1. Notes accompany this presentation. Please select Notes Page view. These materials can be reproduced only with Gartner's official approval. Such approvals may be requested via e-mail — vendor.relations@gartner.com. Market trends for convergence: Cellular/Wi-Fi devices, wireless VoIP and converged services Monica Basso Research Director

2. Steps Along the Road IP Ethernet Converged Network Road to Wired/Wireless Convergence 20062008 Many Networks Wi-Fi/Cellular Convergence (data devices) LAN/WLAN Convergence Wired/Wireless Backbone Convergence (IMS) IP Everywhere Wireless Voice Wired Data IP Cellular Wired Access  Wireless Access (WiMax) Unlicensed Mobile Access (UMA) 2010+ Wi-Fi/Cellular Convergence (Voice) Wi-Fi Voice Wi-Fi/Cellular Roaming (Voice)

3. New Cellular-WiFi devices Cellular/Wi-Fi devices: Ericsson P990 (IPT client support unclear) Nokia E60, E60 and E70, all with IPT clients for Avaya and Cisco QTEK 9100+8300 Motorola CN620 (and others) Nokia 9500 (Series 80 – unclear whether/which the IPT clients) Alcatel One-touch 701 Wi-Fi only handsets: BlackBerry 7270 (Avaya IPT) Cisco Wireless IP-phone 7920 Others from Mitsubishi etc

4. WLAN-Enabled VOIP Device Strategies Full member of PBX/IP-PBX Discrete Cellular/WLAN operation WLAN-only soft phones Seamless desk phone to mobile phone roaming Seamless mobile phone to IP-PBX phone roaming Motorola CN 620 Firebox "Deskphone"

5. Wireless Voice: Still the Dominant application VoIP over Wireless Cellular replaces fixed lines Cellular voice trends Infrastructure costs 4x basic wireless networking to support VoIP Only 5 percent terminations But 80 percent of employees will use it occasionally, e.g. SOHO, Skype... Costs fall, bundles grow “Free” voice and data Operators look for value-added services to preserve the “cash cow” Operator voice profits fall Shift from fixed to mobile continues Mobile replaces corporate PBX – Requires customized contracts – Indoor coverage limitations – May lose some PBX features

6. Convergence: Carriers and Services Access Cellular WiFi hotspots Fixed telephone Fixed Broadband Broadcast Wireless Broadband Network Services Customer care Billing and support Directory services Messaging, e-mail, voicemail Authentication Presence Content and media Games Music Video Ring tones News Payment Bundling — multiple vertical services, but little integration Convergence — horizontally, integrated service combinations

7. Mobile Operator Disintermediation Internet access and browsers on phones sideline WAP and operator portals Handset e-mail and IM erodes SMS, MMS “Free” VoIP over WiFi / WiMax / Bluetooth erodes voice traffic Bluetooth and WiFi on handsets attacks everything WiFi and wireless broadband attack 3G DVB and DABS broadcast compete with streaming media 3 rd party media portals (e.g. iTunes) compete with operators Outsourcers and service providers attack value-added applications

8. Recommendations Aggregate mobile and remote access technologies into consistent services for users — independent of the access technology. Test WLAN-enabled cell phones to assess their impact on the future direction of in-building communications. Explore wireless VoIP for special cases such as campus environments with low employee density. Prepare for the evolution of the network infrastructure. Explore bundled and converged offerings, but resist to operator pressure for value-added services that don’t match enterprise needs.

9. Nomadic and Mobile Needs (Voice and Data) Network Dial Voice Cable Modem Data + Softphone Voice DSL Data + Softphone Voice Wi-Fi (Hot Spot) Data VPN Data + Softphone Voice Dial Data Data (GPRS, Edge, 1xRTT, EV-DO) Do-it-yourself or managed service providers (MSPs) MSPs bundle remote access technologies (VPN, dial-up, broadband) and wireless Wi-Fi "Hot Spot" services To come: policy- based management software and control Routing based on: – Security – Speed – Cost Cellular Voice Cellular Voice and Data (GPRS, Edge, 1xRTT, EV-DO)

10. LAN Convergence: Switching and Mobility Come Together WLAN Switch = WLAN Control + WLAN Security Today LAN Switch With Layer 2/3 Capabilities Future Next-Generation Switch = LAN + WLAN Switch Features + 10/100/1,000/10,000M, Power Over Ethernet, IP Telephony, VoWLAN, WLAN Roaming, WLAN QOS, Authentication

11. The Soft Phone — Wired Mobility Head Office Telephony Server PSTN VPN Branch Office Hot Spot Enterprise Private Network (MPLS-Based) Internet Firewall Cellular

12. Fixed/Wireless Voice Convergence — With Cellular/Wi-Fi (circa 2009) Cellular WAN Calls From Outside the Company Dialing Within Company 212.555.1234 4321 Issues Free wireless calling in-building, but need excellent in-building coverage In Europe — Calling party pays In North America — Flat-rate plan will eliminate potential benefits Control of and better feature set in IP PBX Requires replacement of all handsets Complex billing and handoff Enterprise IP PBX In-building Wi-Fi Note: Wired handsets not mandatory Twinning 4444

13. Industry Sector Convergence Drives Change in the Telecoms Business Model Content Company Network Company Telecoms Media and Entertainment IT Sector Convergence Multimedia Sector Service Company Business Model Convergence Telecoms operators need to develop a business model for mobile data and new applications based on IP. Customer