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Mobile Network Market Overview

H1 2013

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I. Recent M&A Activity

II. Mobile Network Market Overview

III. Key Highlights

Contents

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Recent M&A Activity

3

M&A Accelerating in the Sector

# Date Acquirer Target

Transaction

Value ($M)

EV/Revenue

Multiple (x) Target Business Description

1) 04/08/13 NA NA Microsoft Corporation, Mediaroom IPTV Business comprises Internet protocol television business of Microsoft

Corporation which designs software used by phone companies to deliver television over the Internet.

2) 04/03/13 NA NA Tekelec, Inc. develops telecommunications products for fixed, mobile, and packet networks worldwide. It provides

policy management, diameter and SIP signaling, subscriber data management, performance intelligence center, and

SS7 signaling products.

3) 04/03/13 $310.0 NA Ubiquisys Ltd., a mobile communications company, designs and develops communications devices for mobile

operators and consumers.

4) 02/04/13 $2,003.8 5.8x Acme Packet, Inc. provides session delivery network solutions that enable the delivery of voice, video, data, and

unified communications services and applications across Internet protocol networks.

5) 01/23/13 $475.0 NA Intucell Ltd. provides self optimizing network solutions to mobile operators worldwide.

6) 01/23/13 $20.0 NA Neuralitic Inc. provides mobile data intelligence solutions.

7) 01/07/13 $27.4 NA Vineyard Networks develops and provides network application intelligence solutions.

8) 05/07/12 $145.0 3.0x Anue Systems, Inc. provides networking solutions to telecommunication and cable service providers, government

agencies, and corporations with data centers and enterprise networks.

9) 05/01/12 $30.0 NA Ortiva Wireless, Inc. provides video optimization solutions for mobile network operators (MNOs) and managed

service providers (MSPs).

10) 02/21/12 $400.0 NA BelAir Networks Inc. provides mobile wireless broadband mesh networking solutions for video, voice, and data.

11) 02/20/12 $129.7 NA Traffix Systems Ltd. provides next generation networks (NGN) control plane and diameter solutions for

telecommunication companies.

12) 06/14/11 $1,150.0 NA Traffix Systems Ltd. provides next generation networks (NGN) control plane and diameter solutions for

telecommunication companies.

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Mobile Network Market Overview

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SubscriberManagement, Athentication,

Roaming

IMS Functions

PCRF

DiameterRouting

ADCs

MediaGW

HLR/HSSCSCF

Back office IT

Applications Services

Network and Subscriber Analytics

Packet Core RAN

MacrositeRAN

WifiOffload RAN

MetrocellRAN

E-RAN

Backhaul

Femtocells

eNodeB

FlowProcessing

Serving GWPDN GW

MMEDPIFemto GW Network

Security

SON / RANOptimization

CDN functions

Mobile Network Market Map

BSS / OSS

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Packet Core

Network Security FemtoGW DPI CDN

Companies in the Mobile Network Sector

Serving GW/PDN GW/MME Flow Processing SON/RAN Optimization

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IMS Functions

PCRF

Diameter RoutingCSCF Media GW HLR/HSS

ADCs Subscriber Management, Authentication, and Roaming

Companies in the Mobile Network Sector (cont.)Packet Core

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RAN

Enterprise RAN

Femtocells Backhaul Equipment Macrosite RAN

Metrocell RAN Wifi Offload RAN eNodeB

Companies in the Mobile Network Sector (cont.)

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Companies in the Mobile Network Sector (cont.)Back Office IT

BSS/OSS Mobile Analytics

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Key Highlights

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Mobile Packet Core is dominated by tier 1 suppliers— Cisco, Ericsson, Huawei, NSN. New entrants include Juniper, Alcatel-Lucent, FIV

New hardware and software solutions increasingly introduced to optimize network performance— Network security, subscriber security, policy management, policy enforcement, deep packet

inspection, ADC (app delivery controller), video processing, diameter routing, many IMS functions.

— We expect major suppliers to fill in portfolios through acquisitions

Strong trends to virtualize many functions from “big iron” hardware to software on carrier grade servers

Along with incumbents, FIV is in prime position to expand its portfolio with acquisitions

Key Highlights: Packet Core and Network Functions Virtualization

12

Consumer femtocell market established and maturing

Carrier owned and managed Wi-Fi market entering high growth— Lowest cost bandwidth to dense pedestrian users

— Maturing systems market with leaders – Cisco, Ericsson, Ruckus, Huawei

— Software ecosystem still developing. M&A likely needed to fill out client apps, policy, authentication

Outdoor small cell (licensed) market developing quickly— Major RAN vendors expected to dominate Ericsson, Huawei, NSN, Alcatel-Lucent

— Small hardware and software tuck-ins likely required to fill portfolio – custom ASICs, SR wireless backhaul

Indoor small cell (licensed) market still nascent— Opportunity for non-RAN vendors to participate – Cisco, Spidercloud (private), Ruckus, Aruba

Networks, and others

— Interoperability with RAN and mobile core remains a big challenge

Key Highlights: Radio Access Network (RAN)Small Cells and Wi-Fi Offload

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Deriving network data for sophisticated analysis is new and a very hot market likely to see significant M&A. New area of study for WCP Research

Highly fragmented market with dozens of small and large suppliers but no obvious winners— Likely leaders: Oracle, IBM, Ericsson, Cisco and JDSU

— Healthy venture investment in past 2 years

— Hot small players with valuable carrier wins

Key Highlights: Back Office ITNetwork and Subscriber Analytics: Mobile Analytics