This presentation aims to share our analysis of recent developments for Mobile Instant Messaging services and the opportunities for both Instant SMS and Mobile Portal IM service for operators in Latin America. This is from a conference I delivered at the IBC Mobile Messaging & VAS Americas 2007.

1. Instant SMS: Messaging Just Got Personal Bringing SMS To The Next Phase

7. Market Trends

9. SMS Business Overview SMS mass market success: ~100% penetration agnostic to device, technology, location and operator Worldwide 90% of all non-voice revenue comes from SMS SMS revenues will continue to grow Global SMS volumes are expected to continue rising with almost 2.38 Trillion messages in 2010 Operators enjoy 90-95% profit margin on SMS

10. SMS Trends “ SMS is likely to remain the dominant messaging application for a long time – well beyond 2010” Portio Research 2007 “ SMS is set to enjoy revenue of $67 billion by 2012” Portio Research 2007 Graphs: Ovum, 2006 & Strategy Analytics, 2007 SMS is here to stay High Volume Growth (Millions) SMS Revenue Growing, Yet Slower

11. Latin America Mobile Demand Source: LATIN AMERICA MOBILE DEMAND - June 2006, Pyramid Research

12. Mobile Messaging Revenues in LA 2000-2009 Mobile Messaging Trends in Latin America, Pyramid Research 2005

13. SMS Usage in LA 2002-2011 Source: LATIN AMERICA MOBILE DEMAND - June 2006, Pyramid Research

14. Probability of Users Adopting IM Data ARPU, Mobile Penetration & SMS Usage Source: LATIN AMERICA MOBILE DEMAND - June 2006, Pyramid Research

17. Examining the End-User’s Communication Values Richness Interaction Level How engaging is the channel? How does it answer an immediate communication method? What is the user experience? How rich is the communication channel?

18. The Internet Communication Services Richness Interaction Level Talk (VoIP/Video) Chat Instant Messaging Send a Message Email

19. The Mobile Communication Services MMS Interaction Level Richness Talk Voice/Video Portal IM SMS Mobile Email

20. The Mobile Communication Services MMS Interaction Level Richness Talk Voice/Video Portal IM Mobile Email SMS Send a Message Chat Users expect to find the PC/Internet experiences on their mobile But only one Service for impulsive conversations (ISP based) Various services for sending a message

21. The Converged Communication World …more than just a unified bill Single Address Book across all terminals Seamless handover between terminals Simplified and improved messaging experience Optimal network with flexible service pricing Communication Service Provider

24. Challenges

25. Challenges in the Messaging Landscape Reduce OPEX to increase service margins Maintaining the existing SMS service value Preserve brand equity and customer loyalty Improve User Experience Increase ARPU to compensate for flattening SMS revenue Respond to internet messaging threat Operator’s Challenges

26. The Solution = Instant SMS Evolutionizing the existing SMS service with the richness and real-time user experience of Instant Messaging SMS + Instant Messaging = Instant SMS

27. SMS + Instant Messaging = Instant SMS Mass market service Wide inter-carrier interoperability All revenues directed to operator Core messaging service No registration process Perceived as reliable Focused on the mobile community Real-time communication Supports text and multi-media IP based service Conversational-base interface Multi party conversations Presence enhanced service Instant SMS combines the best of both worlds

28. Service Description

31. Instant SMS Chat Experience Selecting an “IM” contact Spontaneously adding a multimedia object Chatting with IM contact Instant SMS user Instant SMS user

32. Instant SMS to Legacy SMS SMS user Instant SMS user SMS user composes message SMS user replies to a message Message is received and displayed in the relevant conversation thread Composing and sending a message Message is received as SMS by the other party Selecting an “SMS” contact

35. Presence goes Beyond Messaging …but needs to start there “ Presence and Availability is the New Age Dial Tone” Ed Fish, AOL SVP and GM of Desktop Messaging Notifications Profile Device Capabilities Social Networking Applications

40. Why Instant SMS? User Experience FMC IP Various solutions exists for each domain, but only Instant SMS answers the needs of all domains

42. Operator Benefits

46. Summary

48. Thank you Raúl Castañón Martínez PSE – Latin America [email_address] www.comverse.com