1. 1 Rick Tang Rick Tang rstang@lucent.com rstang@lucent.com IP Centrex - Integration Service IP Centrex - Integration Service Convergence Network Practice IP Centrex for Service Providers (SP-5)

2. 2 Agenda Value Proposition Concerns IP Centrex Trend IP Centrex Market Driver IP Centrex Desired Value IP Centrex Overview Case Study Tips

3. 3 Value Proposition Benefits Convergence Lower capital investment cost Reduce floor space Reduction in monthly transport cost, and Move Add Change activity Example scenario: 100 employee Enterprise with 512 kbps data need Before: 100 user enterprise would require 5 T1s at $125 per month each. Total cost $625 per month. Additional capital and operational cost is required for DLC and channel bank. After: At 4:1 concentration, 2.5 Mbps for Voice and 512k for data or 2 T1s are sufficient to support 25 simultaneous calls. The two T1s would cost $250 per month. Additional capital and operational cost is required for iMerge.

4. 4 Concerns Convergence of voice and data is making systems more complex Customers expect that vendor products will work with all 3rd party vendor products offered Customers expect complete solutions from vendors that span business units and companies Customers expect vendor products to “Play Nicely Together” and integrate multiple network components into customer-specific offers Fast changing technology requires more expertise Custom Solutions Support is the norm Customers expect faster field deployment and maximized efficiency of offered IP Centrex solution Complex multi-vendor solutions Circuit and Packet Expertise Required Speed deployment and ease maintenance of solution Complex multi-vendor solutions Circuit and Packet Expertise Required Speed deployment and ease maintenance of solution

5. 5 IP Centrex Trend Growth of traditional Centrex services has been stagnant; prices continuing to decline Next-generation service offerings are gaining market share; pricing expected to remain more stable as more features & functionality added Service Providers are facing increasing competition from premises systems (i.e., IP PBXs) Customers want greater control over their voice services Prices of premises solutions declining; functionality improving Most traditional Centrex providers are either considering or deploying IP Centrex (a.k.a. hosted PBX) A variety of hybrid (TDM & IP, premises & hosted) solutions are likely to co- exist for a while Sluggish growth from traditional Centrex services Increased competition from premises systems Sluggish growth from traditional Centrex services Increased competition from premises systems

6. 6 IP Centrex Market Driver Declining prices of traditional telecom services Need to differentiate and improve retention rates Lack of new revenue sources Network optimization and consolidation Operations Expense and Capital Expense savings Competitive pressure from premises systems Opening of new markets as a result of deregulation Service providers can retain customers while gradually implementing benefits of packet technology

7. 7 IP Centrex Desired Value Interoperability Scaleable Simplified management and network administration Seamless continuous communications Highest levels of reliability, and performance Unsurpassed security Gain Advanced capabilities Unifying Portal Converged communications that is application-rich Lower spending and expertise required Services available instantly