The document discusses factors that influence fiber-to-the-home (FTTH) broadband deployment in emerging markets. It presents a model that analyzes monthly household income and information and communications technology spending to determine which countries could support broad, dense, or limited FTTH deployment based on purchasing power. While lower labor costs and favorable policies can help deployment, emerging markets often have smaller addressable markets and lower monthly subscription fees that impact viability. Government interventions may accelerate FTTH expansion in some areas.

1. Emerging Markets & Next-Gen Broadband Benoît Felten, Principal Analyst Wally Swain, Senior VP March 30, 2010

2. Agenda State of Emerging Markets’ Fiber to the Home (FTTH) The FTTH Conundrum Building a Generic Business Model What’s Different About Emerging Markets? Q&A

3. Poll What region of the world are you most interested in?

4. Asia-Pacific Emerging FTTH India: BSNL targets 700K customers in 2009, 7M by 2015 Other smaller initiatives around new property developments China: 8M homes connected with FTTB/H, especially in the south SPs are China Telecom and China Unicom Malaysia: Incumbent TM targets 1.3M homes in or around Kuala Lumpur

5. Middle East/Africa Emerging FTTH Egypt: TMG has limited affluent area deployment (~30K) Telecom Egypt has a pilot deployment in Cairo Saudi Arabia: STC has pilot FTTH deployments, but no significant deployment as of yet UAE: Etisalat covers 700K homes with FTTH/B Du covers 400K Subs low at estmated 70K

6. Latin America Emerging FTTH Brazil: Telef ó nica deploying FTTB in Sao Paulo [~100K homes passed) GVT deploying FTTH in various cities (est. 600K customers over FTTB)

8. Solutions to Enhance the FTTH Business Model

9. What’s Different About Emerging Markets? Lower labor costs Favorable public policy Much smaller addressable market Lower ARPU Slower takeup

11. Proxy for Relative Wage Scale Purchasing Power Parity Inverse Scale Proxy for Wages Relative to the USA

19. Which Force Is Greater In Your Market? Lower labor costs Favorable public policy Much smaller addressable market Lower ARPU Slower takeup

21. Thank You www.yankeegroup.com Read analyst blogs at blogs.yankeegroup.com Watch analyst videos at youtube.com/yankeegroup Follow us on Twitter: @YankeeGroup Fan Yankee Group at facebook.com Benoît Felten, Principal Analyst [email_address] Wally Swain, Senior VP [email_address] Upcoming Yankee Group webinar: 4G Mobile Backhaul Evolution Tuesday, April 27, 2010 | 11am ET Register at www.yankeegroup.com