1. PLC in Latin America Sergio Angeli, CTO PLC Ventures July 2007

2. 2 1.About PLC Ventures 2.PLC opportunities in Latin America Telecom Smart Grid Government 3.Case Study: PLC Proof of Concept Guatemala Description Challenges Results 4.Conclusions Table of Contents

3. 3 About PLC Ventures

4. 4 Corporate structure (Mexican Operating Company) (Territory: Cono Sur, Br, Ar, Chile)(Territory: Cono Norte: Mx, Central America, Caribbean, Andean Region) (Brazilian Operating Company) (Peruvian Operating Company) (Guatemalan Operating Company) 99.99% (Technological Assets, licensees, software) (Supply Agmts with related and 3 rd parties) 1.0% 99% 100% 0.01% (PR Operating Company) Local Partner 75% 25% 0.01% Local Partner 99.99% Local Partner 0.01% Campollo Group

5. 5 ODM Manufacturer Service Provider Utility Co. Local Partner 2 Local Partner 1 Price and Delivery Guarantee License and Support Contract Manufacturing and Technical Support Contract Last Mile Access PLC Assets Admin/Opp Software Development Customization Scalability Price, QoS Cost Guarantee Voice & Data Strategic Contributions Capital Investment Chipset Supplier Accessories Suppliers Partner Agreement Costs Structure Profitability Local Operating Co. Utility IRU Fiber Provider Outsource Install.& Maint. I&M Contract Backbone Contract Development Institutions Smart GridConnectivity National Security 11 PLC Operator Model

6. 6 Backbone SP 1 SP 2 Carriers International connections Service Providers (ILEC, CLEC, ISP) PLC Operator Integration, deployment, network operation and management MV LV FO NMS End Users PLC Operator Model Electric Utility Infrastructure provider Smart Grid user

7. 7 Facts PLC Ventures is technology “agnostic”. PLC Ventures has manufacturing agreements and commercial arrangements with leading manufacturers/ODMs of PLC equipment and accessories. In addition we developed a proprietary PLC Network Management System for remote and real time network administration. PLC Ventures has offices in 6 countries and a team of 20 professionals. We have installed PLC technology test pilots in different electrical grids in America and Europe. In Latin America, our strategic market, we have developed a model of PLC Operator whereby we lease electric grids and develop PLC networks, to provide voice and data service to final users, with one or more telecom carriers. To date, we have executed 2 exclusive IRUs: with EEGSA (Iberdrola) in Guatemala y LDS (PSEG) in Peru, totaling 1.5 million electric clients as potential market. PLC Ventures has deployed two commercial test pilots, in Guatemala and Peru, for Proof of Concept of the technology and its commercial viability. These pilots include the participation of the electric companies, telecom carriers and final telecom subscribers. The results have been conclusive: PLC as access technology offers an economic alternative for last mile transport of voice and data services with excellent quality of service (QoS).

8. 8 PLC in Latin America

9. 9 Telecom Solutions Home Network/Triple Play Access Network/Triple Play Utility Solutions Smart Grid Government Solutions Digitalization Market drivers / limitations Triple play initiatives Limited by broadband penetration Limited offering by incumbents Lack of access to incumbent last mile Technical and non-technical losses Regulatory dependant Digital divide Access to economic support PLC Applications in Latin America

10. 10 PLC presents competitive advantages for Telecom in Latin America : Limited availability of alternative “last miles” for telecommunication services, as incumbent operators normally do not open their network for third party service providers. Market growth opportunity given by low penetration of broadband services, data and voice. PLC enables solutions to crucial problems to electric companies in Latin America: Technical and non technical losses, ranging in the region from low single digits in countries like Peru and Chile to higher than 20% in countries like Honduras and some electric distribution companies in Brazil. PLC is the most efficient alternative for a mass deployment of social digital programs: High penetration and capillarity of electric networks compared to other telecommunication networks, including traditional telephony, wireless, and cable. PLC Opportunity in Latin America

11. 11 Telecom Penetration in Latin America

12. 12 Quality of Service Maintain levels of quality between stipulated thresholds »Monitoring of Transients, Flicker, Voltage Surge, Faults »Harmonic and Inter-harmonic Analysis According to feedback gathered by PLC Ventures, Utilities in Latin America have particular needs that can be addressed through Smart Grid solutions: Operations Reduce service down time, improve efficiency »Quickly detect, identify and locate problems Faults detectors, Re-closers, etc. »Remote network operation RTUs, Capacitor banks automation, load balancing, etc. Smart Grid Applications Billing Efficient reading and collection, reduce non-technical losses »Targeted automatic reading, »Fraud detection

13. 13 Digital Divide Electricity grid penetration: 90 % Several initiatives exist today in Brazil to breach the “Digital divide” GESAC (Barrerinhas, etc.), change in FUST use policy, etc. Source: Atrlas de Energia Elétrica do Brasil – 2a Edição - ANEEL Source: Comitê Gestor da Internet no Brasil (July / August 2006)

14. 14 PLC Risks Standards under definition Competing technologies (ie. WiMax) Regulatory status

15. 15 Case Study: PLC Proof of Concept in Guatemala

16. 16 Introduction Commercial Project Guatemala –Broadband Internet Access and Fixed Telephony for end users Business and residential users 750.000 electric customers, 80% of grid enabled with PLC –100.000 forecasted telecom end users in 2 years, 200.000 in 5 years –Smart Grid applications for the utility Project Plan –1 st Stage: Lab tests and small field trials – DONE –2 nd Stage: Proof of Concept – 95% completed A. Prove the technical feasibility of PLC as an Access Medium in the electric grids of Guatemala. B. Prove the commercial feasibility of PLC in a business model of “Carriers’ Carrier”. –3 rd Stage Commercial roll out – end 2007 / beginning 2008

17. 17 PoC Footprint & Status Home Passed800 PLC Infrastructure units42 CPEs (existing customers)100 Underground transformers4 Overhead transformers32

18. 18 Logical Network Diagram ISP VoIP SP NPL NOC PLC Access Network – Zone 15 FO Backbone 1.Service Providers’ links converge to the Backbone 2.BPL Access network is remotely managed from the NOC. 3.Transport links connect NOC to last mile BPL network clusters 4.Telecommunications signals are transmitted through the electric grid using BPL technology 5.Clients connect their CPEs to the electric socket to gain access to services. Service Providers’ Gateways and NOC Key PLC Access Network Components PLC Nodes Coupling Units CPEs NMS MV Grid LV Grid *Diagram for reference purposes only, actual number of deployed units NOT reflected.

19. 19 LV PLC Coverage & Frequency Planning

20. 20 Challenges PLC Network –Network planning –Deployment procedures –Signal instability in overhead lines (noise) –Equipment Prices Integration with 3 rd parties’ platforms –Backbone (traditional FO backbone and alternatives: WiMax) –Internet servers –VoIP servers –Smart Grid applications –End users Network Operation and Maintenance –Network Management –Operations support: Logistics, inventory, schedule –Customer Support: Troubleshooting and tracking of client’s problems QoS evaluation –How much application traffic can the network handle? –How many VoIP calls can be supported?

21. 21 PLC deployment process, network planning and procedures: 1. Area Selection 2. Grid Analysis 3. Network Planning 4. Software simulation 5. Deployment 6. Network Management Challenge: PLC network Signal instability in overhead lines: Alternatives: Line Conditioning –Eliminating the noise source Firmware improvement –Intensive research work done with chipset providers to improve system stability Differential signal injection –Sometimes useful, but not always effective Line separation = 70 cm Wavelength (λ = c / f) = 10 meters (@ 30MHz) –Not always possible Single phase circuits –Twice the cost Two coupling units required

22. 22 Backbone, QoS –Packets tagging and prioritization –Same configuration used in backbone, ISP NOC and PLC network SIP parameters Internet configuration Challenge: Integration PLC VLAN Info Management Data 1 Data 2 Voice RADIUS FTP Server SQL DB Management Server EBA NMS SP1 SP2 SP3 VLAN Switch Administrators, Operators

23. 23 Challenge: Network Management NMS main functions: Trouble Tickets Inventory Task Scheduler Elements auto configuration and monitoring

24. 24 PLC Network Real-time Monitoring Traffic Simulation Challenge: QoS Evaluation QoS evaluation platforms: IxChariot – Console & Endpoints JDSU* - Appliance & Capture Agents

25. 25 Results

26. 26 LinkTransformer LV HE to Dr. Girón Clinicas Medicas building HE to client Dr. Otto Reyna MV HE to TRD5 (MV Repeater) TDR (MV Repeater) to Multimedica building HE VoltageLV – 220 VLV-220VMV – 13 kV TopologyLV OverheadUndergroundOverheadOverhead and Underground (with intermediary transition) Transmission Mode 10 (Max 85 Mbps) 5 (Máx 133 Mbps) PLC Performance

27. 27 *Tests done with IXChariot platform ** Upstream and Downstream rates are user configurable QoS performance - 10.00 20.00 30.00 40.00 50.00 60.00 Mbps RxTx Enlaces Infraestructura de Acceso Enlaces Aereos Media Tensión Enlaces Aereo-Subterráneo Media Tension Acometidas en Baja Tensión Enlaces Aereos Baja Tensión - 20.00 40.00 60.00 80.00 100.00 120.00 Mbps RxTx CPE( Clientes) Internos Edificio -> Master Clinicas MédicasMultimédicaMaria del Alma

28. 28 VoIP service statistics Simultaneous calls Calls per hour

29. 29 User Satisfaction Poll Results

30. 30 Network characteristics: –Protocol: SIP –CODEC: G.711 –Digital Services: Caller-ID, on-hold, transfer, redirect VoIP Quality measurement –VoIP traffic simulation – Stress test IxChariot software suite 45 simultaneous calls in PLC Cluster –20 Real VoIP calls –25 Simulated VoIP calls –VoIP real-time traffic monitoring Network Sniffer Appliance & Agents Traffic Analyzer –User satisfaction polls Results (average) –MOS: 4.2 Recommended value: >3.5 –Latency: 13ms (avg. one way, from CPE to Softswitch) Recommended value: < 100 ms –Jitter: 2.281 ms Recommended value: < 20ms –Packet loss: 0.1% Recommended value: < 0.2% –Total VoIP traffic in cluster: up to 4000 Kbps Recommended values based on ITU Recommendations G.107 and P.800 and / or experiences from commercial VoIP deployments. QoS evaluation

31. 31 Business metrics Operations –CPE installation time –Installation time per transformer –Trouble Tickets: % open, average closing time CAPEX –CPE costs –Cost per User –Cost per Transformer –Cost per Home Passed –Cost per Home Enabled / Building enabled Market –Services penetration –Competition –Product Prices –Deployment strategy All parameters evaluated and validated in our Business Model to confirm commercial feasibility

32. 32 Conclusions

33. 33 Keys for a successful PLC deployment ODM / OEM Backbone Utility Subcontractor Viable IRU execution Clear O&M procedures definition Use the right technology Development of appropriate applications and solutions Appropriate Network design Efficient network management Micro chips ISP VoIP IRU O&M Procedures Technology Products Services Interconnection Support Access Network Software I+D Engineering Project Management

34. 34 Conclusions: Value Proposition PLC in Latin America: Telecom Market Opportunity Most Competitive Alternative Last Mile, in terms of deployment time and cost “Industry disruptive” opportunity comparable to wireless plays of the 90s PLC Ventures: Operator strengths Electric Contracts (Irrevocable Right of Use of Electric Grids) Technology Assets (3rd party technology contracts, Proprietary Assets) Proof-of-Concept Deployments Negotiating with Electric Distribution Companies PLC Technology Know-how, Team and Field Experience Economies of Scale, from Regional Presence

35. 35 Thank you Contact information: Sergio Angeli, CTO, PLC Ventures e-mail: sergio.angeli@plcventures.com USA: +1 305 365 0102 Guatemala: +502 2382 4040 Contact information: Sergio Angeli, CTO, PLC Ventures e-mail: sergio.angeli@plcventures.com USA: +1 305 365 0102 Guatemala: +502 2382 4040