COMMUNICATIONS INFRASTRUCTURE SECTOR REPORT

SAVVIAN, LLC 150 CALIFORNIA STREET, , CA 94111 | www.savvian.com | 415.318.3600

MARKET HIGHLIGHTS Inside this issue MARKETMARKET HIGHLIGHTSHIGHLIGHTS ƒ Public market deal activity was light in Q3 2007 consisting only of Airvana’s $58MM IPO and Airspan Networks’ Market Highlights $30MM secondary offering ƒ Airvana is down 14% since pricing its IPO while Airspan has gained 25% since completing its secondary Summary Performance ƒ IPOs in 2007 have generally enjoyed positive after-market performance, with Infinera, Shoretel and Starent Observations seeing stock price gains of 55%, 36% and 76% respectively; Veraz is down 12% since pricing Trading Data ƒ During this past quarter Savvian's wireless infrastructure and wireline / data networking indices were up 19% and 16% respectively, outperforming the Nasdaq (up 3% during Q3); our integrated wireline / wireless index Transaction Activity declined 14% in the quarter Savvian Update ƒ Nokia’s purchase of NAVTEQ for $8.0Bn and Bain Capital / Huawei Technologies’ $2.2Bn acquisition of 3Com represented the two largest M&A transactions announced during Q3 ƒ Q3 saw over 25 communications infrastructure M&A deals announced, representing more than $13Bn in value ƒ Over the same timeframe, our coverage universe has seen 50 companies raise roughly $650MM in the private capital markets, suggesting ongoing receptivity to the broader communications infrastructure market by venture investors, players and firms (1) San Francisco Office SUMMARY PERFORMANCE 150 California Street AV / Revenue AV / EBITDA Price / EPS San Francisco, CA 94111 CY 07E CY 08E CY 07E CY 08E CY 07E CY 08E Phone: (415) 318-3600 Integrated Wireless / Wireline 0.9 x 0.9 x 12.7 x 8.1 x 31.4 x 15.1 x Wireline / Data Networking 3.3 x 2.9 x 14.8 x 11.5 x 32.0 x 22.1 x New York Office Wireless 3.3 x 2.7 x 34.5 x 15.9 x 27.6 x 36.9 x * Median Multiples 7 Times Square, 120 Suite 2501 +19% New York, NY 10036 115 +16% Phone: (212) 999-7090 110 105 Chicago Office 100 +3% 71 S Wacker Drive, Suite 1230 95

Chicago, IL 60606 Price Indexed 90 Phone: (312) 212-8210 85 -14% 80 7/02/07 7/13/07 7/27/07 8/08/07 8/21/07 8/31/07 9/14/07 9/28/07

Notes: NASDAQ Composite Integrated Wireline / Wireless (1) Source: Factset Wireline / Data Networking Wireless OBSERVATIONS For further information, ƒ After selling its H3C stake last year, Huawei is partnering with Bain Capital to acquire 3Com in a bid to please contact: challenge Cisco’s market-share leading position − Huawei’s low-cost structure coupled with 3Com’s existing channel should create a solid base from which to compete with Cisco’s leadership position Mike Edwards − Initial successes will likely come in more price-sensitive emerging markets Director − Transaction may impact 3Com’s stated plans to eventually spin-off Tipping Point Phone: (415) 318-3621 ƒ Nortel again lost out to private equity buyers (TPG/Silver Lake for Avaya in Q2; Bain/Huawei for 3Com in Q3) [email protected] − Nortel and Microsoft celebrated the first anniversary of their unified communications alliance, expressing optimism based on positive early results Adam Beard ƒ Q3 also saw a number of interesting developments in the wireless infrastructure segment: Vice President − T-Mobile and Sprint Nextel introduced FMC solutions to extend coverage inside buildings and leverage existing Phone: (415) 318-3694 broadband connections (T-Mobile-WiFi, Sprint-Femtocell) [email protected] − Additional announcements are also likely, as Vodafone, Telefonica, Orange and Softbank are also trialing FMC solutions and Google and Intel have both invested in FMC companies (Ubiquisys & ip.access, respectively) − With muni-WiFi initiatives stalling, other carriers may follow BT and Time Warner Cable’s lead in partnering with FON for WiFi roaming COMMUNICATIONS INFRASTRUCTURE UNIVERSE PERFORMANCE (1)

60% 49%

Last Month YTD 1 Year 48% 45% 42%

30% 23% 19%

15% 12% 12% 4% 2% 4% 0% (1%)

(15%) (15%)

(30%) NASDAQ Composite Integrated Wireless / Wireline Wireless Wireline / Data Networking

Best Performers – Last Mo. Best Performers – YTD Best Performers – 1 Year UTStarcom 36% Research in Motion 131% Research in Motion 188% 3Com 34% Alvarion 116% Alvarion 127% Alvarion 25% Juniper Networks 93% Juniper Networks 112% Research in Motion 20% Nokia 87% Riverbed Technology 107%

COMMUNICATIONS INFRASTRUCTURE COMPARABLE COMPANY UNIVERSE (1)

$MM, Except Per Share Data

Stock LTM EPS Price Price Range Equity Cash & Net Aggregate AV / Revenue AV / EBITDA Price / EPS Long Term Revenue Growth 9/28/07 Low High Value Equiv. Debt Value CY 07E CY 08E CY 07E CY 08E CY 07E CY 08E Growth PEG 08E/07E Y/Y MRQ

Integrated Wireline / Wireless

L.M. Ericsson Telephone Co. (ADS) $39.80 $33.66 $43.41 $64,205 $7,174 ($3,259) $60,946 2.1 x 1.9 x 8.6 x 7.8 x 15.4 x 13.5 x 10.4% 1.3 9.5% 6.4% Alcatel-Lucent (ADS) 10.18 8.53 15.43 23,571 7,599 (355) 23,217 0.9 0.9 15.3 8.4 62.2 16.5 11.2% 1.5 5.2% 51.1% Nortel Networks Corp. 16.98 15.32 31.79 7,419 4,473 1,129 8,548 0.8 0.7 12.7 7.7 34.6 13.6 8.5% 1.6 4.1% (7.8%) ZTE CORP H 5.27 3.39 5.57 8,493 522 51 8,545 2.1 1.7 25.6 19.2 28.3 19.8 21.9% 0.9 24.2% NA UTStarcom Inc. 3.66 2.43 10.92 442 658 (260) 182 0.1 0.1 2.0 NA NM NM 30.0% NM 6.8% (23.7%)

Mean 1.2 x 1.1 x 12.8 x 10.8 x 35.1 x 15.9 x 16.4% 1.3 9.9% 6.5% Median 0.9 0.9 12.7 8.1 31.4 15.1 11.2% 1.4 6.8% (0.7%)

Wireline / Data Networking

Cisco Systems Inc. $33.13 $22.80 $33.38 $202,065 $22,266 ($15,858) $186,207 5.0 x 4.3 x NA 13.4 x 23.1 x 19.9 x 15.2% 1.3 15.4% 18.1% Juniper Networks Inc. 36.61 16.50 37.57 18,821 1,203 (803) 18,018 6.5 5.5 23.8 18.8 44.0 34.1 18.6% 1.8 19.8% 17.2% Tellabs Inc. 9.52 9.31 13.67 4,183 1,613 (1,319) 2,864 1.4 1.4 12.1 8.9 32.0 21.0 8.0% 2.6 4.3% (2.7%) F5 Networks Inc. 37.19 26.15 46.94 3,133 394 (394) 2,739 4.9 3.9 16.3 13.5 35.4 30.6 24.6% 1.2 25.3% 32.3% Ciena Corp. 38.08 22.04 41.13 3,274 1,729 (387) 2,887 3.6 3.0 28.5 19.0 28.7 22.1 18.3% 1.2 20.5% 34.4% Polycom Inc. 26.86 24.13 36.61 2,465 307 (307) 2,158 2.4 2.0 12.9 9.6 20.0 15.9 18.5% 0.9 19.7% 41.8% Riverbed Technology Inc. 40.39 16.81 49.44 2,842 218 (218) 2,625 11.6 7.5 64.3 34.1 63.0 50.7 51.8% 1.0 53.6% 199.3% Foundry Networks Inc. 17.77 11.88 19.45 2,646 747 (747) 1,899 3.3 2.9 14.8 11.5 39.6 28.6 17.1% 1.7 13.4% 32.1% ADC Telecommunications Inc. 19.61 13.40 21.06 2,304 678 (276) 2,028 1.5 1.5 11.6 11.4 17.8 16.5 11.0% 1.5 5.4% 0.7% Sonus Networks Inc. 6.10 4.71 9.03 1,586 305 (305) 1,281 4.0 3.2 27.9 12.9 53.3 26.6 21.9% 1.2 27.4% 17.1% Adtran Inc. 23.03 20.32 28.72 1,576 175 (126) 1,451 3.0 2.7 10.5 10.0 20.6 17.7 11.3% 1.6 8.8% 1.1% 3Com Corp. 4.94 3.22 5.24 1,974 501 (71) 1,903 1.5 1.4 NA 10.0 39.8 25.2 10.0% 2.5 6.0% 6.4% NETGEAR Inc. 30.42 20.01 41.33 1,065 156 (156) 909 1.3 1.1 11.0 9.5 20.1 17.4 16.0% 1.1 15.3% 25.7% Tekelec 12.10 10.96 16.50 863 465 (340) 523 1.2 1.1 7.7 6.5 23.0 18.8 14.0% 1.3 4.3% (7.7%) Acme Packet Inc. 15.42 10.25 21.97 920 126 (126) 794 7.0 5.1 27.6 19.3 45.8 33.7 32.7% 1.0 35.5% 41.1%

Mean 3.9 x 3.1 x 20.7 x 13.9 x 33.8 x 25.2 x 19.3% 1.5 18.3% 30.5% Median 3.3 2.9 14.8 11.5 32.0 22.1 17.1% 1.3 15.4% 18.1%

Wireless

Nokia Corp. (ADR) $37.93 $18.87 $38.06 $149,131 $11,359 ($10,370) $138,761 2.0 x 1.8 x 13.3 x 11.7 x 21.4 x 18.8 x 13.1% 1.4 12.8% 28.3% QUALCOMM Inc. 42.26 34.10 47.72 70,753 7,308 (7,308) 63,445 7.0 6.2 16.3 14.1 20.6 18.7 19.3% 1.0 13.0% 19.2% Motorola Inc. 18.53 15.61 26.30 42,500 8,691 (4,326) 38,174 1.0 1.0 34.5 13.1 NM 26.9 9.5% 2.8 8.7% (19.3%) Research In Motion Ltd. 98.55 28.36 100.98 54,997 1,169 (1,161) 53,836 10.5 7.2 34.8 24.0 53.0 36.9 27.0% 1.4 45.4% 76.5% Palm Inc. 16.27 13.41 19.50 1,693 548 (548) 1,145 0.7 0.7 NA 15.9 33.8 40.0 13.9% 2.9 3.7% (0.5%) Aruba Networks Inc. 20.00 13.01 23.85 1,539 110 (110) 1,429 8.7 5.6 NM 51.6 NM 53.9 16.5% 3.3 55.6% 65.4% Alvarion Ltd. 14.52 6.03 14.99 902 122 (122) 780 3.3 2.7 95.1 41.7 NM 49.2 27.7% 1.8 23.8% 30.7%

Mean 4.8 x 3.6 x 38.8 x 24.6 x 32.2 x 34.9 x 18.1% 2.1 23.3% 28.6% Median 3.3 2.7 34.5 15.9 27.6 36.9 16.5% 1.8 13.0% 28.3% Notes: (1) Source: Factset SAVVIAN, LLC 150 CALIFORNIA STREET, SAN FRANCISCO, CA 94111 | www.savvian.com | 415.318.3600 SELECTED MERGER & ACQUISITION TRANSACTIONS ($MM) (1)

Announced Date Acquiror Target Equity Deal Value Aggregate Value AV / LTM Sales AV / LTM EBITDA AV / NTM Sales AV / NTM EBITDA

10/01/2007 Nokia NAVTEQ $7,953.6 $7,626.3 11.1x 31.4x 8.8x 28.1x 09/28/2007 Emerson Motorola (ECC Business) 350.0 350.0 0.7x NA NA NA 09/28/2007 Bain Capital / Huawei Technologies 3Com 2,166.7 2,030.8 1.6x NM 1.5x 11.6x 09/27/2007 Digium Switchovox NA NA NA NA NA NA 09/27/2007 Occam Networks Terawave Communications (GPON Assets) 5.3 5.3 0.7x NA NA NA 09/24/2007 EchoStar Communications Sling Media 380.0 380.0 NA NA NA NA 09/23/2007 Arris C-COR 706.0 634.0 2.3x 16.4x 2.0x 11.9x 09/21/2007 Alcatel-Lucent Tamblin NANANANANANA 09/18/2007 Cisco Cognio NA NA NA NA NA NA 09/18/2007 Ciena Phyflex NANANANANANA 09/14/2007 Telepark Telecom SANYO Co. 41.7 41.7 0.1x NA NA NA 09/06/2007 Tandberg Codian 270.0 270.0 NA NA NA NA 08/30/2007 Microsoft Parlano NA NA NA NA NA NA 08/14/2007 Pannaway TelStrat (Access Division) NA NA NA NA NA NA 08/10/2007 NEC Sphere Communications 42.0 42.0 NA NA NA NA 08/06/2007 F5 Networks Acopia Networks 210.0 210.0 NA NA NA NA 07/25/2007 Harmonic Rhozet 15.5 15.5 NA NA NA NA 07/24/2007 Bluesocket Pingtel NA NA NA NA NA NA 07/23/2007 Aruba Networks Network Chemistry NA NA NA NA NA NA 07/10/2007 Motorola Leapstone NA NA NA NA NA NA Ashmore Investment Management / 07/02/2007 ECI Telecom 1,203.2 963.2 1.5x 12.5x 1.3x NA Swarth Group SELECTED FINANCING ACTIVITY ($MM, except per share data) (1)

Price per Share Quarter Prior to Filing Q/Q Growth CY 08 Shares Operating LTM at Time of Current AV / Name Pricing Date Amount Offered Pricing Current % Change Revenue Margin Revenue Pricing Market Cap Revenue Price / EPS Business Description Initial Public Offerings

Airvana Inc. 07/19/07 $58.1 8.3 $7.0 $6.1 (13.6%) $1.3 NM $170.3 (79.2%) $404.9 1.2x 13.8x Provides IP-based network infrastructure products for mobile broadband services

Secondary Public Offerings

Provides network infrastructure products used by wireless carriers to provide mobile Airspan Networks Inc. 09/20/07 $34.5 17.3 $2.0 $2.5 25.0% $22.1 NM $107.3 (17.2%) $146.7 0.8x NM broadband services

Amount Raised Total Capital Date Company Investors Business Description ($MM) Invested ($MM)

Lehman Brothers Venture Partners, Morgenthaler Ventures, Intersouth Partners, TDF, 09/27/2007 Overture Networks $12.3 $45.0 Provides solutions at the edge of the access network. Armada Ventures, Gray Ventures Provides network infrastructure focused on designing and building large Ethernet fabric switching 09/25/2007 Woven Systems MDV-Mohr Davidow Ventures, Goldman Sachs, Palomar Ventures 20.0 35.0 solutions. Lightspeed Venture Partners, Galleon Crossover Fund, Vision , 09/17/2007 Teknovus Technology Alliance Investment, Itochu Technology, US Venture Partners, Partech 28.0 65.7 Develops EPON semiconductors and embedded software for the FTTH and FTTB markets. International Ventures, Focus Ventures, Samsung Ventures, Mitsubishi Tektronix Development, ComVentures, TPG Growth, Foundation Capital, Paladin Manufactures a network security device that can perform deep-level packet inspection and 09/17/2007 Cloudshield Technologies 15.0 79.9 Capital treatment on OC-48 fiber links without degrading network performance. Loudwater Partners, Centaurus Capital, Uberior Equity Ltd, Palo Alto Investors, Designs and develops integrated optics technology based on three technology platforms: lithium 09/13/2007 Gemfire 37.0 124.0 ThinkEquity Partners niobate, polymers and semiconducter lasers. Benchmark Capital, Azure Capital Partners, Broadcom, Cipio Partners, Delta Ventures, 09/11/2007 Broadlight 12.0 40.5 Supplies communication semiconductors and optical transceivers for FTTP PON solutions. Israel Seed Partners, Motorola Ventures, Star Ventures, Tellabs Provider of optical burst switching for scaling metro and campus networks from 10 to 640 gigabits- 09/10/2007 Matisse Networks Merril Lynch, Menlo Ventures, Monitor Ventures, Walden International, Woodside Fund 45.0 80.0 per-second.

Vengrowth Private Equity Partners, BDC Venture Capital, GrowthWorks Capital, Kodiak 09/10/2007 BTI Photonic Systems 12.0 53.1 Provides fiber optic systems to expand network fiber capacity. Venture Partners, Primaxis Technology Ventures, Lucent Venture Partners

08/29/2007 Syntune AB InnovationsKapital, Teknoinvest, Vision Capital 7.1 22.3 Develops tunable lasers.

Telecommunications Development Fund, Sequel Venture Partners, Grotech Capital Provides switching and IP media gateway solutions enabling service providers to maintain voice 08/22/2007 Aztek Networks 7.5 14.1 Group, Legend Ventures and 911 services with VoIP and IMS networks. Developing a turnkey home video entertainment solution that integrates TV content in HD with on- 08/20/2007 Building B Morgenthaler Ventures, Omni Capital, Index Ventures 17.5 17.5 demand premium content and Internet video for the home without need for a PC. Develops products for optical networking, including network design, system integration, 08/15/2007 Tejas Networks Nortel 3.1 47.5 comissioning, operations and subsequent maintenance.

08/09/2007 Xtera Communications New Enterprise Associates, ARCH Venture Partners, Wellcome Trust of London 52.0 218.8 Provides optical transport solutions for converged broadband services.

08/09/2007 Intune Networks Amadeus Capital Partners, Balderton Capital, Spark Capital 17.8 21.5 Designs tunable laser transmitters for optical networks.

Vedanta Capital, T-Systems Venture Fund, SoftBank Capital, TeleSoft Partners, 08/06/2007 LiteScape Technologies 14.0 26.5 Develops VoIP-enabled business applications software. Blumberg Capital Silver Creek Technology Investors, Pequot Private Equity, Foundation Capital, 07/31/2007 Hammerhead Systems 18.0 101.0 Provides aggregation, interworking, and migration solutions. Enterprise Partners, Mayfield, Apex Ventures

07/30/2007 BridgeWave Communications Intel Capital, SDL Ventures 7.8 61.0 Provides wireless access technologies that extend the reach of broadband networks.

Kleiner Perkins Caufield & Byers, Lightspeed Venture Partners, Northern Light Venture 07/30/2007 Aerohive Networks 20.0 24.0 Provides cooperative control enterprise wireless LAN architecture solutions. Fund

07/23/2007 Optier Cisco NA NA Provides software solutions that link business services to underlying IT infrastructure.

07/20/2007 Ubiquisys Atlas Venture, Advent Ventures, Accel Partners, Google 25.0 42.0 Develops and markets femtocell solutions.

Menlo Ventures, Thomas Weisel Venture Partners, Sequoia Capital Partners, 07/20/2007 Santur Corp. 25.0 85.1 Manufactures integrated optical components and tunable lasers. Lighthouse Capital Partners, VantagePoint Venture Partners

07/18/2007 AliphCom Khosla Ventures, Mayfield Fund 4.3 10.3 Develops noise cancellation technology and related products for the mobile market.

Labrador Ventures, New Enterprise Associates, Duchossois Technology Partners, 07/17/2007 NextHop Technologies 4.0 40.3 Develops routing protocols and related technologies. Parker Price Venture Capital

07/16/2007 Skyhook Wireless RRE Ventures, Bain Capital, Intel Capital, CommonAngels 8.5 15.6 Provides metro-area positioning capabilities based on Wi-Fi for use in mobile devices.

07/16/2007 BroadSoft Meritech Capital Partners 10.0 76.0 Provides a comprehensive range of VoIP applications on one platform.

07/16/2007 Adomo Storm Ventures, Menlo Ventures 11.5 27.4 Provides enterprise voice messaging solutions.

07/09/2007 Dilithium Networks Franklin Templeton, Galleon, Attractor, Duquesne 33.0 65.0 Produces audio and video communications solutions for converged networks. Notes: (1) Source: Company press releases, Wall Street estimates, VentureXpert, CapIQ SAVVIAN, LLC 150 CALIFORNIA STREET, SAN FRANCISCO, CA 94111 | www.savvian.com | 415.318.3600 SELECTED SAVVIAN COMMUNICATIONS INFRASTRUCTURE TRANSACTIONS

Acquired by Preferred Acquired by Acquired by Stock

Pending We advised the seller Financial Advisor We advised the seller We advised the seller

Acquired by Minority Acquired by Acquired by Recapitalization

We advised the seller Financial Advisor We advised the seller We advised the seller

Preferred Convertible Preferred Acquisition of Stock Notes Stock PIPE

Financial Advisor Placement Agent Placement Agent We advised the buyer

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Savvian Advisors, LLC is a leading investment bank serving growth companies through its merger and acquisition advisory and capital market financing services. Savvian professionals cover a broad array of industries, including the technology, media, communications, healthcare, business services, financial technology and consumer commerce sectors. Savvian has offices in San Francisco, New York and Chicago.

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SAVVIAN, LLC 150 CALIFORNIA STREET, SAN FRANCISCO, CA 94111 | www.savvian.com | 415.318.3600