Nextivity Overview Dec 2008 Summary

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Nextivity Overview Dec 2008 Summary

  1. 1. <ul><li>December 2008 </li></ul>
  2. 2. Introduction <ul><li>Poor indoor coverage remains the major pain point for Wireless Operators, representing a €17B+ market opportunity for 3G alone </li></ul><ul><li>Nextivity’s patented Cel-Fi product holds the key </li></ul>
  3. 3. P/E multiples peaked over promise of 3G <ul><li>Expectation was that 3G would enable voice, data and video revenues – a triple-play that could be served while mobile or in the home </li></ul>P/E Multiple (x) Wireless Operators* Forward P/EPS, 1998-present *Vodafone, Telefonica, NTTDoCoMo, France Telecom, Deutsche Telekom Source: First Call 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Peak of 3G auctions Reality sets in that 3G will disappoint
  4. 4. 3G promise thwarted by physics… <ul><li>Most 3G networks were launched on higher frequencies that have difficulty traveling through building walls where subscribers are located, making it challenging to deploy pervasive voice and high speed data services </li></ul>Ironically, the area with the highest probability of usage (up to 70%), is also the area with the lowest probability of coverage
  5. 5. In-home coverage remains industry’s top pain point 35-45% of customers have poor in-home coverage (using 3G, GSM, or CDMA) Expensive, sizeable problem for industry However industry lacks solutions 25% <ul><li>What happens to customers with poor indoor coverage? </li></ul><ul><li>Put up with it unhappily </li></ul><ul><li>Get a 2 nd line (work/home) </li></ul><ul><li>Churn & don’t tell you why </li></ul><ul><li>Churn & tell you why </li></ul><ul><li>How expensive is churn? </li></ul><ul><li>Churn is >2%/month, of which 17%+ churn explicitly due to indoor coverage </li></ul><ul><li>Cost of customer acquisition is €300+ </li></ul><ul><li>ARPU is €50-90/month </li></ul><ul><li>Customer lifetime value is €2,200+ </li></ul>Source: Nextivity interviews with carriers, Nextivity estimates 45% Tier 1 operator 35% Tier 1 operator 36% Signals Research (based on mathematical estimates) “ There is not an operator in the world that does not need an in-building solution…” “ We have a huge pain point with customer churn due to poor indoor coverage and until now have had no tools to save these customers” Frustrated 71M W-CDMA subs with poor indoor coverage create a TAM of €17B
  6. 6. Network quality still remains the axis of competition <ul><li>Would switch operators to get better in-home coverage </li></ul>Would switch service providers to have fast at-home mobile internet Would only use their mobile service if home coverage was good Would purchase additional equipment if they could make free phone calls inside their home Source: Quality Resource Associates, 2006 (research sponsored by Alcatel-Lucent) Network quality is the key driver of customer satisfaction, churn &upsell
  7. 7. High Speed Data Cards a bright spot…. Integrated HSPA modem 3G data card Source: ABI Research, Ericsson High Speed Data Card Shipments Millions of units, projected 2009 2010 2012 2011 +36% CAGR 2013 By 2011, we are on track to have 100M+ laptops (50% of total laptops manufactured) with integrated HSPA modems
  8. 8. However, in-home data rates have been an embarrassment & present a major challenge <ul><li>Operators have had to credit 3G subscribers because their dongles (i.e., USB-based mobile broadband devices) have been so slow or didn’t work at home </li></ul>
  9. 9. Nextivity’s ‘Cel-Fi’ solves the physics problem that has hobbled wireless from its inception <ul><li>Cel-Fi is the world’s first 100% digital, operator-grade, mass-deployable ‘Smart Repeater’ that removes the effects of in home path loss while capturing and regenerating a stronger signal, enabling pervasive voice and high speed data throughout the home </li></ul>Cel-Fi Window unit Coverage unit Cel-Fi removes the adverse effects of outer & inner walls
  10. 10. Cel-Fi is customer installable & self-configuring Cel-Fi is the first mass deployable solution thanks to its extraordinary ease of use Note: To watch this demo, please view it in PPT Slide Show mode. Or, it is also viewable at: http://www.nextivityinc.com/consumers/images/demo_h.swf
  11. 11. Operators extremely excited about Nextivity <ul><li>Operators see a wide range of revenue generating and cost saving opportunities </li></ul>Major applications Churn mitigation & customer save programs Fixed line replacement for voice and high speed data Providing broadband where no wireline broadband service exists Enterprise applications “ Right now our usual answer to a residential customer is no, I can’t provide you a repeater; but this product means we can say yes” “ The existence of the enterprise product is very helpful, it would be very much easier to implement than what we do today”  “ This product should go hand in hand with the USB dongle modem to create a replacement for wireline broadband in the home”  “ We are just starting to cover the rural areas with 3G and it is not easy. This product has a future with us”
  12. 12. 30+ operators are piloting Cel-Fi products globally As a key vendor in partnership with Three Hutchison, Nextivity has received its first volume commitment worth €24M+ (minimum €12M) Non-EU pilot commitments have also just begun… Hong Kong, Australia and Russia have already committed
  13. 13. Product summary: Simply Revolutionary
  14. 14. Proven team Has shipped millions of wireless units to top tier customers in the past <ul><li>Experienced wireless CEO </li></ul><ul><li>GM of Broadcom’s Broadband cellular products group; </li></ul><ul><li>CEO/Chairman of Zyray Wireless (acquired by Broadcom) </li></ul><ul><li>CEO of Centera LTD </li></ul>Werner Sievers , CEO <ul><li>12 years of experience in wireless </li></ul><ul><li>Senior Director at Broadcom responsible for platform development in the Mobile Communications BU </li></ul><ul><li>Co-Founder of Zyray Wireless </li></ul><ul><li>Holds several patents and has published 30+ journal articles </li></ul>MichielLotter, VP of Engineering <ul><li>15 years as a prolific systems engineer/inventor in wireless for Texas Instruments, Morpho, Motorola & Fujitsu </li></ul><ul><li>Broad experience with cellular systems (GSM, DECT, WCDMA, IS-95, cdma2000 and TDS-CDMA, and other systems such as GPS and wireless LANs (WiFi&WiMax) </li></ul>BehzadMohebbi, Founder & CTO <ul><li>20 years of experience in wireless / semiconductors </li></ul><ul><li>Financial management roles at DEC, Intel, Kyocera Wireless & Qualcomm </li></ul><ul><li>Operational experience from GE & Advanced Marketing Services </li></ul>Tony Pun, Director of Finance <ul><li>22 years in Sales & Business Development </li></ul><ul><li>Sales Director EMEA for IPWireless responsible for Mobile Network Operators & RAN Infrastructure partners across Europe </li></ul><ul><li>Sales experience with for several companies pioneering 3G Backhaul, RAN Optimization and Active DAS solutions </li></ul>Andrew Gruar, VP Sales & Business Mgm’t, EMEA <ul><li>22 years of telecom experience at T-Mobile, Cingular, Sprint, BCP, US Cellular, Optus, BellSouth </li></ul><ul><li>Global carrier experience spanning N. America, Latin America (Brazil, Venezuela, Chile), Europe (UK, Denmark) and Australia </li></ul><ul><li>Holds multiple patents and author of 2 books on mobile communications </li></ul>George Lamb, Dir. of Marketing & Carrier Ops <ul><li>35 years in the wireless industry at Motorola, RF Communications, Qualcomm, Kyocera, and Elocteq </li></ul><ul><li>Has managed global communications equipment production in the US, China and Mexico </li></ul><ul><li>Holds 3 systems and circuit design patents </li></ul>David Ramsland, VP of Operations
  15. 15. Nextivity summary <ul><li>Team has worked together at Broadcom & Zyray. Collectively the core engineering team has shipped millions of units to top customers including Samsung & Panasonic </li></ul>Top tier investors $17M invested to date Patented breakthrough technology Ideal team <ul><li>Greenfield, patented IP from silicon to systems provides an extremely defensible position. IP dates to 2003 </li></ul><ul><li>Intelliboost processor is the core to a series of product families that seek out the best available signal & adjusts to maximize coverage within buildings </li></ul><ul><li>Intelliboost technology enables operators to address major industry pain points & goals: reducing churn, enabling broadband wireless, and enabling fixed to mobile conversion </li></ul>
  16. 16. KCP Capital Kamal Tayara, Managing Partner [email_address] +971 (50) 559 8114 www.kcpcapital.com Nextivity Werner Sievers, CEO [email_address] +1 (858) 485 9442 x203 www.nextivityinc.com

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