- The document discusses Virgin Media's large fiber optic network across the UK and their investments in broadband and mobile infrastructure. It notes they carry over 50% of the country's mobile traffic. - It then discusses challenges mobile operators face with changing technologies and rising costs, and how traditional thinking will not address these issues. New solutions around multi-supplier networks and flexible deployment options are needed. - The document argues that access networks are still a bottleneck and backhaul transformation is required, involving both technology changes and new business models focused on reducing total costs through balanced, multi-supplier solutions.

1. The evolving mobile network proposition… Marcus Hill, Head of SI Sales Transport Networks for Mobile Operators 20 May 2010

2. Virgin Media Business – an overview Powerful Business Stuff £13bn investment in UK’s largest privately built next generation network 186,000km of local and metro fibre Over 50% of UK’s base stations are on our network 157 voice switches delivering more than 70,000 phone calls every minute 35% of UK broadband and 40% of mobile traffic uses our network Broadband leadership – largest DOCSIS 3 implementation globally Ethernet leadership - innovation, reach, performance and technology

3. Joseph Schumpeter and his theory of “Creative destruction” “ Innovation is the force that sustains long-term economic growth, even as it destroys the value of established structures.” Joseph A. Schumpeter. Capitalism, Socialism and Democracy (New York: Harper, 1975) [orig. pub. 1942]

4. A Mobile Operators Environment… Operational costs 80% of network operational costs for the MNO are attributable to the RAN Change - the only RAN constant TDM Packet SONET/SDH Ethernet TDMA/CDMA UMTS/GSM/LTE MNO A MNO A+B+C Managing legacy investment - MNO can have 3 base station types at cell site GSM - Voice, low-speed data EDGE - Higher-speed data UMTS - Very high-speed data Traditional thinking will not address this environment

5. A Mobile Operators Challenges… Service disruption Cost of change Speed and certainty of benefit realisation Uncertainty Enabling choice for the future Agile and adaptable Traditional thinking will not address these challenges

6. Virgin’s Broadband Explosion An illustration of the consumer’s broadband demands Virgin Media Broadband 3.8m customers 20Mb/s tier up 82% on 07 (Source: Virgin Media 2Q results Aug 08) Western Europe consumer Internet traffic is expected to grow by a factor of 5 by 2012 (Source: Cisco White Paper June 08) Video is expected to grow from 25% of Internet traffic to 50% by 2012 (Source: Cisco White Paper June 08) Virgin Media VOD 74m views per month views up 40% on Q4 08 (Source: Virgin Media 4Q results Feb 10)

7. The Gulf of Frustration… …and the Gap of Revenue If nothing changes, the Gulf of Frustration will escalate! Following incumbent supply path has issues A different model is needed… Multi supplier and technology deployment option stands out Today A further illustration of the consumer’s broadband demands Network Device Gulf of Frustration

8. Mobile & Bandwidth Solutions Technology solutions Ethernet over MPLS Ethernet over DWDM Fixed and Microwave Access Options Architectures – supporting 2G and LTE Managed service and bandwidth options Synchronous Ethernet 1588 overlay possible on all architectures Removing the bandwidth bottlenecks in Mobile Backhaul

9. The Revolution… Access networks are still the bottleneck Cost and charging model MNO vs Backhaul provider tension Business flexibility – who defines the MNO’s business plan? Ability to meet capacity demands Backhaul transformation is required Technology change Business model change Capex focus will not get least cost network Operational costs and models Share! Balanced and multi-supply options are the sensible new path

10. Access and Core Together…. Fixing your access bottleneck will… … expose your core issues Increased access flexibility and agility highlights core limitations Consider access and core jointly Apply the same commercial principles Continued transformation Focus on all costs, Capex and Opex Share! Balanced and multi-supply options are the sensible new path

11. "Once we rid ourselves of traditional thinking, we can get on with creating the future. James Bertrand. Thank you!