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Analyst & Media Day 17/09/2010 © Ascom Network Testing 1
ANALYST & MEDIA DAY ZURICH
Network Testing
Friday, 17 September 2010
Analyst & Media Day 17/09/2010 © Ascom Network Testing 2
AGENDA PROGRAM
ABOUT ASCOM
H1 AT A GLANCE
NETWORK TESTING
Analyst & Media Day 17/09/2010 © Ascom Network Testing 3
PROGRAM: FRIDAY, 17 SEPTEMBER 2010
From 12:30 Standing Lunch13:30 – 13:45 Welcome Address
Riet Cadonau, CEO13:45 – 14:30 Presentation Division Network Testing
Markets today & tomorrow Customer references
Rikard Lundqvist, General Manager Network Testing14:30 – 15:00 Product Overview
Customer needs Our offering
Erik Tarnvik, VP Marketing Network Testing
[ ANALYST & MEDIA DAY ]
Analyst & Media Day 17/09/2010 © Ascom Network Testing 4
15:00 – 15:15 Coffee break
15:15 – 16:00 Product Presentation Network Testing Product Portfolio:
www.ascom.com/networktesting
Jaana Tengman, Director of Product ManagementThomas Renz, Product Management
16:00 – 16:30 Closing Words / Q&A
From 16:30 Drinks
[ ANALYST & MEDIA DAY ]
PROGRAM: FRIDAY, 17 SEPTEMBER 2010
Analyst & Media Day 17/09/2010 © Ascom Network Testing 5
ABOUT ASCOM
Analyst & Media Day 17/09/2010 © Ascom Network Testing
The SeCom division specializes in secure, reliable communication solutions for alerts, mobilization, and tactical communication both for military and civilian use. www.ascom.com/security-communication
The NT division is a global market leader in testing and optimization solutions for mobile networks.www.ascom.com/networktesting
COMMITT
The WS division is a leading specialist in wireless on-site communication solutions for segments as hospitals, elderly care, industry, retail, hotels and secure establishments.www.ascom.com/wireless-solutions
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[ ASCOM GROUP ]
ABOUT ASCOM
Ascom is a business-to-business provider of customized communication solutions in niche markets. The company focuses on Mission-Critical Communication in the following core areas:
Wireless Solutions Network Testing Security Communication
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H1 2010 AT A GLANCE: STRONG H1 RESULTS OF ASCOM GROUP
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H1 2010 FINANCIAL RESULTS OVERVIEW
CHFm H1 2010 H1 2009
Incoming orders 308.2 233.8
Revenue 281.2 235.2
EBIT 24.0 7.3
EBIT margin 8.5% 3.1%
GROUP PROFIT 17.1 11.9
EBITDA 33.9 12.3
EBITDA margin 12.1% 5.2%
[ H1 2010 AT A GLANCE ]
8
Improvement in all targets
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ALL THREE DIVISIONS IMPROVED PROFITABILITY
Security Communication
EBIT margin 8.1% (H1 2009: 5.1%); EBITDA margin 9.0%
[ H1 2010 AT A GLANCE ]
Ascom is a healthy company and shows profitable growth
Wireless Solutions
EBIT margin 10.1% (H1 2009: 5.3%); EBITDA margin 12.5%
Network Testing
EBIT margin 8.0% (including integration and amortization costs of CHF 6.9m)
EBITDA margin 15.4%
Analyst & Media Day 17/09/2010 © Ascom Network Testing 1010
OUTLOOK 2010
Organic growth on Group level compared to prior-year*
Guidance increased > New target for 2010 on Group level:* EBITDA margin: 11-12%
The company intends to pay an annual dividend starting from 2011, provided a well ongoing course of business
*provided that the economic environment remains stable and there is no deterioration in currency relations
[ H1 2010 AT A GLANCE ]
Analyst & Media Day 17/09/2010 © Ascom Network Testing 1111
NETWORK TESTINGEVOLVING NETWORKS. TRUSTED SOLUTIONS.
Analyst & Media Day 17/09/2010 © Ascom Network Testing
Mob
ile N
etw
ork
Test
ing
1212
Mobile Test Solutions
[ NETWORK TESTING ]
+ Comarco WTSJanuary 2009
+ TEMSJune 2009
+ ArgogroupMarch 2008
NETWORK TESTING
ASCOM MADE A SUBSTANTIAL LEAP FORWARD
existing
Set-up of a third Ascom pillar
Analyst & Media Day 17/09/2010 © Ascom Network Testing
[ NETWORK TESTING ]
NETWORK TESTING PRESENTATION TEAM
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Product Segment ManagerThomas Renz
VP Product Management & MarketingErik Tarnvik
General ManagerRikard Lundqvist
Director of Product ManagementJaana Tengman
Analyst & Media Day 17/09/2010 © Ascom Network Testing 1414
THANK YOU!
Analyst & Media Day, 17/09/2010 © Ascom Network Testing 1
ANALYST & MEDIA DAY ZURICHNetwork TestingFriday, 17 September 2010
Analyst & Media Day, 17/09/2010 © Ascom Network Testing 2
EVOLVING NETWORKS. TRUSTED SOLUTIONS.
NETWORK OPERATOR CHALLENGES
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Network Testing
Reston
NETWORK TESTING – A GLOBAL MARKET LEADER
575+ employees in 20+ countries
Headquarters
20+ employees
6-20 employees
1-5 employees
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Core segments
Product/Service offering
Go-to-market
Growth driver
Telecom operators Telecom infrastructure vendors Telecom professional service providers Telecom regulatory agencies and other government entities Telecom content providers
Radio air interface network performance, network quality of service, and services monitoring & testing: Products
Systems Solutions Services 1)
Global presence Direct channel: Offices in more than 20 countries Indirect channel
Increasing demand of mobile broadband services Market growth driven by LTE standard
5
1) incl. Systems & Solutions (Application Development for Telecom Carriers)
Test & Measurement Benchmarking & Monitoring Reporting & Analysis
NETWORK TESTING
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BLUE-CHIP CUSTOMER-BASE
Operator Subscribers
(millions) Ascom
customer China Mobile 493 China Unicom 140 Bharti 102 Verizon Wireless 88 Reliance Communications 81
AT&T Mobility 80 Vodafone Essar 76 Telkomsel 69 Mobile TeleSystems 67
Radiomóvil Dipsa 58 NTT DoCoMo 55 VimpelCom 50 BSNL 50 Sprint Nextel 48 Idea Cellular 47 Vivo 47 MegaFon 45 Claro 42 Viettel 41 China Telecom 40
Source: Informa Telecoms & Media, World Cellular Investors –Quarterly Datasheet, September 2009 (data as of June 2009)
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Selected customers in EMEA
Selected customers in America
Selected customers in Asia
Global top 20 operators
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NETWORK TESTING PORTFOLIO SEGMENTS
Test & Measurement
Benchmarking & Monitoring
Reporting & Analysis
“for troubleshooting and optimization”
“for quality of service and experience”
“for post processing and optimization”
Individual probes to test and evaluate the performance and quality of wireless networks and services.
Dedicated probe systems to benchmark and monitor the performance and quality of wireless networks, services, and content.
Software to visualize, analyze, and report mobile network performance and quality.
TEST & MEASUREMENT BENCHMARKING & MONITORING REPORTING & ANALYSIS
62% of 2009 sales 33% of 2009 sales 5% of 2009 sales
OFFERING
TEMS Investigation
TEMS Pocket
TEMS Symphony Suite
TEMS Automatic
TEMS Monitor Master TEMS Box Office
TEMS Visualization
TEMS Discovery
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COMPETITORS
9
TEST &MEASUREMENT
BENCHMARKING & MONITORING
REPORTING & ANALYSIS
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MARKET POSITION 2009
Approximately 30% Ascom share of Network Testing market estimated at 430 MUSD
Sources: 1. Service Assurance Market Review, June 2009, Analysis Mason. 2. Service Fulfillment Market Review, July 2009, Analysis Mason. 3. World Wireless Test & Measurement Equipment for Installation and Maintenance Applications, February 2009, Frost & Sullivan. 4. Company financial reports. 5. Ascom analysis
Benchmarking & Monitoring135 MUSD
Analyst and Media Day, September 2010 © Ascom
Test & Measurement215 MUSD
Reporting & Analysis80 MUSD
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ADDRESSABLE MARKET – FORECAST
Transitioning
Developing
DevelopedEconomies
Approximately 5% CAGR 2010 – 2014 driven mainly by 3G+ and 4G rollouts
MUSD
Analyst & Media Day, 17/09/2010 © Ascom Network Testing
Sources: 1. World Cellular Information Service
Subscriber Forecasts, June 20102. World Wireless Test & Measurement
Equipment for Installation and Maintenance Applications, February 2009, Frost & Sullivan
3. Informa Telecoms & Media, World Cellular Forecasts 2009-2015, March 2010
4. Service Assurance Market Review, June 2009, Analysis Mason
5. Service Fulfillment Market Review, July 2009, Analysis Mason
6. UBS Global I/O: Telecom Equipment: 7September 2010
7. Ascom analysis
$0
$100
$200
$300
$400
$500
$600
2010 2011 2012 2013 2014
PRIORITIES
Grow faster than the addressable market
Lead in support for emerging mobile technologies (3.5 – 4G)
MARKET Maintain mid- to high-end brand in mobile network testing
Strengthen global distribution, delivery and support organizations
TECHNOLOGY
GROWTH
EXECUTION
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GROWTH DRIVERS
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1. NEED FOR COMMUNICATION USING EXISTING NETWORKS
2. DEPLOYMENT OF NEW NETWORKS & INCREASING COMPLEXITIES
SUBSCRIBER NEEDS
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More places, more often, many different ways & services
Expecting – Demanding - Depending on
Expecting lower prices – More for less
Individual communication increasingly wireless
5.9 bn subscribers 50 bn connections (2020)
Ascom helps operators meet subscriber needs
0
5
10
15
20
2008 2009 2010 2011 2012 2013 2014
Data
Voice
GLOBAL MOBILE NETWORK TRAFFIC
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Growth of data traffic leads to network builds and expansions
Millions of TB per annum
Sources: 1. Future Mobile Networks, January 2010, Informa Telecoms & Media
Analyst and Media Day, September 2010 © Ascom
Internet
Enterprise
Mobile applications
Messaging
TV and video
Games
Location services
Banking/mobile pay/NFC
Marketing and Advertising
Social networking
Location services
DRIVERS
OPERATOR CHALLENGES
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Large investments – Need to start to make money quick
New technologies - coexisting with legacy technologies
While customers demand more for less – the ways to deliver don’t get easier
Supporting legacy cash-cow networks while deploying new networks
Essentially same number of people
Operator challenges represent business opportunities in Network Testing
17
P
Early activity in North America in 2010.Asia Pacific leads LTE (4G) in 2011-12, followed by Western Europe.
GLOBAL LTE (4G) ADOPTION – SUBSCRIBERS
Network Buildout Momentum
Sources: 1. World Cellular Information Service +
0
20'000'000
40'000'000
60'000'000
80'000'000
100'000'000
120'000'000
140'000'000
2009 2010 2011 2012 2013 2014
Africa
Americas
Asia Pacific
Europe: Eastern
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P
Early activity in North America in 2010.Asia Pacific leads LTE (4G) in 2011-12, followed by Western Europe.
GLOBAL LTE (4G) ADOPTION – SUBSCRIBERS
Network Buildout Momentum
Sources: 1. World Cellular Information Service +
0
20'000'000
40'000'000
60'000'000
80'000'000
100'000'000
120'000'000
140'000'000
2009 2010 2011 2012 2013 2014
Africa
Americas
Asia Pacific
Europe: EasternLTE is coming…
But significant momentum not expected before 2012
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20105.3 billion
Majority of subscriptions in Developing economies.Global technology shift toward 3.5G+.
SUBSCRIPTIONS BY REGION & TECHNOLOGY GENERATION
2G3G3.5G+
20136.9 billion
Sources: 1. World Cellular Information Service +2. Ascom analysis
2G3G3.5G+
2G3G3.5G+
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Developing countriesCountries in transitionDeveloped countries
20
20105.3 billion
Majority of subscriptions in Developing economies.Global technology shift toward 3.5G+.
SUBSCRIPTIONS BY REGION & TECHNOLOGY GENERATION
2G3G3.5G+
20136.9 billion
Sources: 1. World Cellular Information Service +2. Ascom analysis
2G3G3.5G+
2G3G3.5G+Technology shifts & concurrent technologies
increased complexities
Analyst & Media Day, 17/09/2010 © Ascom Network Testing
Developing countriesCountries in transitionDeveloped countries
GROWTH DRIVERS
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1. NEED FOR COMMUNICATION USING EXISTING NETWORKS
2. DEPLOYMENT OF NEW NETWORKS & INCREASING COMPLEXITIES
We help operators deliver – cost efficiently
We increase the speed of technology rollouts and provide critical insights
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Infrastructure Roll-out Verify that network implementations work as intended.
Troubleshooting Identify and analyze problems in their networks.
Benchmarking of competition Compare their networks with competitors networks, for marketing or other purposes.
Monitoring the Network Ensure that their network continuously functions and performs as intended.
Ascom Network Testing helps operators to understand their customers experience from a technical perspective and improve
how customers perceive their networks
WIRELESS OPERATORS NEED NETWORK TESTING SOLUTIONS
NETWORK TESTINGEVOLVING NETWORKS. TRUSTED SOLUTIONS.
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WIRELESS OPERATORS NEED NETWORK TESTING SOLUTIONS
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Infrastructure Roll-out Verify that network implementations work as intended.
Troubleshooting Identify and analyze problems in their networks.
Benchmarking of competition Compare their networks with competitors networks, for marketing or other purposes.
Monitoring the Network Ensure that their network continuously functions and performs as intended.
INFRASTRUCTURE ROLLOUT – THE CUSTOMER NEED EXPLAINED
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Rollout activities are very large projects and occur when an operator:
Enters into operation – green field.
Goes through a technology shift and adds new technology their network. GSM -> WCDMA CDMA -> LTE Typically requires major adjustments to existing
installations as well as new installations of network elements.
Adds capacity or features to the network
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INFRASTRUCTURE ROLLOUT – THE CUSTOMER NEED EXPLAINED
GLOBAL BASE STATION FORECAST ALL TECHNOLOGIES
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INFRASTRUCTURE ROLLOUT WHY IT DRIVES ASCOM’S BUSINESS
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Ascom provides leading drive test solution - TEMS Investigation
Used for Initial Tuning and Final Acceptance of network
No traffic yet in network = drive testing
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Initial Tuning and Final Acceptance are critical activities: Network Operator - to know they have a working network Network Equipment Manufacturer - to get paid
Necessity
Volume
Longevity
Volume - Base stations typically rolled out in parallel by several teams – multiple test products needed.
Technology Evolution drives need to continuously update or re-purchase drive test products in order to support the latest and greatest technology.
INFRASTRUCTURE ROLLOUT WHY IT DRIVES ASCOM’S BUSINESS
TEST & MEASUREMENT BENCHMARKING & MONITORING REPORTING & ANALYSIS
62% of 2009 sales 33% of 2009 sales 5% of 2009 sales
OFFERING
TEMS Investigation
TEMS Pocket
TEMS Symphony Suite
TEMS Automatic
TEMS Monitor Master TEMS Box Office
TEMS Visualization
TEMS Discovery
30Analyst & Media Day, 17/09/2010 © Ascom Network Testing
TEMS Investigation
Data collection and real-time troubleshooting− Industry’s broadest support for devices - over 200 different terminals and scanners− Supports all major technologies− Industry’s broadest support for LTE: agreements with Samsung, LG Electronics,
Qualcomm and ST Ericsson− Data collection as well as service testing− Drive testing and indoor data collection
On-screen “light” post-processing− Multiple means of presentation and total flexibility− Single log file replay as well as post-processing of multiple logfiles− Compatible with TEMS Discovery Professional for advanced post processing
Reporting− Technology-related RAN tuning and acceptance reports− Statistical KPI reports
ASCOM’S SOLUTION AND WHAT’S IMPORTANT
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WIRELESS OPERATORS NEED NETWORK TESTING SOLUTIONS
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Infrastructure Roll-out Verify that network implementations work as intended.
Troubleshooting Identify and analyze problems in their networks.
Benchmarking of competition Compare their networks with competitors networks, for marketing or other purposes.
Monitoring the Network Ensure that their network continuously functions and performs as intended.
BENCHMARKING – THE CUSTOMER NEED EXPLAINED
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Benchmarking – comparative evaluation of one network against another – is typically performed for two reasons:
To support marketing claims – legally and commercially – “our network is better, faster, drops less calls, has better 3G coverage” etc.
To find and address network weaknesses in key areas
“The right marketing strategy based on benchmarking dictates shifts in market share, in
particular in mature markets.”
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BENCHMARKING – WHY IT DRIVES ASCOM’S BUSINESS
TEST & MEASUREMENT BENCHMARKING & MONITORING REPORTING & ANALYSIS
62% of 2009 sales 33% of 2009 sales 5% of 2009 sales
OFFERING
TEMS Investigation
TEMS Pocket
TEMS Symphony Suite
TEMS Automatic
TEMS Monitor Master TEMS Box Office
TEMS Visualization
TEMS Discovery
Analyst & Media Day, 17/09/2010 © Ascom Network Testing 35
ASCOM’S SOLUTION AND WHAT’S IMPORTANT
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TEMS Symphony Suite
Benchmarking systems up to 24 networks at a timeAll major radio technologiesServices: Speech, video, SMS, MMS, IP-data testing (FTP,
HTTP, WAP, Ping, UDP, e-mail)Real-time speech and video quality testing on multiple
networks in parallelScalable CPU powerRugged DesignNew even more powerful Hardware Solution coming in 2011!
Analyst & Media Day, 17/09/2010 © Ascom Network Testing 37
THANK YOU!