International IP Telephony Opportunities Ingrid Simunic Ph D

International IP Telephony Opportunities Ingrid Simunic, Ph. D. Marketing Director February 6, 2003 The Voice of Next Generation Networks. TM

Vo. IP Market Momentum World Wide Vo. IP Minutes Vo. P Penetration in Long Distance Networks Vo. IP Driving the Future of ILD Source: Probe Research Vocal. Tec Communications - Confidential & Proprietary

TDM vs Vo. P Growth Traffic for Vo. P in international networks Growth in Vo. P traffic far surpasses growth in TDM traffic Vo. P replace the TDM international network TDM traffic to see negative growth starting 2004 Source: Probe Research Vocal. Tec Communications - Confidential & Proprietary

The Momentum continues…and is driving Innovation Market Driving Forces Deregulation Increased Competition Low margins & customer churn New Revenues Lower Ownership Cost Faster Time to Market Next. Gen Softswitch Based “Core” Tandem Networks Value-Added Services Calling Cards, IP Conferencing, Vo. IP VPN, Unified Messaging Vocal. Tec Communications - Confidential & Proprietary

Conflicting Drivers of Today’s Competitive Environment Demand for New Revenue Generating Services versus Lower OPEX and CAPEX Vocal. Tec Communications - Confidential & Proprietary

Conflicting Drivers of Today’s Competitive Environment GREENFIELD DEPLOYMENTS EXISTING / INCUMBENT CARRIERS Quick Time to Market New Revenues Reduce Customer Churn Increase ARPU versus Higher Margins Lower OPEX High Efficiency Increase Margins Low OPEX Increase Efficiency Vocal. Tec Communications - Confidential & Proprietary

Addressing Service Providers’ Needs Full range of value-added Service offerings on a Single Platform (Voice VPN, Conferencing, Global Call Center, Calling Card, etc) Quick time to deployment and service operation Fast Return on Investment (ROI) Significantly increase profitability Advanced Softswitch - based Technology Platform Superior Routing Capabilities Packet Tandem Switch Architecture (e. g. NLD & ILD Service, Trunk Replacement) Proven Interoperability and Standards Support H. 323, SIP, MGCP, SS 7, etc Scalable turnkey and easy Customizable System Vocal. Tec Communications - Confidential & Proprietary

Single Platform for Innovative Enhanced Services Deploy our int’l/ LD solution today and expand seamlessly on the same open services platform Consumer Services Enterprise Services Voice VPN Centrex (future) One Number (future) Calling Card Prefix Number (to Service Provider) Association Next-Gen/Multimedia Services PC/Web Communications Video-telephony Personal Unified Comm. Presence Basic Carrier Services LD and Intl’ VOIP Net Trunk Replacement Web Enabled Contact Centers Web Enabled Call Centers for ECommerce Enhanced Carrier Services Exchange Carrier (+IDM) Vocal. Tec Communications - Confidential & Proprietary

International / LD Calling Packet Tandem Switching Class 4 functionality with reduced capex and opex Flexible routing, not limited like PSTN to point Centralized and easier management leading to reduced operational costs and faster response to market changes Moving network infrastructure to IP Unmatched Interoperability VT interoperates with 60% of all Vo. IP ports deployed in virtually every country Wide origination / termination / routes choices SS 7 connectivity Homologated SS 7 support for international protocols SS 7 certification by telcos worldwide (e. g. DT, FT, Global One, Telecom Italia) SS 7 tunneling (ensures call continuity) Scalability Fast ROI Vocal. Tec Communications - Confidential & Proprietary

Calling Card Solution International LD arbitrage Ethnic minorities will continue to fuel the growth of the industry Low rates to specific destination w/budget control Customized language IVRs The mobile (wireless) market Youth & business – budget control (not postpaid) Cost effective for international calls due to high roaming pricing The Internet Ease of purchase: virtual pp cc + recharge over the Internet pp cc for pc 2 ph Qo. S Vocal. Tec Communications - Confidential & Proprietary

Vo. IP VPN Service Provider Value Proposition Vo. IP-VPN As The Complete Toll Bypass – Improve Margins Local PSTN charges are significant! Vo. IP-VPN is an ‘end to end’ Vo. IP solution Vo. IP-VPN improves Service Provider’s margins by by-passing the origination and termination PSTN networks V-VPN Origination PSTN International PSTN / Vo. IP Termination PSTN Vocal. Tec Communications - Confidential & Proprietary

Vo. IP VPN Basic Solution Architecture ACME Israel Service Provider On-net ACME Berlin On-net IP Network Off-net Vocal. Tec, Israel Vocal. Tec NY CPE = Customer Premises Equipment VGW = Vocal. Tec Gate. Way VGK = Vocal. Tec Gate. Keeper VNM = Vocal. Tec Network Manager Vocal. Tec Communications - Confidential & Proprietary

Vocal. Tec Proven Experience Founded in 1989, the Internet Telephony pioneer World leader in providing software-driven VOIP solutions Ongoing technical innovations and leadership in the industry standards February 1995: Internet Phone March 1997: Invented and developed first gatekeeper February 1996: First industry IPO (NASDAQ: VOCL) July 1999: First deployment of gateway 2000 August 1997: World leading carrier invests in Vocal. Tec April 2001: Vocal. Tec SIP server addresses new markets February 1998: First complete IP Telephony solution (VEA) 1995 1996 1997 1998 1999 Deutsche Telekom selects VT as exclusive NGN partner for carrier services 2000 Vocal. Tec Communications - Confidential & Proprietary 2001

Vocal. Tec Powers the World`s Leading Carriers Vocal. Tec Communications - Confidential & Proprietary

THANK YOU ! www. vocaltec. com One Executive Drive Suite 320 Fort Lee, New Jersey USA Vocal. Tec Communications - Confidential & Proprietary