24 March 2008

Security: Confidential

Huawei Local Call Local Switching Solution

www.huawei.com

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Agenda

Huawei Local Call Local Switching Madre de Dios Business Case Proposal

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Page 2

Local Call Local Switching

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The new GSM market

GSM users continues to increase steadily and

competition grows

fiercely
Most operators are spending much more time and money trying to expand their network capacity Most newly-added GSM users are

low-end users, which results in a steadily decreasing ARPU

In order to increase revenues, operators are eagerly seeking

effective ways to reduce TCO

while at the same time ensuring service quality

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Page 4

Satellite Transmission is the Key

As GSM penetration has almost reached the saturation point in most developed areas, GSM is now expanding in

rural areas

Satellite transmission
equipment required for deploying a mobile network constitutes a

very

large investment, thus

transmission becomes a big challenge

TCO model for rural areas has the

satellite transmission cost as a large portion of the total costs; therefore any savings that can be made in terms of the transmission cost is also a
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key to lowering the TCO

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Reducing the Transmission costs

MSC Server MGW/TC
MSC Server

MGW/TC

BSC

BSC

BTS

Typical GSM Network

BSC/BTS Local Call Local Switching

Description Description
Enable connect to any MSC with standard A interface without changing current NSS Enable connect to any MSC with standard A interface without changing current NSS

Benefit Benefit
Saving Ater/Abis transmission Saving Ater/Abis transmission Saving TC resourceDSP processing power Saving TC resourceDSP processing power Enhance Voice Quality, less BER of multi-hop Micro-wave transmission network. Enhance Voice Quality, less BER of multi-hop Micro-wave transmission network.
HUAWEI TECHNOLOGIES CO., LTD. Page 6

Madre de Dios

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Page 7

Current Scenario

All the calls occupy Satellite

Transmission resources

Iapari

BTS

Iberia

La Pastora Maldonado BSC

Madre de Dios

Huawei Scenario

Only not local calls occupy

Satellite Transmission resources

Iapari

HW BTS

Iberia
local-calls local-calls

La Pastora Maldonado HW BSC

local-calls local-calls

Madre de Dios

Saving Calculation (1/4)

Traffic Model for Madre de Dios Region
Traffic Total Movistar-Movistar Local Other Erlangs 120 97 23 Percentage 100% 80.80% 19.2%

Satellite Bandwidth per BTS

BTS La Pastora Iberia Iapari Maldonado TOTAL = Time Slots 32 8 8 16 64

Note: According to Huawei experience, the Local traffic per region is around 40% in average. Therefore for the case of Madre de Dios we would be more conservative and assume the Movistar Local calls percentage of

TRX Number per BTS

BTS La Pastora Iberia Iapari Maldonado TOTAL = TRX 9 6 4 6 25

60%

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Page 10

Saving Calculation (2/4)

Local Traffic in Madre de Dios for each BTS in a normal day

BTS origen Maldonado Maldonado BTS destino Maldonado Otros Total calls 13240 474 13714 % 96.50% 3.50% 100% BTS origen Iberia Iberia BTS destino Iberia Otros Total calls 1581 0 1581 % 100% 0% 100%

BTS origen La Pastora La Pastora

BTS destino La Pastora Otros Total

calls 8477 561 9038

% 93.80% 6.20% 100%

BTS origen Iapari Iapari

BTS destino Iapari Otros Total

calls 8521 0 8521

% 100% 0% 100%

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Saving Calculation (3/4)

To determine the number of BTS we calculate as follows:

time slots saved as local traffic

in each

Percentage of Local Traffic in Madre de Dios BTS

X Percentage of Local Traffic in each

x Total Number of Time Solts

Maldonado = 0.6 x 0.965 x 16 = 9.26 time slots (58% Iberia = 0.6 x 1 x 8 = 4.8 time slots (60%

Saving)

Saving)
(56%

La Pastora = 0.6 x 0.938 x 32 = 18 time slots Iapari = 0.6 x 1 x 8 = 4.8 time slots (60%

Saving)

Saving)

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Page 12

Saving Calculation (4/4)

To determine the annual amount each BTS we calculate as follows:

of money saved as local traffic

in

Number of Time Slots saved

X Price of Time Slot per month X 12 $ 29,700

Maldonado = 9 x 275 x 12=USD Iberia = 4 x 275 x 12 =

USD $ 13,200 USD $ 59,400

La Pastora = 18 x 275 x 12 = Iapari = 4 x 275 x 12 =

USD $ 13,200

TOTAL Estimated Saving per Year = USD $ 115,500

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Huawei Proposal

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Page 14

Huawei Comprehensive BSS Portfolio

12 TRX per cabinet 12 TRX per cabinet 6 TRX per cabinet 2 TRX per cabinet

BTS3012AE BTS3012
Indoor macro BTS Dense urban Urban Outdoor macro BTS Urban Suburban Hotspot BTS3006C BTS3002E Outdoor Mini BTS Rural area Hotspot Inaccessible geographies

BSC6000
All-IP platform BSC

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Performance Enhanced Outdoor BTS3012AE

Outdoor Macro BTS3012AE
Working Frequency Bands: 850MHz, 900MHz, 1800MHz, 1900MHz Maximum Configuration: Output Power of TRX: 12 TRXs per cabinet 60W (47.78dBm) GMSK; 80W (49.9dBm) with PBT

Static receiving sensitivity: -112.5dBm for TCH/FS in normal temperature Coverage Capability: Transmission Interfaces: Transmitting diversity/ PBT/ 4-way Receiving diversity E1, STM-1

Up to 4 hours backup without additional battery cabinet

1700(H)*1000(W) *880(D)

GERAN hardware ready, smooth evolution to 3G

4The BTS3012AE cabinet fulfils the requirements of IEC 529. The

protection level reaches IP55

43012AE Temperature Range -40~55

390kg (S444) HUAWEI TECHNOLOGIES CO., LTD. Page 16

BSC6000 Large Capacity and Site Saving

Single Cabinet: 1536 TRX, 1800K BHCA, 9K Erl 2200(H x 600(W) x 800 D) BSC6000 Full configuration (2 cabinets with TC ): 2048 TRX,2340K BHCA, 12K Erl

Traditional BSC

Benefit: Benefit: vLarge capacity, reduce BSC site, tremendous cost saving vLarge capacity, reduce BSC site, tremendous cost saving vSupports E1 and STM-1 interfances vSupports E1 and STM-1 interfances vEasy expansion for large capacity up to 2048TRX vEasy expansion for large capacity up to 2048TRX v2048 TRX Half Rate, high tolerance for traffic-peak v2048 TRX Half Rate, high tolerance for traffic-peak vWith TC, 2 cab. for 2048TRX configure, 7/8 footprint saving vWith TC, 2 cab. for 2048TRX configure, 7/8 footprint saving
HUAWEI TECHNOLOGIES CO., LTD. Page 17

Proposed Scenario

Equipment : 40 Macro Outdoor BTS 3012AE (3/3/3 TRX) + LCLS Feature 01 BSC (500 TRX) + TC + PCU Time estimated for the equipment to arrive in Lima: 45 days Services Included: BSC, TC, PCU installation in Lima BTS delivered in TM Warehouse Huawei IOT services

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Page 18

Annual Saving per Satellite BTS + LCLS

US$ 1000
2500

2000 1867.5 1660 1500 1245 1000 830 622.5 500 207.5 0 1 41.5 5 10 15 20 25 30 35 40 45 415 1037.5 1452.5

2075

50

Number of BTS

01 BTS = 9 TRX
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Page 19

A GSM Base Station at the top of World

* Huawei has been selected by China Mobile to install a new generation GSM Base Station on Mount Everest. The base station will provide mobile network coverage for the Beijing 2008 Olympic HUAWEI plans to reach the summit in time for the Olympic Games. The base station Torch Relay Team thatTECHNOLOGIES CO., LTD. Page 20 will be positioned at an altitude of 6,500 meters