ROMTELECOM BROADBAND Leading the future communications Vasile VOICU

ROMTELECOM BROADBAND: Leading the future communications Vasile VOICU, Ph. D, MBA Director Infrastructure Business June 2007 , Bucharest Infrastructure Business Directorate 1

Agenda ü Company profile ü ROMTELECOM is changing ü Infrastructure SDH/DWDM network ü IP MPLS Core/Edge ü Broadband network and services ü NGN architecture and future services ü Conclusion Infrastructure Business Directorate 2

ROMTELECOM IN NUMBERS (1) STAFF COMERCIAL PRESENCE NETWORK Headcount 12800 Commercial relations with other telecommunications operators 337 Connected countries Fiber optic km 323 >30000 for more details click here Infrastructure Business Directorate 3

ROMTELECOM IN NUMBERS (2) Ø 3. 5 mil PSTN Customers Ø 20, 000 ISDN Customers Ø 165, 000 ADSL Click. Net Subscribers Ø Over 5, 000 IP Premium Service Lines Ø 215, 000 DTH TV subscribers Ø State of the Art Hosting Data Centres (Bucharest and Brasov) Infrastructure Business Directorate 4

Being a Part of OTE Group… Infrastructure Business Directorate 5

…Our Strengths ü In-Depth Knowledge of Telecommunications Industry & Communications Technologies ü Highly Qualified and Experienced Professionals in network, communications and software ü Ability to adapt international expertise to local conditions of the new international executive team experienced in restructuring telephone companies and introducing new systems and processes ü Strong Financial Position ü Strong Brand Name and High Degree of Recognition in National and International Markets ü Coverage - nationally distributed presence throughout Romania. Infrastructure Business Directorate 6

ROMTELECOM IS CHANGING ü ROMTELECOM is no longer a telephone - only company ü Liberalized market = focus on non - traditional services with high-growth potential ü Data & Internet services are the key for future success ü ROMTELECOM is becoming a strong player in the ISP market both in residential and business segment ü Now, ROMTELECOM embracing Broadband opportunities & challenges for more details click here Infrastructure Business Directorate 7

ROMTELECOM IS CHANGING – the past “Legacy” connectivity based services: – Telephony – Fax – Leased lines – Telegraphy Infrastructure Business Directorate 8

ROMTELECOM IS CHANGING – the present Broadband data based services: – Internet services • TDM access • ISDN access • ADSL – – VPN MPLS Gaming Hosting Data Centre Back up services Infrastructure Business Directorate 9

ROMTELECOM IS CHANGING – the future Broadband future services: – Internet service • ADSL 2+ • FTTH – – – – VPN MPLS upgrade IP TV Vo. D PVR IP Telephony TRIPLE PLAY QUAD PLAY Infrastructure Business Directorate 10

…Our IP MPLS Network Satu Mare Baia Mare Zalau Dej Bistrita Tg. Mures Fagaras Sighet Sfantu Gheorg he Miercur ea. Ciuc Piatra Neamt Iasi Vaslui Campulung Moldovenesc Sighisoara Oradea Botosani. Suceava Alba Roman Tecuci Arad Pascani Sibiu Onesti Deva Turda CLUJNAPOCA Brad Barlad BACAU Medias Lugoj Focsani TIMISOARA BRASOV Drobeta Severin Buzau Bucures ti Victoria Braila Bucures ti Dacia Resita Tulcea CRAIOVA Tg. Jiu Hunedoara BUCURES TI BANEASA GALATI Bucuresti Sud. Est GE/DWDM GE/SDH FE/SDH GE/FO FE / UTP Petrosani Bucurest i Sud. Vest Slatina Râmnicu Vâlcea Piteşti Slobozia Calarasi Câmpulun Alexandria g Muscel Târgovişte Câmpina Ploieşti Giurgiu BUCURESTI CNT 2 Constant a Medgidia. Poporulu i GSR 12 xxx P Cisco 7613 PE Cisco 7606/6509 PE Cisco 7206 PE Cisco 3745 PE Cisco 7206 Cisco 7304 RR Border Infrastructure Business Directorate 11

…Our SDH/DWDM Network Ukraine Legend: STM-4 Cernauti Botosani Siret Radauti Satu. Mare Carei Beius TIM 1 STM-16 Vascau BRA 1 Caransebes Vrsat STM-4 Tg. Secuiesc BAC 3 Campulung Rm. Valcea Tg. Carbunesti CRA 1 Cheia Slatina Sinaia Cahul Oancea BB 4 Tecuci GALATI BRASOV BB 1 Petrosani Turnu. Severin Orsova Barlad Sf. Gheorghe Fagaras Hateg Tirgu-Jiu Vaslui Focsani Hunedoara Resita BACAU Od Covasna Secuiesc Deva Lugoj STM-16 Miercurea Moinesti Ciuc Targu. Mures Tarnaveni Medias Faget Isaccea Rm. Sarat GAL 2 Tulcea Braila Campina Targoviste Pitesti Buzau BUC 1 Faurei Kogalniceanu Cernavoda BB 2 Urziceni BB 3 Strehaia Slobozia Fetesti Medgidia Calarasi Baneasa BUCURESTI CRAIOVA Constanta BUC 2 STM-16 Alexandria CRA 2 Caracal Babadag GAL 1 Ploiesti Rosiori Yugoslavia Republic of Moldova BAC 1 Onesti Sibiu Deta Raducaneni Turda Alba. Iulia Arad STM-4 Husi CLU 1 CLUJ Nadlag TIM 2 Roman Reghin Brad TIMISOARA Balti Piatra-Neamt Dej Huedin Oradea Szeged Iasi Bistrita Zalau Chisinau Cris BAC 2 Vatra Dornei Tg. Neamt Tg. Lapus Alesd Hungary - ADM or LXC - International Exchange Pascani Suceava Campulung Baia-Mare CLU 2 Sim. Silvaniei Berettyoujfallu STM-16 Sighet Negresti - Regenerator Giurgiu Turnu Magurele Corabia Oltenita Ruse Zimnicea STM-16 Cobadin Bulgaria Mangalia 12 KAFOS: Bulgaria Turcia 12

ROMTELECOM’s SDH /DWDM - Concept Diagram - Infrastructure Business Directorate 13

…Our International and Local Peering Infrastructure Business Directorate 14

…Our Access and Metro Network Infrastructure Business Directorate 15

Current trends in telecommunications • A reshaped competitive landscape with a lot of new players. New market forces are changing the way to provide services and make business. • Voice goes mobile. • Mobile goes ‘broadband’ and leaps towards IP • Explosive growth in Internet services and mobile internet • Tariffs are based on packages of bundled services • Convergence enables operators to expand the range and quality of services • Convergence requires broadband technologies Infrastructure Business Directorate 16

ROMTELECOM NGN architecture: What are its aims ? • Make it easier to create new services – Faster – More people can create • Make it easier to buy and use services – Enable customers • Make it simpler to deliver and maintain service – Process automation • 30 -40% cost reduction Infrastructure Business Directorate 17

NGN architecture Logical Nodes Access Network Today Remote Concentrators, DSLAMS and Data Muxes Voice Switches and Data Cross Connects Switches (Data) Data Centre International Networks Internet Peering End Customer Logical Nodes Fibre to the Building Access Multi. Service Access Devices Aggregation Metro Routers Service Edge Core Routers Data Centre Core Infrastructure Business Directorate 18

Today's network has many access aggregation devices Network Infrastructure Service Management many exchange sites For 0. 5 million Broadband 4. 5 million PSTN customers 7 m pairs MDF RCU pairs Voice pairs DSLAMs Broadband pairs CWSS DPCN. . thousands boxes Fibre TOTAL ~10 m pairs : 50, 000 fibres Mid Band Service Mgt boxes x. DSL Broad Band Service Mgt thousands boxes PDH/SDH Multiple Copper Data Service Mgt DWDM/SDH Multiple Fibre Data Service Mgt thousands circuits >50000 fibres SDH/PSTN thousands Copper Data Services Narrow Band Service Mgt boxes DWDM SDH… TOTAL ~15, 000 boxes Multiple service management organisations and systems 6+ service Mgt Organisations Infrastructure Business Directorate 19

The future will be based on a multi-service access node Network Infrastructure For 0. 5 million Broadband 3. 7 million PSTN customers 3, 7 m pairs Up to 0, 5 m pairs Service Management Voice or Broadband MDF Integrated test and operations Data Services circuits 50, 000 fibres ~ 9 m pairs : 50, 00 fibres Up to 10% reduction! Copper Fibre M Multi-Service U Access Aggregator L T Transmission I e. g. MSH M E D I A Multi Band Service Management Single service management organisation ~5, 000 boxes Up to 70% reduction! Fewer devices, simpler service management Infrastructure Business Directorate 20

ROMTELECOM ADSL coverage • 1700 DSLAM • Over 900 cities and towns • Over 350 K ports 21

The broadband time • DSL is shaping the market in terms of – Growth pattern and need to have – Service delivery oriented business models – NGN architecture deployment – Competitive landscape and service providers’ interactions • Wireless broadband access (e. g. Wi. MAX) likely to enter the same game adding – Nomadism and Mobility, – Access to service where DSL is not available – Affordability, diversification, fair competition Infrastructure Business Directorate 22

Revenues are driven by services Log-Log Graph of Estimated Service Provider Revenue and Growth from End-User Services ($B) 1, 000% “Niche” Car automation Growth Rate Log of ‘ 01 -’ 04 CAGR of global service provider revenues from end-user services “Emerging” Online Gaming Advertising Asset Optimization Marketing E-SCM Videophony Music B 2 B Collateral Home Content B 2 E B 2 C automation Online Videophony Fin. Trans. Messaging Search Messaging Other Online News, entertainment Info. svcs. Sports and P 2 S calling other info. Vo. D 100% 10% P 2 P calling Voice calling “Mature” Consumer Enterprise 1% 1 10 100 1, 000 Revenue Potential The Boston Consulting Group Infrastructure Business Directorate 23

Broadband networks and NGN enable new services • Major concern : New services over broadband access • Key business issues to be mastered – which services ? – for which customers ? – with which potential revenues ? • How to add value to the basic fast internet service on broadband accesses ? Infrastructure Business Directorate 24

ROMTELECOM services roadmap • BB High Speed Internet • Unified Messaging • Vo. IP Telephone Service • Content Delivery • Primary line • Second line • enabling IP Centrex • Voice VPN • Application Service Provisioning • Games • Downloads (MP 3) • Gambling • Storage solutions • CRM solutions • Web hosting • Video distribution • Video telephony • Browse and talk • IP TV • IP VPN (data) • Click to Dial • Interactive TV • BW on-demand • IP Centrex • TV on demand • Qo. S on demand • Basic • Cinema of the • Triple play • Advanced future • Quad play • Multimedia Conferencing Long Distance Bypass • • Distance learning • Internal • Instant Messaging / • Distant arraignment • External Presence Management • Remote lab • PC to Phone (Int’l) • SMS/MMS on fixed • Phone to PC network Infrastructure Business Directorate 25

Future service portfolio (mass market) Voice PSTN MVNO POTS Low-speed Internet Hi-speed Internet TV-live Dial-up 2 G Double play 2, 5 G Triple play with 3 G Naked ADSL Double play Triple play Wi. Max Vo. IP Internet Vo. IP Wi. Fi Internet Double play Triple play 26

CONCLUSION • Infrastructure based services are evolving towards commodity products emphasizing lower prices and requiring a value proposition focused on operational excellence. • Next Generation services are the future growth engine of the ROMTELECOM, focusing on offering new and innovative products requires a value proposition focused on product innovation. • ROMTELECOM support effective development and provision of both types of services, to be perceived by the target customer segments as an integrated offer, addressing their specific needs. Infrastructure Business Directorate 27

CONCLUSION (cont. ) Existing Business Ø Corporate GBM Ø Ø Ø High Value Ø Ø Mass Market Ø Ø Increase Share of Wallet Secure New Accounts ØImprove Customer Experience Increase usage ØProduct Innovation Increase lines ØManage Churn Add new sites ØExploit Group Synergies Retain (Cosmote) Customers Improve Service ØDevelop Partnerships Manage PSTN ØIncrease Brand decline Awareness Develop ADSL Grow Dolce New Business ØEnterprise Solution Provider ØBundled / Packaged Offers ØContent ØVAS ØIntegrated Products Infrastructure Business Directorate 28

Thank you ! Infrastructure Business Directorate 29