Residential Services

External Launch Plan

Revisions

St. Clair 3/28/2001 Initial Document

St. Clair 5/4/2001 Change product name

NetSpeak Corporation

This launch plan is a comprehensive description of the activities required to communicatethe market and product position for NetSpeak Corporation’s Residential Services solutionto several audiences using a variety of media, including trade press, advertising, events,collateral and the World Wide Web. It provides the corporate positioning, key messagesand product descriptions necessary to inform media relations, collateral developers andadvertising personnel about the company, and it describes the several programs thatCorporate Communications will execute to communicate these messages.

Overview

This document contains a communication plan, including media relations and advertisingplan, for NetSpeak’s VoIP solutions. This chapter contains the following sections:

� This Introduction� Product Description� Product Name� Product Positioning� Target Market� Competitive Analysis� Key Messages� Product Pricing� Complementary Products� Desired Launch Partners and Products

Market Opportunity

NetSpeak has developed a Residential Services solution that uses VoIP technology todeliver secondary line telephone service to residential subscribers over a hybrid fibre/cable(HFC) network. This solution consists of a variety of NetSpeak-developed softwaremodules combined with a Cisco cable modem infrastructure and third party billingsoftware.

While teledensity (the number of main lines per 100 people) is high in North America andEurope (about 60 or more than one line for every two people), teledensity in other areas ismuch lower. For example, teledensity in Mexico is 11, or just one line for every 10 people.To improve teledensity, governments are deregulating local access to promote additionalinvestment in infrastructure and wake up sleepy incumbent carriers.

Chapter

Introduction 1

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Local Access Mechanisms

There are a variety of ways to deliver additional telephone lines to consumer andenterprise:

� Using a hybrid fiber/coax (HFC) infrastructure combined with either TDM or packet-switched voice circuits

� Using traditional, circuit switched/TDM infrastructure� Using digital subscriber line (DSL)� Using fixed wireless� Using cellular wireless

HFC networks have been installed to deliver digital cable television services to residentialcustomers. Though expensive to build, these networks can also be used to deliverbroadband Internet connectivity and telephone services, spreading the cost of the networkover several services. There are two mechanisms that can be used to deliver telephoneservices: using the network to deliver phone service in TDM format allows traditionalCLASS 5 central office switches to host the service. Several US cable companies,including Cox Communications, use this mechanism today. Although it allows the cablenetwork to be used for telephone service, TDM suffers from the disadvantages listedbelow (expensive, innovation difficult) and it is less efficient that packet switching. Packetswitching, in the case of HFC networks, exclusively Internet protocol (IP) switching, usesthe network more efficiently, can be easily integrated into multifunction CPE (telephoneservice, digital television decoding and Internet access), and allows rapid (in theory)innovation. However, cable IP telephony technology may not meet regulatoryrequirements, is often very expensive, and potentially suffers from QoS problems.

Traditional circuit-switched/TDM networks are both expensive to deploy and offer verylimited opportunity for service innovation. Such networks are expensive primarily becausethey are limited to one service: voice. HFC networks can be used to deliver voice, videoand broadband Internet connectivity for only a small amount of additional investment. Thecentral office switch provides the majority of intelligence for a circuit-switched/TDMnetwork. Because these switches are proprietary and have closed interfaces, serviceinnovation is difficult and customer provisioning via Web interfaces is impossible.

Since DSL uses high-frequency modulation to offer broadband data services over a localloop that uses a twisted-pair copper plant, it can be used to offer more “virtual” lines on theexisting plant, thus potentially increasing teledensity. Given that it uses the existing plant,DSL would seem to be a perfect mechanism for increasing teledensity; however, it hasproved difficult to deploy. Several reasons have been sighted: It appears that a largeportion of the existing plant is in too poor a condition to support DSL and that multiple DSLsignals in the same wire bundle can interfere with each other. For example, DSL service toan existing customer might fail when a new customer that is served via the same bundle isswitched on.

Fixed wireless local access technology, such as MMDS, has been proposed to deliverbroadband Internet connectivity, digital television and telephone services (see HFC). Thechief problem with this mechanism is its line of sight nature: there can be nothing inbetween the antennas, including buildings and trees. Nevertheless, in some areas, thismechanism may provide the best plant for delivering a variety of services.

In many geographies cellular has been the primary mechanism for increasing teledensity.Because it requires no cable between the central office and the subscriber, it’s relatively

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inexpensive to deploy. Coverage problems remain, however, which affect QoS, and it is asingle service technology (voice). Many consumers also want Internet connectivity andtelevision. 3G technology promises broadband Internet connectivity, but whether wirelesscan truly replace wire-line technology for voice and broadband connectivity is doubtful.

One of the benefits of IP technology is that it is transport agnostic: bits is bits.Consequently, NetSpeak’s Residential Telephony offering can run over a variety oftransport plants, including HFC, DSL and fixed wireless. All have their benefits andproblems as outlined above. Because HFC networks are widely deployed and can beused to deploy a variety of digital services, NetSpeak is currently focused primarily on thattransport mechanism. However, we will support other transport mechanismsopportunistically.

Secondary vs. Primary Line Service

Nearly all of the residential subscribers targeted for telephone service by cable systemoperators will already have local telephone service from the incumbent LEC, likely a singleline. However, getting a second line from the incumbent is often expensive and difficult,and the subscriber may want one for a home office, teenage children, a retired parent, andso on. one telephone line already installed, probably from the incumbent LEC.

In many countries, this secondary line is not subject to the same regulatory requirementsas the first or primary line. For example, E911, wiretapping or availability requirementsmay be nonexistent for secondary lines. Consequently, NetSpeak has elected to pursuesecondary line opportunities only.

Target Customers

There are several target customer segments for NetSpeak’s Residential TelephoneSolution:

� Cable service providers - These are new or existing cable service providers who ownthe HFC plant and are providing at least one service - cable TV. They are looking toprovide other services such as Internet Access, Pay Per View, etc. to increase theirrevenue, customer loyalty, etc. To provide these services they need to invest in costlyinfrastructure and customer premise equipment. Adding residential voice to theirservice offering is potential viable way of extending their revenue base for minimaladditional investment. The competition for VoIP is the traditional telco using a typicalClass V switch feature base.

� VoDSL - LEC/CLEC - These are new or existing telco service providers who areoffering high bandwidth access to homes, SOHO, telecommuters, and businesses.They are looking to provide bundled services in a similar fashion as the cable serviceproviders.

� Wireless Local Loop/Fixed Radio Access service providers - These are new orexisting telco service providers who are offering traditional local services utilizingradio access technologies instead of copper. These providers need technologies thatcan deliver POTS and vertical features. This can be met using TDM Class V switchesor new technologies such as a combined Voice and data network solutions. Theyalso include bundled services in their business plans.

� LMDS/MMDS - Local or Multiple Point Distribution providers target multi dwelling/unithigh rise towers. Their customers can be both residential and business, offeringmultiple services.

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Market Demographics

The target market is global both in scope and nature. There is significant activity inAsia/Pacific and Latin America. Most of the traffic either terminates and/or originates inthese theaters with major off/on ramps located in the US for long distance services. Forthe residential services we can position the market segments in the following manor:

North America - The North American market is very appealing given the general marketacceptance of broadband technologies in cable and DSL. This market boasts the highestpenetration of both of these technologies with a substantial potential subscriber base andpotential service providers competing in this theater. The Broadband voice offering(VoDSL, Voice over Cable) must adhere to well defined standards such as thosepublished by PacketCable and also meet FCC telecommunication regulations. This is nosmall feat, and the potential subscriber base is very well versed in new technology andmust meet their expectations. The competition in this market is quite steep fromcompanies such as CopperCom and Telecordia. Both of these companies have beendeveloping products to meet the North American market requirements for several yearsand represent a significant competitive threat. In addition, NetSpeak does not have amarketing and technology partner in North America as Cisco would partner withTelecordia for at least the cable offering.

Latin America - This market represents significant opportunity for the NetSpeak residentialservice solution. There are several countries that have either deregulated or are in theprocess of deregulation. This deregulation is occurring in countries that haven't, for themost part, forged a well defined residential feature set and set of regulatory requirementswhich must be met. That is not to say that these are free-wheeling markets, but these arecertainly open to new solutions that do not provide traditional feature sets. Even for thosecountries that are still a few years away from deregulation, the traditional incumbents maybe exploring new alternatives. Target countries would include:

� Brazil� Mexico� Venezuela� Argentina� Chile� Uruguay� Colombia� Cost Rica

Asia Pacific - There are several countries that have either deregulated or are in theprocess of deregulation. These include the following:

� Japan� Hong Kong� Singapore� Korea

Even for those countries – such as China and India – that are still a few years away fromderegulation, the traditional incumbents may be exploring new alternatives.

Western Europe - Western Europe is very similar to the US market. It is saturated with thelatest technology and features. It also has a significant number of service providers andvendors competing in the marketplace. Teledensity is high.

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However, there is a surprisingly large degree of interest in Western Europe for aresidential solution that can economically serve tens of thousands of subscribers scaling tohundreds of thousands of subscribers.

Eastern Europe/Middle East/Africa - This market is similar to Latin America and Asia assome of the countries are in the process of deregulating or privatizing. In this definition,this theater includes Eastern Europe countries, the Middle East and African countries. Thisis normally referred to as EMEA, minus the Western Europe countries of the UK, France,Germany, etc. In general, these are developing countries which need telecommunicationand data network infrastructure build-outs.

Summary

The market segments to target would be those countries and service providers (new andold) that are deregulating in:

� Latin America� Asia Pacific� Eastern Europe

Secondarily, target potential customers in countries that are not deregulating, but growingin subscriber line penetration, in:

� Latin America� Asia Pacific� Eastern Europe

Broadband solutions for residential customers in the following markets are notaddressable at this point for Western Europe and the USA. We could revisit thesemarkets if we are able to develop or acquire products that meet the followingrequirements:

� Feature set compliant to PacketCable standards� Product capabilities that are carrier-grade (Unix, provisioning, network management,

availability, scaleable)� Comprehensive feature set� Virtualization of services in the case of a line side business offering

Market Requirements

NetSpeak’s Residential Telephone Solution must meet the following requirements:

1) POTS - Plain Old Telephone Service that is functionally equivalent to traditionaltelephone service but provided at a lower costs. Other mandatory features include dialplan restrictions per customer, routing of calls to service bureaus, malicious call traceand testing features.

2) Advanced services equivalent to traditional telco. There are several mandatoryfeatures, plus other vertical subscriber services that are required for this market.Please see Appendix A for the simplified list of services required for internationalresidential offerings.

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3) Services not available from traditional telco. The traditional telco is going to be biggestcompetitor to our potential customers. In order for our customers to grow theirsubscriber base, they need a set of features that the traditional Class 5 office cannotprovide. This set of services may be exemplified by a 'Find Me/Follow Me" service.

4) Services/features enabled by the Internet. The typical features of Call Forwarding maybe developed to bridge the traditional DTMF activation/deactivation sequences with anew 'Internet Experience' method of subscriber self provisioning and subscriber webbased self management of the services. Since most, but not all, of the potentialservice providers internationally will be bundling their service offering together, it isreasonable to assume a web based interface to activating/deactivating these featureswould be acceptable and adopted. Further promotional items surrounding this type ofinterface can be used also.

5) Costs efficient solutions (bundled service offerings; combined network solutions).Although it is common assumption that VoIP is more cost effective, it must be proventhrough a strong Return on Investment and other financial calculations (NPV) etc.These tools must take into consideration the total costs of a combined solution, notjust the NetSpeak component. Furthermore, design and marketing activities shouldcontinually explore ways of reducing the cost of ownership for the service provider. Anexample would be using a OSS/BSS partner that can incorporate the total set ofrequirements for the service provider.

6) Strong and easy provisioning/management. Tools and open interfaces must be madeavailable for the service provider/integrator to simplify the provisioning andmanagement of the solution. A single provisioning point, with multiple views/authoritylevels, is required by the customers. The provisioning tools must consider both green-field systems as well as existing systems. Also it must consider it is subservient to ahigh level system such as Cisco's Cable Manager to ease the provisioning of thecustomer premise equipment, the subscriber billing account, etc. The criteria appliesfor network management also.

Solution Names

The phrase NetSpeak Residential Services is the formal name of this product. Becausethe name is somewhat unspecific and may lead readers to assume that NetSpeak isoffering a service rather than the enabling software, the product name must always bequalified with the following phrase when used for the first time. For example, NetSpeakoffers a Residential Services “solution, which allows carriers to deliver telephone servicesover digital cable television networks.” Though not part of the formal name, the use of“solution” connotes that NetSpeak is integrating all of the components required to offer atelephone service to residential subscribers and may help avoid confusion aboutNetSpeak’s role as a service provider verses software vendor. The use of “residential”indicates that the product has the line-side features required for residential subscribers.“telephone” indicates that the solution delivers voice and fax communication capability.The use of “digital cable television networks” indicates that the solution requires abroadband HFC medium.

The following phrases identify the NetSpeak components of the Residential Servicessolution:

� NetSpeak Residential Gatekeeper

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� NetSpeak Route Server� NetSpeak Media Server� NetSpeak Event Management Server� NetSpeak Control Center

Capitalization

The formal names of the solution and its components must always be written with initialletters capitalized, as they are the proper names of these products.

Abbreviation

All of the formal names for the NetSpeak Residential Services solution and its componentsmust be used in their entirety the first time they are used in any document. Thereafter theymay be used without NetSpeak (eg, Route Server) and acronyms (RG for ResidentialGatekeeper) are permissible so long as they are unique and defined before the first use.Acronyms are preferable to the use of part of the name as a pronoun for the whole (eg,Gatekeeper when the writer means Residential Gatekeeper).

Trademarks

The names of the solution and its components are highly descriptive and therefore cannotlikely be trademarked. NetSpeak, of course, is a registered trademark of NetSpeakCorporation.

Solution Description

This section describes the external view that NetSpeak will give of the ResidentialServices solution. Note that the external view may represent features that are not includedin the current release of the Solution.

NetSpeak has partnered with Cisco to develop a residential second line offering for theinternational market. To support this effort, NetSpeak has created a number ofcomponents, chiefly the Residential Gatekeeper, that it is combining with Cisco hardwareand a third-party billing package to produce a complete Residential Telephone Solution.This same technology can be leveraged in the xDSL market going forward.

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PSTNCisco GK

Infrastructure ZoneApplication Zone

Packet NetworkService Provider

NetSpeak RouteServer

Billing & ManagementServers

V

NetSpeakMedia Server

Residence B

Residence A

Call Controland Signaling

Cisco GK

Access Zone

SMB

NetSpeakResidential GK

CVA124CVA124

CVA124CVA124

CVA124CVA124

Figure 1. Broadband Residential Telephone Service Topology

The system architecture will be comprised of a set of NetSpeak Residential Gatekeepers(RGKs) that provide the line-side features (such as call screening or call forwarding) thatcable system operators believe are required for a viable service offering. The Cisco UBRs,residing in the residence, will register with Cisco Infrastructure Gatekeepers, known asAccess Gatekeepers (Access GKs). All off-net call traffic will route through a set of Cisco5300 Gateways managed by a Cisco Gatekeeper. Calls may be placed on-net to on-net,on-net to off-net, off-net to on-net, or even off-net to off-net. An example of the latterscenario would be an off-net call routed to a subscriber then forwarded off-net, thus off-netto off-net.

A set of provisioning enhancements will enable the Integration of NetSpeak Residentialtechnology with web-based customer tools for provisioning and customer maintenance.The provisioning interface along with an existing GK subscriber interface will bedocumented, allowing Integrators to build custom solutions to match their particular needs.

NetSpeak Component Descriptions

The NetSpeak Residential Services solution consists of the following components:

� NetSpeak Residential Gatekeeper: The NetSpeak Residential Gatekeeper (RGK)is a H.323v2 compliant gatekeeper. It uses a flexible call-flow scripting engine with acustomized application to provide call flows, feature definition and processing forresidential functionality. The Residential Gatekeeper performs the following functions:

� Provides all residential features for individual subscribers on a per call basis� Provides access to advance routing capabilities and features� Call Control and Service Control functions� Interfaces to real time streaming of audio for announcement features� Interfaces with Billing & Subscriber Management systems

Residential subscriber services such as call forwarding, blocking, etc. are functionallydefined and applied in real time call processing by the Residential Gatekeeper. Thesefeatures are pre-scripted and applied on a per-call, per-subscriber basis by theGatekeeper. For instance, if a call is destined for a particular subscriber with callforwarding activated, the gatekeeper will determine if the criteria for forwarding is met,

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reroute the call and continue to provide call processing until the call is successfullyterminated. It will successfully interface with the billing system to ensureauthentication, authorization and full accounting is performed. In order to processthese types of calls, the Gatekeeper utilizes predefined integrated interfaces to:

� NetSpeak’s subscriber database, which contains specific feature detail� NetSpeak’s Route Server for routing of the packet call� Third-party billing server for authentication, authorization and accounting (AAA)

functions. This uses the industry standard RADIUS specification and Cisco’sVendor Specific Attributes for pre/post-paid billing

� NetSpeak’s Media Server for functions such as playing announcements andNetSpeak’s Voice Email

Call traffic can be distributed over multiple residential gatekeepers, which can beimplemented using N+1 redundancy. The gatekeeper supports SNMP for alarmingnetwork or server failures and is configurable via NetSpeak’s GUI based controlcenter.

� NetSpeak Route Server: The NetSpeak Route Server is the intelligent routing oraddress translation engine for NetSpeak Gatekeepers. The Route Server performsall call routing functions, which includes directing every call in or out of domain, aswell as flexible real-time E.164 and custom dial plan address resolution andtranslation. Least cost or priority routing is supported to allow for ultimate resourceutilization.

The route server is an advanced routing engine capable of configurable route plans tosupport off-node platforms for premium services such as free-phone, weather,horoscopes, adult services, etc. It also has the ability to restrict dialing or enablingdialing to these services and other plans such as local, national or international callson a per subscriber basis.

The route server also manages resources for load balancing and controls networkaccess to its resources. It supports a robust set of administration capabilities via theNetSpeak Control Center, including administrative access control, centralizedconfiguration, and fail over support. The Route Server employs a mated-pair hot-standby redundancy strategy, and supports SNMP for alarming network or serverfailures.

� NetSpeak Media Server: The NetSpeak Media Server is the media-streamingengine for all Interactive Keypad (DTMF) prompting, messaging, andannouncements. It supports custom audio messages, which can be recorded intolocal languages and is load-balanced and controlled via the NetSpeak Gatekeeper.

The Media Server supports both playback and recording in numerous formats,including G.711, G.723.1, and G.729a. The Media Server supports a N+1 hot-standbyredundancy strategy and supports SNMP for alarming network or server failures,which is configurable via NetSpeak’s Control Center.

� NetSpeak Event Management Server: The NetSpeak Event Management Server isthe central repository of network events and transactions. Types of data that can becollected by an EMS are Call Detail Records as a supplement to a billing server andNetSpeak server alarm data. The EMS data can be used for report generation andanalysis.

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� NetSpeak Control Center: The NetSpeak Control Center is a client application usedto configure, administer, and manage all NetSpeak servers. It uses a WindowsGraphical User Interface. All server communications are encrypted.

Solution Features

Two levels of service are possible with NetSpeak’s Residential Services solution: basicphone-to-phone services (essentially life-line dialtone) and enhanced services (dialtoneplus value added services).

Basic Services

� On-net to On-net (all calls originate and terminate on the IP voice network): Thecall stays on the service provider IP network from one subscriber to anothersubscriber. The call is routed based on assigned public E.164 numbers. Thesenumbers are permanently assigned to the subscriber, although they can be re-assigned by the service provider based on service termination. The numbers mustfollow the E.164 assignment standard for the international variation of the dialingplans. Each customer premise access device, or customer premise equipment (CPE)modem is assigned at least one E.164 number. It is possible for multiple E.164s to beassigned to one access device, based on support of multiple analog ports on thedevice. The E.164 number becomes the subscriber’s ANI (Automatic NumberIdentifier), which will be passed along in all applicable packets per the standardsused. The ANI will be delivered to the access device unless otherwise instructed bythe protocol or through the Calling Number/Name delivery blocking feature. All callsgenerate a Call Detail Record by being processed at the residential gatekeeper.

� On-net to Off-net (calls originate on the IP voice network and terminate on thepublic-switched network or with an IP termination partner): The call originates onthe service providers IP network from the CPE endpoint device and the callterminates on Public Switched Network (PSTN) through a gateway or other IPnetworks. The subscriber dials a public E.164 number and the call is routed throughthe gateway or to another gatekeeper/call manager. All caller identification (numberand name, and presentation/restriction identifiers) information will be sent to thegateway/gatekeeper/call manager if available. The termination endpoint should beconfigured to properly pass along the caller information if appropriate based on theprotocols being used in the network. All calls generate a Call Detail Record by beingprocessed at the residential gatekeeper.

� Off-net to On-net (calls originate on the public-switched network and terminateon the IP voice network): The call originates from the PSTN or arrives from anotherIP network and terminates on the service provider’s IP network through the CPEendpoint device. The call is routed to the subscriber’s access device by the dialedE.164 number/called number. All Caller information will be presented to the accessdevice if available and if permitted. The presentation/restriction indicator will be usedwhen available from the PSTN trunk protocol. For such calls, the trunking gateway ofthe infrastructure gatekeeper will perform the billing/call detail recording functions.

Line Side Features

The phase one feature set will be attributed to the product as of its formal release inOctober. The phase two feature set will be positioned as part of a future release, probably

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in early 2002. See Residential Feature Description for a comprehensive description ofeach feature. The following feature names and capitalization should be used on allcollateral and documentation.

� Phase One Features� Call Forward Unconditional� Call Forward Variable� Call forward On Busy� Call forward No Answer� Selective Call Forwarding/Redirection� Selective Call Rejection/Call blocking (announcement)� Anonymous Call Rejection� Presence Management (Find Me/Follow Me)� Call Restriction (selected destinations)� Voice E-Mail� Service Bureau Support

� Emergency Services� Repair and Return/Customer Services� Operator Services� Directory Services

� Calling Line ID Presentation (CLIP)� Calling Line ID Restriction (CLIR)� Calling Identity Delivery on Call Waiting� Malicious Call ID (MCID)� Redial� Call Return� Call Waiting� Cancel Call Waiting� Unified Messaging Support

� Phase Two Features� Three-Way Calling� Automatic Recall� Automatic Callback� Message Waiting Indicator (light or stutter dial tone)� Distinctive Ringing� MGCP CPE Support

Subscriber/Provisioning Interface

The Residential Services solution provides XML, Open Database Connectivity (ODBC)and Java Database Connectivity (JDBC) programmatic interfaces to its routing andsubscriber databases. These interfaces are in the form of stored procedures that allowservice providers to easily build Web-based provisioning interfaces for both customerservice agents and subscribers. Agents will use these interfaces to create, modify anddelete accounts, to enable and disable specific services, and so on. Subscribers will usethese interfaces to setup, configure and use features such as find me/follow me, callscreening, voice mail and so on. Potentially, this capability could allow consumers tosubscribe to services, including basic telephone access, without having to speak to acustomer service agent.

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Billing Interface

The Residential Services solution produces call detail records for all calls in Radius format.Both flat rate and post-paid billing models are supported. The solution has been testedwith billing software from digiquant, Mind CTI and Portal.

Product Positioning

Pundits have been forecasting the delivery of voice communication services over HFCnetworks since the mid nineties; however, services have failed to emerge on a large scaleto date. This failure is due to several factors:

� Existing solutions are quite expensive� Competition in the US from incumbent telephone service providers is substantial:

service is readily available and fairly affordable� Regulatory barriers are high in the U.S.: there are often requirements for very high

availability (99.999%) and E911 capabilities� Many proposed solutions rely on untested technologies such as MGCP and SIP� Customers have very high QoS expectations� MSOs have been generally slow to upgrade their existing plants to support telephony� MSOs have focused primarily on selling Internet access as their next value-added

service because its easier

There is, however, demand for equipment and software to deliver telephone service overHFC and other broadband networks if the proposed solution can overcome some of thebarriers listed above, especially in markets that have low teledensity.

NetSpeak’s Residential Services solution has the following attributes that specificallyaddress the barriers listed above:

� Low initial cost: Telephone service with NetSpeak’s Residential Telephone Solutioncan be initiated with as few as 7500 subscribers at a cost of about $600 persubscriber, which includes the cost of the entire solution (cable modem, cablemodem termination system, NetSpeak’s software, integration, etc). This costcontrasts very favorably with alternative solutions, including TDM and other VoIPsolutions. With monthly subscription and long distance revenues of about $30 permonth, operators can expect to recoup their initial investment in about 3 years.

� Popular value added feature set: NetSpeak’s Residential Solution includes a varietyof features/services that subscribers often demand and which they are willing to payextra for. These features include caller ID, voice mail, call screening, selective callblocking and so on.

� Support for E911: With battery backup, the NetSpeak/Cisco solution providescomplete 911 service bureau support with high availability

� Use of proven technology: NetSpeak’s VoIP software is well proven in actualdeployments worldwide, and Cisco’s H.323 cable modems incorporate theexperience gleaned from deploying millions of H.323 ports in VoIP networks.

� High QoS: The NetSpeak/Cisco solution provides very good QoS, again based onCisco and NetSpeak’s long experience with H.323-based VoIP networks.

� MSOs have upgraded many cable systems to support Internet access: Doing so hasessentially prepared these systems to support telephone service. The only thingmissing has been a cost effective telephone solution. Because the cost of the plantupgrade to support two-way services can be amortized over two services, Internet

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access and telephone service, the operators ROI will be significantly higher thanwould be the case for either service by itself.

In addition, market interest is highest in geographies with either low teledensity, such asLatin America and Asia, or that have been more recently deregulated than the NorthAmerican market. PTTs in these geographies have often been relatively slow to deliveradditional lines to subscribers, their prices are high and customer service is poor. Thesefactors provide an excellent opportunity for new service providers, especially those withexisting local loop plants such as cable MSOs.

While the NetSpeak/Cisco Residential Services solution is clearly interesting to operators,it presents several positioning problems with the communications trade press:

� It is an H.323-based solution in a world that is rapidly evolving to SIP and MGCPcentric solutions

� As of this writing, NetSpeak’s migration path to a SIP/MGCP solution is unclear

The general communication strategy is to down play the solution’s H.323 foundation,focusing instead on the significant functionality that it affords. However, when theseobjections are presented, we can counter them in the following ways:

� Existing PacketCable/MGCP solutions are two expensive for most cable operators.Although these solutions can potentially support millions of users, they cost tens ofmillions of dollars for the VoIP software and servers alone. Most cable MSOs expectto initiate services with only a few tens of thousands of subscribers, scaling tohundreds of thousands of subscribers over two to three years. During this process,especially during the first few months, they will learn much about what it takes tomanage and deploy telephony services. NetSpeak’s solution is ideal for this processbecause it can be scaled incrementally to support millions of subscribers, but with alow initial investment.

� Existing SIP implementations are far from deployment ready for local loopapplications from both a hardware and software point of view.

� NetSpeak will deliver an MGCP/SIP solution for residential telephone service earlynext year. This solution will incorporate what we have learned from our initialdeployments and will be based on much more mature hardware and software. Wewill ensure that our H.323 solution interoperates with this new platform to conserveour customer’s investment.

Competitive Analysis

The following table summarizes the relative merits of 3 of the most prominent NetSpeakcompetitors for local telephone service:

Company Disadvantages AdvantagesNetSpeak New market entrant, H.323 platform Cisco channel, deployed productClarent Closed, proprietary solution; Cisco

target; very limited deploymentsEarly mover in market, goodreputation with carriers

Vocaltec Closed, proprietary solutions; nodeployments

None

Telecodia Very expensive Relatively mature technology,good relationships with Cisco andcarriers

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Key Messages

The following key messages should be emphasized in all marketing communicationsabout the NetSpeak Residential Services solution:

� Complete, integrated VoIP solution for delivering local telephone service of HFC andother broadband networks

� Twenty-first century telephone system with Web-based configuration for advancedfeatures� Find me/follow me� One number services� Voice email and unified messaging� Selective call blocking, call screening� Easy user provisioning

� Based on proven, reliable technology� Delivered in partnership with Cisco Systems, the world leader in IP technology� Scalable from thousands to millions of subscribers in a cost-effective manner� Deployed today in field trials with live subscribers� Can be used to deliver both competitive local telephone service and direct dial long

distance services

Partners

Given the relatively small size of NetSpeak, it is imperative that we “stand on theshoulders of giants.” Cisco and our in-market integration partners (Getronics, CapGemini)provide substantial credibility to our message.

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This chapter defines the sales and marketing collateral that will be developed for sellingthe NetSpeak Residential Services solution.

Target Audience

The target audiences for NetSpeak collateral are primarily the chief technical officer,network architects and senior marketing management of a carrier or MSO. Secondaryaudiences include journalists for communications trade press and general press, financialand industry analysts, and so on. The audience should be considered familiar withtelephone network technology and acronyms, but not necessarily the finer points of packettelephony solutions.

Creative Direction

Today, NetSpeak software is a fundamental part of the infrastructure of VoIP networks, anapplication that is mostly invisible to subscribers. Such a conservative application mightcall for conservative creative, but Internet culture has raise audience tolerance for “edgier”graphic and copy treatments. Also, Residential Services solution has a more end-userfocus, which would demand more consumer-oriented messaging. To balance these twodirections, NetSpeak collateral designs should reflect the following themes:

� Edgy graphic designs, color and type styles� Incorporating images of consumers using telephones in residential settings� Consumer style slogans� Enthusiastic, positive copy style� Comprehensive, well organized product descriptions, specifications

Architecture

The carriers or MSO that are the likely buyers of NetSpeak products are most interested inthe kinds and extents of services that they can offer with NetSpeak products. Informationabout individual products is interesting only insofar as requirements for server platformsand other technical data are concerned. An appropriate document architecture, then,would be primarily solutions oriented, with individual product descriptions as backup/drill-down material. In addition to traditional product brochures, other pieces of collateral willinclude PowerPoint presentations, white papers and applications notes.

The collateral created for this solution will be included on NetSpeak’s collateral CD. Inaddition, the Solutions Brief created for this solution will be printed.

The following collateral pieces are required to support the Residential Services solution:

Chapter

Collateral 2

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Type Scope Audience

Solution Brief A description of the Residential Servicessolution, its features and its application.Illustrated with photographs of consumersusing phones, web interface, systemdiagram. NetSpeak standard SB format,printed, four color plus CD-ROM, PDFformat, four to six pages.

Carrier marketing managers, carriertechnical management, industry analystsand press.

Product Brief A brief description of ResidentialGatekeeper, its features, applications andspecifications. Illustrated with systemdiagrams, NetSpeak standard PB format,CD-ROM, PDF format, two to four pages.

Carrier technical management, industryanalysts and press.

Presentation Speaker support highlighting theapplication, target market, architecture,financial justification and essential featuresof the Residential Services solution. ColorPowerPoint, 30 slides. Illustrated withsystem diagrams, NetSpeak standardpresentation format, CD-ROM, PPTformat.

Intended for network architects, technicalmanagement, senior management, industryanalysts, journalists

FeatureDescription

A detailed description of the ResidentialServices solution’s line side features.Illustrated with interface diagrams,NetSpeak standard PB format, CD-ROM,PDF format,30 pages

Carrier marketing managers, carriertechnical management, industry analystsand press.

Applicationnote

A detailed discussion of how a serviceprovider can use the Residential Servicessolution to deliver local telephone serviceover an HFC network.

Intended for carrier technical management,industry analysts and press.

17

This chapter defines the media relations activities that will be undertaken for publicizingthe NetSpeak Residential Services solution.

Goals and Objectives

The three primary goals of our media relations activities are as follows:

� To place one favorable, feature-length stories about the capabilities of the NetSpeakResidential Services solution in the communications trade press.

� To ensure favorable mentions of the Solution in the “Just Released” or “NewProducts” sections of all publications contacted (approximately 10)

� To obtain mind share with editors covering the cable telephony space to ensuremention of the NetSpeak solution in any roundup articles

In addition to the above, this launch should serve to raise NetSpeak’s profile with in theVoIP industry as one of the few companies to deliver a local access solution based onVoIP technology.

Strategy

To achieve the coverage outlined in the Goals section, NetSpeak will executestraightforward press tour aimed at a select group of cable and VoIP trade press. We willnot attempt to interest the broader communications trade press, the general interest pressor the financial press at this time.

We will announce the Residential Services solution at the National Cable TelevisionAssociation (NCTA) show in Chicago on June 11, 2001. The NCTA show is heavilyattended by potential customers and a fair sampling of the communications trade press.

To achieve maximum coverage around the formal announcement date, we will briefpublications from 10 to 5 days before the formal announcement. Since monthlypublications all maintain web sites that are updated daily, no long-lead briefing will bedone.

NetSpeak will also brief a select set of VoIP and cable technology analysts in late May toensure that comments and perspective from a neutral source are available for the tradepress.

In addition, NetSpeak will invite several partners to endorse the product, specifically CiscoSystems and one or more cable MSOs that are using the solution.

Chapter

Media Relations 3

18

Tactics

NetSpeak will conduct press tours in both the United States and Latin America. Becausewe do not yet have representatives in Europe and to contain expenses, a press tour ofEurope is not included. When NetSpeak obtains a integrator/reseller in Europe thatsupports the Residential Solution, a press tour would be appropriate. Because Cisco Asiahas not yet endorsed the Residential Services solution and to contain expenses, an Asiapress tour is not included. When NetSpeak obtains the endorsement of Cisco Asia, aseries of press meetings or events there would be appropriate.

U.S. Press Tour

As noted above, the primary communication vehicle will be a press tour focused on aselect group of cable and VoIP trade press. The press tour will be conducted from 10 tofive days in advance of the formal announcement on June 11. In the U.S., NetSpeak willvisit the offices of the target media.

Latin American Press Tour

In Latin America, NetSpeak will conduct press briefings over breakfast in Venezuela andMexico. These breakfasts will be organized in concert with our Latin American resellers,specifically Intesa and Getronix, upon whom we will rely to invite the press to thesemeetings.

Prerequisites for a Successful Press Campaign

While there has long been considerable hype surrounding cable telephony, NetSpeakcould be one of the first to announce a substantial deployment. Such a story should haveappeal to both the VoIP and cable trade press. Given both that cable telephony and H.323are considered to be relatively old news (olds?), we must have the following in order tohave success with those publications:

� A demo that shows the advantages of the product for consumers users. Such a demomust show the Web interface for the advance features (find me/follow me, voiceemail). If at all possible, the demo should include the ability to make an actual long-distance telephone call over an IP network to show audio quality.

� Cisco must endorse this solution� NetSpeak must have the endorsement of one or more customers at launch

Target Media

U.S. Communication Trade Press

The target media for NetSpeak Residential Services solution public relations activitiesinclude the reporters and editors of the following communications trade publications.

Publications Editor Info Frequency Lead

Time

19

CommunicationsWeek

Theresa Foley, Contributing Editor,Key West, FLtheresa@theresafoley.com

T +1 305 292 9166David Molony, Editordavid.molony@cwi.emap.comT: +44 (0)20 7505 8642

Weekly 3 Days

Inter@ctive Week John McCormick, Editorjohn_mccormick@ziffdavis.com516-229-3755 · Fax 516-229-3707Dana Coffield, CommunicationsEditordana_coffield@ziffdavis.com303-604-1046 · Fax 303-604-1230

Weekly 3 Days

Pulver Report Jeff Pulverjeff@pulver.com

Tel .631.547.0800

Weekly 3 Days

CommunicationsTechnologies

Natalia Feduschak, Senior editor800-325-0156

nfeduschak@phillips.com

Monthly 2 months

Broadband Week Bill Menezes, Editorbmenezes@cahners.com303-470-4834

Karen Brown, Senior Editorklbrown@cahners.com

303-470-4836

Weekly 3 Days

TelephonyMagazine

Kelly Carroll, Associate Editorkelly_carroll@intertec.comTel: 312-595-1080

Vince Vittore, Executive EditorE-mail: vince_vittore@intertec.com

Tel: 312-595-1080

Weekly 3 Days

CED/ MultichannelNews

David Iler, Contributing Editoreditor@denver.net

Voice: 303.470.4800Fax: 303.470.4890

Monthly 2 months

CommunicationsNews

Ken Andenberg, Editor

kena@comnews.com

Monthly 2 months

ComputerTelephony Ellen Muraskin, Executive Editor

emuraskin@cmp.com917-305-3325

Monthly 2 months

CommunicationsSolutions Magazine,Internet TelephonyMagazine

Tom Keating, Executive TechnologyEditor

tkeating@tmcnet.comPh: 800-243-6002, 203-852-6800;

Fx: 203-853-2845Greg Galitzine, Editorial Director

Monthly 2 ½ months

20

ggalitzine@tmcnet.comPh: 800-243-6002, 203-852-6800;

Fx: 203-853-2845

Global Telephony Wayne Walley, Editor-in-Chief

wayne_walley@intertec.com

Monthly 3 months

Tele.com Jason McKay, Business Editor

jmckay@cmp.com212-592-8435John Salak, Editor-In-Chief

jsalak@cmp.comPh: 212-592-8217

Monthly 3 months

Latin America Communications Trade Press

Publications Editor(s) /

Journalist(s)

Frequency Lead Time

Business News Americas TBD TBD TBDTelepress, Latinoamerica TBD TBD TBDCompuChile (Chile) TBD TBD TBDNet (Mexico) TBD TBD TBDPhone (Mexico) TBD TBD TBDPC World LA TBD TBD TBDRevista Comunicaciones (Venezuela) TBD TBD TBDRevista RNT (Brazil) TBD TBD TBDTelecom Online (Brazil) TBD TBD TBD

Telecom Latin (Chile) TBD TBD TBDTeleNexo (Latin America) TBD TBD TBDTelepress Latinoamerica (Brazil) TBD TBD TBDTotal Communications (Peru) TBD TBD TBDLatin Trade TBD TBD TBD

Communications Trade Press Pitch

NetSpeak’s Residential Services solution allows cable MSOs and other broadbandcarriers to begin offering residential telephone service in an economical and scalable way.Specifically, the solution has the following attributes:

� Low initial cost: Telephone service with NetSpeak’s Residential Telephone Solutioncan be initiated with as few as 7500 subscribers at a cost of about $600 persubscriber, which includes the cost of the entire solution (cable modem, cablemodem termination system, NetSpeak’s software, integration, etc). This costcontrasts very favorably with alternative solutions, including TDM and other VoIPsolutions. With monthly subscription and long distance revenues of about $30 permonth, operators can expect to recoup their initial investment in about 3 years.

� Popular value added feature set: NetSpeak’s Residential Solution includes a varietyof features/services that subscribers often demand and which they are willing to payextra for. These features include caller ID, voice mail, call screening, selective callblocking and so on.

21

� Use of proven technology: NetSpeak’s VoIP software is well proven in actualdeployments worldwide, and Cisco’s H.323 cable modems incorporate theexperience gleaned from deploying millions of H.323 ports in VoIP networks.

� MSOs have upgraded many cable systems to support Internet access: Doing so hasessentially prepared these systems to support telephone service. The only thingmissing has been a cost effective telephone solution. Because the cost of the plantupgrade to support two-way services can be amortized over two services, Internetaccess and telephone service, the operators ROI will be significantly higher thanwould be the case for either service by itself.

In addition, market interest is highest in geographies with either low teledensity, such asLatin America and Asia, or that have been more recently deregulated than the NorthAmerican market. PTTs in these geographies have often been relatively slow to deliveradditional lines to subscribers, their prices are high and customer service is poor. Thesefactors provide an excellent opportunity for new service providers, especially those withexisting local loop plants such as cable MSOs.

Research Firms

Targets

Firm Analyst(s)

Aberdeen Group Bill Hills, David Dines

Cahners In-STAT Brian Strachman, Laurie Gooding

Forrester Research Amanda McCarthy, Bruce Kasrel

Forward Concept Will Strauss

Frost & Sullivan Alpa Sha, Andrew Pierog, John Cha

Gartner Group/Dataquest Al Lill, Sujata Ramanaryan

GIGA Elizabeth Herrell, Rob Enderle

IDC Tom Valovic, Randy Perry, Paris Burstyn

Jeff Pulver Jim Pulver

Meta Group Elizabeth Ussher, Michael King

Network Strategy Partners Susan Almeida

Paul Kagen and Associates Margot Black

Probe Research Hilary Mine, John Marcus

Release 1.0 Kevin Werbach

Ryan.Hankin.Kent John Ryan

The Phillips Group-Info Tech Terry White

Yankee Group Megan Gurley, Brian Van Dussen, Sanjay Mewada

Zona Research Martin Marshall

Pitch

See the trade pitch.

22

This chapter defines the promotional activities that will be undertaken for merchandizingthe NetSpeak Residential Services solution.

Advertising

No advertising is contemplated.

Tradeshows

The shows at which we will feature the NetSpeak Residential Services solution include:

Event Location Date Booth SizeSCTE Orlando May8-11 CiscoSupercomm Atlanta Jun 3-7 CiscoNCTA Chicago Jun 10-14 Meeting roomFall VON Atlanta Oct 15-18 20x20Western Cable Los Angeles Nov 27-30

Demonstration Software

Demonstration software that shows how the user interface works will be available on ourWeb site. Since it is a Web-based application, it will not be necessary (or possible) todownload it. The demonstration will be scripted, possibly using Director.

Giveaways

None.

Chapter

Promotion 4

23

This chapter defines the budget that is required to publicly launch the NetSpeakResidential Services solution.

Item Budget

Media Relations

US press tour 20.0$

Latin America press tour 15.0$

Events

Meeting room at NCTA 15.0$

Collateral (printing)

Solutions Brief 5.0$

CD 3.0$

Sum 58.0$

Chapter

Budget 5