The Age of Convergence Delivering a New Era

The Age of Convergence: Delivering a New Era of Collaboration Eric Shepcaro Senior Vice President AT&T Business Development October 12, 2006 © 2006 AT&T Knowledge Ventures. All rights reserved.

Discussion Topics • The Age of Convergence is (finally) here • The drivers for convergence • The four points of convergence • Impact on the enterprise • What’s next? 2 © 2006 AT&T Knowledge Ventures. All rights reserved.

Delivering Meaningful Convergence Anytime, anywhere collaboration … using any device 3 © 2006 AT&T Knowledge Ventures. All rights reserved.

The Age of Convergence All the pieces are coming together Nielsen Ratings March 2006 Broadband Penetration Tops 68% in US July 2006 More than half of larger businesses have adopted Vo. IP in their operations today January 2006 The U. S. business market for networkbased Vo. IP will grow to approximately $3. 3 B by 2010, a combined annual growth rate of 31. 4% between 2004 and 2010. May 2006 March 2006 Over 622 billion minutes of Vo. IP traffic was carried by service providers worldwide in 2005 28. 5 million subscribers will use residential Vo. IP Millenials multi-tasking by 2009. lifestyle rely on IM, Mobile Devices, Social Networking August 2006 More than 50% of businesses use IM as part of their business solutions 4 © 2006 AT&T Knowledge Ventures. All rights reserved. Websites both in their personal and business lives

Consumer: The Digital Home Needs and Drivers Broadcast Television Telco Cable, DBS, Telco Media Client PVR/DVR Residential Gateway or Router/Modem Internet Control/Automation Network Needs to support: • Data delivery Digitally controlling your. . . • Entertainment TV High Definition E-World • Voice services Environment • Content sharing (Safety, Security & Energy) • Security, Safety, Automation Mobile Devices Vo. IP services Mobile Voice Quad Play Source: In. Stat, March 2006 5 Server Media Fixed voice (Pots, cable, Vo. IP) © 2006 AT&T Knowledge Ventures. All rights reserved. Networked CE Devices Digital Video, Imaging & Audio Broadband Sharing & Printer Sharing

Business: A New World of Needs • Efficient transactions are a given — to win, you need more than that Integrated VPN 6 Network-Based Firewall Global MPLS Network • Service and personalization make the difference • Collaboration and information will supercharge the productivity of knowledge workers Web/ App Server MPLS VPN • Labor continues to shift to low-cost regions • Converged networking environments require flexible access, class of service, management and continuity services Storage Internet Branch Office Remote Offices and Workers Over Any Device Suppliers/ Distributors © 2006 AT&T Knowledge Ventures. All rights reserved. Headquarters Data Center

Four Points of Convergence § Take advantage of services over IP § Optimize the application infrastructure § Use IP-MPLS to enable application convergence § Integrate on-net options for wireless and fixed connections 7 © 2006 AT&T Knowledge Ventures. All rights reserved.

Business Convergence to IP/MPLS Common, Global IP Network W L FR/ATM W Voice Private Line Internet W Wi. Max Radio(s) L LOS Radio Node • • • 8 Traffic classification based on priority Packet marking to identify class Policing to discard excess traffic Shaping to queue the traffic Fair queuing to ensure all traffic gets through Congestion Management to prevent bottlenecks © 2006 AT&T Knowledge Ventures. All rights reserved.

AT&T Services over IP Product Strategy • Single, scalable, common platform • Support TDM & IP hybrid environments • Plug & Play capability AT&T’s So. IP Infrastructure Vo. IP Enabling Enterprise Networks Vo. IP Enabling Premises Solutions • • Vo. IP on Managed IP & VPN Services Interoperable Network- & Prem-based VPN’s IP LD / IP Local Call Routing / Toll Free Features • IP Telephony Interoperability & Certification • Managed IP Telephony & LAN Service So. IP Applications Integrating Client Experience 9 • • • Control over IP Traffic and Provisioning through a single portal • Consistent service levels across all Services Network-based IP Telephony Remote Worker Conferencing – Audio / Web Enabling IP Call Centers © 2006 AT&T Knowledge Ventures. All rights reserved.

Optimizing the Application Infrastructure Dynamic Network Architecture Separate Networks, Systems and Applications • • 10 Near real time Silos across disparate platforms Fixed rule set Manual, reactive Discreet resources and service Interoperability issues Application instability Virtualized resources and services • Performance SLAs • On-demand, automated • Integrated platforms • Dynamic policies Interoperability • Application stability • • Management Portal AT&T Global MPLS Network © 2006 AT&T Knowledge Ventures. All rights reserved.

Take Advantage of Services over IP Voice Video Conferencing Messaging 11 © 2006 AT&T Knowledge Ventures. All rights reserved. Integrated Collaboration Applications

A New Definition of Collaboration • • • • 12 Dynamic Network Applications Multi-modal Ubiquitous Device independent Intelligent and integrated Delivered in New Ways Predictive Personalized Global Highly Secure Delivering New Efficiencies Improved business performance Enhanced corporate agility Increased operational control Strengthened security Voice Conferencing Messaging Video © 2006 AT&T Knowledge Ventures. All rights reserved.

Consumer Convergence Opportunities Integrating the “three screens” Interactive content Remote-access DVR Remote-access parental controls Electronic sell-through On-screen info Broadband Voice Caller ID on the TV 13 Mobile video Wireless Gaming/Music Gaming portal Shared music account © 2006 AT&T Knowledge Ventures. All rights reserved.

Integrated Collaboration in Action… a real-world scenario 14 © 2006 AT&T Knowledge Ventures. All rights reserved.

Convergence at Play within AT&T • Integrated call center applications – Instant access to relevant customer information • Technology of the Future delivered today – 21, 000 field technicians empowered with wireless-enabled networking to access diagnostics, customer orders and network information • Visibility and Control with Business. Direct – Customer portal enables realtime access to network performance information, service and ordering 15 © 2006 AT&T Knowledge Ventures. All rights reserved. Enhanced Relationship Management Resource Virtualization Infrastructure Consolidation Distributed Workflows

IP Multimedia Subsystem Enables Anytime, Anywhere Applications The IP Multimedia Subsystem (IMS) is a network architecture that enables new converged services while allowing for the interoperability of these converged services between subscribers. Wired Data Networks Wired Converged IP Network Wired Voice Networks Anytime, Anywhere Applications IMS Cellular Voice/Data Wireless Legacy networks 16 Wireless IP Network Wireless Networks All networks speaking the common language of IP © 2006 AT&T Knowledge Ventures. All rights reserved.

Enterprise Network Convergence Solutions Business Challenges • Standardized services and costs across all properties • Convergence on a single unified networking infrastructure Solution • Converged Inter. Continentals voice, Internet and data using Vo. IP • Implemented AT&T Toll-Free Service helping to ensure every guest can connect with Inter. Continental hotels prior to checking-in • AT&T ACCU-Ring dedicated SONET service consolidating the company’s private line, switched and enhanced voice, data and video services for highly reliable, secure networking Client Benefits • “We are very much interested in the convergence of our network” Gustaaf Schrils, IHG vice president of technology and services “The competence, the emerging technology, the infrastructure, the relaiblity – all of those are key ingredients that help us convince our franchisees that AT&T is the best solution for them”. • Predictable cost per hotel room, no matter how many local or long distance calls a guest makes with Vo. IP • Economies of scale with a secure, reliable and flexible infrastructure 17 © 2006 AT&T Knowledge Ventures. All rights reserved.

Progression of the Age of Convergence • IP Networking is delivering real value – For consumers: convergence of digital media, devices, access and mobility options – For business: performance, agility, control and security – and the power of collaboration • No two solutions will look alike… IP Convergence provides flexibility • Better management of bandwidth, storage and computing power • More options for all markets, including smaller businesses and consumer • A New Era of Collaboration 18 © 2006 AT&T Knowledge Ventures. All rights reserved.

The Age of Convergence: Delivering a New Era of Collaboration Eric Shepcaro Senior Vice President AT&T Business Development © 2006 AT&T Knowledge Ventures. All rights reserved.