The document summarizes research from a study on the SMB VoIP market. Key findings include: SMBs are unsure where to learn about and purchase VoIP solutions; no single provider dominates; measured SMB VoIP adoption has declined; interest in fixed-mobile convergence is higher than expected; and total cost of ownership models show hosted VoIP can cost around $45 per employee per month for a 75-employee company. The research included surveys, interviews and competitive analysis of VoIP providers.

1. Selling VoIP to SMBs Latest Market Research VON.x San Jose 2008

2. Agenda Section 1: Research Overview Section 2: End-User Analysis – Non VoIP Deployed Attitudes, Needs and Purchase Drivers Section 3: End User Analysis – VoIP Deployed Who, What and Why Section 4: Fixed Mobile Convergence Section 5: Competitive Analysis

3. Savatar Overview Consulting and research company founded in 1997 in Boston Offices in Boston and Denver 20 professionals plus support staff Servicing leading clients in the technology and telecommunications industries Practice areas in marketing strategy, sales strategy, channel recruitment, marketing and operations

4. RESEARCH OVERVIEW Section 1

5. Overview The data presented today is from a research study of the SMB VoIP Market conducted by Savatar in October 2007. The work is sponsored by ADTRAN, Comcast, MetaSwitch and Sprint. The research study consisted of three elements: Quantitative Research - Savatar surveyed over 550 North American SMB owners and decision makers on their attitudes toward VoIP, likely purchase drivers and their product and vendor preferences Qualitative Research - Savatar conducted one hour interviews with 15% of the survey respondents to understand their product and pricing preferences in greater detail Competitive Research - Savatar evaluated the sales process, pitches and pricing of important VoIP service providers to assess their readiness to serve the SMB VoIP Market

6. Summary There is no dominant or preferred SMB VoIP service provider SMBs are unsure where to go to learn about VoIP and buy products The market still is waiting for a winner Measured SMB VoIP adoption declined The lack of a credible, national brand focused on SMB is hurting market growth The time is now to enter, grow, attack, or fail SMB buying process and decision making is simple and straightforward SMBs buy based on a comprehensive value proposition SMBs are not small enterprises, market leaders recognize this fact Interest in FMC is much higher than expected SMBs who have adopted VoIP are twice as likely to be interested in FMC Is FMC the killer app or wishful thinking?

7. END USER RESEARCH NON VOIP DEPLOYED Section 2

8. How Familiar are you with VoIP? Awareness Moves from Low to Medium

9. How Interested are you in VoIP? Interest Increases

10. When you think of the term VoIP, with which phrase do you most identify?

11. How would you expect a VoIP system to compare to your current system? < 100 Employees

12. Whom do you think of as a business VoIP provider? Traditional Telcos (Verizon, AT&T, Qwest, Sprint) Telecom Equipment Providers (Avaya, Cisco, Nortel) Cable Companies (Comcast, Time Warner, Cox) Non-Traditional Telcos (Vonage, Packet 8) Communication Service Companies (Covad, Level3) Internet Service Providers (ISPs) (AOL, Yahoo!, Google, MSN) Wireless Providers (Sprint/Nextel, Verizon Wireless, Cingular/AT&T, T-Mobile)

13. Whom do you think of as a business VoIP provider?

14. How important is each of the following in deciding to change to a new phone system? (< 100 employees)

15. END USER RESEARCH VOIP DEPLOYED Section 3

16. Measured VoIP Adoption over Time

17. From whom did you purchase your VoIP system?

18. How important were each of the following in your decision to switch? (< 100)

19. Since installing your VoIP system, what new features are most important to your company? (< 100)

20. How does your VoIP service compare to your old service? (< 100)

21. Would you recommend VoIP service to your business peers? Not Recommend Recommend Highly Recommend

22. FIXED MOBILE CONVERGENCE Section 4

23. FMC Baseline Definition Some VoIP providers are now offering a service called Fixed Mobile Convergence (FMC). With FMC, mobile and desk phones would use the same telephone system so an individual could use a mobile phone in tandem with a desk phone or replace it altogether. Additionally, FMC provides: A consistent feature set regardless of whether an individual uses a mobile phone or desk phone (4 digit dial between all devices, conferencing, call forwarding, etc.) Free calls between all mobile and desk phones in the company A single voice mail box for an individual's desk and mobile phones If desired, a single number for an individual's desk phone and mobile phone

24. FMC Interest

25. COMPETITIVE ANALYSIS Section 5

26. Competitive Product Set Vendor Product ADTRAN NetVanta – Premises AT&T Voice DNA – Hosted AT&T Nortel BCM – Premises AT&T TDM Centrex AT&T IP Flex Reach - Trunking Bandwidth.com Business VoIP – Hosted Cbeyond BeyondVoice – Trunking Covad ClearEdge Pro - Hosted Cox TDM Business Voice EMBARQ Nortel BCM – Premises EMBARQ TDM Centrex

27. Competitive Product Set Vendor Product Optimum Lightpath TDM Internet and Voice Paetec Dynamic IP – Trunking Qwest OneFlex – Hosted Sprint IP VC – Hosted TWC TDM Business Voice Verizon Omni PCX – Premises Verizon HIPC – Hosted Verizon TDM Centrex Verizon TDM PRI XO IP Office – Premises XO XOptions – Trunking

28. Total Cost of Ownership + +

29. TCO – AT&T Voice DNA – 75 Employees TCO = $152,316 or ~ $45 per employee per month What does the customer need to pay up front? Phones - $11,804 H/W - $13,591 Install - $6,762 Total - $32,157 What does the customer pay each month for voice and data? 2 T-1s - $854 Service - $2,434 Auto Att - $50 Total - $3,338 X 36 m =$120,159 What does the customer pay each year? None

30. TCO/Employee/Month – 75 Stations Monthly Cost for Voice & Data per Employee $ 20 $ 40 $ 60 $ 80 $ 100 $ 120 $ 140 Feature Richness Low High Premises Based VoIP $43-80 Trunking $14-20 Range of Reported Spending $20-100

31. TCO/Employee/Month – 75 Employees

32. Savatar Research Subscriptions In 2008, Savatar will be offering annual subscriptions to worldwide SMB Market Research Two studies per year covering VoIP, FMC, Managed Service and more Subscriptions include: All end user data, analyzed and customized for your company. Delivered at your site, twice each year. License to use the information internally and externally All competitive data including a customized TCO calculator. 40 Hours of Savatar senior consultant time to use as you see fit.

33. For more information: Mick Ahearn, VP Business Development [email_address] +1-617-670-4315

34. Q & A Section 6