer use current TDM infra (Terminal) giving them migration path to IP. 4. Highly scalable from new iPECS H-G/W users with high capacity MFIM : No change on installed system when increase the extension beyond the system capacity. 5. Most efficient and low cost way to deploying Pure IP environment with iPECS server 6. Efficient in securing and running Applications : All the application currently exist, under developed and upcoming in the future will be used for all platforms. 7. This allow distributors and resellers to keep doing what they are doing for iPECS now since all skill sets and knowledge getting from iPECS can be re-used. We can see this new iPECS h gw as totally different aspect when we put this as one of G/W for iPECS, compare to the view that we put this separate from iPECS and try to position it for ipLDK replacement. When we look at the shipment record of iPECS in 2007, average TDM configuration for a server is 10 SLTs, 3 DTIs and 3 LCO at total around 30 extension including 20 IP Phones. TDM is 3/13, the cost for new h g/ws for 3/13 will be lower than the cost for current iPECS g/w modules. The more TDM is configure, the more cost effective new H GW is.. © 2006 LG-Nortel

Business Case Template - LG-NORTEL Introduction Business Case Template - LG-NORTEL Maximum Capacity : 160 Ports Basic Configuration for B - Cabinet Built in DSP (8ch VoIP) Minimize number of daughter board. Basic 12 ports (6SLI+6DTI) 1 LAN ports Basic resource built in. 32 ch resources : CID, DTMF, CPT and fax tone detect. 1 Rely / Alarm / RS232 / Ext paging , MoH Key Structure 2 Cabinets 80 port per cabinet Optimized for 30~60 port range 19” rack / desktop / Wall mountable Compact and Data equipment look. IP / TDM backbone Small number of components. Modular connection : 1 to 1 EXPB VMIB DTIB24 SLIB12 LCOB4 MPB VOIB DTIB12 LCOB8 SLIB24 © 2006 LG-Nortel

Business Case Template - LG-NORTEL Introduction Business Case Template - LG-NORTEL Co / Extension card Other function VoIP : 12 ch / 24 ch (12+12) Fail-Over to PSTN (VLAN(802.1Q)) SRTP IPSec Second Private IP Address (STUN) DHCP Wireless WTIB : 3 types 4 cell / 8 / 16 Voice mail : 8ch, 100 hr. Current iPECS feature base Voice message back up Email notification/SMS notification Message operation by Softphone Message manage through Web access etc. Multiple voice mail box. AAFB : 8ch, 30min Trunk Analog CO 3 types : 4 / 8 / 16 ports CID supported as a basic. Line status information CMU daughter only : 12k/16k/50k 1 PFT circuit per 4 Cos. BRI : 2 types : 4 / 8 ch Digital trunk : 1 type switchable E1 / T1 / PRI / R2 Resource daughter for R2. Extension SLIB – status : on/off 2 types : 12 / 24 ports Function : RGU, MSGU, DTMF rcv and CID generation. Line status information DTIB © 2006 LG-Nortel

Business Case Template - LG-NORTEL Introduction Business Case Template - LG-NORTEL Application Others iPECS UCS Multi party video conference with MCIM. Max 24 voice 6 Video w/ Phontage or UCS. iPECS UMS (?) Personal web manager Provide iPECS application interface (AIM) System Multiple language support Web admin Redundancy system processor Networking Remote service on both managed and unmanaged networks. Centralized Control TNET Analog Co auto fault detection and recovery Enhanced ACD ACD Agent Agent auto connection Agent queued call display Agent unavailable reason codes Call in queue page alert Group mail box. © 2006 LG-Nortel

Introduction – Capacity detail Total resources IP / TDM ipLDK100 Max Capacity 160 ports 144 ports Trunk 80 (TBD) 40 Extension 120 (TBD) 96 Analog/Digital / IP VoIP ch Basic 8 NA Max 32 48 Wireless # of Cell 12 or 16 16 # of simultaneous call (TBD) 64 # of Handset registered 80 Voice mail # of channel Memory 10hr (TBD) 10hr Discussion points Number of max trunk ports Number of extension ports Number of wireless base station. => What percentage out of whole wireless sold in ipLDK100 requires over 4 cells.

Business Case Template - LG-NORTEL Schedule Business Case Template - LG-NORTEL FCD : Between the end of DEC/2008 and Q1/2009 March + 5~6 months ▼ Spec building + 2 months ▼ Development + 2 months ▼ Engineering Sample + 1 months ▼ Pilot Sample Preparing production Between End of 2008 And Q1/2009 Discussion points Country who will take FCD. © 2006 LG-Nortel

Next step. 1. Building the platform 2. Focus on securing right applications for iPECS. (For both current iPECS and iPECS HG) Mar Apr May Jun July Aug ~ Prioritize among the applications required. Come up with how to secure them 3) Generation proposal 4) Discuss the proposal with Distributors. 5) Fix the plan and execution.

Key items Action Schedule 1. Building the New iPECS Hybrid G/Ws LGN to set up the schedule and share it. 1. Building the New iPECS Hybrid G/Ws April 2. Securing applications on top of iPECS series. 1) Prioritization 2) Differentiation Discussion Next step might be surveying and execution As discussed 3. Looking for new business -.New products should be required -.Offering converged Residential or SOHO. product to Carrier could be new .possible to address with ODM model. HD level video conf fitting into SMB market (iPECS based) GSM/UMTS gateway for iPECS -.Better FMC solution Need to studying PLC to see if it can be used for SOHO IP telephony Femto to expand market. As discussed As discussed Continued 4. Any other ?