KPN has had success with its multi-brand strategy in the Netherlands, Belgium, and Germany through brands like Telfort, BASE, and e-plus. This strategy allows KPN to efficiently target different market segments with tailored brands and offers. KPN then expanded this strategy into new markets like Spain and France using an asset-light mVNO approach with shared resources and outsourced operations. Initial results after one year of launch in Spain were positive, with total subscribers for KPN/e-plus brands growing from 2007 to 2009.

1. Business Innovation Session: Developing new mVNO businesses Miguel Ángel Suárez mVNO Networking Congress November 2010

3. 50% Market Share

4. BASE is the 3rd operator in Belgium

5. 15% Market Share

6. e-plus is the 3rd operator, faster growing in a penetrated market

7. 13% Market Share

8. The multibrand strategy allows KPN to address more efficiently targeted market sgments with a brand and offer tailored to their needs

9. This strategy implies the launch of own brands and/or the partnership with third party brands, reckoned in their markets, through “branded reseller” or “joint venture” partnerships

10. A relevant number of these brands has been finally acquired by KPN, demonstrating the validity of the multi-brand caseMulti Brand mVNOs Partner Brands Strategy Own Brands Own MNOs Either as incumbent or as challenger, KPN has bet on the wholesale market to consolidate or develop its market position… AN EXAMPLE OF A “BELIEVER” MNO 2

12. Only mVNO proposals

13. Resources shared, lean organizations and outsourced operations

14. Multi-country approach using a common platform:

15. Central: network, IT systems

16. Local: Mkt, Sales, Logs, CuCa

17. Multi-brand diversification:

18. Top target segments: no-frills, ethnic, distribution

19. Own brands & champion partner brands3

20. …with quite positive results already one year after launch. AN EXAMPLE OF A “BELIEVER” MNO Total active subscribers in Spain of KPN/e-plus brands (000) 2007 2008 2009 4

21. Agenda The “mVNOmovement” aroundtheglobe AnmVNO Case Study: the US Business InnovationWorkshop

22. Across the world, the “mVNO-meter” is high: the “mVNO-movement” is growing and demonstrating it is here to stay. THE MVNO MOVEMENT AROUND THE GLOBE Europe ~74% mVNOs Established environment: fluid mVNO dynamics North Am. ~12%mVNOs 2nd wave US, driven by nofrills/retail Asia ~5% mVNOs Cons. in several countries. New success stories Middle East ~<1% mVNOs First mVNOs up & running in Oman & Jordan LatAm. ~<1% mVNOs First mVNOs in Col, Arg, CR. Brazil to come in 2011 Africa Presence in South Africa & ongoing discussions in several cos. Australia ~7% mVNOs Consolidated in Australia & New Zealand

23. Most of the international groups have already developed mVNO propositions in their home & key markets. ORIENTATIVE!! THE MVNO MOVEMENT AROUND THE GLOBE Source: Total Telecom mVNO database

24. Agenda The “mVNOmovement” aroundtheglobe AnmVNO Case Study: the US mVNOmarkettoday Business InnovationWorkshop

25. The US has gone through all the mVNO phases but, at the end of the day, it has consolidated a strong mVNO business AN MVNO CASE STUDY: US We all know about failed mVNOventures such as Helio, Amp´d Mobile, ESPN or Disney Mobile…. but what is the situation right now? * * 23.986 22.383 21.440 19.907 *Virgin & Boost not included. Source: companies financial statements & own elaboration 7%-13% of mVNO customers** in wholesale (~20% Sprint w/Virgin & Boost), 10-25% of Gross Adds ** 24 Mio Subs in mVNOs: 9,2% of total market** 20,49% growth in mVNONet Adds vs. 1,24% in own brands** **Excluding connected devices

26. This growth is distributed among a number of different mVNOs, addressing different segments… AN MVNO CASE STUDY: US Not exhaustive Source: own analysis

28. And furthermore, itsbusiness has hadsignificantaccelerationin thelastyear

29. Around 50-70% of those new clientscould come fromStraightTalk, brandlaunchedtogetherwithWalmart…

30. … so Walmartcouldhavemade ~1,7-2,4 Miosubscribers in 1 year…

31. … and withARPU of 30USD, itsyearlyrevenuecouldbe ~620-870 MUSD. ARPU (USD) 37,6% Quarterlyrevenues (MUSD) 73,6%

32. …thankstoanincrediblesuccess of WalmartStraightTalklaunch, thatiscurrentlybeingexpandedinto new markets AN MVNO CASE STUDY: US July/august 2010 ¿? September2010 October2009 October2010 Agreement w/ ATT&T-Mobile Potentialevolution LaunchWalmartFamily Launch Introduct. of smartphones Wider portfolio of devices at signficantlowercost Bettergrossmargins More smartphones and high-enddevices? Data mVNOlikeBestBuy? Expansion of operationsacrossLatAm? New segmentaddressed: 50%US market Ownbrandused Firstpostpaidservice New brand, notWalmart´s CDMA OnlywithVerizon Offerupgradetomeetthe Christmas campaign ProgressivelyaliningWalmartofferwiththat of theMNOs.

33. Agenda The “mVNOmovement” aroundtheglobe AnmVNO Case Study: the US mVNOmarkettoday Business InnovationWorkshop

34. The mVNO models are diverse and -still- open to imagination, yet they need clear vision and action to become success stories. MVNO MODELS “Traditional” models “New” models Retail Banking M2M Charity Children Ethnic SMS only Elderly Community/clubs Discount/no frills Travelers/VoIP Data-only SMEs Telco Media VoIP/Innov P&S Etc.

35. Now imagine you are an mVNO entrepreneur… how would you reshape the mVNO Business? WORKSHOP DYNAMICS Think of an mVNO for the new wireless world: New connected devices: ebooks, house appliances, cars, laptops, cameras, photo frames… New wireless device manufacturers: Apple, Lenovo, Google, Dell, Amazon ... New online communities and sticky services: Facebook, Tuenti, Youtube... New telco services and over the top plays: roaming, VoIP, SMSoIP … New geographies, withnew models: Asia, Latin America, Africa … Break into groups. Each member should propose an innovative value proposition and a market. Choose one and develop it together. Examples: The mVNO of the car manufacturers The mVNO of the people with income below 100USD The mVNO of Facebook, Google or YouTube The mVNO of Apple or HP The mVNO of Mediamarkt or Radio Shack The mVNO of the evangelic community The mVNO over IP You have 30 minutes to prepare a presentation. At the end, one or two of the group members should do the presentation to the public.

36. Example of questions to answer Market proposition: what is the target segment, the positioning and the market proposition and what makes it different? Opportunity assessment: why do you think the opportunity will be successful? Entry strategy: how will you develop that opportunity?. Branding/positioning. Offer: portfolio, products & services, pricing, promotions, customer service, etc. Channel: direct or indirect, traditional or new Communication strategy Key success factors: what aspects will be critical to succeed? Remember: prepare a small presentation and select two people to present.

37. THANK YOU Miguel Ángel Suárez +34 644 100 002 miguel.suarez@gmail.com

39. SIM-only play over TMUS

40. Low –cost unlimited: $40 T+T unlimited, $60 All Unlimited

41. Estimated 350k active subs

42. 30% data plans

43. Main distribution is independent retailers

44. Very low-cost platform (200k$)

45. MVNO w/ Verizon

46. Estimated customer base >1mn

47. Large bundles & unlimited: $30 1200 T+T, $45 All Unlimited

48. Independent retailersand POS-driven approach

49. Launched in Q4/09

50. Walmart low-cost offer

51. Verizon, AT&T & T-Mobile

52. Large Bundles & Unlimited: $30 1000 T+T, $45 All Unlimited

53. Estimated gross adds Q210 ca 400K

54. Positive impact on Verizon wholesale Gas…

55. …led to new ATT contract

56. MVNO w/ Sprint

57. Ready Wireless & Trumpet

58. 30k retail locations,10kmBB

59. ZERO cost CPGA

60. Low-cost bundles & unl,; $20 20 T+T, $30 1000

61. Get ready roll-out expected Q4/10 as replica to Straight

62. Deals with Dollar General, CVS and Radio Shack

63. Gaining significant market awareness and share

64. Lowest T+T+D Unlimited at 40$, best market deal

65. 40$, not 40$-ish

66. Charge for remaining VAS and features

67. Independent dealers and some key chains

69. …yet, no signs of a better-than-market performance in the last quarters

70. Online and chains as main channels

71. Revamped operations with wide portfolio of plans, from pay-per-use @ 5c to Unlimited to $50 T+T`W

72. Introduction of some smartphones in portfolio

73. Launched new payLo sub-brand to mid-market: 400 min for 20$.

74. Plus competitive 1200 bundle at 40$....

75. …yet, unlimited at 60 is turning not competive

76. Growth- separate of Straight Talk not that clear…

77. …but consolidated brand, market and differentiation in prepaid….

78. …i.e. highly accepted by low-usage 55+ white americans

79. Net10 brand widely present but seems also limited impact

80. Cricket signed national mvNO deal with Sprint

81. Verizon launched low-cost prepaid and prepaid smartphones

82. AT&T tiered data plansMarket growth driven by mid usage (high bundles or low-cost unlimited) 18

84. Free text messaging with second mobile number

85. Company history

86. Launched in August 2006 as Voicemail service

87. Launched textfree in March 2009

88. Feb 2010:

89. Reached profitability

90. 1bn text sent during last 9 month

91. 15mn downloads across all apps (14 apps, all Top100)

92. September 2010:

93. 3.5bn texts sent since launch (18mth)

94. 1.4bn ad impressions per month

95. Application downloaded 7mio times

96. Users open on avg. 10 times per day

97. 70% are on ipod touch

98. Advertising model (eCPM est. $1)

99. $6 per year ad free (premium version)

100. Next steps

102. En vez de desarrollar un acuerdo propio, se apalanca en los servicios de un enabler, Tracfone, del grupo América Móvil, con experiencia contrastada en el negocio móvil y economías que le permiten competir en precio.

103. Lanza una marca nueva separada y diferenciada –StraightTalk- pero a medida que ésta tiene éxito crecientemente la asocia de forma visual a su propia marca Walmart.

105. Venta sólo de producto “prepago” que simplifica el proceso de venta en tienda al hacerlo desasistido

106. Posicionamiento y comunicación de “ahorro” en línea con su estrategia general “save money, leave better” y transmitiendo siempre un beneficio relevante al cliente.

107. Oferta tanto de SIM-only como de terminales -en línea con la demanda del mercado-. Diez a quince referencias de terminales, no más para mantener el foco. Opción innovadora de terminales de segunda mano “puestos a nuevos”.

109. Posicionamiento en línea con el mercado: no el más barato pero sí muy competitivo.

110. Apalancamiento en la marca Walmart para transmitir fiabilidad y calidad.

111. Posicionamiento en lineal similar a las otras marcas, permitiendo comparación.