Network Virtualisation A Service Provider s Perspective Presented

Network Virtualisation – A Service Provider’s Perspective Presented by: Steve Legge, Chief Operating Officer 8 May 2007

The Evolution of SOUL • Australian broadcasters required a broadband network for Digital TV (DTV) • Buy or Build? Optus or Telstra were the only bandwidth resale options … (both expensive) • NBN therefore elected to build excess broadband capacity at minimal marginal Cap. Ex and Op. Ex • A separate entity was created as a licensed carrier to facilitate the sale of excess capacity, adopting the Soul Pattinson name • Convergence of broadcast television and telecommunications content and distribution successfully implemented across the network • The business and network expanded along eastern seaboard of Australia

Who is SOUL? • The largest operator of ‘greenfield’ MPLS based IP networks in Australia • The only national PSTN interconnected IP network in Australia • Voice, video and data over a single, national IP network • Fibre network throughout intercapital and regional Australia • In excess of 300 points of presence (Po. Ps)

Who is SOUL? • Network has full Qo. S feature support with Service Level Guarantees to support lower latency, packet loss and jitter • 100% Powered by Cisco Systems – Single vendor platform • Infrastructure is SOUL owned and operated, and independent of Telstra • In excess of 900 employees in offices throughout Australia • Consumer Call Centres in Perth and Sydney

Network Design • The network was initially designed for DTV Transmission • Provides higher availability than standard Telco networks, as the network core cannot suffer any downtime • Increased redundancy in all layers • Architecturally different to other telco networks as design is optimised for content delivery, not just traditional services • This increases the access to regional areas due to distributed core design • Diverse fibre paths also operate across the country for redundancy • Capability exists to rapidly increase regional reach (new POI deployments)

New Demands on the WAN Business Imperatives IT Applications WAN Implications • Reduce cost • Collaborative apps • Any-to-any • Increase productivity • B 2 B applications • Scalable bandwidth • Improve Responsiveness • Web services • Convergence • IP telephony • Qo. S • Video applications • Security • Storage / back-ups • Availability • Content distribution • Remote access • Distributed data centers • Web integration • Teleworkers • Manageability • Build resilience • Focus on core competencies

More Complex Communities of Interest • IP Telephony drives PVC growth • Full mesh for media bearers • Separate voice and data PVC’s • Larger PVCs for desktop video • Shared services require PVC’s back to data centres • Ultimately a cost that you bear • Direct • Via Service Provider • Network Performance Frame Relay vs Qo. S IP VPN Costs Frame Relay Application Demands Qo. S IP VPN Degree of Meshing Hub and Spoke Full Mesh Source : Ovum, 2003 A compromise between performance, customer satisfaction & budget

More Complex Connectivity Demands ý ¨ Intranet & Extranet GPRS Internet 3 G UMTS Content & Information WLAN Ethernet — _ Communication & Messaging ATM / FR Applications & Collaboration DSL / Cable Dial Seamlessly accessible from any access technology Accessible from any device, portable across devices • • Support an expanding range of devices and technologies Aggregate users and content from anywhere without bottlenecks Maintain accessibility, security and control over all connections Seamless, consistent experience to anywhere in the IP cloud

Benefits of MPLS VPN MPLS IP VPN Scalability Low-high speed access Any technology Security Equivalent to ATM/FR Flexibility Any-to-any connectivity Easy add/remove users and sites IP address freedom Performance Guarantees Co. S for voice, video & data IP SLAs for predictable latency, throughput, availability, packet loss & jitter Coverage and Reach On. Net for performance, function and SLA Off. Net for global coverage and remote users / devices Price and Cost efficiency Lower price per bit of IP One access line, multiple services ATM FR

A More Extensive Feature Set 4 -8 Co. S Levels End-to-End SLAs End-to-End Prioritisation Unified IP Comms Access Technology Agnostic Co. S / Qo. S P 2 P & Application Bandwidth Control Multicast Routing Simplicity Simplified Network Integration Application Acceleration Ancillary Features / Functions Any-to-any Connectivity Integration with CSS Portal IPSec &SSL Remote Access Clean Internet Access Network Admission Control (VPNAC) Network. Based Firewalls Core Features / Functions

A Closer Look Full Service Networking Layer 3 Routing protocols available on PE-CE – Static, RIP, OSPF, EIGRP, e. BGP IP Services like NAT, DHCP can be configured on per-VPN basis on the PE router Traffic Engineering for SLA, bandwidth protection and restoration VPN A CE Layer 3 access via DSL, Cable, Ethernet, ATM/FR, Dial, 3 G VPN B CE PE PE VPN B CE VPN A CE IP / MPLS Qo. S mechanisms like Queuing and Policing are configured at CE and PE routers Core routers have no knowledge of customer network Traffic separated by unique route distinguishers Layer 2 Circuits available – Ethernet, ATM, Frame Relay, PPP, HDLC

A Closer Look Shared Services ERP Collaboration Video Hosted Content VPN A CE VPN B CE PE PE VPN B CE VPN A CE IP / MPLS Internet Gateway Vo. IP Gateway Internet PSTN

A Closer Look Remote Access Collaboration ERP Video Hosted Content VPN A CE VPN B CE PE PE VPN B CE VPN A CE IP / MPLS SSL Internet Gateway Vo. IP Gateway IPSec Internet PSTN

IP VPNs = Improved Performance Operational Performance Technical Performance • Enable a range of applications from voice to video, content, and storage • End-to-end Qo. S for data, voice, and video • Increased productivity • • Improved communication effectiveness Affordable, any-to-any connectivity and enhanced network availability • Any access speed and technology • Focus on core competencies • • Closer ties to partners and suppliers Security and privacy equivalent to or better than Frame Relay and ATM • Lower communications & improved productivity for remote users • Support private IP addressing plans • Favorable price/performance ratio of IP networks

The Next Generation Leased Line • Driven by business & market needs • Enterprises AND Service Providers • More complex communities of interest • More complex connectivity demands • Appetites for Value-Added Services • Migration from ATM/FR is NOT just about cost 1. Scalability 2. Reach 3. Security 4. Application convergence 5. Enabling evolution Source : Business Communications Review / Info. Tech

Why Choose SOUL? • “SOUL-owned” competitive infrastructure, providing an alternative to traditional Telco incumbents • New and improved broadband products and services to metro and regional communities • Commitment to our Customers and their business • Commitment to solution delivery • Premium purpose built network designed to support real time applications

In Summary • SOUL - one network • Greenfield National MPLS – IP Network • True convergence – Broadcast video, carrier voice and private data across one MPLS network • Consider convergence across the business • Network, Service, Application • Broadband IS and WILL BE the delivery enabler • Economics of multiple services • SPs must continue to enforce a place in the value chain