TASIM Trans Eurasian Super Information HighwaySummary Presentation

October 2010

2

The TASIM initiative was launched in 2008 by the government of Azerbaijan to bridge the Eurasian digital divide

TASIM: Trans Eurasian Super Information Highway

– Project launched in 2008 by Government of Azerbaijan

– Objective: Bridge the digital divide in Eurasia

– Approach: Construct a regional Internet backbone

Significant support at Bakutel 2008 and from the UN General Assembly in 2009

Status Quo: Preparing implementation and approaching potential network operators to seek partner agreements

Eurasian Digital Divide and TASIM Country Scope- Broadband Penetration 2009, Subscribers % -

TASIM Overview

Prepare TASIM Launch

Partner with Network

Operators

Develop TASIM

Business Model

Generate International

Buy-In

Frame TASIM Idea

2008 2010 2012

Phase 1 Phase 5

Today

Phase 2 Phase 3 Phase 4

Sources: ITU, Booz & Company analysis

Malaysia S.KoreaKazakh.BulgariaU.KSweden

9%

Uzbek.Russia Georgia Kyrgyz.

34%

0%0%

4%

41%

6%

11%

30%

9%Digital Divide

in Eurasia

3

TASIM can act as a broker mediating between operators, provide IP transport services or position itself as a service exchange

TASIM Business Models

Provide peering with other operators on a service layer, i.e. TASIM acts as a “converter” or exchange of services

Signaling (VAS) as additional service on top of a transport network

Services not offered to end users

Provide IP-based transport services to other operators

One or more transport links to international IXPsBased on all means of transport (dark fiber, capacity

rents, IP VPN, etc.)Services not offered to end users

Facilitate deals between operators through smart negotiations, i.e. joint deals enabled which would not be possible otherwise

Money earned on a commission basisNo assets or technical infrastructure ownedServices not offered to end users

BrokerBroker

Unified IPTransportUnified IPTransport

ServiceExchangeService

Exchange

3

2

1

Details

BUSINESS MODELS ARE COMPLEMENTARY

Asset Heavy

Asset Light

Transport Layer Service Layer

Network Layers Scope

BrokerBroker1

ServiceExchangeService

Exchange

Unified IP Transport

Unified IP Transport

2

3

Business Model Framework

Underlying TransportNetwork

Total AssetIntensity1

1) For the Service Exchange Business Model including the required underlyingtransport network (which could be provided by a third party)

4

TASIM may act as a trusted negotiator between operators with different visions, strategies and business styles

Objective: Improve regional operators’ contacts by enabling deals between operators, some of them wouldn’t be possible otherwise due to political, geographical or commercial issues

Approach: TASIM’s role is to deploy a smart negotiation approach to become a trusted deal broker for the majority of operators in the region serving as a “enabler” for operator-to-operator deals

Infrastructure: TASIM doesn’t need to own or operate any technical infrastructure. The actual network/service interconnection will be handled by the operators

Optionally TASIM can act as a financial clearing house optimizing payments between operators

Broker Business Model: Overview

Operator 1

Operator 2

Operator 3

Operator 4

Operator N

TASIM

Newly established network route - TASIM acted as a mediator between involved operators and therefore enabled construction of the route

negotiates

negotiates

1

5

The Unified IP Transport business model aims at establishing and operating an own transport and transit network in Eurasia

Russia

Philippines

Japan

Brunei

Taiwan

South Korea

North Korea

Vietnam

Cambodia

LaosMyanmar

Sri Lanka

India

Mongolia

China

Pakistan

Kirgistan

Tadschikistan

Afghanistan

Dschibuti

Qatar

Yemen

Usbekistan

Turkmenistan

Eritrea

Iran

Saudi-Arabia

Iraq

Kazakhstan

Azerbaijan

JordanIsrael

Syria

Lebanon

Georgia

Chad

Egypt

Cyprus

Turkey

Benin

Togo

Ghana

Libya

Greece

Niger

Bulgaria

Burkina Faso

Ukraine

Serbia

Romania

Tunesia

Sierra Leone

Belarus

Mali

Guinea

Hungaria

Algeria

Lithuania

Italy

Guinea-Bissau

Estonia

Latvia

SenegalGambia

Poland

Mauretania

Finnland

West Sahara

Germany

Marocco

Sweden

Denmark

Spain

France

Belgium

Netherlands

Portugal

Norway

United Kingdom

Ireland

Iceland

NepalBhutan

Bangladesh

Thailand

Kuwait

Oman

United Arab Emirates

Croatia Bosnia-Herzegovina

Austria

Switzerland

Luxemburg

Moldawia

Albania

Macedonia

Montenegro

Slovenia

Czech Republic

Slovakia

Armenia

SomaliaEthiopia

Sudan

Possible TASIM Transport & Transit Network Routes

Backbone Network in Surrounding Regions

Unified IP Transport Business Model: Overview

Objective: Establish a regional transport and transit network for IP traffic which is wholesaled to international and regional operators

Approach: − TASIM leases fiber or capacity from several operator

partners, creates an interconnected backbone and wholesales the network back to the partners and other operators

− TASIM creates value by• Providing connectivity to 2nd/3rd level countries

(countries without direct border to the operator home country)

• Consolidating capacity and therefore creating scale effects

• Committing capacity so that new routes can be built or existing ones upgrade

Infrastructure: TASIM owns and operates own active infrastructure in its network

Envisioned EndgameMoscow

China (Shanghai)Turkey

(Istanbul)

UAE(Dubai)

2

6

Key concepts

Own active infrastructure, one network

Passive infrastructure by consortium members, when available

Wholesale business only

7

In the Service Exchange model TASIM can help operators to jointly provide services

TASIM’s objective is to improve regional operators’ national and international footprint by facilitating the exchange of services between operators

For example, if an international company wants to interconnect offices in several countries, TASIM can help operators to avoid each-to-each contacts by becoming a single point of contact for all

TASIM’s role is to simplify service integration between operators by introducing single point of contacts, and common standard on parameters of services

Service Exchange Business Model: Overview

Operator 1

Operator 2

Operator 3

Operator 4

Operator N

TASIM Service

Exchange

Underlying network connectivityClient’s VPNs connected via TASIM service exchange

Client VPN

Client VPN

Client VPN

Client VPN

Client VPN

EXAMPLE

Client VPN(HQ)

Operator1

TASIMSE

Operator2

ClientVPN

(remote)

One-stop shop client payment

Service exchange

fee

Network usage

fee

EXAMPLE

3

8

Russia

Philippines

Japan

Brunei

Taiwan

South Korea

North Korea

Vietnam

Cambodia

LaosMyanmar

Sri Lanka

India

Mongolia

China

Pakistan

Kirgistan

Tadschikistan

Afghanistan

Dschibuti

Qatar

Yemen

Usbekistan

Turkmenistan

Eritrea

Iran

Saudi-Arabia

Iraq

Kazakhstan

Azerbaijan

JordanIsrael

Syria

Lebanon

Georgia

Chad

Egypt

Cyprus

Turkey

Benin

TogoGhana

Libya

Greece

Niger

Bulgaria

Burkina Faso

Ukraine

Serbia

Romania

Tunesia

Sierra Leone

Belarus

Mali

Guinea

Hungaria

Algeria

Lithuania

Italy

Guinea-Bissau

Estonia

Latvia

SenegalGambia

Poland

Mauretania

Finnland

West Sahara

Germany

Marocco

Sweden

Denmark

Spain

France

Belgium

Netherlands

Portugal

Norway

United Kingdom

Ireland

Iceland

NepalBhutan

Bangladesh

Thailand

Kuwait

Oman

United Arab Emirates

Croatia Bosnia-Herzegovina

Austria

Switzerland

Luxemburg

Moldawia

AlbaniaMacedonia

Montenegro

Slovenia

Czech Republic

Slovakia

Armenia

SomaliaEthiopia

Sudan

Russia

Philippines

Japan

Brunei

Taiwan

South Korea

North Korea

Vietnam

Cambodia

LaosMyanmar

Sri Lanka

India

Mongolia

China

Pakistan

Kirgistan

Tadschikistan

Afghanistan

Dschibuti

Qatar

Yemen

Usbekistan

Turkmenistan

Eritrea

Iran

Saudi-Arabia

Iraq

Kazakhstan

Azerbaijan

JordanIsrael

Syria

Lebanon

Georgia

Chad

Egypt

Cyprus

Turkey

Benin

TogoGhana

Libya

Greece

Niger

Bulgaria

Burkina Faso

Ukraine

Serbia

Romania

Tunesia

Sierra Leone

Belarus

Mali

Guinea

Hungaria

Algeria

Lithuania

Italy

Guinea-Bissau

Estonia

Latvia

SenegalGambia

Poland

Mauretania

Finnland

West Sahara

Germany

Marocco

Sweden

Denmark

Spain

France

Belgium

Netherlands

Portugal

Norway

United Kingdom

Ireland

Iceland

NepalBhutan

Bangladesh

Thailand

Kuwait

Oman

United Arab Emirates

Croatia Bosnia-Herzegovina

Austria

Switzerland

Luxemburg

Moldawia

AlbaniaMacedonia

Montenegro

Slovenia

Czech Republic

Slovakia

Armenia

SomaliaEthiopia

Sudan

In each business model operators will connect to TASIM on different layers

Service ExchangeTASIM acts as intermediary connecting services of different operators, e.g. P2P, video, VPN

BrokeringTASIM negotiates route deals between multiple operators, but does not own or operate any infrastructure

TransportTASIM provides IP connectivity for participating operators via the TASIM network based on rented fiber/capacity

Operator 1 Operator 2TASIM Network

Network equipment (e.g. node)

Existing Fiber InfrastructureOwned by operators

ILLUSTRATIVE

9

Impact on regional carrier market

New business model for regional transit

Win/win for participating operators

Service Exchange as added value

Improved regional connectivity