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4G Mobile Ventures Panel Discussion

4G Mobile Ventures Panel Discussion. Moderator: Scott A. Snyder, PhD snyder4g@gmail.com 610-256-0662. Panel Introductions:. Scott Snyder (moderator), DSI/Wharton School Dan Deeney, New Venture Partners Anton Wahlman, Industry Analyst Macy Summers, Lockheed Martin

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4G Mobile Ventures Panel Discussion

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  1. 4G Mobile VenturesPanel Discussion Moderator: Scott A. Snyder, PhD snyder4g@gmail.com 610-256-0662 ©Scott A. Snyder 2010

  2. Panel Introductions: • Scott Snyder (moderator), DSI/Wharton School • Dan Deeney, New Venture Partners • Anton Wahlman, Industry Analyst • Macy Summers, Lockheed Martin • Andreas Koch, Juniper Networks ©Scott A. Snyder 2010

  3. Is Wireless Ready to Take-off? • 4B+ wireless users • WiMax and LTE being widely deployed • 300M wireless sensors shipped to date (ABI Research) • App store model has demolished entry barriers • Immersive applications beginning to appear • Convergence of ICT trends towards a ubiquitous “Cloud” • Cuts across all major verticals and intersections • Government investing $7.2B into broadband initiatives via ARRA Is Wireless the Internet of the Coming Decade? Breakthru LLC Confidential Information

  4. Strong Signals… Google has just announced that it has acquired AdMob, the mobile ad platform that has been especially popular on the iPhone, for $750 million. This is a big win for the company’s early investors, which include Sequoia Capital and Accel Partners (this is a huge day for Accel — they were also investors in Playfish, which was just acquired by EA). More recent investors include DFJ and Northgate Capital. Mobile advertising company Quattro Wireless confirmed Tuesday that it's been acquired by Apple, in a blog post by Quattro CEO Andy Miller, who's identifying himself now as Apple vice president of mobile advertising. A price wasn't named, but AllThingsD reported that it's $275 million when it broke the news on Monday. “This year's International Consumer Electronics Show (CES) was all about wireless. In fact, wireless was probably the most pervasive of all technologies at this year's show, extending its reach to every sector of technology, from Ford's Sync system to set-top boxes, home entertainment systems, healthcare, e-readers, tablets and M2M.”  - Blog Post by Andrew Berg Monday, January 11, 2010 Breakthru LLC Confidential Information

  5. But the trends are not great… • $3.3 billion invested in 252 mobile companies in 2006 (Thomson Reuters) • $2.5 billion invested in 237 mobile companies in 2007 • U.S. VCs put just over $2 billion into 204 mobile companies in 2008 • $1 billion invested in 66 mobile companies through Q3 2009 • Many venture capitalists believe that the Wireless sector will experience declines with 37 percent predicting lower levels for next year as well (NVCA 2010 Predictions)

  6. Mobile Investment/M&A Profile

  7. Innovation Opportunities Exist at the Intersections ©Scott A. Snyder 2010

  8. 4G Investment Landscape RAN Packet Core Voice Core MSS GGSN SGSN GMSC MGW IuPS Gn, APN IP Core VoIP Transmission 8

  9. Network Capacity Continues to be a Challenge • Capacity problems experienced today in 3G networks will exist in 4G world • While 4G capacity gains may initially be in 5-10x range, ‘effective’ capacity gains in urban areas will be incremental • New devices, services and applications will contribute to complex capacity planning and network management • Underlay network of small, dense sites needed to support umbrella of marcocells • Investments that provide operators with increases in network capacity will gain traction in the market • Small base stations with innovative backhaul • Real-time optimization of traffic in meshed 4G IP networks • Improved network intelligence on capacity drivers will be key • Mobile network analytics, subscriber profiles and usage patterns • Improved service delivery based on device and service requirements

  10. The Acute Need For 4G • 3G in 2003: Solution in search of a problem • 4G in 2010: Fire hose applied to a fire • LTE around the world…eventually • WiMax early lead, but struggling with phones • WiFi: augments everything

  11. 4G Megatrends • VoIP replaces GSM/CDMA2000 • But which kind of VoIP? • Carrier-based managed VoIP • …or over-the-top providers? • Security, Security, Security • Hacking VoIP becomes #1 trend by 2011-12 • VoIP encryption to become #1 most desired app • …extending to IP-based videoconferencing

  12. Consolidation: Too much already! • Infrastructure systems • Ericsson, Huawei, Cisco, Alcatel, Motorola, Samsung, Alvarion • Operating systems – and handsets • RIM, Apple, Google, Microsoft, Nokia, Palm • Dell, Samsung, LG, HTC, HP

  13. Mobile VenturesWhere Capital is to be Deployed? • Capital Markets are still investing in Mobile businesses. New trends in technology, unattended sensors, enterprise integration and security will drive significant growth in mobile telecommunications capital deployment. • Deal Flow candidates: Mid-stage, recession resistant, capital efficient companies with attractive exit pathways and an experienced management team have the best profile for many Technology Funds. 1. NEW APPLICATIONS & TECHNOLOGIES 2. THE “SEA OF LTE” (AND WiMAX too) 3. NEW BUSINESS MODELS 4. CYBER & SECURITY

  14. UNIQUE NEEDSGOVERNMENT & MILITARY Mission Markets Security, Governance, Enterprise Integration, Data Exposure, Mobility, RF Challenges, Tactical Quality of Service are some of the Government challenges using 3/4G wireless for Mission Operations. SECURITY MOBILITY GOVERNANCE TACTICAL QoS

  15. The New Services Ecosystem Future Services Revenue ($2.5Trillion) Current Services ($1.8Trillion Revenue WW) Business Model Transformation Network Features Dedicated to NSP Walled Garden Specific Services Today’s SP Network Services Ecosystem Developer Community OTT App/Content Providers NSPs Device OEMs Fixed BB Fixed Line Voice Mobil Voice Business Data Digital TV (IPTV) Mobile Data Services Network Transformation Video The New SP Network Service Elements in Cloud Computing Layer Policy & Identity Management Access and Transport Fabric

  16. The Open Mobile BB Challenge True mobile broadband data speeds • 3.5/4G Network Buildouts • HSPA, Wimax, LTE • Adoption of 3G/4G handsets • Elimination of bandwidth bottleneck • Opens mobile to web applications Advertising driven revenue models • Emergence of mobile advertising models • Search advertising (incl. local) • Targeted ad insertion • Growing role of search, portal and web services players • Subsidization of “free” mobile apps Affordable consumer smart phones • iPhone is changing the game • User friendly: easy access to web • ~50X BW usage of other smartphones • Millions sold even without subsidy – now subsidized at prices $200 • Elimination of handset/deck bottleneck • Easier for content providers to go direct • Massive increase of mobile IP traffic Open handset operating systems • Open Handset Alliance Android • First open, free mobile platform • Google open OS with developer kit • Growing share of Linux operating systems • Carrier no longer controls OS and apps • Proliferation of optimized mobile apps Implications • NSPs will have less bargaining power with content and device partners • NSPs will need to find new ways of adding value to participate in content revenues! • Mobile devices and network will become vulnerable to security threats

  17. SP Network and Cloud Based App Access

  18. The Value of the Service Provider Network Video Gaming Home Telemetry Identity Internet L7 VPN L3 VPN L2 VPN WebServices Routing/Switching Virtualization Business Residential Experience Security L7 Application Assured Applications Mobile L7 Signature Enhanced L3/L4 Stateful Best Effort L3/L4 Stateless

  19. Network Monetization

  20. Hot areas for 4G network investments Context Intelligent Mobile Networking – Application Assured Cloud Infrastructure Context aware mobile multimedia applications The Network Infrastructure Enabling Their Delivery Context aware policy engines driving QoE and security End to end mobile security – app to device to datacenter to network Open service delivery platforms – enabling integrated OSS/BSS, including clearinghouse DRM functions Virtualization across wireless broadband networks Thin client, cloud-based application delivery architectures Advanced content distribution architectures optimizing trade offs between CDN, P2P and

  21. Questions? • Will investments in this space require a high degree of collaboration to succeed (operators, device vendors, app/content players, end-users, etc.)? • What are the biggest lessons learned in making investments in emerging technologies like 4G? • When will the enterprise application space become exciting as a 4G investment? • Do you have any advice to start-ups with a 4G innovation looking for capital?

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