NEOTEC RAZILIAN MMDS OPERATORS ASSOCIATIO José Luiz N

NEOTEC RAZILIAN MMDS OPERATORS ASSOCIATIO José Luiz N. Frauendorf June, 2001

WHAT IS MMDS ? NEOTEC

MULTIPOINT MULTICHANNEL DISTRIBUTION SYSTEM NEOTEC

BAND ALLOCATION

SPECTRUM ATRACTION BAND WIDTH x ATTENUATION

MMDS STRENGTH • Lower cost than cable • Investment only at customer’s premise • Fast to implement • Reliable - protected spectrum • Ideal for small and medium markets • Convergent Technology (video, voice and data) • Benefits from cellular technology NEOTEC

MMDS APPROACH YESTERDAY - Pay TV the only service - Analog technology - Macro cell distribution TODAY - Multiple services (video, voice and data) - Digital technology - Macro and / or multicell - Line-of-sight only - Residential market only - Line-of-sight not required

MULTIMEDIA CONCEPT BROADCAST: Video Audio Telecommunication: Phone / Fax Data / Internet PAY-TV Premium TV PPV / VOD Games Music + SINGLE SERVICE PROVIDER

POTENTIAL SERVICES Residential Market: – Analog Vídeo – Digital Video – Fast Internet Access Corporate Market: • Internet Access – “VPN´s” - Virtual Private Network – Video Conference NEOTEC – IP Telephony

WHY IS MMDS SO IMPORTANT TO BRAZIL? NEOTEC

BRAZIL RESIDENTIAL MULTIMEDIA MARKET • • Total Population = 160. 000 Inhabitants Total Homes = 40. 000 HH Total “A”, “B” and “C” classes = 30% Total Market = 12. 000 HH Total Subscribers = 3. 500. 000 (Today) Penetration in 2, 005 = 60% Total Subscribers in 2, 005 = 7. 200. 000 HH

BRAZIL CORPORATE MARKET LARGE COMPANIES: SMALL + MEDIUM CO. • Quantity= 5. 000 • Quantity = 3. 5 mi. • Top size = 350 • PIB - 52% total • Revenue = US$ 200 mi. • Revenue = US$ 50, 000 to to US$ 4. 7 bi. (top 350) • Data service = R$ 5. 9 bi. US$ 200 mi. • Data service = R$ 12 bi. Source TELETIME March 2, 001

MMDS MARKET POSITIONING Rural Region (< 50 HP/Km) • MMDS • Satellite Periferic Region ( < 200 HP / Km) • MMDS • DSL modems • Cable modems Urban Region ( > 200 HP/Km) • Fiber • LMDS • MMDS • DSL modems • Cable modems NEOTEC

MMDS - PLANNING NEOTEC

MMDS - PLANNING KEY POINTS PCAPACITY PCOVERAGE PINTERFERENCE NEOTEC

DIGITAL 3 D MAP SURFACE AND STREETS NEOTEC

TRANSMISSION MODELING TRANSMISSION NEOTEC

NEOTEC

NEOTEC

SHADOW AREAS NEOTEC

SHADOW AREAS vs. TARGET MARKET NEOTEC

NEOTEC

NEOTEC

FREQUENCY PLANNING NEOTEC

ANALOG / DIGITAL VIDEO HEADEND BLOCK DIAGRAM NEOTEC

DIGITAL HEADEND BLOCK DIAGRAM DVB SATELLITE RECEIVER ANALOG A/V SATELLITE RECEIVER MPEG - 2 ENCODER MULTIPLEXER A/V OFF-AIR DEMODULATOR MPEG - 2 ENCODER SCRAMBLER QAM MODULATOR CA C O M B I N E R B R O D B A N D T R A N S M I T T E R AUDIO LOCAL SOURCE VIDEO SIGNAL AQUISITION MPEG - 2 ENCODER SIGNAL PROCESSING SIGNAL MODULATION SIGNAL TRANSMISSION A N T E N N A

INTERNET HEADEND BLOCK DIAGRAM NEOTEC

Transmitting Antennas (“down-stream”) INTERNET HE BLOCK DIAGRAM Receiving Antennas (“up-stream”) CMTS

CUSTOMER’S PREMISE EQUIPMENT (CPE) BLOCK DIAGRAM NEOTEC

DISTRIBUTION BLOCK DIAGRAM NEOTEC

NEOTEC

SYSTEM ARCHITECTURE NEOTEC

DOCSIS “+” STANDARD

NETWORK OVERVIEW

WHAT IS “NEOTEC”? NEOTEC

MMDS OPERATIONS GEOGRAPHIC DISTRIBUTION Total (NEOTEC) House Holds = 18. 7 mi. (81%) Operations = 92 (63%) Municipality = 338 (72%) NEOTEC

CHALLENGES • • Internacional Market Demand Industry Standard Open System Near “line-of-site” Installation Suppliers Diversity Equipment Cost Market / Investor’s perception Latin America and specially Brazil are the largest markets

THANK YOU NEOTEC R. Pedroso Alvarenga, 505 /132 04531 -011 São Paulo S. P. Brazil c/o: José Luiz N. Frauendorf e. mail: jlfrau@uol. com. br Phone: (55 -11) 3167 -6252