February, 2005 Page 1 California State University, Sacramento Wideband Broadcasting Internet Technology Service (WBITS) Spencer A. Freund AVP, Telecommunications CSUS

February, 2005 Page 2 The Plan To convert 3 of the 4 ITFS channels at CSUS to Two-way digital data Initially to provide data service to on and near campus penetration (within 3-5 miles) Eventually extending service to 15 miles from the campus Provide this service to the CSUS “family” faculty, staff & students.

February, 2005 Page 3 Purpose Driving force – to provide academic and administrative programs to enhance teaching, learning, personal productivity, and access to resources in a cost effective and efficient manner.

February, 2005 Page 4 Outcomes of a University Owned System Penetrates almost every corner of the campus in ways that cannot presently be supported. Allows for roaming from one zone to another Supports full transparency from the classroom, to the campus, to the workplace, to the home Provide a higher level of service at a lower cost.

February, 2005 Page 5 Outcomes of a University Owned System (continues) Caters to the needs of the educational community. Extends the campus wired high speed network Offers “brand” recognition Supports portability & mobility

February, 2005 Page 6 Deployment Plan Initially Three antennas located on the CSUS campus Would provide coverage on campus and to within 2-5 miles This would provide coverage to approximately 7,000 students, faculty and staff

February, 2005 Page 7 Deployment Plan (continues) As client demand increases – to place additional sites in the community- Eventually (2-3 years) reaching out 15 miles. This would cover 90% of the 30,000 CSUS “community” population (see chart next slide )

February, 2005 Page 8 Market Area

February, 2005 Page 9 Management Plan

February, 2005 Page 10 Marketing & Sales To provide a service that is superior in speed, convenience, and price to other available wireless operations, Greater and easier access to campus IT Resources Increased bandwidth Better functionality Support for voice Support for data Support for video Fully integrated into the campus high speed backbone

February, 2005 Page 11 Revenue Generation Initial startup and deployment to a core of 100 $20 per month (then assumed faculty/staff $34K yr/1, $85k yr/2 & $134K yr/3) Rollout to local population of approximately 1000 subscribers Over a 2 -3 year period marketing to all constituents within a 13 – 15 miles radius. The plan assumes a 25% take rate of constituents.

February, 2005 Page 12 Revenue Generation - Projected

February, 2005 Page 13 Revenue Projections Estimated Revenue projections Year 1 = $ 142,000 Year 2 = 708,000 Year 3 = 1,014,000 Total Revenue projections – First three years $ 1,864,000.00

February, 2005 Page 14 Equipment Costs Initial Start-up equipment and installation = $ 350, Subsequent additional site costs of $225,000 each Over three years equipment cost approximately $1,025,000.00

February, 2005 Page 15 Operational & Startup costs Projected operational costs Year 1 = $154,140 Year 2 = $243,934 Year 3 = $302,530 Capitol Investment - first 3 years $1,025, Total Expense Outlay – First three years. $1,725,604

February, 2005 Page 16 Looking good – RIGHT? Expenses $ 1,725,604 Revenues $ 1,864,000 Profit $ 138,396.00

February, 2005 Page 17 Wrong! This plan assumes no changes in technology. There is no equipment refresh in the plan. Technologies changing very rapidly. Equipment becomes obsolete very quickly Hardware is very expensive. Client procured cards are also expensive. Assumes no competitive thrust from larger better financed providers. Does not provide for costs to provide ITFS video services through another means. Business is not a “core competency” of the university. Cell site development wasn’t included.

February, 2005 Page 18 California State University, Sacramento Wideband Broadcasting Internet Technology Service (WBITS) Spencer A. Freund AVP, Telecommunications CSUS