XConnect Overview

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SOURCE: Forrester, 2009 Market Overview: Sizing Unified Communications. Forrester predicts that the worldwide market for UC will be growing from $1.7b in 2008 to $14.5b by 2015 (36% CAGR). Grey bars are implied by the CAGR growth.

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XConnect – overview

XConnect Global Networks provides secure, managed ENUM Registries and SIP-based multilateral peering services which enable seamless routing between VoIP, NGN, IMS, mobile and legacy networks.

UC Federations: Registry technology supporting complex video/UC interworking.

National Federations: In-country ENUM-based Federations enabling service providers (SPs) to exchange voice and multimedia sessions on a national basis.

Global Alliance: Global ENUM-based peering Federation, enabling service providers to

exchange voice and multimedia (eg. HD voice and video) sessions globally.

Registry voice: Terminates carrier wholesale traffic to a global Registry of telephone numbers.

Key management

Overview

Eli Katz: CEO and Founder Neil Cohen: Director of FinanceDavid Schwartz: CTOJohn Wilkinson: Global Director of Sales and ProductsMyer Luknar: Director of Information TechnologyRonnen Slasky: Director of Operations and Product DevelopmentEnrique Garcia-Ayesta: VP, EMEA

Key technology partners

Board members

Eli Katz: CEO and Founder - Executive John Wilkinson: Global Director of Sales and

Products - Executive Ohad Finkelstein: Chairman of the Board -

Independent Dr. Paul Reynolds: (Chief executive Director

Telecom New Zealand) - Independent Dr. Torsten G. Kreindl: (Board member and

Chairman of the Finance Committee of Swisscom) Grazia Equity

David Hand: Crescent Point

Selected flagship customers (130 customers)

Notable awards

Market Growth:

Strategy:

Synergistic growth from a global multi –

Federation strategy

Leverage and Expand XConnect world-leading

ENUM Registry

Product innovation for new segments (HD

voice, video and UC)+ +

VoIP subs penetration to increase from 30% in 2009 to 45% in 2014.

Unified communications market growth forecast.

Ranked 5th

Key services include:

Founded:Headquarters:Employees:

Key locations:

Main Investors:

2005 London, UK

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USA, Japan,South Africa, Israel

Crescent PointGrazia Equity

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XConnect is the global IP Federation market leader

Overview:

There is an ongoing explosion of multimedia IP communications including IP voice, HD voice, video and UC.

IP networks are usually connected via the legacy PSTN which is inefficient, costly and does not support new IP multimedia communication services.

IP Federations are:

A suite of ENUM Registry and interconnect services.

Increasingly replacing PSTN transit, enabling the mass market adoption of new services through cross-network end-to-end IP multimedia communications.

XConnect operates and enables the world’s largest number of Federations, across all segments,

Global and National as well as UC Enterprise and video.

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XConnect delivers a new Federation paradigmBEFORE

IP Phone

Smartphone

PC

IP Phone

Smartphone

PC

Standard mobile

Standard phone

VoIP end-usersVoIP end-users Interconnection between various operators (multi hop PSTN)Interconnection between various operators (multi hop PSTN) Terminating partiesTerminating parties

IP communications end-usersIP communications end-users Multimedia hub-based interconnect and ENUM RegistryMultimedia hub-based interconnect and ENUM Registry Terminating partiesTerminating parties

Multi hop PSTN

Smartphone

IP Video com.

Telepresence

IP Phone

PC

*

*

IM

*

* Multimedia IP communications services are not supported by the standard multi hop PSTN paradigm

Smartphone

IP Video com.

Telepresence

IP Phone

IM

PC

Standard mobile

Standard phone

Cur

ren

t Vo

IP in

terc

onn

ect

pa

radi

gm

All

enco

mp

ass

ing

Fe

dera

tion

pa

rad

igm

IP Network

IP Network

AFTER

ENUMRegistries

(DNS for Telephone Numbers)

Multimedia, Multi-protocol

Interconnection(IPX) Hub

Security & Identity Management

Reporting & Settlement

Advanced Services Support

Patented proprietary technology

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XConnect’s core platform including the ENUM Registry and interconnect (IPX) hub systems is based on patented, market-leading and proprietary technology.

The XConnect secure and carrier-grade platform addresses all the key challenges of IP Federation services with fully configurable advanced

peer-by-peer policy control.

XConnect patented and developed ENUM Registry and Directory technology, with

advanced Policy Control, Routing and Security.

Unique, XConnect developed, multimedia and multi-protocol interconnect (IPX) hub platform with support for H323, SIP and XMPP/Jingle

across voice, HD voice and video.

Advanced services to support video Federation and complex device, network and protocol

interworking.

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Vendors and technology

Enterprise services

Next Generation

Access (NGA) “Multimedia hub-based interconnect”

Mass market consumer services

VoIP MVoIP Web 2.0 Video IM HD voice

LTE

SBCs

UC/SIP platforms

IMS

Tele-presence

HD voiceIMIP-PBXsVideo conf.

UC

Enterprise/metro Fibre

FTTC/H

Various market forces driving XConnect growth

Drivers

Drivers

En

able

rs

En

able

rs

Growth from a global multi – Federation strategy

XConnect’s strategy is to create and operate multiple Federations across a global footprint

All XConnect Federations are interconnected to each other, creating substantial growth across the entire customer base. Reed’s law states that the value of interconnecting N networks is 2 ^ N.

95% of all voice minutes are domestic / national traffic.

XConnect National Federation services, in a growing number of countries, deliver domestic interconnect services (VoIP and other new services), with specific national requirements including private IP networks.

National

Providing specialised Federations for HD voice and video, including additional features and new segment of operators, eg. managed Enterprise video providers, as well as consumer and business video.

All XConnect services incorporate the capability for IP-based services such as video.

New IP services

The 5% of minutes reflecting International Traffic represents 400b minutes, and $13b of value (Telegeography, 2009).

XConnect offers the Global Alliance service for international traffic, delivered through its global PoPs.

International

Enterprise or UC Peering enables cross-Enterprise calling (voice, video, UC) operated by vendors of PBXs/UC platforms.

This will be a major revolution and migration of traffic towards Enterprise Federations.

XConnect is the first to be offering UC Federations, including telepresence and video calling.

UC/Enterprise

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The network effect

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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014VoIP subs VoIP penetration

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2%4%

5%8%

10%19%

29%32%

40%

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AustriaSwitzerland

UKPortugal

SpainBelgium

ItalyGermanySwedenNorwayFrance

Netherlands

Global consumer MVoIP traffic, 2010–2015Global consumer MVoIP traffic, 2010–2015

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SOURCE: Cisco VNI, 2011

CAGR 10-15E = 46%

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VoIP subs penetration to increase from 30% in 2009 to 45% in 2014VoIP subs penetration to increase from 30% in 2009 to 45% in 2014

SOURCE: Infonetics historical, Goldman Sachs Research forward estimates

Skype S-1 filing:“According to industry sources, the worldwide telecommunications services market, which includes traditional fixed voice, mobile voice, internet-based voice known as Voice-over-Internet Protocol (VoIP), broadband and other fixed data and mobile data, was $1.5t in 2009. According to industry sources, the size of the IP-based voice services market, in which we participate, was $41b in 2009 and grew at a 34% compound annual growth rate from 2006 to 2009.”

CommentsCommentsVoIP penetration of non-cable fixed linesVoIP penetration of non-cable fixed lines

SOURCE: Company data, national regulators, Credit Suisse estimates

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TeleGeography:“VoIP has developed from a tool for facilitating international interconnection rate arbitrage into an uncontroversial technology, widely used by incumbent and startup carriers alike. Indeed, a growing number of wholesale carriers no longer distinguish between VoIP and TDM routes in their rate sheets, focusing instead on price and quality of service metrics. International VoIP traffic has grown from less than 10m minutes in 1997 to 103b minutes in 2009”.

VoIP adoption is well underway and growing

CAGR 05-10E = 49%

CAGR 10-14E = 16%

A number of countries remain under penetrated in Europe, leaving significant up-side for growth

Significant growth opportunities

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Mobile

Global consumer Internet mobile video com. traffic, 2010–2015(1)Global consumer Internet mobile video com. traffic, 2010–2015(1)


CAGR 10-15E = 90%

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Consumer video communication playersConsumer video communication players CommentsComments

CEO Mark Zuckerberg was quoted saying “with the explosion of social media, billions of people will be on Facebook and other sites. So the next five years will be all about adding apps and other features to users to allow them to connect in new ways.”

Bill Gates was quoted saying “The idea of video conferencing is going to get so much better than it is today. Skype actually does get a fair bit of revenue.”

Global consumer Internet fixed video com. traffic 2010–2015(1)Global consumer Internet fixed video com. traffic 2010–2015(1)

(Petabytes per month)


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Fixed

CAGR 10-15E = 40%

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(1) Figures do not take into account the recent Facebook/Skype partnerships that overnight bolsters Skype’s video user base from c. 150m to c. 750m subscribers.

XConnect is uniquely positioned to deliver interconnect services for next generation consumer communication services (video, IM, UC, OTT, etc.). The

current IP PSTN interconnect paradigm cannot handle these services.

Cross-platform IP video is at the cusp of an explosion

Hardware vendor Service providers

(Petabytes per month)

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SOURCE: Dell’Oro, Barclays Capital Estimates

telepresence predicted to be a $5b market by 2015 (Infonetics).

Market adoption predictions by Gartner(1):

By 2016, more than 80% of telepresence meetings will include a participant from a personal video device.

By year-end 2015, 60% of Enterprises will provide 30% of their users with cloud voice services.

The IP-PBX market is growing strong and will be cannibalising existing TDM-based PBX services quite rapidly. This will be a large driver for SIP trunking proliferation, which ultimately is a core driver for XConnect’s growth .

Worldwide IP-PBX market, projected revenue growthWorldwide IP-PBX market, projected revenue growth CommentsComments

SOURCE: Infonetics research, Enterprise telepresence and Video Conferencingquarterly market size, share and forecasts, March 2011

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CAGR 11-15E = 20%

Enterprise video conferencing and telepresenceEnterprise video conferencing and telepresence

($b)

SOURCE: Forrester, 2009 Market Overview: Sizing Unified Communications. Forrester predicts that the worldwide market for UC will be growing from $1.7b in 2008 to $14.5b by 2015 (36% CAGR). Grey bars are implied by the CAGR growth.

CAGR 08-15E = 36%

Unified communications market growth forecastUnified communications market growth forecast

($b)

(1) Gartner, Predicts 2011: Adoption of Unified Communications creates new sourcing and deployment challenges

With Enterprise communications also growing rapidly

CAGR 10-14E = 6%

($m

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Situation/Opportunity Increasing VoIP adoption globally means that National operators require

an in-country interconnect point to enable cross-network IP traffic. Emerging trend of shift from per minute revenue business model for SP’s

to service-based revenues. Mass adoption of services requires cross-network IP interconnection.

National Federations are deployed with an in-country XConnect hub either sold directly or via neutral infrastructure providers. (e.g. datacentre providers, Internet Exchanges, etc.).

Solution: National Federations, typically involve National infrastructure providers,

who partner with XConnect to offer a range of local interconnect services to SPs.

National Federations are deployed with an in-country XConnect hub and ENUM Registry to enable National interconnect for operators.

For partners: the service includes full management, policy control and

operation of the Federation service including reporting, rating and billing services.

For service providers: National and international peering enabling lower cost, increased

quality multimedia features . Support for new IP services e.g. HD voice and video. Flexible settlement models and policy control. Number Portability correction. SuperQuery – interworking with other global Registries e.g.

GSMA PathFinder.

National Federations

OverviewOverview Key service featuresKey service features

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Description ChallengesCompany

Platform structureSolution

Deregulation of market to break monopolistic control of incumbent operators.

Enabling SME’s to become regulated operators in their local area.

Cost of investing in own infrastructure to run telecoms business as a barrier to entry.

High termination charges by incumbents meant new entrants could not compete.

Diversifying and enhancing the business to consolidate market leadership.

Summary: Deployment of National Federation service

including ENUM Registry and multimedia interconnection hub in partnership with Multisource to Service Providers/operators in South Africa.

Fully managed hosted soft switch solution to enable new entrants to set up VoIP operations without the associated costs and technical complexities including full back office operations.

Features include: Multi-lateral peering via interconnection hub

enabled new SPs to interconnect directly and bypassing incumbents.

Provides wholesale wireless network solutions to meet the communication needs of operators/SPs throughout Africa.

Focuses on supplying products in solution format, supported by a wide range of supporting services.

Multisource provides wireless solutions as an alternative to fixed line connectivity through stable, long term, reliable partnerships, cost effectively and efficiently.

Case study - South African National Federation

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Summary: Deployment of National Federation service

including ENUM Registry and multimedia interconnection hub in partnership with DE-CIX to Service Providers/operators Germany

Features include: Multi-lateral peering via interconnection hub

enabling SPs to interconnect directly and bypassing incumbents.

Central number-management and number-portability platform for operators, facilitating ENUM-based number discovery and routing that will enable calls to be delivered accurately and directly across networks.

DE-CIX provides direct and settlement-free IP interconnection ("peering") IX infrastructure services to all types of ISPs including broadband providers, content delivery networks, web hosters, and incumbent operators

DE-CIX is the World’s leading IX with over 450 customers from 52 countries

DE-CIX is strictly carrier neutral and is owned by the eco association - the World’s largest non-profit association for the Internet industry.

Case study – German National Federation

Diverse and complex regionalised market with no central interconnect hub for NGN and VoIP traffic, meaning SP’s reliant on inefficient bi-lateral interconnects

Increased demand from SP’s for cross network IP services such as video and HD Voice

De-centralised number portability system Increasing revenue & differentiating services

to maintain market leading position and increase revenue from new service offerings

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Overview ChallengesCompanies

Most HD voice services are limited to within the service providers’ network, essentially creating “HD voice Islands”.

Interworking issues due to different codec for HD being deployed, fixed SP’s using G722, wireless using AMR-WB, OTT service providers using Silk, iSAC and other codecs.

Mass adoption of HD voice requires cross network interconnection with the option of transcoding between codecs.

Platform structureSolution and Benefits

HD voice represents a new generation of high quality voice providing more effective voice communication.

HD voice is currently being deployed by hosted IP/PBX providers as a service differentiator.

Wireless providers are deploying HD voice to improve cellular call quality.

Conferencing providers can offer better audio conferencing services by implementing HD.

Summary: Deployed the world’s first HD voice

Federation. HD voice calls are routed directly between end-points bypassing the PSTN.

Enables cross network HD voice calling between fixed and mobile networks.

Federation Features: Numbering and routing management via

ENUM local query to ensure that call avoids the PSTN.

SIP signalling. Policy driven, secure and scalable.

Media transcoding G722 to AMR-WB (fixed/mobile).

Interworking to GSMA Pathfinder and IPXs. Joined by 8 US voice and conferencing SPs

at launch. Now 11 operators in total including 4

European operators.

Case studies – National Federations HD voice

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Situation/Opportunity:

Current PSTN legacy interconnect model is inefficient, costly and does not support IP services.

Operators require scalable platforms for international IP interconnect.

Direct bilateral interconnect is inefficient, non scalable, resource and capital intensive.

Solution:

Global Alliance enables SPs to multilaterally interconnect utilising ENUM Registry and Federation hub:

Securely routes traffic between NGN and VoIP networks.

Simplify the process of interoperability and interconnection between networks.

launch of new multimedia IP services on a cross network basis choosing flexible commercial and settlement models.

Hosted virtual interconnect management. Support for multimedia HD voice, video including Video

Interconnection Exchange (VIE) – supporting complex video interworking.

Policy-based private peering. Flexible settlement models. Source of new revenue for Service Providers to collect per

minute fees on inbound calls. Number Portability corrected routing. SuperQuery: interworking with other global Registries e.g.

GSMA PathFinder. Private and public IP network access.

Global Alliance


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Telio is a leading European provider of access-independent broadband telephone services.

Telio’s mission is to be a major force in defining and providing fixed and mobile internet communications to the consumer and small business.

In 2008 Telio became the second largest fixed line telephone provider in Norway.

Listed on the Oslo Stock Exchange (ticker:TELIO).

Case study – Global Alliance

Incumbent operator interconnection regime based on PSTN meaning IP end-to-end not supported and also charging transit fees, resulting in higher costs for Telio.

Required platform for international IP interconnection to strategic destinations.

Required support for new video service to enable availability on a cross-network basis.

Summary: Global Alliance for international

interconnection, giving Telio access to over 100 SPs globally.

Features include: National interconnection via National

Federation. Exchange voice traffic directly on IP, bypassing incumbent and PSTN.

Video interconnection to other video networks managed via Video Interconnection Exchange (VIE).

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Situation/Opportunity:Cost of termination across the carrier wholesale market is reducing. Carriers need cost efficient termination to remain competitive and maximise margins.XConnect focuses on Registry and NP destinations where TN termination costs are highly variable, e.g. US, UK and Canada.Tier 1 customers include KDDI, IDT, AT&T, Sparkle, BICS and Tata.Solution:The Registry enables wholesale carriers to terminate calls directly to the terminating Service Providers' networks.Routing at granular telephone numbers (TN) level, rather than traditional country and area code, enables efficient direct routing, decreasing transit costs and increasing quality as opposed to legacy IP/TDM conversion.

Focussed on core XConnect Federation destinations, not general global A to Z routing.

Customers access the termination service by ‘dipping’ against the ENUM Registry, either using an ENUM or H323 query, or via the use of a SIP redirect.

NP correction is provided both with XConnect routing capability, and is exposed for the customer’s own routing.

XConnect use Federation members to terminate these Registry calls, therefore providing customers with a new revenue source.

Registry voice


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Situation/Opportunity:

Rapid growth in the deployment of Enterprise IP-PBX and UC platforms. Explosion in video calling and conferencing across consumer and Enterprise segments including web, mobile, desktop and Telepresence.

Current market is highly fragmented with multi-vendor, multi-platform and multi-network solutions, creating islands of service.

These islands require interconnection to enable ubiquitous service availability.

Solution:

XConnect licenses technology to operators and vendors for them to create UC and video Federations including Registry, Directory and interconnect technology.

XConnect addresses the interoperability challenge across multiple protocols, codecs, networks and devices.

Directory to identify end-user reachability.

Registry to enable inter domain, policy-based, intelligent routing of video calls, authorization and permission-based end-user communities.

Interconnect for multiplatform protocol working. Multiple signalling protocols including SIP, H323 and XMPP/Jingle.

XConnect Registry (and Directory) technology to enable video interworking of B2B video services supporting ENUM, SIP and H323 queries.

Enables direct, secure, next generation communication between Enterprises: voice, video, IM/Presence and collaboration.

Enables interworking between existing Enterprise Federations, XConnect Federations and Registries including access to other global Registry services such as GSMA PathFinder.

UC Federations (Enterprise and video)

Industry recognised technology partners

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Award winning services

Ranked 5th

Documents

XConnect Overview