Alcatel-Lucent's CDMA Portfolio: Sales Training Overview Mike Hobby November 2006

Alcatel-Lucent's CDMA Portfolio
Sales Training Overview

Mike Hobby
November 2006
All Rights Reserved Alcatel-Lucent 2006, #####
Agenda
1. Objectives
2. State of the Mobility Market
3. Vision and Strategy
4. Key Customer Drivers
5. Portfolio in Brief
6. Competitors: CDMA Strategic Position
7. Value Proposition
8. Initial Points of Contact
9. Key Takeaways
10. Acronyms
11. Q & A
2 | Alcatel-Lucent's CDMA Portfolio | November 2006
All Rights Reserved Alcatel-Lucent 2006, 21155
Objectives
This session focuses on educating our sales teams on how to sell this portfolio.
After completing this session, you will be able to:
Describe the CDMA radio access portfolio
Present 3G solutions that perfectly meet operators challenges
Highlight Alcatel-Lucent main differentiators
Compare Alcatel-Lucent solutions vs competitors
State of the Mobility Market
Market Growth
Double digit growth is a thing of the past

Growth areas for voice are China and India
In NAR, declining voice ARPU will be countered with blended
offers driving data usage
Market Trends
Data adoption remains a major opportunity

Beginning to see data demand in enterprises
Driven by lifestyle applications for mass market
IMS enables operators to capture these segments
with blended services
Technologies
3G alternatives continue to generate interest

EV-DO has first to market advantage
Wi-Fi and WiMAX distract the DO market
Operator Challenges
Cost control and revenue growth still top priority

Capex and Opex efficiency still key in maturing markets
Squeezing value from embedded base while moving to Packet
Landscape Challenges
Market consolidation
Non-traditional competitors entering to own telecom wallet
Legislative impacts
What Customers Are Telling Us

Top Drivers Influencing Telecom
Biggest Challenges in Managing Their
Revenue generating features
Networks
Subscriber retention
Capacity
Capacity
Interoperability with other technologies
End-user experience
Interoperability with legacy equipment
Lower equipment cost
OA&M interfaces
Real estate/zoning for capacity
Technology/Market Influences
Influences on Equipment Purchases
VoIP
Price
Mergers/market consolidation
Product life
WiMAX/broadband technologies
Compatibility with legacy equipment
Wi-Fi roaming
Performance/quality
Security
Coverage
Alcatel-Lucent CDMA Market Vision and Strategy

Spread spectrum is growing worldwide
The world is moving from time division to spread spectrum
Alcatel-Lucent is the market leader in spread spectrum
Alcatel-Lucents competitive advantage
Huawei
3%
Samsung
6.2%
Others
2.2%
Unmatched expertise and network know-how

Simplified end-user provisioning
Performance, capacity and speed
Alcatel-Lucent
47.3%
Motorola
19%
Security and service transparency
World-class partnerships
Bringing customers the most competitive solutions available
Integrators, devices
Nortel
22.2%
Source: DellOro (2Q06)
CDMA2000 1X Voice and Data

Key Customer Drivers
Operates in increments of 1.25MHz
CDMA2000 1X supports voice and data on same carrier
26.4 Erlangs of voice traffic per sector
High capacity voice and medium

speed packet data services
153.4 kbps peak packet data

Defaults to cdmaOne when 1X not available
Symmetric forward and reverse links

Supplemental data channels assigned as data demand,
voice demand and RF conditions permit
Packet data introduces advanced

all-IP architectures to improve
performance and deployment
flexibility
Airlink drives actual data rates up to 153 kbps

Typical user experience 40 - 60 kbps
Bursts up to 100 kbps
Enables service flexibility and

basic web access features.
1X provides extended coverage
for 1xEV-DO
Soft hand off for optimized voice and data

performance
1xEV-DO Rev 0 Data Overlay

Operates in increments of 1.25MHz
1xEV-DO carrier is dedicated to data
z
z
IMS Blended lifestyle services

HSDe (Enterprise), HSDsmb (small-medium business),
HDDmm (mass market)
Improved support for real-time high

speed packet applications, including
Internet access, email, etc.
Deployed worldwide in 450/700/850/1800/1900 MHz
Fastest 3G forward link

Time division multiplexing optimizes performance in good
channel conditions
Advanced all-IP architectures

improve performance and
deployment flexibility
Airlink drives FL peak data rates to 2.4 Mbps

z
Typical user experience 400 - 600 kbps

z
Bursts up to 1 Mbps
Reverse link at 1X speeds
Enhanced service flexibility and

new revenue-generating services
Unparalleled coverage with 1x
filling coverage holes
Up to 153.6 kbps Peak data rate

z
Typical User Experience 40 - 60 kbps

z
Bursts up to 100 kbps
Soft hand Off

DO Rev A Performance Improvement

Improved forward link
Larger payloads drive data rates to 3.1 Mbps
z
User experience 440 - 700 kbps

z
Bursts up to 2 Mbps
Improved MAC and packet division multiplexing

improves performance in good channel conditions
Improved reverse link

Up to 1.8 Mbps data rate
z
Improved speeds and latencies

now support real-time packet
applications, such as VoIP,
gaming, push-to-speak
Extends all-IP architectures to

further improve performance and
deployment flexibility
User experience 100 - 500 kbps

z
Bursts up to 1.2 Mbps
Throughput and latency gains with hybrid ARQ

Improved MAC layers on RL
QoS
Enhanced capabilities further

service flexibility and IMS
revenue-generating features
Unparalleled coverage with
1xEv-DO Rev 0 and 1x filling
coverage holes
Requirements for VoIP/PTT applications
Broadcast/multicast (BC-MCS)
Multimedia content to multiple users using OFDM
CDMA Evolves to Provide Enhanced Capabilities and Services

1999
2000
IS2000
(CDMA2000
1X)
2001
2002
2003
IS856 Rev A
(1xEV-DO)
IS856 Rev 0
(1xEV-DO)
Voice
2004
Broadband
2005
2006
IS856 Rev B
(1xEV-DO)
Enhanced broadband
2007
IS856 Rev C
(1xEV-DO)
2008
2009
Harmonization?
Ultra broadband
Key Features
26.4E voice
packet data
Data optimized
bursts of over 1 Mbps
allIP architecture
Higher FL / RL rates
low latency
bursts of over 2 Mbps
QoS
OFDM multicast
Multi carriers
higher peak rate
Broadband data
VOD, MOD
high-speed Internet
enterprise
applications
Real-time apps video

tel, VoIP, PTx,
interactive gaming,
multimedia in FL and
RL path
Broadband real-time
applications
High efficiency (OFDM/MIMO)

scalable BW 1.25 to 20 MHz
FDD, TDD
ultra high-speed
Key Applications
Voice
high-speed data
picture, video
email
web browsing
Multimedia
VoIP and video delivery
advanced IMS
TDM
CDMA
DL = DownLink (Forward Link)
Dates shown are standards completion dates (or expected completion dates.)
HSDPA = High Speed Downlink Packet Adapter
Initial VoIP not as spectrally efficient as optimized VoIP.

Optimized VoIP for 802.16 is TBD.
CDMA/TDM
HSUPA = High Speed Uplink Packet Adapter
OFDM*
LTE = Long Term Evolution

UL = UpLink (Reverse Link)
Mobility indicates when each particular standard supports mobility

inter-operability between the terminal and BTS.
OFDMA/MIMO/SDMA
A Portfolio Built Around Market Drivers

Alcatel-Lucent is deeply focused on listening to its customers, understanding the market drivers
that create their challenges, and driving solutions to market that meet their needs.
Reduce CAPEX and OPEX
Less real estate, less power consumption, self diagnosing and more efficiencies
Improve network services
Provide clear consistent service with a coverage and capacity options i.e., Macrocell vs Compact Cell
Reduce network complexity
Asset approach to BTS design simplifies sparing
Macrocells that evolve in the field
Differentiate service
High-speed data is key differentiator
Satisfy existing and expand customer base
Clear consistent coverage attracts and keeps customers
Drive data adoption
Take data to where your customers are
S Coverage and Capacity

T Decrease Footprint
S Efficiencies
T Maintenance Costs
Alcatel-Lucents CDMA Portfolio
Radio Access
Lucent built W-CDMA and CDMA base stations on a common platform that differ
in only a single circuit pack
CDMA supports 3G evolutions with only SW upgrades and minimum HW change
Our base stations use common assets and come sized for diverse deployment
needs
One size does not fit all network needs
Inherently supports Alcatel-Lucents IMS solution
Designed to gracefully evolve
Evolving from circuit to packet to provide investment protection for our
traditional customers
Immediate 3G networks for new markets
Sized for emerging markets to mature,
capacity-demanding networks
Core
Transport
Solution to move to all-IP using existing T1/E1

Inherently supports Alcatel-Lucents IMS solution
Immediate OPEX savings in leasing and provisioning costs
Maximizes data transport efficiencies
Example of using partnerships where it makes sense
Realizing the promise of 3G with smart common platform evolution

L2 Switch
Aggregatio
n Router
Wireless
DHCP
DNS
PDSN
RNC--AP
1X RNC
PCF
Video
Voice
ENTERPRISE
IP
Network
ECP
ATM SHO
Data
AAA
DCS
1XAccess
Network
Content
Services
Firewall & VPN Gateway
1X RNC cPSB
1
/E
T1
GigE
(PCF)
Applications
Applications
SMSC
OA&M
Network
HLR
DS3
OMP FX/
OMC--RAN
OMC
T1/E1 Mux
Channelized
RCS AP &
OA&M Proxy
Watchmark
1X&DO BTS
T1/
E1
EV-DO Access Network
DO RNC
CDMA2000 1X and 1xEV-DO Architecture
IP
Network
Acronyms
1X - CDMA2000 1X
1X RNC - 1X Radio Network Controller
AAA - Activation, Authorization & Accounting
AP - Application Processor
cPSB - CompactPCI Packet Switching Backplane
DCS - Digital Cellular Switch
DHCP - Dynamic Host Control Protocol
DNS - Domain Name Server
DO RNC - 1xEV-DO Radio Network Controller
ECP- Executive Cellular processor
HLR - Home Location Register
L2 - Layer 2
OA&M - Operation, Administration & Maintenance
PCF - Packet Control Function
PDSN - Packet Data Serving Node
RCS Radio Cluster Servers
SHO - Soft Hand Off
SMSC - Short Message Service Center
Radio Access
Complete Range of Base Stations
Modcells
Compact
4.0B - New flagship product introduced

in 2005, enabled by wideband RF chain
Preferred solution for new highest traffic
sites
4.0B - Enabled by the same wideband

RF chain as in M4.0B, for high capacity
with lower ultimate growth requirements
Preferred solution for new high/medium
traffic sites
4.0 - High-capacity product using

Narrowband RF chain
Growth to embedded Modcell 1.0, 2.0,
3.0 and 4.0, as well as some focused
applications
4.0 - Upgrades Series II to 4.0 platform
4.0 - High-capacity product using

Narrowband RF chain
Growth to embedded Modcell 1.0, 2.0,
3.0 and 4.0, as well as some focused
applications
High Density
4.0B - Upgrades Series II to 4.0B platform
8420
Modcell based product for in-building and campus applications

Offer dual band in single frame
4400
(Indoor GA July.06,
Outdoor Target to
GA Jan.07)
Ultra-compact, scalable platform supports low to medium capacity

No frills approach to quality CDMA voice and data coverage
2400
(Target to GA
Spring 07)
A microcell for hole filling, in-building and rural (low capacity) applications
Modcell 4.0/4.0B Digital Shelf

CTU
1 Redundant Unit
Clock Distribution
Input from OMR/OMQ
URC/MCR
Radios
URC
URC
URC
URC
CMU
CMU
CMU
CMU
CMU
CMU
CTU
CTU
UCR/MCR
UCR/MCR
UCR/MCR
UCR/MCR
UCR/MCR
UCR/MCR
CMU
CMU
CMU
CMU
CMU
CMU
URC
Controller Card
Provides Network
Interface
I/O Panel
Network
Connections
Alarm Connections
Ethernet
I/O Panel
Common Units
Band Specific Units
OMR
OMR
OMR/Q
Primary Rubidium
Secondary Quartz
Connection to CTU
CPC
CPC
CPC
CPC
CPC
CPC
CPC
CPC
CMU
Baseband Processing
Pooled Resource
CDMA2000 1X or SB-EVM
+SW Load
CPC
Converts +24/48VDC to internal
voltages
N+1 Redundancy
CMU - CDMA Modem Unit

CPC - Common Power Converter
CTU - Common Timing Unit
OMR/Q - Oscillator Module
Rubidium/ Quartz
URC Universal Radio Controller
UCR - Universal CDMA Radio
MCR - Multi Carrier Radio1
3G Mobile Device Relationships

Lucent enjoys alliances with a number of independent device providers to ensure
compliant mobile device availability consistent with Lucent infrastructure
deployment plans
PCMCIA Cards
CDMA2000 Agreements with Sierra, Novotel, GTran, Samsung
Other target end-user device vendors include:
Motorola, LG, Nokia, NEC, Siemens, Sony Ericsson, Samsung, Sagem/Fujitsu
Platforms
Qualcomm, PrairieComm, TTPCom, Sasken, Intel, TI, Agere, EMP
CDMA Eco System

Manufacturers
Handsets
PDA
PCMCIA/USB/Other
PCs
Wireless Local Loop
1X
DOr0
DOrA
88
>1130
43
41/5/101
35
>209
29
17/4/13
16
13
5
4/0/2
2
-
7
54
BSR-Future Approach to Mobile Networks
First implementation of Flat IP designed to simplify mobile network architectures

Combines the RNC, PDSN and base station into one powerful element
Evolution to a flat architecture
Involves evolution of the RAN, PDSN and the transport network
Must support all services including VoIP
The Home Agent provides a mobile IP anchor point
Coexistence of next gen BTS (BSR) with traditional RAN architecture needed to preserve investment in current EV-DO
infrastructure
Enables the user to move seamlessly within a network of BSRs and between BSR and surrounding networks
Mobility within the BSR network combines the best of IP and lower layer mobility protocols for superior performance
(HLR/HSS)
O
IP
Backbone/
Internet
Proposed BSR Network
CDMA2000
Voice
1x DCS/
ECP
AAA
DO Overlay
PDSN
Data
USDS
Present Hierarchical Network
PSTN/
PLMN
The BSR can be integrated

into any existing network,
based on standard external
interfaces
The BSR lowers CAPEX/OPEX
by combining network
elements: BTS, RNC and PDSN
The BSR can exist in any form
factor, but is being developed
initially in pico and microcell
format to address the
challenges of 3G in-building
coverage
Market considerations for CDMA BSR

Drive for cost-effective in-building enterprise coverage
Couple with enterprise PBX interworking for more targeted services, location based billing,
and public network offload
Converged wireless/wireline service offerings
OPEX savings by linkage with enterprise PBX for local enterprise calling and PSTN interconnect
through PBX trunking
New spectrum allocations Data + VoIP only, greenfield approach

E.g., 700 MHz and AWS spectrum
New devices needed for new spectrum, leverage DOrA/B VoIP for telephony, with fallback to 1x
in legacy spectrum
Rural drop-in networks that have difficult business case due to backhaul costs
Barrier to ubiquitous deployment: high speed, metro-E/optical facility availability
Facilitated by broadband cable plant
User applications to supplement BSR deployment

Enterprise VoIP services/interworking and wireless/wireline convergence
Locally broadcast content, realtime broadcast streaming content (e.g., security cameras)
Push-to-talk, video telephony, and other IMS person-to-person multimedia services
CoreCDMA Mobile Switching Center
Mobility Manager (ECP)
Designed as an alternative to the Mobility Manager it provides the same

functionality in a greatly reduced footprint. It is an ideal solution for operators
in emerging markets. It is currently available for markets outside of North
America.
Switching platform that delivers a full range of voice and data services.
Supports up to 2 million BHCA
99.9999% reliability
Efficient migration to packet
Supports centralized and integrated OA&M
Modular distributed architecture
The Packet Switch Compact was developed to deliver the same features and
benefits of the Packet Switch in a greatly reduced footprint. It scales from
35K -250K BHCA and can evolve to a full size Packet Switch if capacity needs
increase. This product combined with the Mobility Manager Compact provide
an MSC solution that fits the needs of emerging markets.
Mobility Manager Compact
Packet Switch (DCS)
Packet Switch Compact
Handles the call processing and mobility management functions in the network.
It is a scalable solution that allows operators to achieve up to 2 million BHCA.
The product features are continually enhanced to improve efficiencies and the
introduction of satellite processors allows for capacity enhancements as well as
significant footprint reduction. Future plans to handle up to 3 million BHCA.
Future 1xEV-DO Rev A and VoIP (R28/29)
USDS
ISG
VoIP SIP AS
(OSA--GW,APB)
(OSA
(HLR, HSS, GRAS)
LMRS
(MRCF&P
SMS
(CSCF,
PDF,
FS5000)
FPS
(5E)
CDMA2000 1X circuit voice
O
Plexus
LNG
(MGCF
& MGW)
OMC--H,
MI, eSM OMC
OMC--CN
OMC
(CCF, OCS)
SurePay
PDSN
VitalQIP
1X PD
(ENUM, DNS, DHCP)
IP
Network
ECP
1X Access Network
LCP
AAA
IP
Backhaul
HLR
OMP FX/
OMC--RAN
OMC
RCS AP
1X
Traffic
1X RNC
1X BTS
1x & DO BTS
DO
Traffic
Parlay AS
DO Data
& VoIP
IMS Core Network
Diameter
DO BTS
DO
Backhaul
DO RNC
EV-DO Access Network
Acronyms
APB - Active PhoneBook
AS - Application Server
CCF - Charging Collection Function
CSCF - Call Session Control Function
ENUM - tElephone NUmbering Mapping
eSM - Enhanced Service Manager
FPS - Flexent Packet Switch
GRAS - Global Roaming Application Server
HSS - Home Subscriber Server
ISG - Intelligent Services Gateway
LCP - Lucent Control Platform
LMRS - Lucent Media Resource Server
LNG - Lucent Network Gateway
MGCF - Media Gateway Control Function
MGW - Media Gateway
MI - Management Interface
MRCF&P - Media Resource Control Function and
OCS - On-line Charging System
OMC-H - Operations and Maintenance Center Home Location Register
OMC-CN - Operations and Maintenance Center Core Network
OSA-GW - Open Service Access - Gateway
PDF - Policy Decision Function
SIP- Session Initiated Protocol
USDS - Universal Subscriber Data Structure
PSTN/
PLMN
Future QChat Push-to-Talk (R28/29)

Highly Interactive, Low-Latency "Walkie-Talkie" Communications
High performance and reliable PTT experience
z
Multiple call types: direct, 2 users, predefined/ad hoc groups, member lists, chat room
Guaranteed talk permit and optimistic talk permit
Nationwide and global calling

Call restrictions
Invite mode
Add member
Talker arbitration
User-friendly addressing
User authentication
Lawful intercept
OTA downloadable and configurable client
Alcatel-Lucent Is the Primary Service Integrator for QChat

Partner with Qualcomm
Exclusive contract with Sprint in North America
Can be offered outside of North America
CDMA2000 Leads the Drive to 3G Voice and Data

Sources: www.cdg.org,
www.3gtoday.com,
www.3G.co.uk 06/06
Azerbaijan
Uzbekistan
Tajikistan
Finland
Russia
Kyrgyzstan
Georgia
Kazakhstan
Belarus
Latvia
Norway
Ukraine
Poland
Moldova
Romania
Czech Rep
Mongolia
Canada
Bermuda
Bahamas
Cayman Islands
Portugal
Jamaica
Haiti
Dominican Rep Algeria
Mali
Puerto Rico
US Virgin Island
Niger
Antilles
Barbados
Trinidad & Tobago
Venezuela
Cote D'Ivoire
Ghana
Nigeria
Cameroon
USA
Mexico
Belize
Honduras
Guatemala
El Salvador
Nicaragua
Panama
Colombia
Ecuador
Peru
KEY
Brazil
2nd Generation (cdmaOne)

3rd Generation (CDMA2000 1X)
Chile
3rd Generation (1xEV(1xEV-DO)
Uruguay
Congo
Angola
Zambia
Namibia
Botswana
Japan
S Korea
China
Nepal
Taiwan
Hong Kong
Laos
China
Egypt Israel
Egypt
Pakistan
Kuwait
Oman
India
Saudi Arabia
Sri Lanka
Yemen
Ethiopia Bangladesh
Myanmar
Kenya
Thailand
Uganda
Malaysia
Rwanda
Indonesia
Mauritius
Madagascar
Mozambique
Vietnam
Cambodia
Guam
Philippines
Saipan
Fiji
Australia
South Africa
New Zealand
Australia
243 operators in 86 countries operate CDMA

networks supporting >335 M subs
Argentina
228 operators launched CDMA2000 1X (3G) voice and data networks supporting >275.2 M subs
86 Operators in 62 countries have launched or announced for plans 1xEV-DO DataNetworks
61 Commercial 1xEV-DO networks support >45 M subs (11/06)
Leading CDMA Network Operators

Other
30%
Verizon 17%
China Unicom
11%
Sprint Nextel
9%
LG (Korea) 2%
KTF (Korea) 7%
1. Verizon Wireless (US)
Reliance (India) 5%
SKT (Korea) 7%
est. 56.7M subs
2. China Unicom
est. 34.5M subs
3. Sprint Nextel (US)
est. 51.9M subs (incl. iDEN)
4. Vivo (Brazil)
est. 21.6M subs
7. Reliance (India)
est. 17.3M subs
8. KTF (Korea)
est. 12.6M subs
KDDI (Japan)
7%
Vivo (Brazil)
8%
Alcatel-Lucent network infrastructure supports six of the largest CDMA network operators
3G WinZAPP Mobile-Romania Achieves Industrys Lowest CAPEX and OPEX and

a High ARPU
Bucharest-based Zapp focuses on providing state-of-the-art wireless telephony and data

services to business customers in Romania. To counter fierce competition from regional GSM
service providers, the company needed to upgrade its network to support 1xEV-DO based
wireless broadband data services. Cost concerns mandated that the new network provide
optimal service coverage with minimal investment
ZAPP partnered with Lucent to design and deploy a third-generation mobile network, using
Lucent Flexent CDMA450 Modcell ES base stations and associated core network equipment.
The new network provides data speeds of up to 2.4 Mbpsamong the fastest data speeds
available in Europe
Challenge
Solution
Benefits
Zapps network CAPEX and OPEX figures are the lowest in the industrythanks to the Lucent
architectures large coverage footprint, high capacity, usage-driven link budgets, and efficient
packet-based encapsulation
Flexible Lucent architecture enabled Zapp to achieve 90% population coverage and 80%
geographic coverage with only 502 BTSs and a total investment of USD 150 million
Lucent network and service design expertise helped Zapp achieve extremely high network
availability (99.955%) and call completion rates (98.57%)
Zapps per-subscriber revenues of approximately USD 25 ARPU easily outpace the competition
Lucent post-sale services and support keeps Zapps network operation and evolution in line
with latest technology upgrades
Testimonial or Third Party Endorsements
Lucent delivers top-notch performance and

manageability. Their extensive exposure, experience and
knowledge means brand new customers can rely on and
benefit from the default network parameters and tuning
work Lucent has already done for other spectrum
implementations. And, with the flexible Lucent
infrastructure, you can deploy and manage an extremely
cost-effective network with the lowest site density both
in urban areas thanks to the high capacity offering per
cell and in rural environments thanks to the large
coverage offering per cell.
Victor Stan Chief Technology Officer, Zapp *
*
This customer reference was provided to Lucent Technologies prior to merger completion
Loss Analysis Example 450MHz Band
Strategy
Achievements
Issues
To upgrade existing analog networks and supply new greenfield Nordic mobile telephone (NMT)
and 450 Mhz operators with digital CDMA technology in the 450 Mhz band
Target customers: existing and greenfield NMT operators in the A, H, and K bands of the 450 Mhz
frequency band
Recent achievements: LU has installed, commercially launched and is expanding the first
commercial CDMA450 network for Zapp Mobile (formerly TeleMobil) Romania in 2001. Has a
present subscriber growth of over 400 thousand and a capacity of over 2 million. Has installed
and optimized four other networks in the Russian Federation - Delta and Moscow Cellular
Communications (MCC), Uzbekistan, and Vietnam
Lucent established and drove the initial market opportunity
Lucent has installed, commercially launched and is expanding commercial CDMA450 network
for Zapp Mobile (formerly TeleMobil) Romania in 2001
Lucent has installed and optimized four other networks in the Russian Federation
Delta & Moscow Cellular Communications (MCC), Uzbekistan, and Vietnam
Lucent is traditionally the high price competitor in most RFP responses
Despite this Lucent is invariably on the final sort list of vendors
Lucent is high in terms of Capex but has business cases to show we are very competitive in
terms of Opex
While Lucent was initially positioned to be the market leader in the 450 market Asian vendors
embarked on an aggressive campaign to dominate and gain market acceptance
RFP responses were significantly lower than any competitive bids (many contacts were
suspected of being offered below cost and peripheral equipment from external sources was
offered for pennies-on-the-dollar)
Asian companies offered aggressive vendor financing and network sponsorship western
companies could not match
Lucent has had several opportunities to swap out competitors (including other NAR vendors)
networks in other frequency bands, but has lost the opportunity when the incumbent supplier
typically undercuts any viable deal Lucent was able to structure
Competitors: CDMA Strategic Position
Lucent maintains a broad

differentiation strategy providing
best-in-class reliable products
Competitive Advantage Pursued
Nortel had differentiated itself with its

claimed operational excellence, however,
they have since become a fast follower
to Lucent
Motorola remains a niche differentiation
player with heavy focus in the AP region
where more than half of its revenues
are derived
Despite Samsungs innovation claim and
ability to get to market first, poor product
performance has forced them to be a
niche low cost player
Low cost
Target Market
Differentiation
Broad
Niche
Huawei and ZTE entered the CDMA

landscape during the telecom downturn
and are slowly gaining share with their
low-cost tactics
Competitive intensity will force partnerships or withdrawals from the CDMA market as competitors
execute their strategies
CDMA (SWOT)
Strengths
Innovation Our R&D ability
Common platform
Flexible assets and common sparing
Best-in-class switch
Graceful evolution in RAN and Core
Quality
High capacity w/scalability
OPEX savings
Support for legacy products
Weaknesses
Price
Lack of a distributed solution
Time to market with small scale products
Support for legacy products uses resources
Our salaries and benefits
Opportunities
Ericsson has exited CDMA
Nortel seems to be focusing on cheap
Potential for gaining traction with IMS
CDMA450 opportunities
Asian vendors have not gained traction in NAR
Market changes, consolidation, government
controls
Ability to offer financing
Threats
GSM-backed campaign to position CDMA as 2G
dying technology
Asian vendors are influencing the market
We have no government support
VoIP off-loading our MSC
Breadth of current portfolio and age of
embedded base impacting ability to deliver new
products
3G Operator Value Proposition

Alcatel-Lucents CDMA portfolio delivers:
Complete pre-integrated end-to-end voice and data solutions
Integration and optimization services
Innovation and OPEX savings built into every product
CDMA EV-DO RevA enables new sources of revenue
Attract high value enterprise subscribers with secure, mobile HSD

Provide new services where voice revenues are flattening
Reduce churn
Offer a cost-effective voice and data solution to emerging markets
CDMA offers a clear evolution path beyond 3G

An operator can deploy with assurance that their investment is protected
Alcatel-Lucents CDMA portfolio offers a clear evolution path
y From 1x to beyond EV-DO RevA
RevB standards established
RevC standards expected 1Q07
y Evolution usually requires minimal HW and SW upgrades
3G operators offering secure high-speed data access with mobility can command a
premium over existing Internet/data access options
Enterprise Value Prop Marketing Support

High Speed Data
Supports enhanced productivity with anytime, anywhere access to enterprise data across
seamless, secure, easy to use solutions
Enables improvements in current business practices
Provides the framework for new business models that improve business practices
CDMA and IPSec address security concerns
Reduce Operations Costs with Media Access Optimised to Maximize Bandwidth

Efficiencies
Increase customer and employee satisfaction
Enhance network security
Productivity improvements of 30-50%

Positive returns on investment for the enterprise in one year or less
CDMA Value Proposition for Alcatel-Lucent

With the Alcatel-Lucent Merger We Can Now Offer Additional Enhancements
to Our CDMA Offers
New Back Haul Options
y Ethernet
y Microwave options
New Network Options

y Routers
Enhanced Support
y Services
y Network optimization
y Expanded sales teams
Internal Points of Contact for CDMA

Product Marketing
Kathy O'Connell (Senior Manager)
y
+1 973 884 6473 kathyoc@lucent.com
Carie Armstrong (Core IP)

y
+1 630 979 5258 cariearmstrong@lucent.com
Joe Baldesweiler (CDMA450, PTT)

y
+1 973 386 5264 baldesweiler@lucent.com
Sandi Fleming (SW Value Prop, IP BH)

y
+1 973 386 2493 sfleming@lucent.com
Mike Hobby (1xEV-DO Rev 0 & A)

y
+1 (773) 525-4028 mjhobby@lucent.com
Lisette Molina (OA&M)

y
+1 973 386 2797 lisettemolina@lucent.com
Jim Starkey (BSR)

y
+1 630 713 1387 jstarkey@lucent.com
Shuang Yu (BTS)
+1 973 386 4973 shuangyu@lucent.com
Conclusions
Operators need 3G to deliver the applications and services that drive ARPU
CDMA2000 / 1xEV-DO is worlds leading 3G technology
Alcatel-Lucent is the world leader in delivering quality CDMA networks

The Alcatel-Lucent CDMA portfolio delivers
Innovation as well as quality
Products sized to meet the demands of any network
Investment protection beyond 3G
Commitment to customer satisfaction
The Alcatel-Lucent merger adds complementary products and services to a robust

CDMA portfolio
Pent-up demand for mobile business productivity tools can be satisfied now with 3G airlinks
and services with Alcatel-Lucents CDMA portfolio
Acronym List
1X
1xEV-DO
1X RNC
AAA
AAT
ACK
AF
AP
APB
AR
ARQ
AS
AT
BCMCS
B-PCF
BTS
CBR
CCU
CCF
CDM
cHDLC
CICC
CMU
cPSB
CRC
CRM
CSCF
D-ARQ
DCS
DHCP
DNS
DO
DO RNC
DPH
DRC
DSC
ENUM
ECP
ECPC
E-PCF
eCRTP
EF
EMS
E-PCF
ER
ERP
Esm
ESC
FBP
FMM
FMS
FPS
CDMA2000 1X (x = 1 carrier)
1xEVolution Data Optimized
1X Radio Network Controller
Activation, Authorization & Accounting
Average Aggregate Throughput
Acknowledge
Assured Forwarding
Application Processor
Active PhoneBook
Aggregation Router
Automatic Repeat Request
Application Server
Access Terminal
Broadcast Multicast Services
1X RNC Blade PCF
Base Transceiver Station
CDMA Baseband Radio
CDMA Control Unit
Charging Collection Function
CDMA Digital Module
Cisco High Level Data Link Control
Common Interface Control Card
CDMA Modem Unit
CompactPCI Packet-Switching Backplane
CDMA Radio Controller
Customer Relationship Management (Siebel)
Call Session Control Function
Delayed ARQ
Digital Cellular Switch
Dynamic Host Configuration Protocol
Domain Name Service
1xEV-DO
1xEV-DO Radio Network Controller
Data Protocol Handler
Data Rate Control
Data Source Control
tElephone NUmbering Mapping
Executive Cellular Processor
ECP Complex
Netra Ethernet PCF
Enhanced Compressed RTP
Expedited Forwarding
Element Management System
Netra Ethernet PCF
Edge Router
Enterprise Resource Planning (Portal. Focusing on SAP,
Oracle, PeopleSoft )
Enhanced Service Manager
Ethernet Switch Card
Flexent Blade Platform
Flexent Mobility Manager
Flexent Mobility Server
Flexent Packet Switch
FRPH
GICC
GRAS
GUI
H-ARQ
HDLC
HLR
HO
HSS
IFRPH
ISG
IOT
IP
IPBH
IPCP
IPoHDLC
L2
LCP
LMRS
LNG
MAC
MAP
MGCF
MGW
MI
MLG
MLPP
MLPPP
MLS
MRCF&P
MSC
NAQ
OA&M
OCS
OMC-H
OMC-CN
OMP-FX
OSA-GW
PCF
PD
PDF
PDSN
PHA
PHV
PP
PS
PSTN
PSU
PTS
PTT
PTX
Frame Relay Protocol Handler

Gateway Interface Control Card
Global Roaming Application Server
Graphical User Interface
Hybrid ARQ
High Level Data Link Control
Home Location Register
Hand Off
Home Subscriber Server
ISDN Frame Relay Protocol Handler
Intelligent Services Gateway
Inter Operability Testing
Internet Protocol
Internet Protocol Back Haul
Internet Protocol Control Protocol
IP over HDLC
Layer Two (ISO Protocol Stack)
Lucent Control Platform
Lucent Media Resource Server
Lucent Network Gateway
Media Access Control
Market Advantage Program
Media Gateway Control Function
Media Gateway
Management Interface
Multi Layer Group
Multi-Level Pre-emptive Priority
Multi Link Point to Point Protocol
Multi Layer Switch
Media Resource Control Function &
Mobile Switching Complex
Negative ACK
Operation, Administration & Maintenance
On-line Charging System
Operations & Maintenance Center - Home Location
Register
Operations & Maintenance Center - Core Network
OMP for Flexent
Open Service Access - Gateway
Packet Control Function
Packet Data
Policy Decision Function
Packet Data Serving Node
Protocol Handler for ATM
Protocol Handler Voice
Packet Pipe
Protocol Server
Public Switch Telephone Network
Packet Switching Unit
Push to Speak
Push to Talk
Peer Telephony eXchange (PTX) also known as Peer-toPeer (P2P) call
QoS
RCC
RCS
Rev 0
Rev A
RLP
RNC-M
ROHC
RTP
SB-CBR
SB-CBRm
SB-EVM
SB-EVMm
SCM
SDB
SFA
SHO
SIP
SMSC
SNMP
SS7
SUA
TCS
TP
TPU
TS
UCR
UCRm
UDP
ULAM
USDS
VCC
VoIP
VPC
VPN
WPS
Quality of Service
Reliable Clustered Computing
Radio Cluster Servers
1xEV-DO Revision 0
1xEV-DO Revision A
Radio Link Protocol
CDMA2000 1X RNC Management
Robust Header Compression
Real-time Transport Protocol
Single Board Radio for Modcell 4.0
Single Board Radio for Modcell 1.0-3.0
Single Board EVM for Modcell 4.0
Single Board EVM for Modcell 1.0-3.0
Supply chain management
Short Data Burst
Sales Force Automation (Siebel)
Soft Hand Off
Session Initiated Protocol
Short Message Service Center
Simple Network Management Protocol
Signaling System 7
Software Update Automation
Traffic Control Server
Force 690 Traffic Processor
Traffic Processor Unit
Time Slot
Ultra CDMA Radio for Modcell 4.0
Ultra CDMA Radio for Modcell 1.0-3.0
User Datagram Protocol
Ultra Linear Amplifier Module
Universal Subscriber Data Structure
Virtual Channel Connection
Voice over IP
Virtual Path Connection
Virtual Private Network
Wireless Priority Service

Alcatel-Lucent's CDMA Portfolio: Sales Training Overview Mike Hobby November 2006

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Alcatel-Lucent's CDMA Portfolio: Sales Training Overview Mike Hobby November 2006

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Alcatel-Lucent's CDMA Portfolio

Sales Training Overview

2 | Alcatel-Lucent's CDMA Portfolio | November 2006

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3 | Alcatel-Lucent's CDMA Portfolio | November 2006

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State of the Mobility Market

Double digit growth is a thing of the past

Data adoption remains a major opportunity

3G alternatives continue to generate interest

Cost control and revenue growth still top priority

4 | Alcatel-Lucent's CDMA Portfolio | November 2006

All Rights Reserved Alcatel-Lucent 2006, 21155

What Customers Are Telling Us

Biggest Challenges in Managing Their

Revenue generating features

Interoperability with other technologies

Interoperability with legacy equipment

Lower equipment cost

Real estate/zoning for capacity

Influences on Equipment Purchases

Compatibility with legacy equipment

5 | Alcatel-Lucent's CDMA Portfolio | November 2006

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Alcatel-Lucent CDMA Market Vision and Strategy

Alcatel-Lucents competitive advantage

Unmatched expertise and network know-how

Security and service transparency

6 | Alcatel-Lucent's CDMA Portfolio | November 2006

Source: DellOro (2Q06)

All Rights Reserved Alcatel-Lucent 2006, 21155

CDMA2000 1X Voice and Data

26.4 Erlangs of voice traffic per sector

High capacity voice and medium

153.4 kbps peak packet data

Symmetric forward and reverse links

Packet data introduces advanced

Airlink drives actual data rates up to 153 kbps

Enables service flexibility and

Soft hand off for optimized voice and data

7 | Alcatel-Lucent's CDMA Portfolio | November 2006

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1xEV-DO Rev 0 Data Overlay

IMS Blended lifestyle services

Improved support for real-time high

Deployed worldwide in 450/700/850/1800/1900 MHz

Fastest 3G forward link

Advanced all-IP architectures

Airlink drives FL peak data rates to 2.4 Mbps

Typical user experience 400 - 600 kbps

Reverse link at 1X speeds

Enhanced service flexibility and

Up to 153.6 kbps Peak data rate

Typical User Experience 40 - 60 kbps

Bursts up to 100 kbps

Soft hand Off

All Rights Reserved Alcatel-Lucent 2006, 21155

DO Rev A Performance Improvement

User experience 440 - 700 kbps

Improved MAC and packet division multiplexing

Improved reverse link

Improved speeds and latencies

Extends all-IP architectures to