Copyright © 2001, Fonet Global Inc.

VoIP Business trends

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Internet Telephony to the RescueInternet Telephony to the Rescue

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The Business Opportunity

“….. Leveraging VoIP with new Last Mile technologies and services.

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Business Strategies for VoIP

• Begin with Dial-up equipment to get high volume quickly

• Add VoIP interconnects to reduce costs

• Build key strategic partnerships with 4-6 peering carriers

• Look for local partners in less developed telecom markets (often they offer calling card locally)

• Begin with wholesale traffic to get ROW Termination , add ASP termination, subscriber services.

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International VoIP Business Trends

• Annual MOU international calling increasing

• Subscriber rates for international calling dropping, use of dial-arounds increasing

• Increase in use of wholesalers by major carriers for international traffic

• Increasing numbers of traditional switch-based wholesalers migrating to VoIP

• Switch-based resellers becoming less competitive, even going out of business, VoIP wholesalers growing rapidly

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Explosion in Worldwide Internet Based CommunicationsExplosion in Worldwide Internet Based Communications

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The VoIP Drivers

Level of Importance

or Value

Time

ArbitrageArbitrage

TransportTransportBenefitsBenefits

Value-addedValue-added IntegratedIntegratedServicesServices

Operational Operational AdvantagesAdvantages

New ServiceNew ServiceAccess OptionsAccess Options

Now

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Latin America’s VoIP TrafficLatin America’s VoIP Traffic

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Latin America’s Six-Country InternationalLong Distance Market

$462.0

$513.0

$194.1 $113.4

$266.40.0

1000.0

2000.0

3000.0

4000.0

5000.0

6000.0

7000.0

8000.0

Market Revenues (US$ Millions)

Tra

ffic (

Billion

s o

f M

inu

tes)

ArgentinaBrazil Chile Colombia

Venezuela

53% Revenues

$1,732.5

Mexico

65%Traffic

Total Market Value: US$3.3 Billion

Source: IDC’s Latin America Telecommunications Continuous Information Service, 2000

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Latin America’s Six Largest Domestic Long Distance Markets:

$1,358.7$228.0 $670.0

$453.20.0

5000.0

10000.0

15000.0

20000.0

25000.0

30000.0

35000.0

40000.0

45000.0 (US$ Millions)

Tra

ffic (

Billion

s o

f M

inu

tes)

ArgentinaChile

Colombia

Venezuela

Total Market Value: US$10.9 Billion

45% Revenues

29% Revenues

$4,422.5

Brazil

54%

$2,962.3

Mexico

24%

Source: IDC’s Latin America Telecommunications Continuous Information Service, 2000

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The Business in detail The Business in detail

Local Loop Network Provider

VOIP Devices

Origination International LD

Origination Domestic LD

Local Loop Value Added Services

- New Last Mile Technology (ATA Devices) - Switchless, Gatekeeper and Softswitch based …)-De-Regulation-Monopoly-Customer Frustration with Telcos

Traffic Termination

Unified Telephony™

Wholesale

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Termination Model

Internet

Local Terminatio

n

Internet or VPN

Local Termination

Domestic Carrier

Worldwide Carrier

ICC (SLP)

IBC

Long Distance Rest of the

World Termination

PSTN Long

Distance

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PSTN Long

Distance

Origination Model ( DLD _ILD )

Internet

Fonet Fones

Dial Up or Dedicated

Link

IPCall

ICC (SLP)

Local Access and

800 numbers

IPCollect

800 Access Nationwide

Local Terminati

on

Internet

Local Termination Querétaro

IBC

Long Distance Termination Nationwide

Rest of the World

Termination

RediBasis

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Local Loop Added Value ServicesLocal Loop Added Value Services

Fonet Fone

• Unified Messaging• Network Announcements• User Announcements (pre-

call)• Call waiting• Call Retrieve• Forward on Busy• Forward on no reply• Conditional Call Forward

(caller ID)

• Time Dependent Call Forward

• Voice and Fax Mail• Conference Services (pre-

arranged)• Call Deflection• Group Call Pick Up• Line Hunting

Fonet ServiceNetwork™

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Residential • Population• Total market• Residential market• Residential geographical market

SME• Companies• Total market• SMC market• SMC geographical market

Target Markets

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RegulationRegulation

LATIN AMERICA´S IP TELEPHONY RISK FACTORSLATIN AMERICA´S IP TELEPHONY RISK FACTORS

QQSQQS

Bandwidth AvailabilityBandwidth Availability

EquipmentInteroperability

EquipmentInteroperability

Year 2001/2002

RegulationRegulation

QQSQQS

BandwidthAvailability

BandwidthAvailability

EquipmentInteroperability

EquipmentInteroperability

Year 2004/2006