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Slide 1: FirstPartner FirstPartner Welcome to VoIP Market Map Welcome to the 2006 Q3 VoIP Market Map. It is an overview of the global VoIP industry on one page and includes key facts and underlying trends that drive this industry. 1) Starting at the top, the map identifies four main customer segments and their key needs. 2) It presents the complete range of phones and devices that customers can choose from to adopt VoIP service. 3) The map identifies different channels through which customers buy phones and VoIP services and solutions. 4) The map distinguishes between traditional service providers like fixed line carriers and new Internet telecom service providers. 5) It lists leading players that offer infrastructure and technologies to both service providers and enterprise customers. 2006 Market Map: Guide To VoIP Kurt Lyall klyall@firstpartner.net Christopher Owen cowen@firstpartner.net www.firstpartner.net t. +44 (0)870 874 8700 Customer Segments Residential / Families Needs: 1) Out of the box and simple to use 2) Reliability and low cost 3) Number portability Small Office Home Office (SoHo) Needs: 1) Ease of administration 2) Cost efffective 3) Network of users Public Space / Campus Needs: 1) Simple to use 2) Coverage and range 3) Fast hand-off Enterprise Needs: 1) Interoperability with legacy systems 2) Security and reliability 3) Operating cost Phones / Hardware Market Facts 1. Subscribers to retail VoIP service worldwide rose by 83% from 10.3 million at the beginning of 2005 to 18.7 million. 2. Number of subscribers paying for PC to phone service is over 4.7 million. Skype has the largest market share at 45%. 3. Time Warner Cable in USA signed up 900,000 subscribers in 2005. 4. France is the largest VoIP market in Europe with 2.8 million subscribers. 5. The VoIP market for hardware and software is led by Cisco, which had 24.3 % share in the Q106. Avaya came in second with 23.4 %. Soft Phone / IM Software AOL BT Voyager CallComm Express Talk Google Jabber Lipz4 Microsoft USB Phone Vendors Actiontec Atcom Canyon Clarisys Ipevo Onyx Philips US Robotics Smart Phones Dell Eten Flipstart HP HTC iMate Hybrid Devices AOL Portable IM Nintendo GameBoy Nokia NGage Sony Mylo Xbox Live! Hitachi Cable Wi - Fi Phones Cisco Motorola NetGear Sony Symbol Toshiba UT Starcom Vocera IP Phones Cisco Alcatel Siemens Cidico Mitel SIPPhone Snom Unidata Comms Systems ATA Cisco Digium D-Link Grandstream Linksys Vegastream Zoom Zyxel Other VoIP Voice BillKey Edgecore Logitech Motorola Netgear Polycom Sierra Wireless US Pure-Play VOIP Market Share 20% 1% 1% 2% 2% 2% 55% 3% 4% 5% 5% Vonage Lingo 8x8 (Packet8) Source: Telephia Verizon VoiceWing NetZero Voice Earthlink AT&T CallVantage Broadvoice Other SunRocket AOL Channel Mobile Operators 3 (Hutchison) KPN Mobile Retailers Circuit City CompUSA Dixons Mesh Computers PC Mall PC World Radio Shack Micro Centre CDW Walmart Tesco Carrefour Online / Mail Order Amazon Dabs Kelkoo Firebox VoIP Supply VoIP Phone Depot Firebox PC Telephone Play.com Shopping.com Talkip4u TigerDirect IT VARS / Resellers Brightstar Brightpoint Dangaard Data Sharp Telecom El Corte Ingles Micro Computer Smith Micro Tech Data Synnex Global IT Networks GTSI Computacenter Telecoms VARS / Resellers Central Telecom Data Sharp Telecom Equant L3N Netservices SouthernCom ABP Scantalk VoIPBitz Vonexus Lirex STS Accenture BT Consulting CapGemini Fujitsu Services HP Services Logica CMG System Integrators Atos Origin CommVerge Satyam Computers Tata Consultancy Orca Group Quentris Market Drivers 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 2004 Source: The Yankee Group, 2004 VoIP Penetration into Broadband Market (US) 2005 2006 2007 2008 Service Providers Internet Telecom Service Providers Skype Vongage Lingo SunRocket Packet8 CallVantage Google Yahoo NetLogic VoIP Street CallServe iConnect InPhoneix Telappliant Earthlink PlusNet Symphony VoiceWing Voiceglo Go2Call BT Yahoo Easynet Kingston Mistral Plusnet Nildram Sky Tiscali Orange Demon Internet Service Providers AvantGo Covad ISP Net Canada FranceNet Road Runner NetZero Virgin.net Pipex AOL Datanet Wireless Internet Service Providers BT OpenZone Concourse Liberty Europe Swisscom T-Mobile Wayport Fiberlink iPass GoRemote Boingo Azulstar Mobiboo Clearwire Speednet Services Commspeed NextPhase Wireless FreshTel Avantel ERF Wireless Net2Phone 360 Networks Albacom CableVision Gamma Telecom Inmarsat iTXC KMC Telecom Primus Telecom Rapid Technology VoiceNet Alternatives Tech Terra TelCove Wave Crest Thus Viatel Modus Telecom Inclarity NewEdge Alternative Telecom Fixed Carriers British Telecom Deutsche Telekom France Telecom Telecom Italia KPN SingTel Telefonica Telia Sonera Telenor Cable & Wireless Comcast Hanara MCI Sprint Time Warner Cable NTT Verizon VSNL Qwest PCCW Market Commentary 1. Service provider race Low barriers to participation allow new entrants to launch services. Business models vary from provider to provider. Ultimately survivors must have strong funding, good marketing strategy and willing to fight for market share as traditional carriers are also launching competing services. 2. Infrastructure vendors have been over funded Multiple specialist vendors, funded by VCs, have launched platforms and infrastructure to support VoIP services. Ultimately too many suppliers are currently in the market and very few will be able carve out a sustainable niche in the long-term. As technologies standardise, vendors will need to consolidate technologies to deliver better value propositions to carriers and enterprises. 3. Mainstream networking vendors are the main beneficiaries Driven by the need for more bandwidth in order to deliver acceptable quality of service, mainstream network vendors are likely to benefit from VoIP helping to triggering customer up-grade and replacement cycles. ISPs will also benefit as businesses and consumers look to increase their network requirements. 4. VoIP over Wi-Fi is in hype mode Unclear service delivery models, lack of hotspots and poor handset performance means that the combination of these two technologies will take longer than expected to become a meaningful service. Platform Example: A viral network for sharing information and content Largest peer to peer system ever built Presence on over 100 million desktops Draws 1% of www bandwidth Wholesale Providers BT Wholesale Castle Networks First European Global Source Infocomm Level3 Primus Teleglobe Termination & Preselect Providers Annecto Telecom Bactel BandX Cable & Wireless Global Crossing Global Termination ICX Europe Verizon IP to IP Interconnect Providers Cable & Wireless Global Crossing InfinRoute Networks ITXC iBasis Level3 Progress Telecom Qwest Centrex & VPBX Providers Aastra Telecom Alcatel Avaya Nortel Polycom Samsung Siemens Sylantro C4L Belco Digium Speed Touch Nortel Tandberg Toshiba Unisys CPE Providers 5. VoIP over cellular networks Solutions are being developed to enable customers to access buddy lists and make VoIM calls from their cellphone without incurring any long distance or per minute mobile charges in some cases. Tier 2 mobile operators are taking a lead through marketing arrangements with ITSPs to differentiate their consumer propositions and boost data ARPU. Evolution of Skype Platform FirstPartnergrowing strategic marketing and research agency. No other agency FirstPartner is a fast has the strength of understanding of technology and its impact on changing customer behaviour, combined with marketing know-how. We take on big marketing challenges for our clients, helping them to, launch new technology based propositions and better optimise their marketing strategies. FirstPartner was established in 2001 and is growing on average more than 50% year-on-year. We have a unique and successful culture, thanks to our multi-disciplined teams covering marketing, creative, finance and research. Our track record speaks for itself and spans working with global brands through to the most innovative start-ups. Why not contact us to get your team up to speed and to build on the debate. Technology and Platform Providers Global IP Voxeo Ubiquity Software Mindspeed Sylantra Netwise ShoreTel Voice Processing IVR Content Opensource Platforms PIM Antispam & App. integration Skype Developer Ecosystem Voxeo Pamela Systems Voxpilot Scodor 4Teambiz VApps VideoIM Tellme IVR Inbound PBX Video response Voicemail PIM Conferencing Video Voice portal Carrier Grade IP Infrastructure Soft Switches Gateways Media Services CRM Billing & Mediation Other Enterprise IP Infrastructure Unified Message IP PBXs/Centrex Switches Gateways Firewalls Access Points Disclaimer The map includes information compiled from various reputable sources and other methods like structured interviews and surveys, conference material and information available in the public domain. As data and information sources are outside our control, FirstPartner makes no representation as to its accuracy or completeness. All responsibility for any interpretation or actions based on this map lies solely with the reader. 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