The African Internet Telecom Summit Banjul, The Gambia, June 5-9, 2000

1. Tuesday, November 08, 2011 The African Internet & Telecom Summit (Banjul, The Gambia, June 5-9, 2000)  Topic: Internet Telephony Opportunities in Africa & Gambia Telecom Presented by: Yaw Osei Amoako, Ph.D. ITXC Corporation Regional Director - Africa

2. Agenda Overview of Internet telephony What, Why & How (Phone to Phone)? History of Internet Telephony Internet Telephony Revenue Growth Vs. Switched Telephony Revenue Growth Birth of New Communications Network Telecommunications Market in Africa ITXC Corporation � The Story Behind GAMTEL & Internet Telephony Opportunities ISPs & Internet Telephony Opportunities Show me the Money (US$) Next Step � Where do packets come from & How to become an Affiliate of ITXC

3. Big What? Mistakes �No Corporate MIS Manager will allow his/her company�s email to go over the Internet.� � AT&T Executive, 1994 �People will never give their credit card numbers on the Internet.� � Common Wisdom, 1996 �Voice over the Internet will never work� � Press Coverage in 1998

4. What is Internet Telephony or VoIP? Point to Point use of IP to carry and route two-way voice communications over data network. VoIP uses the real-time protocol (RTP) to help ensure that packets get delivered in a timely way - thus avoiding delay, the biggest single concern for network managers trying to maintain good voice quality.

5. Why Internet Telephony? IP uses the available capacity in a more technically efficient manner. PSTN call occupies a duplex (2-way) circuit for the entire duration of the call, including the pauses between words or between replies. PSTN is optimized for voice transmission sampled in 8 bit bytes, 8,000 times a second, for an aggregate rate of 64 kbit/s. IP call could theoretically be routed over different circuits, each of which would be occupied for a few thousandths of a second at a time, as packets are routed across the network to be reassembled at the distant end. Technically efficient network provides greater capacity utilization for IP calls. IP is engineered to meet average loads, and the typical utilization over an extended time period is around 60-70% of network capacity and with built in redundancy, calls do not fail. PSTN is engineered to meet the business peak hour and thus network components are in use for, perhaps, less than 20% of time. Overloaded PSTN cause call attempts to fail. Internet Telephony has the potential to significantly reduce the cost of long distance voice communication

6. Implications of IP Telephony for African Countries Originating Calls: African countries customers are much more price sensitive. African Telcos� are not responsive to new technology. Low-cost IP telephony will kick-start the growing Internet market Traffic generated is likely to be incremental, i.e., it would not necessarily substitute for calls that would otherwise have been made directly on the PSTN, because they would have been too expensive. If substitution occurs, it is likely to be discounted services, such call-back or prepaid services, not necessarily the Telcos� core business. Reduction of Telcos� commitments to making international settlements payments to foreign Telcos�.

7. Why is Voice Over the Internet Better? Infrastructure costs much less No need for $500,000 switches One network for both voice/fax and data One network management team Compression is 6 times better than PSTN Allows for speed to market Allows for better margins Has no single points of failure Requires no long term commitments

10. Short History of Internet Telephony: Grandma To Grandma

11. Projected Size of Internet or IP Telephony IndustryThe Increase in IP-Based Voice Communications Worldwide:

12. IP Telephony Revenue Vs. Worldwide Telecommunications Revenue

13. IP Telephony Voice-Enabled E-Commerce Revenue

14. Current State of IP Telephony Market Reseller market today Phone-to-Phone market for international calls PC-to-phone - free, flat rate, charged 400 million min./ month and growing by 25% a month Enhanced services Unified messaging International toll-free Calls to call center from web site Calling from Portal Many countries are deregulating or planning to deregulate their communications industries

15. Birth Of A New Communications Network The Old Way Converts sound into electrical signals and shoots them across a copper network. It�s simple and works well, but it�s expensive. The switches that direct traffic across the network cost million of dollars. And each call uses an entire circuit. That�s like every car on the highway getting its own lane. The result: Switched Long-distance calls cost more per minute compared to IP calls per minute. The New Way Internet technology is much cheaper than traditional phone gear. That�s because its digital routers, which direct traffic on the Net, cost tens of thousands of dollars, not millions. What�s more, each piece of data shares a line with data from other calls, just as cars share a highway lane. Parts of the same conversation often travel different paths, taking whatever route is available. The result: Long-distance IP calls cost less compared to switched calls.

16. Circuit Switch Vs. Packet Switch Circuit switched networks, the modern telephone network, allocate a full end-to-end circuit for the duration of a call regardless of whether the parties are speaking or silent using a 64K dedicated circuit. Since the bandwidth remains constant, the cost of a phone call on the PSTN is based on distance and time The Future is Digital, and the next step in digital telephony is packet voice. Packetized data moves independently as on a multi-lane highway Packets take up less room, but do not necessarily arrive together Packet switch is more efficient mode of transport Less expensive, facilitates one network not two Packets allow for enhanced services, melding of Web info, data, voice and video

17. The Economics of Convergence

18. Data and Voice Traffic

19. Telecommunications Market Growing in Africa

20. 1998 - International Traffic by Origin

21. Traffic Growth by Region 1997-1998 Source:Telegeography

22. Largest Telecommunications Routes From Africa (Anglophone Countries)

23. 1999 - Inter-Regional Internet Bandwidth (Source: TeleGeography)

24. Major Infrastructure Being Built to Handle the Projected Load Qwest and Level 3 - burying fiber - U.S. AT&T, Carrier 1, GTS and Deutsche Telecomm - burying fiber along tracks, canals, electric lines - Europe Teledesic and Iridium - low orbit satellite network Teligent and WinStar - microwave high speed local loop Global Crossing, Marubeni -transoceanic cables - Europe, Africa, Pacific

25. ITXC � The Story Behind

26. ITXC Background Internet Telephony eXchange Carrier Founded 1997 Financing from Intel, Chase, VC, VocalTec, AT&T NASDAQ: ITXC (IPO � Sept 27, 99) International Subsidiary in UK and Singapore. Sales office in Beijing. Largest Wholesale Internet Telephony carrier by footprint, volume Tom Evslin: Founder, Chairman and CEO Founder and VP of AT&T WorldNetsm

27. ITXC.Net History Focused exclusively on wholesale VoIP industry Deployed 1000+ VOIP gateways on 4 vendor platforms 10 network wide gateway upgrades in 24 months Three supported platforms, Vocaltec, Cisco and Clarent ITXC.net carries more traffic than any other IP telephony network or Clearing House

28. ITXC Customers & Affiliates Facilities-based Telcos, PTTs Bell Atlantic, Ameritech, China Telecom, Korea Telecom, GTS, Japan Telecom, Telstra, C&W Optus, IDT... Telephony resellers Newly formed ITSPs International ISPs (for termination) Pure wholesale - Not business or residential end users

29. Building at Internet Speed:  After 24 months:� 220+ PoPs � 135 Cities � 60 Countries � 130 Affiliates

30. Is there proof that this works?

31. GAMTEL � Gambia Telecom & Internet Telephony

32. The First Stage Winners in Africa Will Be... Those who enable transitions Those who know their place in a layered industry Those who move quickly Those who buy gateways Those who depreciate their gateways (and soft-switches) quickly Those who look to new markets

33. Big Picture of How GAMTEL Will Make Money in This New Industry Test technology today by terminating and getting paid for it Sell IP calls to keep your costs down - high margins Both Build a domestic Internet Telephone Network with ITXC Intellectual Expertise Start writing enhanced services applications Use a voice ASP for enhanced services Carefully define your market in this new world

34. Network Economy Operate one network one set of cables one support team More efficient use of bandwidth Less expensive components No IRUs No long term bandwidth commitments

35. Opportunities for GAMTEL Arbitrage Revenue defense Political Value-added IP based services Unified messaging Internet economics

36. Opportunities for GAMTEL - Arbitrage Primarily International outbound Diminishing opportunity with increasing competition and lower margins Regulated vs.Deregulated Need to use a Internet telephony carrier for cost and quality High volumes possible

37. Opportunities for GAMTEL - Revenue Defense Protect your customers by offering competitive IP based telephony to cost-sensitive user base Open up new destinations using Internet Telephony instead of existing PSTN carrier relationships Lower cost base over Internet

38. Opportunities for GAMTEL - Political Lower outbound costs increase usage amongst lower incomes IP telephony and competitive telecoms industry go �hand-in-hand� with the Internet economy Lower prices always increase volumes, lower imbalance of traffic Internet/IP telephony infrastructure roll-out, �leapfrogs� old technologies

39. Opportunities for GAMTEL - Value Added IP-based Services Audio-conferencing Application Sharing Device to Phone (webtalkNOW!TM) Web to Phone International 800 (Borderless800TM) Home Country Direct (BDirectT)M )

40. Opportunities for GAMTEL - Unified Messaging Voice, e-mail and fax mailbox Text to speech and vice-versa Roaming services Mailbox out-dial over VoIP �Virtual� PBX

41. Opportunities for GAMTEL - Internet Economics One network for Voice and Data Common bandwidth Common equipment Common staff

42. OPPORTUNITIES FOR ISPs

43. Opportunities for ISPs- New Revenue from Voice/Fax services PC/Web to Phone Phone/Fax to Phone/Fax Value added services

44. Opportunities for ISPs- PC/Web to Phone Work with ITXC or a similar company Sell or give away a PC client or Web browser page Build your own brand Advertising or subscription based model

45. Opportunities for ISPs- Phone/Fax - Phone/Fax Only when: You have experience with telephony minutes You have real-time billing and call control facilities (switch , pre-paid platform) You understand the pricing dynamics You have legal approval You have a distribution mechanism and/or a strong telephony focussed partner

46. SHOW ME THE MONEY (US$)

47. International Termination Traffic Per Bandwidth 384Kbps (30 Ports) = 400,000 Minutes/Month 512Kbps (48 Ports) = 600,000 Minutes/Month 764 Kbps (60 Ports) = 800,000 Minutes/Month 1Mbps (96 Ports) = 1,000,000 Minutes/Month Multiply by Agreed Termination Rate ($0.00) = Gross Maximum Income/Month ($00,000.00) Less Cost of Bandwidth/Month ($00,000.00) = Net Maximum Income/Month ($00,000.00)

48. Cost of Terminating Calls Fixed Costs Termination Gateway(s) Cost of 30 Lines or E1 Connection Monthly Costs � To Be Incurred by Telco Internet Connectivity Bandwidth $7000 - $20,000 (Minimum of 384Kbps � Prices vary from country to country Local Termination Charges (Prices vary from country to country)

49. Hypothetical Example of Income To Be Generated From Terminating Calls(Actual #�s may vary) 512Kbps = 48 Lines = 600,000 minutes Multiply By Terminating Rate of $0.15 Total Gross Income $90,000 Subtract Monthly Cost of Bandwidth $10,000 Subtract Cost of 48 PSTN Lines $ Subtract Cost of Gateways $ Total Net Income $80,000 GROSS MARGIN PER MINUTE: $0.01 - $0.35

50. WHERE DO THE PACKETS COME FROM?

51. Who is Originating Minutes & Who Is Terminating IP Calls Today? Incumbent Telcos Ameritech (USA) Bell Atlantic (USA) Japan Telecom Korea Telecom China Telecom GAMTEL (Gambia Telecom) New Competitive Carriers Internet Service Providers (ISPs) Cable Companies Wireless Companies Internet Telephony Service Providers

52. CRANS Network Topology

53. How a Telco can originate call to the world

54. How does a Telco become an ITXC Termination Affiliate? Review and signing of Non Disclosure Agreement (NDA) Review and completing a Deployment Provision Form Provide IP Connectivity Address or Addresses for testing Review and signing of Carrier Origination & Termination (O&T) Agreement Intense testing and deployment period - DP team works with the affiliate to test its Internet connections, and PSTN lines and the installation of the CRANS If the affiliate passes all of the tests and the quality of its termination meets the ITXC Standards, a certificate is awarded and ITXC Sales force will begin to sell minutes to the new destination to origination affiliates ITXC does the selling, marketing and insulates affiliates from debts and pays affiliates directly.

55. ITXC Global Offices ITXC Corp600 College Road EastPrinceton, NJ 08540 USA+1.609.419.1500+1.609.419.1511 (fax) ITXC Asia Pte Ltd391A Orchard Rd. #13-08Ngee Ann City Tower ASingapore 238873+65.838.4035+65.235.0349 (fax)