ECI Telecom in Brazil

Aviel Tenenbaum

Executive Vice President, GS&M

ECI Telecom in Brazil

Brazil: Technological Innovation & investment Opportunities

December 15, 2008Tel Aviv

Confidential , not for distribution2

ECI Snapshot

Global provider of equipment infrastructure solutions and services for telecom operators with focus on Transport and Broadband Access solutions for bandwidth-intensive applications (3rd. Quad play, IPTV)

Established in 1961. HQ in Israel, went public in 1982 and became private in 2007

Strong, entrenched positions with major carriers in emerging markets and in developed ones

2008 revenues of over US$700 million, booking run rate approaching US$1B

Development centers in Israel, U.S., India and China, employing more than 1,000 R&D engineers

Installed base of over US$7 billions worldwide

The 2007 Acquisition

On September 2007 ECI was acquired by the Swarth Group and the London-based Ashmore Group in a transaction valued at $1.25 billion.

Following the acquisition, the company made a very successful turnaround, including:

Structure Reorganization - simplifying, reducing redundancies, increasing efficiencies - cost savings of $30 million annually;

Outsourcing the manufacturing to Flextronics, the world leader outsourcing group ($40 bln annual sales) to allow ECI focusing on its core competencies;

Expanding product offering – CESR, GPON

Expanding to new territories – inc. Brazil and Africa (more than 10% of ECI’s orders in the first year)

Considering M&A opportunities

Confidential , not for distribution

Global HeadquartersGlobal Headquarters

Regional HeadquartersRegional Headquarters

R&D LocationsR&D Locations

Sales OfficesSales Offices

4

ECI has over 400 customers in approximately 70 countries

ECI service its customers mainly through its direct sales force

2,500 employees worldwide,1,500 employees in Israel

A Global Player

Confidential , not for distribution 5

Strong Presence in Mature & High-Growth Markets

(Svyaz Invest)

(MGTS)

2007Sales Breakdown

CAGRCAGR

6%

11%29%

17%

2008 – Going to a Record Year

2008 is becoming a record year for ECI:Major wins in India, Latin America, North America, Africa Russia and Europe

Launching of new products (CESR – awarded the Best Product of the Year, more than 10 new customers in first 4 months)

Order intake in 2008 of over US$800M, more than 25% growth compared to 2007 and a current run rate approaching US$1B

Revenues more than $700M, over 10% growth YoY

Services revenues of more than $100M

Current backlog of $270 million – double YoY.

Increased profitability

2009 forecast – continuous growth

ECI in Brazil

Confidential , not for distribution 8

Brazil

Vibrant, stabilized economyDemocracy

Transparency and fair laws & regulations

High-growth economy8th largest GDP in the world: $1.3T(2007)

Growth rate of 4%

Lowest inflation among BRIC countries (4.5%)

Telecom growth targetPopulation of over 185M

Potential for communications: broadband and wireless

Telecom Highlights: Fixed Line Subs: 50M, Wireless 100M, Data: 12M, Cable TV 4M

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Potential Utilities customers

Confidential , not for distribution

ECI’s Growth Strategy

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Simplicity and availability of content and applications everywhere, at any time

Any Service…Any Device…Everywhere…Anytime

Mobile Subs in India (M)

1128

4876

150

233261

0

50

100

150

200

250

300

2002 2003 2004 2005 2006 2007 2008*

* 31-march-2008

Emerging MarketsFast growth of mobile subscriber’s base

Data services and broadband access expansions

Strong and efficient fit of ECI’s solutions to support such needs

Developed MarketsTraffic continues to grow:

Streaming media

Mobile data applications and access bitrates

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Brazil is Part of ECI’s Growth Strategy

Expertise of working in the BRIC markets

Experience of growing with Tier 1 operators as well as with high growth 2nd Tiers

Good fit product offering – wireless backhaul, Governmental and Defense, next generation networks

Financing capabilities and packages

Confidential , not for distribution

ECI Experience in Brazil

■ Understanding of local market and business requirements is vital■ Learning curve – 7 years

■ Competitive dynamics

■ Regulatory issues

■ Unique and tailored solutions

■ Local presence a must■ Relationship – Relationship – Relationship

■ Local team and management (including support)

■ Technological innovation

■ Commitment to market and growth

■ From Vendor - customer to Partnerships12

Confidential , not for distribution

Looking Ahead

■ ECI view Brazil as it base for Latin America expansion and regional support hub, to further support our growth (doubling LATAM business YoY)

■ Our focus in Brazil is to expand both with 2nd. tier as well as incumbent operators

■ Brazil’s operators can enjoy technology leapfrog with ECI

■ Considering local manufacturing and partnerships

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Thank you!

[email protected]