Mr. Andrew Nester Chairman - LMA Systems, Inc. Broadband Wireless World Forum San Francisco, CA February 19-21, 2001

Mr. Andrew NesterChairman - LMA Systems, Inc.

Broadband Wireless World ForumSan Francisco, CAFebruary 19-21, 2001

LMA Systems, Inc. Proprietary Document

The MarketThe Market Wireless Broadband

The Strategis Group predicts that wireless broadband revenues will reach $3.4 billion in 2003.

Dain Rauscher Wessels estimates wireless broadband revenues will reach $7.4 billion in 2003.

eMarketer reports by 2003 small and medium sized business will represent 80% of the total fixed wireless market.

Competitive Assessment 100% of towns/cities with more than 1,000,000 inhabitants have access to both

DSL and cable. In towns/cities with 50,000 to 100,000 inhabitants, 26.2% have cable and 32.1%

have DSL.(Source: US Dept. of Commerce)


Broadband OpportunityBroadband Opportunity

0

10

20

30

40

50

Internet Access

Internet Access 2000

US Central CitiesRural Urban

02468

101214

Broadband Access

Broadband Access 2000

US Central CitiesRural Urban

Commercial Opportunity 65% of small and mid-sized companies have Internet Access 11% of these companies use broadband

(Source: Insight Research, March 2000)

Residential Opportunity

(Source: NTIA and ESA, US Dept. of Commerce)


Wireless Broadband Opportunity Wireless Broadband Opportunity Exploding demand for high speed broadband services Need for high speed connections over the last mile Availability of proven wireless solution using MMDS spectrum Availability of licensed MMDS spectrum in second tier markets Availability of proven, reliable head-end and CP equipment FCC first accepted applications for two way data services in August

2000 Sprint and WorldCom providing leadership and credibility

Spent $1B each to acquire spectrum in 1999 Announced plans to launch 60 first tier markets over next two years


CompetitionCompetitionResidential SOHO Small

BusinessMedium Business

Large Business

DSL (ADSL)

Cable

T1

T3

Satellite

MMDS

LMDS

Unlicensed Wireless


Who is LMA Systems?Who is LMA Systems? Provider of fixed, two-way wireless broadband solutions to

businesses, residences, and institutions.


LMA Target MarketsLMA Target Markets Focus is on secondary and rural U.S. markets

Minimum market size 50,000HH

“Positive” demographics Good business mix High PC penetration High HH income High education level Good growth projections

Few Competitors


Target SubscribersTarget Subscribers Small & Medium Businesses Corporate Telecommuters SOHO Advanced Residential

Heat Seekers Multiple PCs Home Networks


Have a Strategic Plan Have a Strategic Plan Acquire spectrum in second tier and rural markets Provide technical/customer support from single network

operating center Offer broadband services to small to medium sized

businesses and advanced residential customers Target through “geo-marketing” to capitalize on coverage

areas Increase recurring revenue stream in two ways:

Develop broadband value added services Leverage network with larger numbers of residential customers


Frequency Evaluation CriteriaFrequency Evaluation Criteria Availability (fragmented ownership provides opportunities) Fit (clustered, usable spectrum) Valuation ($X per channel per household, adjusted for

market size) Acquisition options

Purchase Lease (with option to buy and/or right of first refusal) Joint Venture (with option to buy and/or right of first refusal)


Comparison of TechnologiesComparison of Technologies

LMDSLMDS LPTV *LPTV * MMDSMMDS UnlicensedUnlicensed

BandwidthBandwidth Very HighVery High HighHigh HighHigh MediumMedium

RangeRange ShortShort LongLong LongLong MediumMedium

PropagationPropagation True LOSTrue LOS Near LOSNear LOS Near LOSNear LOS Near LOSNear LOS

CPE CostCPE Cost HighHigh LowLow LowLow MediumMedium

Ideal MarketIdeal Market UrbanUrban Suburban/ Suburban/ RuralRural

Suburban/ Suburban/ RuralRural

SuburbanSuburban

License CostLicense Cost MediumMedium MediumMedium MediumMedium LowLow

* LPTV is currently licensed for downstream only.


Site Buildout PlanSite Buildout Plan Cookie Cutter approach Approximately $500K to $1M per site (hard and soft costs) FCC application and buildout occur simultaneously 90 days to launch of services Dedicated Team (s)

RF Engineer Data Engineer Project Management Launch Marketing Programs Launch Sales Team Launch Installers Assigned QoS Support (Technical/Customer)


Subscriber AcquisitionSubscriber Acquisition Comprehensive Site Marketing Plans Business Partners Direct Sales In-House Sales Universities MTU’s (Multi-Tenant Units) Third Party Sales Corporate Sales


Broadband ServicesBroadband Services

Base Level Offering Internet Access/Services Data Carrier Services Virtual Private Networks (VPN)


Broadband Services Broadband Services

Advanced Offering B2B Application Services/ Web Hosting Voice over IP Custom Video Application Services - Delivering top end applications to small

and medium sized businesses. Examples: Profession Specific (Legal, Health Care, HR, etc.) Customer Relationship Management (CRM)/Contact Management Project Management Data Warehousing


Have the Right BalanceHave the Right Balance Businesses bring in five times the revenue of residential

accounts. Businesses are better users of value added services. Residential accounts may transition to business accounts

as e-commerce, home-based businesses and telecommuting grow.


Different Markets have Different Different Markets have Different NeedsNeeds

Choose your markets and segments carefully. Select the right portfolio of products to meet the needs of

your customers. Don’t be everything to everyone.


The Key is…The Key is… Carefully manage subscriber acquisition & retention costs. In today's competitive broadband marketplace, it's not

enough to know who your customers are, what you want to sell them and how you hope to manage that relationship. To survive and succeed, providers must manage subscribers based on the value those customers bring to the enterprise. Those that do not will lose the coming battle for market share and increasing revenue.


Cost per Residential SubscriberCost per Residential Subscriber

Equipment Costs

$0

$500

$1,000

$1,500

$2,000

$2,500

xDSL MMDS UnlicensedBWA

Cable

Co

st

pe

r S

ub

sc

rib

er

($)

Plant/License Headend/Common Equip. CPE Installation

(Source: First Union Securities, Sept. 2000)


Where You Want to BeWhere You Want to Be

MMDS

DSL

Cable

LMDS

Unlimited

Limited

High Low

Delivery Cost

Sweet Sweet SpotSpot


Key Factors for SuccessKey Factors for Success Procure adequate spectrum Conduct thorough market and competitive assessments Know your target market and their needs Establish differentiation Manage subscriber acquisitions


Questions & AnswersQuestions & Answers

Thank you.

Documents

Mr. Andrew Nester Chairman - LMA Systems, Inc. Broadband Wireless World Forum San Francisco, CA February 19-21, 2001