Wireless Backhaul Panel March 16, 2010

CompTel 2010 Wireless Backhaul Panel March 16, 2010

Wireless Data Evolution is Driving Fast Growing Demand for Backhaul Services Voice Texting and Email Mobile Internet Typical Cell Tower Bandwidth Requirements Per Carrier Two T 1 s (3 Meg) 3 8 T 1 s (5 10 Meg) 25 50 Meg Ethernet 300 Meg in 5 years Smartphones 40 Million (16%) 246 Million Data Capable Devices Demand for Smartphones and mobile Internet applications driving bandwidth requirements at cell towers Source: CTIA 10/8/09 Page 2 Confidential

CompTel Wireless Backhaul Panel John Scarano COO and Co founder Zayo Group Lynn Refer CEO Telecom Transport Management Matt Young Director of Sales Alcatel Lucent Jeff Stuparits, PE P.E. Distinguished Member of Technical Staff Verizon Wireless Backhaul Planning Moderator: Ron Mudry CEO of Tower Cloud

ZAYO BANDWIDTH Company Summary and Wireless Backhaul Overview March 16, 2010

Zayo Group 2

Wireless Trend More data devices Driving >250% data CAGR Accelerated further by LTE % of ATT Subs with integrated devices (VzW: top 30 mkts by 2011) Zayo is actively building fiber to the tower networks in order to meet the growing demand for wireless data services Source: AT&TW presentation at 2009 4G Conference 3

Primer Base Station Capacity Maximum useable bandwidth per tower increasing rapidly Representative ti Base Station ti Capacity Evolution 2006 2007 2008 2009 2010 2011 2012 2013 HSDPA/HSUPA 3.6 / 14.4Mbps 1.9 Mbps HSPA+ 21(28) / 5.8 HSPA+ 42 Mbps 2G 3G 4G HSPA+(MIMO) HSPA+(MBand) Base stations connect 84 Mbps 168 Mbps wireless voice/data traffic to fiber (and copper, microwave, LTE 172 Mbps etc.) backhaul networks Base stations ultimately govern the maximum bandwidth a tower can support upgrades trigger multi-year handset upgrade cycles Source: Telstra plan presented at 4G Conference 4

How Does Zayo Support the Wireless Space? Tower Mobile Switching Center Central Offices Antenna Local Voice Connectivity Other MSCs IP Routers Voice Switches Backup; voice and data aggregation Voice Tandem Exchanges Wireless Provider Base Station App Servers (e.g., Voicemail) Other Network Elements Wireless Wireless voice connectivity it Internet Peering Locations Internet Traffic Fiber to the Tower Backhaul Zayo Fiber Network Other Bandwidth Infrastructure services 5

Price per Meg? Without price compression per meg, high speed smart phones are unlikely to be economically viable for wireless carriers Illustrative Price per Meg Fiber to the Tower 100% 75% 50% 25% 0% Price per Meg at Various Bandwidth Commitment Levels 6 Megs 20 Megs 50 Meg 100 Megs Cost effective for voice Cost effective for 3G Speeds Cost effective for high speed wireless internet Price per meg decreasing 85%, while bandwidth increases 16x this elasticity of demand fuels healthy growth Using this example, revenue increases by 2.4x 6

Compelling, Common Characteristics Example Markets Dense pre-existing metro fiber network Balance sheet affords very long term payback Believe high likelihood of a second/third tenant 5-10 year contracts; 100% ETL Provide service to majority of customer towers 100% Zayo controlled end to end network Memphis Indianapolis Philadelphia Spokane Requires laser implementation focus 7

Telecom Transport Management, Inc. Overview Privately-held, venture-backed company Pure-play provider of high capacity wireless backhaul services Utilize hybrid fiber/microwave backhaul solutions to over 1,000 cell sites Currently offer service in 5 markets/12 cities to four national carriers and one regional service provider Contracts are typically 5-7 years in length with recurring revenue while expenses are fixed, allowing for considerable scalability through lease-up activity TTM expects to become cash flow positive 3Q 2010 1

End to End Backhaul: Fiber and Microwave Protected Microwave Wireless Carrier Switch Fiber Capacity Microwave Hub Cell Site Fiber Hub Cell Site Fiber Fiber Cell Site Cell Site Cell Site TTM End to End Service 2

Mobile Transport Evolution Comptel 2010 Matt Young Sales Director March 2010

Market Trends explosive growth in Mobile Broadband Faster/cheaper mobile broadband devices are driving the need for higher capacity networks Continued growth in mobile subscribers with strong forecasted growth in 3G subscribers New end user services are IP driven with network assets migrating to support Ethernet/IP IP transformation needed to provide scalability and to reduce/control network transport costs End user demand d for new broadband d services can New terminals boost data % S ubs Mobile TV or Video iphone Source: MMetrics Average offset reductions in ARPU 2007 2009 New Handsets + Services + Subscribers All IP + RAN Capacity Cost + Scalability $599 Mobile Broadband Backhaul $199 Mo obile Subscrib bers (Millions) Mobile data-users growth rate 2008 to 2012 Video 194% Games 95% Information service 86% Music 136% E-mail 83% MMS 99% Graphics/images 77% Ringtones 62% Source: Pyramid 2 Alcatel-Lucent Mobile Transport Evolution All Rights Reserved, Copyright Alcatel-Lucent 2009

IP/MPLS Mobile Backhaul Transport Solution For 2G, 3G and LTE Convergence over Ethernet networks where available NodeB. enb, BTS NodeB Ethernet ATM/IMA (nxt1/e1) 7705 SAR-8 or Ethernet Carrier Ethernet or IP Network (MetroE, TPSDA, Packet Microwave ) Ethernet 7750 SR Ethernet ATM OC3 RNC, BSC, SGW, MME, OC3ch BTS T1/E1 TDM IPoMLPPP (nxt1/e1) 7705 SAR-F nxt1/e1 TDM SONET or Microwave Network OC3ch Convergence over TDM networks where required Cell Site Aggregation Dynamic end-to-end MPLS PWs Any access media MPLS OAM tool kit Accurate synchronization delivery Connection Resiliency LAG Multi-Chassis APS Redundant Pseudowires Fast Re-Route End-to-End OAM and SLAs Service Router flexibility RAN MLS (L2/L3) RAN router aggregation Backbone VPN edge Intra-MTSO consolidation 3 Alcatel-Lucent Mobile Transport Evolution All Rights Reserved, Copyright Alcatel-Lucent 2009

Convergence of 2G/3G/LTE Backhaul, Backbone and LTE Evolved Packet Core Seamless convergence of IP backhaul/backbone and Evolved Packet Core Flexible enodeb Carrier Ethernet access alternatives Multi technology solutions => higher BW, Ethernet and all IP 2G/3G CDMA / EVDO GSM / GPRS EDGE UMTS /HSPA+ IP channel BTS Node B Cell Site Access Cell Site Aggregation Microwave Fiber Copper IP Backhaul MPLS, Edge Router BSC RNC Circuit Switched Core (Voice) Packet Switched Core META (IP backhaul and backbone) LTE+EPC IP channel enode B Cell Site Access Access Cell Site Aggregation Backhaul Microwave Fiber Copper IP Backhaul MLS, Edge Router and S/P GW MTSO All-IP Evolved Packet Core MME PCRF META (IP backhaul and backbone) Common IP backhaul / transport and IP EPC management 4 Alcatel-Lucent Mobile Transport Evolution All Rights Reserved, Copyright Alcatel-Lucent 2009

Conclusion Critical success factors for evolving transport of new mobile broadband services: Architectural flexibility and scalability - to address diverse backhaul environments Sophisticated QoS - essential for new services and new business models Robust network and OAM tools - to meet SLAs and reduce OPEX Clock synchronization to enable reliable handoffs and guarantee service performance Trusted partner with expertise in delivering true E2E transport solutions optimized per customer 5 Alcatel-Lucent Mobile Transport Evolution All Rights Reserved, Copyright Alcatel-Lucent 2009

BACKHAUL REQUIREMENTS [ Fiber Based Ethernet-to-the-Cell ] Comptel March, 2010 Jeff Stuparits, P.E. Distinguished i Member of Technical Staff Verizon Wireless Backhaul Planning Verizon Network and Technology Atlanta, GA 1

Verizon Wireless Overview Offers Voice (CDMA) and Data (EVDO) services 40,000+ cell sites Customers: 91M+ Net Customer Additions in 4Q09: 2M+ 4Q09 Revenue: $13B+ Deploying 4G LTE starting in 2010 We need Fiber (Ethernet) to our Cell Sites 2

LTE Plans Four-year plan to have all cell sites LTE capable Phase 1: Commercial launch of 25-30 markets by yearend 2010 All cell site traffic (voice, EVDO, and LTE) will run over Ethernet Backhaul. All T1 s will be disconnected. Additional information available at Verizon Wireless web site or other internet sources (recent Tony Melone interview with Network World) 3

Fiber/Ethernet Penetration Phase 1 2010 (Metro) 90/10 (90% Fiber / 10% MW) Phase 2 2011 Phase 3 2012 Phase 4 2013 (Rural) 10/90 (we want to avoid this) Can Phase 4 be pushed towards 50/50? A challenge for the Transport industry! Phase 3 and 4 planning needs to take place now. 4

What (most) Wireless Carriers Want: Our Transport Wish List 1. Fiber (or MW) based Ethernet Transport System, 2. Delivering 5-10 times the bandwidth we use today, 3. At less MRC (OpEx) than we pay today. When all 3 of these items are enabled, we tend to move forward with urgency. 5

VZW Targets Fiber Based Ethernet Backhaul GigE Multimode fiber interface at cell site High Availability, Five 9 s+ 9s+ in the core 50Mbps to start 100Mbps once 4G ramps up, then +++ 100-500Mbps for Microwave Hub sites Target price: 100Mbps for $1500/mo. 6

Backhaul Requirements End; 7

CompTel Wireless Backhaul Panel John Scarano COO and Co founder Zayo Group Lynn Refer CEO Telecom Transport Management Matt Young Director of Sales Alcatel Lucent Jeff Stuparits, PE P.E. Distinguished Member of Technical Staff Verizon Wireless Backhaul Planning Moderator: Ron Mudry CEO of Tower Cloud