WIXLIB

Carrier Solution BusinessGrowth Strategy– Network Infrastructure Business toward NGN March 7,2007Botaro Hirosaki, Ph.D.Executive Vice PresidentNEC Corporation

1. Approach to NGN and IT / NW Solution Business2. Out Commitmenttoward NGNクリックして章タイトルを入力- NEC’s Carrier Business Network Growth Strategy -

NGN Market LandscapeShift to All Digital / All IPBand-freeMedia-freeNetworkNetwork viceService ProvidersProvidersBroadcastersBroadcastersNew Revenue SourcesFixed CarriersTerrestrial / SatelliteMore New ServicesMobile CarriersCable TVsNetworkNetwork EquipmentEquipment VendorsVendorsInternetTelecom GearsBorderlessService CreationEnvironmentContentsContents �ｉｘｅｄＭｏｂｉｌｅITIT VendorsVendorsCPECPE VendorsVendors NEC Corporation 20073

What is NGN?NGN：Flexibility for new business model creation All IP： Two-layer structure (Transport & Service) Open Interface Points： ANI-UNI-NNI－ Traditional －Appli.Appli.Appli.－ NGN －NGN vs. InternetNGNService ApplicationsAppli.y Security & quality assurance providedby Network operatorsy Efficient service creation by ANIy InterInter-network connection by NNIy Seamless service provisioning tousers by UNIy Network management/control functionＡＮＩService PlatformSDP（Service Delivery nfra.NetworkInfra.NetworkInfra.（Network Control）Control）ＵＮＩ(QoS,QoS, SLA)Network Infrastructure（Transport）Transport ControlxDSLPSTNFTTHMobileWiFI.WiFI.WiMAXOptical / IP ernety User’User’s own risky BestBest-efforty AutonomyAutonomy-based (No centraladministration)y Ease of use SDP： Service Delivery Platform IMS： IP Multimedia Subsystem MMD： Multimedia Domain ANI： UNI： NNI:Application Network InterfaceUser Network InterfaceNetwork-Network Interface NEC Corporation 20074

Broader Business OpportunitiesNGN business SecurityEnterprisesPublicAgenciesService ApplicationsService tion, Billing,Billing, Ubiquitous,Ubiquitous,Service Service ProvisioningProvisioning (( ex.ex. Video)Video) Enlarge service providers’ areasNetworkNetwork InfrastructureInfrastructureAccelerate ubiquitous & higherspeed communicationOpticalOptical // IPIP Network,Network, OpticalOptical Access,Access,WirelessWireless AccessAccess (3G,(3G, WiMAX) WiMAX) NGN : Enabler of New Business Creation NEC Corporation 20075

NEC : Partner for Business Innovation As a leading company of both IT & NW industries, NECwill support your business innovation in all TGovernment &EnterpriseISP / ASPVirtualNetworkOperatorService ApplicationOpenInterfaceService Delivery PlatformNetworkPublic AgenciesNetwork Service emTransport NEC Corporation 20076

1. Approach to NGN and IT / NW Solution Business2. Out Commitmenttoward NGNクリックして章タイトルを入力- NEC’s Carrier Business Network Growth Strategy -

Outline of NEC Carrier Network BusinessSalesBusiness Areas- Carrier Network sales9929 30%70%約70%March,2006ResourcesXEmployees ：About 10,000XSubsidiaries ( Carrier Network Business )y Japan:12y Overseas :27ServicePlatformNetworkSystems-Sales by ce ApplicationsSDP(Service Delivery Platform)IMS/MMD(Network Control)Transport ControlOptical / IP TransportAccess(Mobile、WiFi, WiMAX, xDSL, FTTH)EnterpriseNetworkCPECarrier Network Biz.Business Area NEC Corporation 20078

Carrier Network Business Environment Japan：Expectations for further investment toward NGN deployment Overseas ：Steady growth of emerging market , Recovery of advanced marketJapanese market size2,000Overseas market size（ 1Bil）1Bil）CAGR:3%（‘06 ’09）Demand fornew servicesexpected grow1,500（ 1Trillion）1Trillion）20CAGR:5%（‘06 ’09）15Service Platform101,000NGN30-40%5005Network ��’０９Estimated by timated by NEC NEC Corporation 20079

Competitive Advantage of NEC’s Carrier Network BusinessDriving Force of Business Growth in NGN eraNEC’s Advantages Capability of end-to-end solution supplyyyFrom infrastructure to applications“Full-layer & Full-line” solution lineupNO.1 Position in Japan , the most NGN-advanced country Expertise & Experiences in service platform layer Higher capability of development Abundant records Technology innovation towards NGN Footprints in overseas market NEC Corporation 200710

Advantage of NEC : “Full-layer & Full-line” Solution LineupTotal Solution lineup from Transport to ServicesPSTNMigrationFMCReduceCAPEX/OPEXIntegrated Billing solutionOSS/BSSVoIP solution(Next-generation SIP/IMS)Video imagesolutionData GWsolutionBiz. PlatformsolutionService PFsolutionNetwork control solutionTransportControlTransportVertically Integrated SolutionSDPIMS/MMDNon-TrafficBusinessTriple PlayEdge / coreAccessQoS, Access authenticationSwitch, RouterOptical / IP TransportBroadband Access （PON，xDSL，AGW）NW Infra.solutionMobile Access，WiFi，WiMAXMobile TerminalCPEFixed TerminalSTBFixed TerminalHorizontally Developed Solution NEC Corporation 200711

Advantage of NEC : NO.1 Position in Japanshare(*)MarketofWire-line equipment in JapanMarket share(**) ofWCDMA base stationin JapanOthersNo.1Company E20%OthersNo.17%13%34%39%16%3%3% 6%Company OCompany MCompany CCompany P19%13%Company F27%Company FCompany HNetwork equipmenty Optical transmission equipmenty Networking Equipments(ex. Router, Switch, Broadband Access .)y VoIP equipments (For carriers, enterprises. )y VPN / Security equipment(*)(**)Fuji Chimera Research Institute,Institute, 2006MCA, 2006 NEC Corporation 200712

Expertise & Experiences in Service Platform DevelopmentMarket Share for Softswitchin Japan(*) Outstanding System Integration Capabilityrealizing Carrier-Grade ServiceNo.1Others30%y Abundant “Know-How” accumulated throughthe supply of universal service systems(Switching equipment)Company O55%15%y Application to NW-software development(*)Fuji(*)Fuji Chimera Research Institute,Institute, 2006 Massive software development powery NW Vendors NEC(Utilization of IT Solution Software Resources)y IT Vendors NEC(Abundant experiences in NW-Biz)HardwareOver 10,000DevelopmentresourcesSoftware(70%) IT Solution Biz.SW developmentresourceDevelopment resource( as of FY2006, incl. partners) NEC Corporation 200713

Advantage of NEC ： Technology Innovation in NGNNetwork product created through Technology InnovationService ApplicationCarrier-grade Software Development :”NC9000/7000/5000 Series”XField-proven by major operatorsXHigh-reliability (99.9999%)Service PlatformSDP(Service Delivery Platform)IMS/MMD(Network Control)Network InfrastructureTransport ControlOptical / IP TransportMobileWiFI.WiFI.xDSL FTTHWiMAXXaTCA, UNIX -basedHigh-end optical transmission technology : ”DWDM4200 Series”X40Gbs , Maximum 80 wavelengthsXSupporting GMPLS, optical cross-connectRadio/Optical Convergence technology :”WCDMA base station”XField-proven by major mobile operatorsXAntenna extension by optical fiberOpt. FiberApplication of Carrier-grade IP technology :”Router/ Switch”XIP technologies developed over switching-circuit equipmentXCollaboration with Juniper , Alaxala NEC Corporation 200714

NEC’s R&D toward NGNEnterprise IT/NW systemy Middleware for “Voice over IP Network”y VoIP securityy Mobile E-ticket platform- Photonic Integrated Circuits with Si Photonics Miniaturizing and integrating optical devices bycombining micro-photonics and Si nanofabricationtechnology1/1000 miniaturizationService PlatformyyyyyService Integration EnvironmentMulti-media Push to TalkHigh-quality Multicast Broadcasting SystemQuality Degradation Analysis for Large-scale NetworksData Mining for Fault Symptom Prediction50 nm50 mmAWG using Si wire waveguidesConventional AWG usingSiO2 waveguidesCompactLow powerLow costOne-chip OADMPowersupplyTransportyyyyy40Gb/s DWDM Long-haul Transport SystemOptical IP Network Control SystemPhotonic Integrated Circuits with Si Photonics10Gbps High Performance Security PlatformQuantum Cryptography Network30 cmPresent Network terminalTerminalsy Multicore Processory Highly Functional BioplasticsLD UnitFuture Network terminalOADM： Optical Add/Drop MultiplexerAWG： Arrayed Waveguide Grating＊A part of this work was a collaboration with Univ. of Tokyo within theframework of the “Photonic Network Project” supported by NEDO. NEC Corporation 200715

Advantage of NEC : Footprints in Overseas MarketSupply record of NEC’s Network equipments (# of countries) MW radio (trunk)MW radio (PASOLINK)Optical TransmissionSwitchingWCDMAi-mode Service15012310571309 World-wide customer bases Solution lineup fully conforming to global specificationsAdvanced marketEmerging market(e.g. BRICs) NEC Corporation 200716

NEC’s Activities toward NGN (Overseas Market)Global Customer BasesAlliance with partnersOverseas marketPrePre-/Non/Non-IMS market(Low(Low-end)Japanese 425IMS based market(High-end)PSTNPSTNPSTNEmulation- NEAX61/ Pasolink -236# of NEAX61units delivery49331436Router / SwitchWirelessG-PON/DSL3G Infra. delivery55TransportHigh-end Opt.Low-end Opt.373217123G，3G，LTE117V5.2. AGWEricssonNEC’s own product2924Mobile WiMAXAlliance ProductDeliveryService-in4353423 2SAG/NECAlcatelMotorolaNokiaNortelHuaweiLucent NEC Corporation 200717

Mid-Term Business VisionWe would like to be Global Major Player in NGN marketCarrier Network business SalesMid-Term Target40% Growth Best partner for Global Major Carriers Global top supplier of NGN products約About7,000700( 1Bil.)約About10,0001000Overseas3535-40% Strong Biz. Entity through“Empowered by Innovation” Software-oriented Biz. modelJapan Product development with common platform Establishment of global operations structureand cultivation of global major customers Strategic st.)中期Mid-Term TargetMid（見込） NEC Corporation 200718

NGN Transport Product RoadmapFeature expansion for further market competitivenessFY Mar.08OpticalTransportRouter SL(Terminal)HGW100Ginterworking with MobileTraffic controlAuthenticationVoice/Video IVR Voice/synthesisFTTH(Terminal)L7interworking with SAS interworking wuth IMSI-BGFMRFBroadbandVideo deliveryLoad balancerWiMAXλPON/10GbEHGW/HGW/three wavelengthsMulticastVDSL2 Optical Interface/MUXCNMulti RPR, Hybrid erBroadbandAccessFY Mar.1040GMGMediaProcessingFY Mar.09MRFRouter functionOpt/IP InterfaceSAEWCDMALTERANMobile WiMAXWiMAX NEC Corporation 200719

NGN Software ProductsService Application Core products toward IT/NWconvergenceService PlatformSDP （Service Delivery Platform）Info. utilization & control PFService AP PFUbiquitous PFNC7000 SeriesNetwork service PlatformCall controlMessaging Takes lead in full-layer productportfolio over competitorsPresenceMediaresource・・・Sep.2006X Efficient Service development & operationX Communication service development KnowKnow-Howembodied over 4types componentsIMS/MMD （Network Control）Sessioninitiation controlCall SessioncontrolConnection toother Network・・・Network Infrastructure （Transport）Transport Control PlatformQoS .WiMAXMay 2006X NGN / IMS based SIP Call control functionX Highly reliable MidMid-wareX GMI (Global MSF Interoperability) test among Asia,Europe and USNC5000 SeriesOptical / IP TransportxDSLNC9000 SeriesＮＥＷX Transport control realizing highhigh-quality, safety, reliabilityX Interworking with NC9000, Decision of controlinformation regarding band assurance & prioritycontrol for each services, QoS control to Transport Node NEC Corporation 200720