DMS Strategy Nov 2012 V1.1

March 2013

ALCATEL LUCENT ISRAEL DIGITAL MULTIMEDIA SOLUTIONS

COPYRIGHT © 2012 ALCATEL-LUCENT. ALL RIGHTS RESERVED. ALCATEL-LUCENT — CONFIDENTIAL — SOLELY FOR AUTHORIZED PERSONS HAVING A NEED TO KNOW — PROPRIETARY — USE PURSUANT TO COMPANY INSTRUCTION

ALCATEL-LUCENT AT A GLANCE 2,655

TR50

1000+

2012 revenues

€ 14.4 B

CUSTOMERS

Most Innovative Companies 2012

patents in 2011

29,133 active patents

2011 Adjusted operating margin

3.9%

(NETWORK OPERATOR)

1M+

7 Nobel prizes

NETWORKS

72,000 employees

100+

130+ countries

nationalities

Collaborate with

2011 R&D/Sales

250+ universities

15.7%

DJSI leader in Technology

400G IP

DSL vectoring

Carrier cloud

Motive Customer Experience

2

lightRadio

400G photonic

XRS Core router

ALCATEL-LUCENT ISRAEL LEADING THE COMMUNICATION MARKET, STRONG R&D PRESNECE •

Leading technology provider to all communication companies (IP, Optical Transmission, xDSL (+Vectoring), FTTH, WiFi, Small Cells, Network Management & Optimization).

•

LTE leadership serving the upcoming major mobile networks upgrades.

•

Works closely with the Ministry of Defense for it’s communication infrastructure. Alcatel-Lucent Sprint Innovation Presence

Alcatel-Lucent Israel customer

3 COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. ALCATEL-LUCENT — INTERNAL PROPRIETARY — USE PURSUANT TO COMPANY INSTRUCTION

CLOUDBAND BUSINESS UNIT •THE CLOUDBAND BUSINESS UNIT WAS BOOTSTRAPPED IN ISRAEL IN MID 2011 •THE TEAM IN ISRAEL, INCLUDES THE BU MANAGEMENT, R&D, PRODUCT MANAGEMENT, SALES AND OPERATIONS •TEAM INCLUDES PEOPLE WITH BOTH TELECOM AND IT/CLOUD EXPERTISE, MANY ARE “RETURNING” ISRALIES THAT GAINED EXPERIENCE WORKING FOR OTHER MNCS ABROAD

SETTING UP BUSINESS LEADERSHIP AND R&D IN ISRAEL DEMONSTRATE ALU’S STRONG BELIEF IN THE TECHNICAL AND BUSIENSS CAPABILITIES IN ISRAEL

4

CloudBand Description The Problem Network Service Providers are looking to transform their business to achieve: 1. Agility – Ability to introduce and grow their services rapidly 2. Operational Simplicity – Planning, deployment, life cycle management 3. Cost Efficiencies – Reduction of HW & SW costs, manual processes and increased asset utilization 4. New Revenue Streams– Cloud services Our Solution Disruptive software-based platform that leverages cloud architectures and network services to enable our customers to: 1. Move relevant network functions to run on distributed scaled-out cloud platform 2. Provide end to end management, automation and E2E cloud infrastructure 3. Differentiate cloud service offerings leveraging the network for new revenues

CloudBand

Management System

Target Markets 1. NFV(Virtual Telco): Virtualization of network functions for business agility and operational simplicity 2. Carrier Public Cloud: New revenue-generating cloud services targeted at enterprises and consumers

CloudNode

Carrier PaaS

5 COPYRIGHT © 2011 ALCATEL-LUCENT. ALL RIGHTS RESERVED. ALCATEL-LUCENT — CONFIDENTIAL — SOLELY FOR AUTHORIZED PERSONS HAVING A NEED TO KNOW — PROPRIETARY — USE PURSUANT TO COMPANY INSTRUCTION

DMS BUSINESS SNAPSHOT HEADQUARTERS:

 HAIFA, ISRAEL

BACKGROUND:

 BASED ON ACQUISITION OF THE ISRAELI (HAIFA) STARTUP, MOBILITEC, IN 2006

EMPLOYEES:

 120 ( 75 ISRAEL )  THE TEAM IN ISRAEL, INCLUDES THE BU MANAGEMENT, R&D, PRODUCT MANAGEMENT, SALES AND OPERATIONS

OVERVIEW:

 THE ALCATEL-LUCENT DIGITAL MEDIA SOLUTIONS (DMS) IS A MULTI-TENANT CLOUDBASED TECHNOLOGY PLATFORM DESIGNED TO DELIVER INNOVATIVE CONTENT SERVICES FOR CONSUMERS AND ENTERPRISES.  BECAME THE WORLDWIDE LEADER OF DIGITAL MEDIA SERVICES INCLUDING THE WORLD LARGEST TIER-1 TELCOS

KEY CUSTOMERS:

Mobile Nigeria

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EVOLUTION OF DIGITAL CONTENT MERCHANDIZING Mobile App Stores

Enterprise Mobile Content

Multi-content stores

WAP Content Store IPTV VOD Store

Ringtone store

Mobilitec Founded 2000

2005

eBook Store

E-Campus stores

Acquired by ALU 2007

2009

2010 7

2011

2012

2013

THE COMPLETE DIGITAL MULTIMEDIA SOLUTIONS PLATFORM SOLUTIONS

PLATFORM DISCOVERY Enables user-specific, contextual, social, and interactive discovery, and a search experience tailored to device being used.

DELIVERY Optimizes delivery to any device with support for video transcoding/DRM, downloads and streaming and personal media lockers.

PAYMENTS Supports flexible payment mechanisms including rent, buy, loan, ad-sponsored, subscriptions, bundles, discounts and in-app billing

CONTENT MANAGEMENT Ingests content, defines metadata structures, manages catalogs, and leverages tools and APIs for service creation.

SUBSCRIBER MANAGEMENT AND ANALYTICS Leverages customer activity to improve user experience.

MERCHANDISING AND MONETIZATION Promotes content usage with tools for marketing, campaigns, branding, etc…

Multimedia Content Stores Enabling users to discover, purchase and consume any digital content.

Enterprise Mobility Enterprise private App and Content “Stores”. Working with BYOD.

advanceTV Augmenting TV shows, live events & advertisements with targeted content.

eCampus Give students access to curriculum / course content on any connected device.

+ Future Solutions … 8