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Net2Phone IncNet2Phone Inc

Bryan Wiener PresidentPresidentNet2Phone Global ServicesNet2Phone Global Servicesbwiener@net2phone.combwiener@net2phone.com

Net2Phone IncNet2Phone Inc

Bryan Wiener PresidentPresidentNet2Phone Global ServicesNet2Phone Global Servicesbwiener@net2phone.combwiener@net2phone.com

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Global Leader in VoIP ServicesGlobal Leader in VoIP ServicesGlobal Leader in VoIP ServicesGlobal Leader in VoIP Services

• Suite of SIP based consumer and SME voice and enhanced telephony services

• 60% of revenue is outside the US, growth focused on Latin America

—Sell services in over 100 countries.

• $90 MM in annual revenues – segment positive free cash flow on 40%+ gross margins

Net2Phone Global Services

Net2Phone is leveraging its expertise to empower customers with VoIP telephony

• Complete suite of services to deliver residential phone service over cable pipe

• Fully outsourced, managed packet cable telephony solution

• First production deployment in Puerto Rico in Winter 2003

• Partnership with Cebridge, 12th largest MSO in US

Net2Phone Cable Telephony

Net2Phone (NASDAQ: NTOP)• Founded in 1995 – pioneer and leader• ~$500 million market cap• ~$140 million in cash• Strategic investors IDT and Liberty Media

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AgendaAgendaAgendaAgenda

• Target customer sweet spot

• Decision tree for IP Telephony

• Implementation of VoIP solutions

• Case study

• Service Provider Business Model

• Target customer sweet spot

• Decision tree for IP Telephony

• Implementation of VoIP solutions

• Case study

• Service Provider Business Model

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VoIP services have a language all their ownVoIP services have a language all their ownVoIP services have a language all their ownVoIP services have a language all their own

IP Centrex

VoIP GatewaySIP

MGCP

H323

Hybrid - PBX

IP-PBX

Class 5 features

Business trunking

Managed IP-VPN’s

Media servers

Management portals

IADs

Legacy Migration

Unified messaging

Hosted voice services Soft clients

G.723

G.729

Frame rate

My communication costs are high, how can I reduce them? We can’t be the only organization asking this, so why is it so difficult

to get a straight answer?

SLA’s

QoS

LatencyJitter

Security

Tunneled VPN

TDMA

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Enterprise VoIP Customer ProfileEnterprise VoIP Customer ProfileEnterprise VoIP Customer ProfileEnterprise VoIP Customer Profile

• Have more than one office with 30% plus of their calling is inter-office

• Heavy user of LD and ILD services

• PBX is at the end of its operational and financial life cycle

• Have more than one office with 30% plus of their calling is inter-office

• Heavy user of LD and ILD services

• PBX is at the end of its operational and financial life cycle

• Have an existing LAN infrastructure (firewall, switching, cabling etc) capable of carrying additional VoIP traffic

OR• Have access to a broadband connection that has

the capacity to carry the planned VoIP traffic

• Have an existing LAN infrastructure (firewall, switching, cabling etc) capable of carrying additional VoIP traffic

OR• Have access to a broadband connection that has

the capacity to carry the planned VoIP traffic

BusinessCase

Requirements

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Decision tree for choosing IP-TelephonyDecision tree for choosing IP-TelephonyDecision tree for choosing IP-TelephonyDecision tree for choosing IP-TelephonyTypical business objectives

• Save money• Enhance functionality• Improve productivity

Have existing PBXNo PBX installed

Is the PBX at the end of its operational & financial lifecycle?

Yesreplace

Remotelyhosted

IPPBX

Noadd on a

VoIP gateway

Hybrid PBX &VoIP gateway

Locatedon-premise

IP Centrex

VoIP solutions provide the customer with the flexibility to select the option that best suits their needs

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Key issues to considerKey issues to considerKey issues to considerKey issues to consider

• Scale – the ability to support from home users up to large sites

• Migration plan - gradually rather v forklift upgrade

• Lifecycle stage – both financial and operational of current PBX

• Current networking equipment – can it handle VoIP

• Incumbent suppliers – existing contracts for telecoms and maintenance services, ease with which they can be exited

• Ease/ability – to include new sites/business partners/ acquisitions into the network

• Internal organization - skill sets available today and what will be required for tomorrow

• Scale – the ability to support from home users up to large sites

• Migration plan - gradually rather v forklift upgrade

• Lifecycle stage – both financial and operational of current PBX

• Current networking equipment – can it handle VoIP

• Incumbent suppliers – existing contracts for telecoms and maintenance services, ease with which they can be exited

• Ease/ability – to include new sites/business partners/ acquisitions into the network

• Internal organization - skill sets available today and what will be required for tomorrow

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Implementation - a three step processImplementation - a three step processImplementation - a three step processImplementation - a three step process

Customizedsolution for

each customer

IP TelephonyMigration Plan

Network &Business

Requirements

VoIP Assessment

Test & Turn-up

Deployment

Pilot monitoring,& Validation

PilotDeployment

VoIPImplementation

VoIP Config. & Staging

VoIPArch. & Design

DetailedNetwork

Rqmts

DetailedNetwork

Rqmts

LAN/WAN/VoIPInfrastructure& Mgmt Plat. Des.

LAN/WAN/VoIPInfrastructure& Mgmt Plat. Des.

Network Readiness Assessment

IP TelephonyROI/TCO

Assessment

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Case Study: Airline industryCase Study: Airline industryCase Study: Airline industryCase Study: Airline industry

• One of the largest airlines in Turkey – 20 aircraft

• Carries more than 2.4M passengers annually

• Serving 8 Turkish and 75 European cities

• HQ in Istanbul with nine remote offices with a total staff of 870

• Before implementation monthly telephone bill was $US36K

• One of the largest airlines in Turkey – 20 aircraft

• Carries more than 2.4M passengers annually

• Serving 8 Turkish and 75 European cities

• HQ in Istanbul with nine remote offices with a total staff of 870

• Before implementation monthly telephone bill was $US36K

Leading Turkish Airline

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Inter-office on-net PBX enhancement case studyInter-office on-net PBX enhancement case studyInter-office on-net PBX enhancement case studyInter-office on-net PBX enhancement case study

Onur Air reduced their telephone bill by 61% followingimplementation of the Max PVN solution generating a bottom line cost

savings of $US264K per annum

VoIP GatewayAdana office

VoIP GatewayTrabzon office

VoIP gatewayStuttgart office

VoIP GatewayDusseldorf office

VoIP GatewayHatay office

VoIP GatewayHead office

VoIP GatewayIstanbul airport

VoIP GatewayAntalya office

VoIP GatewayIzmir office

VoIP GatewayAntalya airport

VoIP soft switchHead office

Onur AirIP

VPN

Phase 2independent travel

agencies

Net2Phonenetwork

WorldwidePSTN

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Inter-office on-net PBX enhancement case studyInter-office on-net PBX enhancement case study

Free calls can be made anywhere in the world within the Onur Air VoIP on-net VoIP network

Free calls can be made anywhere in the world within the Onur Air VoIP on-net VoIP network

RouterHEADQUARTERS

Dusseldorf Office

VoIPGateway

VoIP GatewayPBX

PBX

VoIP soft switch

Onur AirIP VPN

1. Caller dials soft switch access extension connected to VoIP Gateway

2. Caller receives dial tone and dials the appropriate PVN extension3. VoIP Gateway sends call request message to VoIP soft switch4. Soft switch server authorizes call5. Call is delivered to an extension on PVN network

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IP-Centrex replacement scenarioIP-Centrex replacement scenarioIP-Centrex replacement scenarioIP-Centrex replacement scenario

SS7/Verisign

SS7

Soft Switch

SIP Proxy

Desktopdevices

PSTNOrigination

CarrierSwitch

PSTN

GatewayLocal

Gateway

LocalCalling

IP CentrexApplication

Server

Gateway

PSTN

PSTNTermination

IP

CarrierSwitch

PSTNSwitch

IncomingCalls

IP Link

Local IP

OutgoingCalls

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Reselling IP Solutions is an Attractive Reselling IP Solutions is an Attractive BusinessBusiness

Reselling IP Solutions is an Attractive Reselling IP Solutions is an Attractive BusinessBusiness

Offer sticky service without the need to operate complex global telephony network

Offer sticky service without the need to operate complex global telephony network

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The Net2Phone VoIP Solutions address each of these impediments

Turn-Key VoIP services requires global scale

Factors Constraints

Financial • Capital constraints

• Increased OPEX

Organizational • Telephony skill gaps & experience• 24/7 Customer & Technical Svc

Operation• Major learning curve

Technical • Traffic and IP network engineering

• Standards based element interoperability

Operational • Telephony network operations

• Billing & back office integration

• Local and International PSTN & toll interconnect agreements

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Regulation Impacts OfferingRegulation Impacts OfferingRegulation Impacts OfferingRegulation Impacts Offering

With license and interconnect Without license and interconnect

• Mimic or replace PBX

• Offer local, LD and int’l calling

• Inter-office on-net calling

• Inter-office on-net calling

• International LD

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Models for Selling VoIPModels for Selling VoIPModels for Selling VoIPModels for Selling VoIP

Service Provider to VAR VAR to end user customer

Turn-key service

• Hosted PBX functionality

• CDR generation and maybe bill presentment

• Carrier access

• MAC’s for VAR

• Access to cheaper equipment

Typically a bundled per seat/user pricing from a pick list of services

• Lease of equipment desktop and gateways

• Hosted PBX functionality

• Inter-office trunking

• Access, local/LD/ILD calling

• IP VPN

• Internet access

• Maintenance contract

• Installation and training

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Target VoIP ResellersTarget VoIP ResellersTarget VoIP ResellersTarget VoIP Resellers

• High Speed Data Providers—DSL—Cable—ISPs—WISPs

• System integrators

• Telecom VARs

• High Speed Data Providers—DSL—Cable—ISPs—WISPs

• System integrators

• Telecom VARs

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To finish with some predictions…..To finish with some predictions…..To finish with some predictions…..To finish with some predictions…..

• Free-on-net calling via the hybrid PBX/VoIP gateway will a leading use of VoIP in the multi-branch business market over the next 12 - 18 months.

• Five years from now new sales of PBX as we know it today will be either dead or made as the PBX only serving a redundancy function

• PBX functions/ desktop devices /Access/IP-connectivity / ILD/local/LD will sold as a bundled package by successful service provider