Five inspiring Business Model Innovations in the

Telecommunication Industry
Business Model Innovation, the most bare form of innovation by totally changing the business
model of a company. Several Telco’s have changed their business model radically, some just
recently, but why? Because the traditional telecom business models are facing some
unprecedented challenges due to the globalisation and rapid development of the internet. Telco’s
are not guaranteed of incoming revenues solely by setting up a network anymore. The need for
radical changes in their business models has increased dramatically. Please get inspired with five
really interesting business model innovations* in the telecom industry.

1. Customer relationship - Outsourcing the unexpected: Bharti Airtel Business Model

Innovation

Bharti Airtel, India’s leading mobile telecom service provider,

managed to increase their subscription base from 8.2 million in 2004 to 27 million in 2006. In
2007, Bharti announced that they have even crossed the 50 million customer mark within 143
months of start of operation. They recognised the need for a better customer relationship,
growing revenue stream and, at the same time, decreasing operational cost. In order to do so,
they did the unexpected and outsourced the IT and networking services while staying purely
focused on marketing, sales and distribution.

In 2007, Bharti crossed the 50 million customer mark within 143 months of start of operation

Number 1 in this list of inspiring business models because of Bharti’s strong vision on reaching
customers by effective marketing and sales methods rather then by a technology push from the IT
and networking services.

2. Revenue streams - Standing on the shoulders of the advertisers: Blyk’s Business Model
Innovation

Blyk is a Finnish MVNO (mobile virtual network operator)

operating in the UK and offers free mobile telephony to the youth till the age of 24. Blyk offers
their customers (or maybe I have to call them just joiners ;)) 217 texts and 43 minutes for free
each month. The minutes are paid by advertisers and are aligned with the extensive personal
profiles completed by the subscribers in advance. This increases advertisers rate of convergence
enormously and saves some boring ads on the mobile phones for the customers. It is a business
model driven by advertisers (watch this video of Blyk).

Number 2 in this list of inspiring business model innovations because of the braveness of Blyk to
offer real free communications for a strong niche market.

3. Customer segments - Cultivating emerging markets: Tencent’s Business Model

Innovation

Telco’s in emerging market are known to deliver the best

shareholders’ value by their high performance and low operating costs. However, contradictory
to what many people think it is rather uneasy to deploy new innovative business models in
emerging markets. First reason is the greenfield situation where all competitors have exactly the
same entry levels, the need for innovative value differentiator are even higher to earn that unique
customer segment. Secondly, Telco’s in emerging markets have an even higher urge to deploy a
business model which runs on very small operational costs, again due to the highly competitive
greenfield situation.

Tencent’s numbers are outstanding with 580 million registered users whereof 280 million active
on a very frequent basis. In the feastdays of Tencent their service was used by 29 million users
per day.

The 3rd award in inspiring business model innovations in the telecom goes to a unique business
model which has been set up by Tencent (China) in the emerging markets. Tencent deploys a
unique business model combining both telecom services and gaming. They offer their own
communication, instant messaging (IM) service named ‘QQ‘ which is based on the popular IM-
service of the mid ninetees ICQ. QQ holds room for popular chatrooms, personal avatars, games,
internet storage, and internet dating services. Most of the services are free and therefore very
popular among the youth. By the way, next to the popular QQ IM service, Tencent also offers a
tailored office (TM) and enterprise edition (RTX) or their instant messaging service.

Number 3 in this list of inspiring business model innovations because of very successful mix of
gaming and telecom service meeting the needs of the youth in emerging markets.

4. Core capabilities - Leveraging the knowledge of the crowd: Iliad’s Open Source Freebox
Business Model Innovation
 In France, Iliad with their subsidary French ISP ‘Free‘ had
shaken up the telecom business by bringing free internet television to the end consumer. They
developed their own ‘freebox’ - an internet television set-top box for households - which is based
on the open source Linux software. It is believed that Free was the first ISP that rolled out a
triply play strategy and the company is therefore recognised as one of the most important
innovation drivers in France. Besides the unique open source based core capabilities, the
company gets credits for their strong pricing strategy. It is still maintaining their initial price of
29.99 euros per month for the set-top box. Free has continously added new services and features
to their box without making compromised on their consumer price.

Number 4 in this list of inspiring business model innovations due to Free’s power to utilise free
available open source software in order to shake up the estabilished telecom industry
unprecendedtly till today.

5. Partner network - Creating a community of ‘Foneros’: Fon’s Business Model Innovation

The spanish ISP Fon encourage wireless internet users to

share their bandwidth for the community. Consumers who share their wifi get access to all other
wifi access points in the community all over the world. The wifi-sharing community, named
‘Foneros’ shares in the revenues stream which is gained by the non-foneros who pay a small fee
for accessing the network. The Fon start-up was a great success and the founder Martín
Varsavsky raised 18 million in the first finance equity round in 2006. Major companies invested
including Google, Skype and several equity investment firms. The innovative and largely used
business model was upgraded in 2007 when BT and FON announced that they integrated BT’s
UK wireless network with Fon, enabling an even greater wireless coverage for the Foneros.

The wifi-sharing community gets paid by users that pay a small fee for accessing the network.

Number 5 in this list of inspiring business model innovations due to the shown power of Martin
Varsavsky’s business model along with a community initiative all over the world.

Five Inspiring Business Model Innovation in the Telecom

….when have you planned to innovate your business model?

* In fact, business model innovation focus on the transformation of business to reposition the
business or to grow in new markets. The five inspiring examples describes not the full business
model innovations. I focussed solely on the business building blocks that changed the most as
you can see in the image. Moreover, succesfull business model innovations are mostly
companied with a maximum of two changed building blocks; bringing focus in your business
model innovation makes success.

Business Models in Wireless Industry

Continuing with my previous article on the “Marginalization of Carriers”, in this post, I would discuss the
current and emerging business models in the wireless industry.

The key activities in the value chain of the business model are Service Creation, Identity Management,
Service Provisioning and Billing. The key players in the ecosystem are the carriers, handset vendors,
platform owners (e.g. Symbian, Android), application providers and the content partners. In different
business models, different ecosystem players try to control most of the activities. There are broadly 4
business models that exist today in some form or the other.
Carrier Dominance Model: In this model, the users visit the portal screen of the carrier and
download/use services from the portal (also called the walled garden). The walled garden directs the
user’s navigation within particular areas, to allow access to a selection of material, or prevent access to
other material. Traditionally, the carriers have followed the walled garden business model and
controlled all the entities of the value chain of the business model. This model got prominence when the
wireless industry was in infancy. The carriers took upon themselves to offer end to end solutions to the
users. In this model, the content providers need to tie-up with the carriers for their presence on the
carrier portal. The carrier is responsible for marketing of the service to the users and also for billing and
collection. In return, the carriers charge a huge revenue share (as high as over 50-60%) plus the user
access charge. Common examples of this model have been Vodafone Live, NTT Docomo’s i-mode, Airtel
Live. AOL followed the most successful walled garden on the web and at one point of time, as per
Economist magazine, 40% of the time Americans spent on web was within the confines of the AOL
walled garden
Device Dominance Model: In this model, the device vendor is controls the device, platform and the
content & application partners. Service provider tie-up with the device vendor who puts the service
either on its application store or on its own portal. In this case, the device vendor controls the key
activities of service creation, identity management, service provisioning and billing. Carriers get the
access revenues and have a shared responsibility for identity management. This results in the highest
differentiation for device vendors but the least for the carriers. In this situation, the data adoption and
usage is normally high and the revenue share is better for the content partners. However, the content
partners are expected to take some load of marketing, billing and care in return for higher revenue
share. Also, the development cost of services is likely to be high as separate development is required for
each device vendor. Common examples of this approach are Apple and RIM. Both Apple and RIM have
complete control over the value chain and they decide on which services to offer
Platform Dominance Model: In this model, the mobile OS platform takes the dominant position. The
platform is available across many device vendors and hence the development effort on part of the
content and application partners is lower. There are limited service differentiation opportunities for the
carriers or the device vendors. The content players need to partner with the platform owner. The carrier
gets the user access revenue and the service revenue is shared between the platform owner and
content partner. In this model, the platform replaces the device vendor in the device dominance model.
The content partners get better revenue share (up to 70%) in return for billing, care and marketing.
Symbian and Android are examples of this kind of approach
Application Dominance Model: This model is very much similar to the web model. The application is
accessed using the carrier as pipe. The carrier gets the user access charges but entire service revenue
goes to the content and application owner. The activities of service creation, identity management,
service provisioning and billing are all done by the application owner. The marketing and care
responsibilities also lie with the application owner. The role of the device and platform owner does not
change in this case. Due to multiplicity of the devices and platforms, the service/application
development cost is very high. Facebook, Linkedin, Google gmail client could be examples of this
approach. However there are not many examples of paid applications in this model

There are many changes taking place simultaneously in the wireless space. The platforms are changing
from proprietary in-house operating system (OS) to proprietary industry OS to collaborative open
industry OS. Carriers are lowering the walls of the walled garden due to demands of the users as well as
pressures from the content and application vendors. New opportunities are evolving which enable the
content providers to completely by-pass of the carrier. All these changes require a change in the
business model in the wireless industry

The emergence of the optimal business model needs to ensure that the consumer interests are taken
care of and the consumer interests are the weakest if the entire or most of the value chain is controlled
by one single large player. In that respect, the platform dominance model probably is best suited to the
consumer needs. Due to higher base, the development costs are likely to be lower and all the ecosystem
players are likely to have an equal say in the platform dominance model. However, the outcome of the
success of any business model would depend on the outcome of the power play between the different
entities of the ecosystem
Can outsourcing create innovative business models?

September 24, 2010

In the last blog I explained how outsourcing helps innovation. In this blog I will discuss how
outsourcing can help companies to come up with new and innovative business models using
Bharti Airtel as an example.

Bharti Airtel is India’s largest Telecom service provider had following set of requirements in
growing their business all over India and globally:
Provide high quality customer service
Add new customers without increasing capex and decreasing total cost of ownership
Reduce the calling fee to the customers
Manage end-to-end business processes using latest Information Technology
Manage and grow telecom network capacity along with the growth of customers

How did Bharati Airtel achieve all the above goals?

Airtel outsourced everything except marketing, customer service, and finance. Airtel outsourced
all their business processes to IBM to manage it. By using IBM’s IT infrastructure and
standardized business frameworks, Airtel reduced their capital expenses and increased the
quality of customer experience. Airtel outsourced their telecom networks to Ericsson and Nokia.
Ericsson agreed to get paid by the usage of their network infrastructure instead of upfront
payment. This again reduced Airtel’s capital expenses.

By outsourcing their capital intensive tasks to their partners, Airtel concentrated in acquiring new
customers and managing them efficiently. Airtel managed to acquire new customers without
investing in new IT and telecom infrastructure and it gave them a significant competitive
advantage over their competitors. Using IBM’s expertise in customer faced IT business
processes Airtel managed to give superior customer service to their customers. By adding new
customers with fixed cost Airtel reduced their service fee to their customers and this made their
customers to use their phones more frequently which directly benefits Airtel’s profit margin.

As the late business guru C.K. Prahalad explained in his landmark book The Fortune at the
Bottom of the Pyramid emerging markets need new and innovative business models to make
profit by targeting poorest people. Airtel successfully created a innovative business model by
outsourcing all capital intensive services to third party vendors and kept core competencies
within their company. Their business model also helped them to get into new businesses
telemedia and digital TV. Globally Airtel is the third largest mobile operator and in India it owns
more than 30% of mobile market.

So the answer is YES, outsourcing helps companies create innovative business models, Airtel is
one example and I am sure you can find several other companies use outsourcing to create
innovation in their businesses.
Bharti Televentures’ business model was applauded by IBM CEO Sam Palmisano during IBM business
leadership forum in China where top CEOs from the western world participated. In Feb-2004, Sunil
Mittal, CEO of Bharti took a bold step in outsourcing its cellular network operations to its equipment
vendors – Nokia, Ericsson and Siemens. Sunil’s views were he could focus more on better customer
service.

Executive Summary
OSS Telecom Technology is an exciting Bend, Oregon based offshoot of OSS Telecom
Technology Taiwan, a $300 million steel conglomerate. The main company was formed to
pursue opportunities in operations support systems (OSS) in the telecom software industry. The
company has enjoyed a solid base of 24 telecom operators utilizing their software.

OSS Telecom Technology will pursue several objectives that will allow them to quickly gain
market penetration. The first objective is to offer a high value, high quality product for the
telecom industry. Also important from an internal operation standpoint is the ability to develop
superior human assets through training and competitive incentives. Lastly, OSS Telecom
Technology will pursue a customer intimacy model. The pursuit of this specific business model
will ensure complete satisfaction of their customers.

The Products

OSS Telecom Technology has a diverse OSS-based repertoire of products to support the telecom
industry. Their first product is CARIBOU, a subscriber billing software solution. Within the
CARIBOU package, traffic processing, bill generation, accounts payable, system administration,
packaging, and customer care and administration are addressed. Each module within CARIBOU
is its own robust application.

OSS Telecom Technology also offers their MEDUSA product. The MEDUSA product provides
network support in the form of configuration, control, and management of network elements.

The Market

The market potential is huge for OSS Telecom Technology's products, evidenced by what
appears to be the unstoppable growth of the telecom industry is quite promising. Currently, the
telecom industry is the strongest growth industry and is responsible for huge gains in the capital
markets. The proliferation of cell phones, as just one subset of the telecom industry is increasing
at rates which at one time were unimaginable. One illustrative example is that it is forecasted that
within two years 65% of children from the age of 10-15 will have cell phones. Broadband
Internet service is also forecasted to achieve record penetration. Within three years it is expected
that 85% of the population will have access to some sort of broadband connection with 60% of
that group subscribing.

OSS Telecom Technology will target two market segments. The first is Tier 2 telecom operators.
This segment has an 8% annual growth rate and 481 potential customer. The second targeted
market segment will be Tier 3 telecom operators. While the annual growth rate of this segment is
less at 6%, there are more potential customers, 2,011.

Management Team

OSS Telecom Technology has put together an experienced management team to lead the
organization through this dynamic industry. The assembled team was chosen to a large degree on
the experience that they had within the industry. The telecom industry is quite technical and
comprehensive information and insight of this unique sector is instrumental for success. Victor
Smith has been brought in as CEO. Victor has 25 years of telecom experience. The last 12 years
Victor has severed as COO of Atlas Telecom, a major player. OSS has another Atlas Telecom
executive in the person of Kenneth Jones. Kenneth is the Executive Vice President and has also
served with the NCR Corporation and Harris Corp. Kenneth worked on a large variety of
projects at these companies and brings a strong skill set to OSS Telecom Technology. James
Jackson is also an Executive Vice President with experience from IBM, Atlas, Mosaics and the
Lotus Development Corporation. Rounding out the management team is Ken Smith with topical
experience from MIDCOM Communications and US Intelio Networks.

OSS Telecom Technology, leveraging their strong management team and their superior product
offerings will reach the Break-even point in year two. After a Net Loss in year one, Net Profit
will become positive at the end of year two, but will leap up in year three. Sales for OSS
Telecom Technology is forecasted to be moderate in year one and see a hefty increase again by
the end of year three.

1.1 Objectives

OSS Telecom Technology's operating model is designed to meet our goals which include:

1. Developing OSS solutions for telecom operations.

2. Bringing high value, high quality products to market.
3. Developing human assets through training and competitive incentives.
4. Practicing a customer intimacy business model.

1.2 Mission

Our mission is to be the provider of high value, high quality, convergent OSS solutions to
telecom operators worldwide. These scalable solutions will have unparalleled support to ensure
flexibility and to meet--and exceed--customer expectations.
1.3 Keys to Success

Strategic Imperatives

In order to achieve its mission, OSS Telecom Technology has made a set of clear and distinctive
strategic choices. These choices have been developed based on two key factors:

 The OSS marketplace

 The company's capabilities

These choices translate into key strategic imperatives which OSS Telecom Technology is
pursuing to gain leadership in the OSS market. There are three levels of operators within the
telecom market. Tier 1 are operators with a subscriber base above one million, Tier 2 are
operators with a subscriber base between 100,000 and one million, and Tier 3 operators are those
with less than 100,000 subscribers.

 Value focus: OSS Telecom Technology will focus on Tier 3 operators, providing full featured,
scalable, and reliable products and service at competitive prices. The lifecycle price of OSS
Telecom Technology's software products will be 20-40% below Tier 1 competitors such as LHS
and Kenan, but will still possess all the features and services offered by these players. Tier 3
competitors, such as Moscom, while lower on price, will not be able to compete with the
features and service OSS Telecom Technology offers.
 Wireline and Wireless Product Portfolio: OSS Telecom Technology's product offering will evolve
from Global Systems for Mobile Communications (GSM) to include other wireless, fixed, and
Internet billing solutions. While initial products were GSM-based, OSS Telecom Technology is
already broadening its product lines to include local loop billing and convergent billing
capabilities, which are key customer requirements.
 Engineering Center of Excellence: OSS Telecom Technology will continue to develop its low cost,
high quality software development and programming center in Taiwan, which provides
significant cost advantages over U.S. and Europe-based competitors.
 Consulting Services: OSS Telecom Technology will combine consulting services with products to
develop strong customer relationships and advance its product offerings. The provision of
consulting services will allow a more customized, relationship-driven approach to our
customers. OSS Telecom Technology will pursue those projects which can be made into
products and marketed to other potential customers. OSS Telecom Technology will employ strict
criteria to determine which consulting services projects it undertakes. Unless there is an
opportunity to "productize" or repeat the solution being developed, the project will not be
pursued.
 Sales Channels: A multi-national marketing and sales team will build both direct and indirect
sales channels. In order to capitalize on the opportunities in each geographic region, OSS
Telecom Technology has put into place a network of on-the-ground, experienced, and
incentivized sales and marketing personnel. These teams will build both direct customer
relationships and indirect channels (through systems integrators, switch manufacturers, etc.).
The indirect channel partners will give OSS Telecom Technology critical leverage. OSS Telecom
Technology will allocate resources to building its partnerships with indirect sales channels.
Partners such as Compaq will allow OSS Telecom Technology to gain geographic reach,
 credibility, and customers which would not otherwise be possible. Specific partner support
programs will be put into place to ensure cultivation of these partnerships.

This section describes OSS Telecom Technology's different products, including CARIBOU,
MEDUSA, PAN, and the new products in production such as the SMSC and the IN Pre-Paid
Calling Card platform. This section also gives an overview of the product road maps for the
various products and includes some of the highlights which make the products unique from and
more advanced than similar competing products.

3.1 Service Description

Below is a description of OSS Telecom Technology's different products, including CARIBOU,

MEDUSA, PAN, and the new products in production such as the SMSC and the IN Pre-Paid
Calling Card platform. This section also gives an overview of the product road maps for the
various products and includes some of the highlights which make these products unique from
and more advanced than similar competing products.

Description of CARIBOU
Subscriber Billing

The basic billing system consists of the following modules:

1. Traffic Processing
2. Bill Generation
3. Accounts & Payment
4. Systems Administration
5. Packaging
6. Customer Care and Administration
7. Specific Value-Added Features
I. Traffic Processing

1. Pricing: CDRs received through tape or from the mediation system are validated and then taken
up for pricing using the tariff package, tariff plan, rate structure, rate calendar, discounts
structure. There are four types of pricing - FLAT, VOLUME, STEP, and SEGMENTED.
2. Reject Maintenance: CDRs with missing information are listed with reject value codes for
manual processing.
3. Traffic Posting: After pricing, the records are posted to the corresponding subscriber account
that is used during bill generation.

II. Bill Generation

Bill generation can be of three types--ad-hoc billing, warm (hot) billing, and cycle wise billing.
The system can take care of multiple billing cycles and multiple billing groups.

1. Pre-bill processing: This process is mainly used for calculating the recurring amount of each bill
cycle.
2. Final bill generation: This process starts after pre-bill processing and it calculates the total bill
and its corresponding discounts for every subscriber. Other than total bill calculation, it takes
care of VOLUME PRICING, FLAT discount, and VOLUME discount.
3. Bill Posting: Records are posted to their corresponding subscriber's account after bill generation.
4. Bill Printing: Printing can be distributed over various printers in the network. In addition, printing
can be selective depending on the account and subscriber number.

III. Accounts & Payment

 Online Payment: Payment can be done over the counter, which is online.
 Off-line Payment: Payment can be collected manually and it can be entered into the system
collectively (in batch).
 Payment Adjustment: Adjustments can be made against accounts in case of both online and off-
line payment.
 Refund: System is capable of providing refunds to its customers.
 Bill Follow-up: In case of late payment, bill follow-up is necessary. The system is capable of
generating reminders in the occurrence of a late payment.

IV. Systems Administration

1. User Administration: This takes care of user management and their privileges.
2. Number Inventory: Manages all subscriber's and service's number inventory.
3. Subscriber Activation/Deactivation: This activity is performed through MEDUSA's service
provisioning system.
4. Bill Correction/Write-off: This is a supervisory function where any bill correction and write-off is
taken care of.
5. Master Information: All the static information is managed through this module. Usually all
system parameters are maintained here.
6. High Toll Alert: System is capable of generating a high toll alert report that can help to identify
fraud.
Packaging

A. Packages: This system can support the following four types of packages:

1. Primary Package: This package is mainly for basic services. It contains four types of
plans: one-time, deposit, recurring, and service usage time.
2. Value-Added Package: This package is designed for all value-added services like call
forwarding, call waiting, busy transfer, STD, ISD etc. It contains four types of plans: one-
time, deposit, recurring, and service usage.
3. Free Service Package: This package is designed for free minutes or units of calls only. A
particular package can be attached to the customer or a specific free service can be
provided.
4. Discount Package: This package is designed for discount only. A particular discount
package can be attached to the customer. Discount can be two types - Flat and volume.

B. Marketing Plans: Each package is attached to various plans. There are five different plans:

1. One-time Charge Plan: This plan is used for one-time charges only.
2. Deposit Charge Plan: This plan is used for deposit charges only
3. Recurring Charge Plan: This plan is used for recurring charges only.
4. Service Charge Plan: This plan is used for service charge only.
5. Long Distance (National and International) Charge Plan: This plan is used for any
national and international long distance call charge.

C. Rate Structures: Support for various types of rate codes and corresponding rate details.

D. Rate Calendar:

1. Daily Rate Calendar: A rate calendar may be generated separately for each day of the
week.
2. Holiday Rate Calendar: This rate calendar is used for holidays only.
3. Ad hoc Discount Calendar: This rate calendar is used for ad hoc discount.

VI. Customer Care and Administration

CARIBOU provides a single window, single view for the Customer Care Agent (CCA) to
address any activity or query pertaining to subscribers that he/she is responsible. A customer
calling online has to go no further to address any issue related to the service. The CCA even has
access to bill images and CDR history through that single window.

A. Subscriber Registration: Registration is a quick and easy process, which may be performed
both on-line as well as off-line (batch). Different marketing plans are offered to a customer such
as: choice of bill date, number selection choice, and other related start-of-service options. Of
course, the package allows for changes in options as many times as is required.
B. Customer Inquiry:

1. Service (primary & value-added services)

o Package related information
o Tariff related information
o Bill related information
2. Activation/Deactivation status
3. Usage Charges
o Bill Amount
o Pending/Adjustment amount
o Credit limits information

C. Customer Complaint: CARIBOU recognizes the fact that the grade of service of telecom
service network draws parameters from all possible service point. To address, track and
contain/minimize faults/complaints, the system provides for a sophisticated management and
tracking of technical and commercial faults/complaints.

D. Complaint Tracking: Recording a complaint is not sufficient. More often than not, a customer
will follow-up on the complaint to inquire about the completion status. The system allows
complaints to be recorded along with updating of the action initiated, thus enabling status
tracking. Various reports can be generated on complaints and actions taken. Complaint aging
reports can also be generated for MIS and evaluation of the quality of service of the network.

E. Customer Feedback: Collection of customer feedback is essential in any service. The feedback
is analyzed and action is taken to improve the quality of service.

F. Emergency Service: A directory service for emergency and utility numbers and other details is
provided in CARIBOU for better customer care for the network.

Description of MEDUSA

The activities handled by MEDUSA are:

1. Acquisition of data from network element.

2. Validation of the data, translation into intermediate form suitable for delivery and storage
of the data.
3. Delivery of the processed data to other applications according to a predefined format.

The system can provide various services for configuration, control, and management of the
Network Elements including:

1. Activation of a subscriber.
2. Deactivation of a subscriber.
3. Denial of service to a subscriber.
4. Resumption of service to the subscriber.
 5. Addition of value-added services, like three-party conference and call forwarding, to the
subscriber.

MEDUSA coordinates and controls the actions of the various NEs to which it connects, thus
obviating the need to configure each concerned entity individually.

3.2 Competitive Comparison

Specific Value-Added Features

The OSS Telecom Technology billing system is functionally rich and modular. It supports basic
services and several value-added services. Some of the special features of CARIBOU are:

 High Toll Alert: Monitor credit limits and different thresholds and generate action alarms. This
feature can be configured to trigger more often to reduce network operator exposure.
 Warm Billing: Ability to generate bills on demand.
 Friends & Families: Qualifying a group of numbers for individual subscribers enabling special
discounts when calling those numbers.
 Churn Analysis: Analysis of calling patterns, demographic details, and behavior of usage to
predict and prevent subscriber exodus.
 Trend Analysis: Statistical analysis of usage patterns and correlation to demographic parameters
to assist marketing.
 Fraud Management: Analysis of customer database and monitoring of online calls to detect and
prevent possible fraud and limit network exposure.
 Loyalty Programs: Bonus programs and credit earning schemes enabling customer
retention. Partnership with airlines and other such organizations in exchange of data.
 Point of Sales (POS): Sales outlets and dealer/agent/retail outlets to manage sales of services in
a commodity fashion.

3.3 Technology

Today's changing scenario of fierce competition forces telecom operators to offer multiple
services. The use of information technology to effectively manage telecom operations is thus
becoming a key differentiation in the drive to get a share of the market. The role of IT is not
limited to "piece-meal" automation. What an operator looks for is seamless integration of his
information needs and the ability to provide innovative customer services.

At the core of a telecom operator's business is revenue billing for the service(s) that it provides.
Timely and accurate billing are preconditions for a smooth operation. At the same time, an
operator is largely dependent on the billing system to provide the flexibility in marketing plans
that subscribers desire. Customer care is another area which is crucial to operations, and, as a
result,  billing solutions available in the market need to be judged on the basis of timeliness,
accuracy, flexibility, and customer care administration.
OSS Telecom Technology has a well-defined process of quality assurance, which is followed
and monitored rigidly. The group reports to the CEO and President, directly.

OSS Telecom Technology has initiated the process of ISO 9000 certification for its systems and
procedures. The systems will be certified for our Taiwan operations. All OSS Telecom
Technology engineering is being performed out of its Taiwan development center, therefore OSS
Telecom Technology will initially apply for certification of those operations. With the help of
external consultants, OSS Telecom Technology has completed most of its
projected milestones. It is expected that OSS Telecom Technology's Taiwan operations will
achieve ISO 9000 certification by June, 2001.

3.4 Future Services

IN Pre-Paid/Calling Card Platform

Product Description

The Calling Card/Pre-Paid system shall be broadly categorized into two subsections.

1. Service Management - for call processing

2. Business Management - for system administration, customer care, and value card management

Call Processing

Some features for calls controlled through this platform are as follows:

 Call Setup
 Call Tracking
 Call Termination
 Credit Update
 CDR Generation
 Call Rating

Some of the functions of the Calling Card platform are mentioned below.

Dealer Management

The system has an optional dealer management module as a part of value card management.

Customer Care and Administration

The customer care portion of the product shall be flexible to incorporate the following functions,
as well as the future needs of the service provider. It shall be such that the overhead on the
customer care expenditures shall be kept at a minimum.

 Add/modify/delete subscriber data

  Add/modify/delete packages
 Add/modify/delete tariff tables of various other operators

Operator Assistance: Subscribers shall directly talk to the operator for any complaints, queries,
and recharging.

Value Card Management

 Value Card Generation

 Value Card Inventory
 Value Card Usage
 Value Card Expiration

Recharging

DTMF support or through operator assistance

Forbidden Numbers

The administrator shall maintain the forbidden numbers list in the database so that the system
checks these numbers while confirming the call setup. The customer care module will
provide support to add or delete the forbidden numbers.

CDR Viewing

The system administrator shall view the details of the CDR by accessing them from the
database. The customer care module will provide support for this feature.

Credit Usage Reports: The system shall generate credit usage reports for the subscribers using
the CDRs.

System Administration

The system shall have a system administrator to execute the following:

 Authentication of users: The system allows the users to access various features by checking the
authentication of the person logged in.
 Backups: The system will support backups of data, like CDR and value cards, when the database
becomes significantly large.

Consumer Ease of Use Features

 Minimum MOC before allowing MTC (for wireless implementation)

 First call treatment
 Reminders
 Announcements
Product Road Map

This section intentionally does not depict an explicit road map for Pre-Paid IN. The features
incorporated in Pre-Paid IN for CARIBOU will be driven by customer care, billing, and tariffs.

Conclusion

The OSS Telecom Technology Pre-Paid IN/Calling Card platform is conceived to be a market
leader for the following reasons:

 IN node-based technology
 Value for money
 Enhanced customer care for pre-paid subscribers
 Quick response time
 Capacity limited to number of lines in the switch

3.4.1 Mini-Short Messaging Service Center

SMSC (OSS Telecom Technology's Mini-Short Messaging Service Center)

Description of the SMSC Platform

OSS Telecom Technology has two deployments of the same product. In one approach SMSC
kernel and the G/I WMSC functionality are bundled into a single entity running on one platform,
whereas the conventional architecture maintains various distributed SMSC kernels connected to
a G/I WMSC through a TCP/IP network. This will help the customers who would want the entire
solution in one box and do not want the solution to contain separately managed entities.

The distributed SMSC kernel is mainly used for connecting SMEs that need to handle massive
throughput. It is also helpful when there is a need for having SMSCs to be geographically
separated.

Providing a configurable SME interface: This can configure itself from an SME protocol
specification file. This file is SME vendor specific. The underlying protocol for message delivery
could be either TCP/IP or X.25.

The SMSC is capable of generating the interface required to connect to different SMSCs. This
will make the SMSC capable of connecting to all major existing interfaces like EMI from CMG,
SEMA, etc. Most importantly, it will help SME vendors define an appropriate interface for their
application that is compatible with SMSC.

Configuring the SS7 card components through the SMSC user interface. Through user interface,
it is able to configure more than one kind of hardware but insulates the hardware idiosyncrasies
from the user. The user will always to presented with the same abstract view of the SS7 network
through the interface.
Features of the SMSC Platform:

 Supporting message concatenation

 Supporting message replacement
 Provide two different architectures for deployment
 Providing a configurable SME interface
 Configuring the SS7 card components through the SMSC user interface
 Providing diagnostic and troubleshooting sessions with managed object
 Making the SMSC available on other platforms
 Making the SMSC capable of generating its own CDRs
 Rapid implementation of VASP over SMS possible, e.g. Stock Watch, email notification and
retrieval, other content provisioning interfacing the Internet, etc.

Conclusion

OSS Telecom Technology's SMSC proves to be the best in its class because of the following
features:

 Available on NT and UNIX

 Distributed computing enabling implementation on multiple machines
 Open interface for any RDBMS
 Value for money
 APIs for rapid deployment of value-added applications

3.4.2 Performance Appraisal of Networks (PAN)

PAN:  Performance Appraisal of Networks (Telecom Network Performance Monitoring

System)

Description of PAN

PAN offers a robust and flexible menu-driven reporting facility. Its reporting module provides
both routine and customized reports. The user can specify the following for generating summary
reports:

 The date of the report to be generated

 The network counters to be used for the reports
 The sort criteria (e.g. by descending utilization, etc. - highest first)
 Threshold values to select the data (e.g. more than three Erlangs traffic)

Reports on a daily, weekly, and monthly basis, on key statistics, help the network operator to
consistently monitor under- or over-utilization of network resources, call pattern distribution,
quality of service, etc.

PAN's Features

 Three-dimensional graphs
  Call-key Statistics Module
 Channel Usage Analysis Module
 Network Profitability Ratio Analysis Module
 Comparative Ratio Analysis Module
 Rank of the Network
 A map of the network hierarchy
 Fault management
 ODBC-JDBC Bridge
 OMC-Switch Interface
 BSS Subsystem Planning Module
 Stores network performance for 6 to 12 months
 Reduces data storage load on the telecom network's OMCs
 Displays multiple graphs for comparisons of various behaviors of network components
 Can be integrated with multi-vendor switch and radio equipment
 Flexible querying and display facility
 Provides indication of revenue earned and revenue lost
 Ease of use - minimum or no training required for MIS use
 Client-server architecture based on JAVA

Conclusion

PAN rides on new technology to take advantage of and keep ahead of competition. There are
very few similar products in this class. PAN is better than Metrica and similar products for the
following reasons:

 Runs on JAVA and is hardware independent

 More value for less money
 Internet enabled and accessible
 User customizable query builder

Market Analysis Summary

Operations Support Systems (OSS) encompasses a broad range of applications and
services. Although definitions vary, OSS typically includes applications geared toward customer
acquisition, service provisioning, asset management, network management, customer care, and
billing. Increasingly, these applications are becoming more interdependent and carriers are
beginning to realize how important world-class OSS is to effectively eliminate competition.

Telecommunications OSS

The OSS segment of the telecommunications industry is experiencing tremendous growth. The
increasingly competitive telecommunications market, both wireline and wireless, has increased
carriers' awareness of the importance of OSS. As a result, companies are investing millions of
dollars in their OSS in order to improve operations and create a competitive advantage.
In terms of aggregate spending on OSS, projections differ, mainly because there is no consensus
on the exact definition of OSS. Nevertheless, the Yankee Group, an internationally recognized
leader in research and consulting services, predicts that the OSS market will grow to almost $60
billion worldwide in 2001 before falling off slightly. The slight decrease in spending is the result
of more companies choosing to build, rather than buy, certain components of their OSS.

Customer Care & Billing Overview

OSS Telecom Technology currently focuses on one aspect of OSS, customer care and billing
(CCB) systems. At its highest level, a CCB system provides a carrier with the means to bill its
customers for service. However, bill generation is but one aspect of a complete CCB application.
The data captured by the billing system provides valuable information to both the carrier and the
customer on how services are used, what additional services are necessary, how services can be
used more efficiently, or even how effective particular promotions or operations have been.
Today's CCB systems collect, collate, manage, and report this valuable information to
management, usually in real time.

CCB systems are also vital in terms of customer service and satisfaction. By having real time
access to customer information, customer service representatives can better respond to customer
needs in a timely and efficient manner. In addition, modern CCB systems can turn the monthly
bill into an invaluable marketing tool; this is important since the customer's bill is the only
regular contact a company has with its customers. As a result, a great deal of attention is
typically place on a company's CCB applications.

4.1 Market Segmentation

Telecommunications Customer Care & Billing Market Segments

To better understand the market for CCB applications and services, it is useful to consider the
market by segments. With respect to OSS Telecom Technology, three main criteria for market
segmentation are particularly important: geographic, technological, and subscriber. Within these
segments, the number of operators will be examined, since it is operators who buy and use CCB
systems.

Geographical Market Segments

The available market for CCB products is not limited to a single country. The market for CCB
applications and services is indeed global. Literally every country on earth has some type of
telecommunications infrastructure in place. However, the degree of teledensity within countries
and the number of competitors within countries varies greatly. Therefore, it is useful to segment
the available CCB market into global regions.

OSS Telecom Technology has identified five individual regions: Europe, North America, Latin
America, Africa, and Asia. Together, these regions account for the entire world, and OSS
Telecom Technology's potential customers.
Technological Market Segments

Another useful way to look at the overall market is through technology. In this case, the total
market was segmented based on whether the operator is a wireless service provider, a wireline
service provider, or a provider of both. The number of wireless operators is greater than that of
wireline operators. This is to be expected given that in many developing countries wireless is the
most cost-effective type of infrastructure. In addition, competition has been active in the wireless
market longer than it has been in the wireline market.

Subscriber-Based Market Segments

The last type of market segmentation to consider is subscriber-based. The distinction by

subscriber size is important because operators' needs, with respect to CCB applications, typically
change with subscriber levels. Tier 1 operators would typically tend toward in-house
development of their CCB applications. Tier 2 operators and Tier 3 operators are more likely to
opt for a third party CCB application. OSS Telecom Technology's primary focus is on Tier 3
operators, which represent the vast majority of available operators.

Market Analysis

2000 2001 2002 2003 2004

Potential Customers Growth CAGR

Tier 2 Telecom Operators 8% 481 519 561 606 654 7.98%

Tier 3 Telecom Operators 6% 2,011 2,132 2,260 2,396 2,540 6.01%

Other 0% 0 0 0 0 0 0.00%
Total 6.40% 2,492 2,651 2,821 3,002 3,194 6.40%

4.2 Target Market Segment Strategy

Post-paid Customer Care and Billing

The total available market for Customer Care and Billing (CCB) systems worldwide is projected
to be $6.9 billion per year in 2004.

A measurement of total available market is the compilation of the number of telecom operators
that will replace their billing system and the number of new billing systems coming online each
year. Half of all billing systems are replaced on average every four years. With over 3,500 Tier 2
and Tier 3 telephone operators currently in operation, and a projected 1,500 new Tier 2 and Tier
3 operators coming online over five years, this means that over 4,300 billing systems will be
needed in the next five years.

Prepaid Intelligent Networking (IN)

OSS Telecom Technology has projected three primary products in its forecast:

1. Post-paid CCB
2. Prepaid IN systems
3. Consulting Services projects

The post-paid CCB systems will be sold to the number of Tier 2 and Tier 3 operators listed
above, specifically, new operators and those who are choosing to replace their current system.
Prepaid IN systems have a much broader market opportunity given the small penetration of
Prepaid IN in Tier 2 and 3 providers. Operators in developing countries project that over 50% of
all calls will eventually be prepaid, while developed countries may reach 35%. This growth,
coupled with the fact Prepaid IN is an add-on, increases the number of new systems operators
will purchase.

Current prepaid solutions (non-IN based) are expensive, require duplicate switch fabric, and will
not be built out to support such a high level of subscriber base. In addition, the operator must
support Intelligent Networking capability to support IN functionality over the long term to
maintain competitive advantage. All GSM operators currently support IN functionality, and all
other operators will certainly implement IN by the year 2005. Very few of the Tier 2 and Tier 3
prepaid solutions today are IN based. This means that the entire Tier 2 and Tier 3 operator base
is a potential market for Prepaid IN over the next five years, with over 5,000 operators expected
to be in operation by the year 2005. The average price for a Prepaid IN solution for Tier 2 and 3
operators will be $1 million.

OSS Telecom Technology Target Customers

Within OSS Telecom Technology's stated primary and secondary markets, OSS Telecom
Technology has developed a “Stepped Target Market Strategy." This strategy is based on two
key elements:

1. Telecom operators have a strong desire to purchase from a vendor with installations similar to
their own, and
2. That larger CCB vendors are moving upscale to larger operators as they gain more experience
and as IT resources continue to become scarce. The primary market of this type of CCB vendors
is Tier 1 operators.

OSS Telecom Technology's first installation base consists primarily of GSM operators in the
range of 25,000 subscribers and under. Through a stepped strategy, OSS Telecom Technology is
moving in three directions:

1. Using this install base to move up to the next band of subscribers within the GSM market,
2. Leveraging GSM wireless experience to penetrate other wireless types in the same subscriber
bands, and
3. Working with GSM operators to provide convergent services such as cable, Internet, and
wireline, and therefore gaining experience in these disciplines.

This strategy currently puts OSS Telecom Technology in the Tier 3 (less than 100,000
subscribers) market, with each step carefully planned to be sure we do not overreach. It is key to
this strategy to maintain all customers as long-term partners and referenceable sites. We want to
under-commit and over-deliver in each step of this strategy.

By repeating this strategy, OSS Telecom Technology, over a five-year period, will offer a wide
variety of convergent solutions to Tier 3 and then Tier 2 (100,000 to one million subscribers)
telecom operators.

4.2.1 Market Needs

The outlook for the future appears positive. Telecom markets will continue to deregulate and the
number of operators will continue to grow to 5,500 in 2004, representing an additional 1,700
when compared to 1998.

With the increase in operators, the demand for OSS has also increased. OSS are the systems on
which the telecom operator's business runs. At the core of OSS is billing for telecom services,
which is provided by Customer Care and Billing Systems (CCB). CCB systems enable accurate,
timely, flexible, feature-rich billing of services. The additional competition in the marketplace
has made OSS and CCB systems, in particular, a key source of competitive advantage for many
players. CCB systems have become increasingly sophisticated, incorporating features such as
hot-billing (where users receive billing information on demand), Internet billing (billing data
disseminated over the Internet), multi-service billing, loyalty programs, and “friends and family”
type services.
4.2.2 Geographic Market

Geographic Market

The Stepped Target Market Strategy has been used to develop geographic markets by first
developing the geographic market closest to home and expanding as one develops experience.
With a large center of excellence in Asia, this was the first market to utilize. Asia and Europe are
predominately GSM. As a result, moving from Asia to Europe makes perfect sense. Latin
America is expanding the installed base of GSM systems. Therefore, OSS Telecom Technology
has made its first step in Latin America and will move forward from there. In addition to Asia,
the U.S. and Europe were early targets for consulting services because much of the technology
and new solutions are developed in these regions.

OSS Telecom Technology's target market is focused on providing OSS solutions to both Tier 3
and Tier 2 operator worldwide. The priority of issues which drive the purchase decision for Tier
3 operators is slightly different than for Tier 1 operators. Understanding these priorities is key to
developing the OSS Telecom Technology value proposition within its target market. A list of
drivers is given below to compare Tier 3 priorities against Tier 1 priorities as part of the selection
criteria for selecting a vendor. These priorities are important to consider when differentiating
OSS Telecom Technology from Tier 1 CCB vendors.

OSS Telecom Technology's position relative to these drivers:

 Price: OSS Telecom Technology will maintain a price that is 20% less than Tier 1 market vendors
for licenses, and 40% less for services. The service price is significant because it is often 50% or
more of the purchase amount for many CCB vendors.
 Features: Within the given product module, OSS Telecom Technology will offer features that
meet or exceed Tier 1 vendors. OSS Telecom Technology will also maintain a robust product
road map that is discussed and approved by vendors in a user group format.
 Service offering: While service offerings to Tier 3 operators from other CCB vendors are
either shrinking or are too expensive, OSS Telecom Technology will offer a complete package of
services at affordable prices.
 Product flexibility: OSS Telecom Technology will strive to maintain a lead in the ability of the
operator to easily add schemes and re-configure the system. In addition, OSS Telecom
Technology will maintain an open environment.
 Scalability: OSS Telecom Technology will continue to engineer scalability into its product. This
will entail commitment to multi-rating engines and porting to more robust operating systems
like UNIX.
 Vendor experience: OSS Telecom Technology will follow a stepped strategy to be sure we
under-commit and over-deliver to our customers.

This positioning strategy differentiates OSS Telecom Technology from Tier 1 CCB
vendors. This leaves a number of other CCB vendors which are targeting Tier 3 vendors. The
approach of these vendors is to lead with price and minimize service functionality. OSS Telecom
Technology believes that most Tier 3 operators desire a full service vendor or a partnership at an
affordable price. OSS Telecom Technology intends to be that vendor
4.3 Service Business Analysis

The economics of the telecommunication, Internet, and cable markets support thousands of
companies. These companies include direct service providers, hardware suppliers, software
suppliers, consultants, and numerous other supporting organizations. However, for the purposes
of this report, it is useful to focus only on the companies that provide CCB applications and
services.This industry segment is the main focus of OSS Telecom Technology.

4.3.1 Distributing a Service

Channels

Products will be sold through direct and indirect channels. The mix is split evenly between the
two. Indirect channels include:

 System Integrators
 Computer Suppliers
 Switch Vendors
 Multi-Tier Operators

OSS Telecom Technology is currently developing relationships with indirect channels including:

 Vertical Matrix
 Compaq
 GemPlus
 CMG
 Harris
 Keppel
 Siemens
 IBM
 Bellcore
 Unysis

Quota Assumptions

The following are quota assumptions for Direct and Indirect Channels per salesperson. As OSS
Telecom Technology develops more experience and presence in marketing, our efficiency in
sales will increase.

Lead Development

One of the key responsibilities of marketing is lead generation. The following methods are used
for lead generation:

 Advertising in trade journals

 Trade shows and conferences
 Telemarketing
  User group
 Direct mailing
 Targeted sales calls
 Customer referrals

4.3.2 Main Competitors

Competitor Financial Performance

The market for billing and customer care has enjoyed solid growth for the past six years.
Companies that compete in this market were direct beneficiaries of this growth, as were their
shareholders.

Analysis: LHS Group and Saville System

Although OSS Telecom Technology faces numerous competitors in the CCB market, two are
worth a closer look. LHS Group and Saville Systems are important because their historical
growth and performance mirror OSS Telecom Technology's projections. Both of these
companies focus exclusively on CCB systems and related consulting services, both derive a
majority of their sales from the telecommunications industry, both are active in international
markets, and both have grown their revenues to over $100 million in approximately five years.
LHS Group's market capitalization grew at a CAGR of 201% from June, 1997 to June, 1998
while Saville's market capitalization grew at a CAGR of 119% from December, 1995 to June,
1998. The stock market, as measured by the S&P 500 stock index, only returned a Compound
Annual Growth Rate (CAGR) of 30% from June, 1997 to June, 1998 and 28% from December,
1995 to June, 1998.

4.3.3 Business Participants

With the increasing demand for OSS and CCB systems, many OSS/CCB software providers
have entered the market.It is estimated that there are over 50 vendors for billing and customer
care systems worldwide. There is an increasing move by computer and switch vendors, system
integrators, and telecom operators (e.g. IBM, Siemens, EDS, Deutsche Telekom) to develop in-
house billing and OSS solutions for customers. They are formidable competitors with deep
pockets, large existing customer bases, and significant influence on customer decision-making.
In addition, the majority of players (both large and small) are extending product service
portfolios to provide all services, i.e. Internet, mobile, cable, fixed, and convergent services. OSS
Telecom Technology will compete in this market by providing high-value products and services
at competitive prices.

Strategy and Implementation Summary

OSS Telecom Technology developed a marketing strategy to ensure long-term growth and
success in the OSS marketplace. This strategy continues to be refined and improved and initially
includes:
  Locating OSS opportunities within the telecom arena.
 Developing partnerships with telecom operators to provide these solutions.
 Determining if the solution is universal, resulting in a decision of whether or not this project
could evolve into a turnkey product or repeatable consulting service.

The advantage of this strategy was threefold:

1. As a partner in the project, OSS Telecom Technology gained valuable experience and first hand
operator knowledge.
2. As a partner, the operator would take a keen interest in the project's success and set high
expectations.
3. The solution would be tested in the marketplace, providing important market intelligence.

5.1 Competitive Edge

OSS Telecom Technology will strive to intimately understand the customer in order to provide

solutions that match their specific needs.To be successful, OSS Telecom Technology will
develop long term relationships and choose customers that share this model.

In the best-selling publication “Discipline of Market Leaders,” customer excellence is defined as

“specializing in satisfying unique needs.” These unique needs are recognizable only by a vendor
with a close relationship and intimate knowledge of the customer.

For a comprehensive definition of the model for customer excellence, OSS Telecom
Technology's plan includes:

 Develop long-term relationships with our customers.

 Avoid clients who do not have long-term potential.
 Avoid pure transactions or one-time deals.
 Do whatever it takes to please the customer.
 Educate employees to be adaptable, flexible, and multi-talented.
 Create an unmatched value proposition of best total solution for our clients.
 Search for new areas of mutual cooperation.
 To constantly improve our value model, develop a value proposition around solutions, and
aggressively evolve and improve each solution.
 Develop an operating model dedicated to delivering unmatched value.

5.2 Marketing Strategy

Within OSS Telecom Technology's stated primary and secondary markets, OSS Telecom
Technology has developed a “Stepped Target Market Strategy." This strategy is based on two
key elements:

1. Telecom operators have a strong desire to purchase from a vendor with installations similar to
their own, and
 2. That larger CCB vendors are moving upscale to larger operators as they gain more experience
and as IT resources continue to become scarce. The primary market of this type of CCB vendors
is Tier 1 operators.

OSS Telecom Technology's first installation base consists primarily of GSM operators in the
range of 25,000 subscribers and under. Through a stepped strategy, OSS Telecom Technology is
moving in three directions:

1. Using this install base to move up to the next band of subscribers within the GSM market
2. Leveraging GSM wireless experience to penetrate other wireless types in the same subscriber
bands
3. Working with GSM operators to provide convergent services such as cable, Internet, and
wireline, and therefore gaining experience in these disciplines.

This strategy currently puts OSS Telecom Technology in the Tier 3 (less than 100,000
subscribers) market, with each step carefully planned to be sure we do not overreach. It is key to
this strategy to maintain all customers as long-term partners and referenceable sites. We want to
under-commit and over-deliver in each step of this strategy.

5.2.1 Promotion Strategy

One of the key responsibilities of marketing is lead generation. The following methods are used
for lead generation:

 Advertising in Trade Journals

 Trade Shows and Conferences
 Telemarketing
 User Group Direct Mailing

5.2.2 Pricing Strategy

Our pricing strategy for products is to maintain a 30% to 40% advantage below Tier 1 CCB
vendors for total installation cost which includes license fees, installation services and custom
services. Coupled with our strong product road map, OSS Telecom Technology believes that this
forms the core of a very strong value proposition.

Post-Warranty Customer Service Pricing

OSS Telecom Technology offers two customer service packages to meet the needs of various
operator requirements:

Extended Customer Service

 24x7 Technical Support Desk

 Problem Solving
 Maintenance Releases
 On-site Support 
Business Partner 2000

 24x7 Technical Support Desk

 Problem Solving
 Maintenance Releases
 On-Site Support
 Proactive Operational Visits
 Software Upgrades
 New modules within the CARIBOU suite

5.3 Sales Strategy

The OSS Telecom Technology sales model is solution-based and a team sale.This sales team will
encompass Field Marketing, Program Management, Support, and Product Management as
needed.The five groups which form the team are listed below:

1. Field Sales will develop and maintain relationships.

2. Field Marketing will define local requirements, develop PR campaigns, and support the local
sales effort.
3. Program Management will be the portal into OSS Telecom Technology operations and will be
the primary contact for sales and the customer concerning project status.
4. Product Management will define in detail the functional specifications for the product
development group.
5. These specifications will be derived from Field Marketing requirements. Product Management
manages all the product release processes to the field, and will be the keeper of the three-year
product road map and will offer expertise as needed.
6. Field and Customer Support will help maintain the relationship throughout the life of the install.

5.3.1 Sales Forecast

Revenues are calculated separately for each product and for maintenance and Consulting
Services. In addition, product revenue is broken out between New Sales and Upgrade Sales. New
Sales and Upgrade Sales are further broken down into License, Installation, and Customization
revenue. The products included in this forecast are Customer Care and Billing (CCB) products,
Prepaid IN (PPIN) products, and the Short Messaging (SMSC) product. Each product and
service revenue assumption is detailed below.

Pricing assumptions for licenses include a 10% discount from list for direct sales and 30% from
list for indirect sales. Sales are forecast at 50% direct and 50% indirect resulting in a weighted
average discount of 20%. Pricing for licenses stays constant over the five year period. OSS
Telecom Technology does not increase license pricing while significantly increasing feature set
to maintain competitive pricing advantage over the five-year period.
Sales Forecast

FY 2001 FY 2002 FY 2003

Sales

CCB (CARIBOU & MEDUSA combined) $13,432,825 $19,857,900 $30,434,900

Pre-Paid IN $3,715,905 $7,136,300 $10,317,800

Total Sales $17,148,730 $26,994,200 $40,752,700

Direct Cost of Sales FY 2001 FY 2002 FY 2003

CCB (CARIBOU & MEDUSA combined) $1,679,105 $2,482,238 $3,804,363

Pre-Paid IN $464,488 $892,038 $1,289,725

Subtotal Direct Cost of Sales $2,143,593 $3,374,276 $5,094,088

5.4 Milestones

One of the benefits of having a large engineering team is the ability to develop solutions for our
customers that are comprehensive and extend our target markets stepwise into additional service
operators. In this sense, we will engage our customers in user groups and develop a
comprehensive product road map. Half of the product road map will contain items directly
requested by our customers. The remainder of the product road map will be based on strategic
market analysis.

OSS Telecom Technology has initiated the process of ISO 9000 certification for its systems and
procedures. The systems will be certified for our Taiwan operations. All OSS Telecom
Technology engineering is being performed out of its Taiwan development center, therefore OSS
Telecom Technology will initially apply for certification of those operations. OSS Telecom
Technology has completed most milestones. It is expected that OSS Telecom Technology's
Taiwan operations will achieve ISO 9000 certification by June, 2001.

Milestones

Milestone Start Date End Date Budget Manager Department

CCB (CARIBOU & MEDUSA) - Product

4/1/2000 3/31/2001 $875,000 K. Jones
Convergent Billing Development

CCB (CARIBOU & MEDUSA) - Tier 2 Product

4/1/2001 3/31/2002 $810,000 K. Jones
Operators Development
CCB (CARIBOU & MEDUSA) - Multi- Product
4/1/2002 3/31/2003 $795,000 K. Jones
Service One Number Billing Development

Pre-Paid IN / Calling Card - IN-Node Product

4/1/2000 3/31/2001 $720,000 K. Jones
APIs Development

Product
Pre-Paid IN / Calling Card - ISO 9000 4/1/2000 3/31/2001 $1,235,000 K. Jones
Development

Pre-Paid IN / Calling Card - Product

4/1/2001 3/31/2002 $680,000 K. Jones
Convergent Billing Development

Pre-Paid IN / Calling Card - Tier 2 Product

4/1/2002 3/31/2003 $745,000 K. Jones
Operators Development

Totals $5,860,000