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Business Summary Aperto Networks is a leading provider of second-generation scalable fixed broadband wireless access systems. The company was founded to provide a breakthrough solution to one of today's critical network bottlenecks - limited availability of last mile broadband access to millions of prospective users worldwide. Aperto's PacketWave™ system provides a point-to-multipoint family of base station, subscriber units, and associated radios and antennas in 2.5, 3.5 and 5 GHz frequency bands for global deployments. Its patent-pending technology supports new wireless builds and complements existing wireline broadband access technology. Aperto addresses service providers' needs for rapid network deployment, multiservice scalability, ease of installation, cost-effectiveness and spectral efficiency for service delivery across dense urban to suburban locations. The company's 90+ technical experts bring strong system-level understanding of applications, carrier services, signaling, end-to-end network protocols, physical layer and upper layer technologies. Areas of expertise extend to first-generation MMDS, telecommunications, networking, cellular, DSL, optical and IEEE 802.11 wireless LAN systems. The principals have been responsible for successful development and delivery of previous generation wireless infrastructure for carriers and enterprises. Market Dynamics In the past two years, the well-entrenched dynamics of runaway Internet access growth have been counterbalanced by new margin pressure in broadband access services and market restructuring among broadband access providers worldwide. As a result, the service provider market has undergone an expanded and even more demanding set of economic requirements and competitive demands. The market continues to demand affordable, rapidly-deployable and flexible broadband access to mass market users. Fixed broadband wireless access, or F-BWA, is becoming a more critical alternative, as service providers and users realize that DSL is not a panacea. Both wireless and wireline service providers now face new needs, such as: Replacement of broadband service for users stranded by DSL carriers in distress; Even more efficient use of scarce network resources (e.g., wireless spectrum); Rapid delivery of T-1 and Ethernet speed connectivity to enterprise sites; Deployment of highly complementary access technologies that minimize dependence on any one means (e.g., license-free wireless spectrum to augment or substitute for scarce licensed spectrum). Most recent market forecasts reflect these changed market dynamics, and continue to show robust growth in the fixed wireless broadband services market. According to Allied Business Intelligence (ABI), MMDS fixed broadband wireless platforms are increasingly "a legitimate competitor to cable modem and DSL technologies, potentially grabbing between 20 and 30% of the world's broadband subscribers."1 This translates to more than 13 million subscribers by 2006. Strategis Group forecasts the growth in US wireless service revenues to be nearly 60% per year, reaching a base of $6.3 billion in annual spending by 20052. A third source, Frost and Sullivan, projects the worldwide F-BWA industry to surpass $28.5 billion in service revenues by 2007, climbing from $842.3 million in 2000 (65% CAGR)3. Aperto Networks' Value Proposition Aperto Networks is dedicated to delivering these primary benefits to service providers worldwide: Rapid network deployment Network scalability with high spectral efficiency Multi-service scalability Ease of installation Demonstrated rapid payback for each cell Leadership in emerging standards Aperto Networks is focused on bringing fixed wireless access up to and beyond the performance and functionality of wireline broadband access alternatives with a solution well suited for the small to medium size enterprise (SME) market and broadband backhaul applications. This means standards-based access systems supporting dense cellular deployments, high network scalability, line-of-sight and non-line-of-sight operations, and end-to-end QoS management in point-to-multipoint topologies. Aperto has defined its architecture to meet these parameters, as well as additional characteristics carriers consider to be "must-haves" for next-generation, cost-effective broadband networks, i.e., service- intelligent IP architectures, personalized multiservice delivery, an adaptive physical layer (radio and modem), advanced Media Access Control Layer and high cellular frequency reuse. Building on this open architecture, Aperto developed three unique technical innovations to further extend per-subscriber manageability and cost-effective, personalized service delivery: ServiceQ™ enables enables carrier-class multi-service Quality of Service (QoS), per-flow service and bandwidth management across the wireless (air) interface, and seamlessly interworks with industry-standard IP DiffServ and MPLS protocols to extend service classes through backhaulnetworks. OptimaLink™ performs dynamic control of link parameters to optimize each subscriber connection in a multi-user, point-to-multipoint environment. Ten multi-layer link parameters are adjusted on a burst-by-burst basis to maximize coverage and capacity while maintaining a high level of spectral efficiency. RapidBurst™ delivers high-capacity (up to 20Mbps), flexible two-way burst-mode TDMA. It achieves unprecedented flexibility in allowing control of transmission parameters, enabling both the OptimaLink and ServiceQ algorithms to function effectively. Aperto plays technical leadership roles in the IEEE 802.16 Task Groups, and also has rapporteur representation in ETSI BRAN4, to further the development of interoperable air interface standards. The company is applying its open architecture approach to wireless access systems for global markets in the 2.5 GHz, 3.5 GHz and 5 GHz frequency bands. By operating in carrier-preferred global bands and using a flexible Media Access Control layer which can support both TDD or FDD, Aperto ensures that it will meet the stringent requirements, regulations and standards of service providers worldwide with a single, integrated product family. In frequency bands where structured channel pairs do not exist, adaptive TDD provides a highly flexible, adaptive and efficient duplexing scheme where a single channel is used for both upstream and downstream transmissions. These systems can make use of every available channel in a well-designed cellular environment for optimum capacity, coverage and cost. Funding History Aperto Networks was founded in 1999 and is privately held. The company has raised more than $35 million in private equity financing from Alliance Ventures, Tyco Ventures, Ridgewood Capital, DMC Stratex Networks, Oki Electric Industry Company, Mitsubishi International Corporation, Satwik Ventures, Redwood Ventures and other strategic private investors. Contact Information Aperto Networks w 1637 S. Main Street w Milpitas, CA 95035 w Telephone: 408-719-9977 w Fax: 408-719-9970 w www.apertonet.com

1) MMDS and Broadband Wireless Access: Market & Opportunities for Data Subscribers, ABI, March 2001
2) U. S. Fixed Wireless Markets, Strategis Group, April 2001
3) North American Broadband Wireless Access Services Markets, Frost & Sullivan, March 2001
4) ETSI BRAN is the European Telecommunications Standards Institute project on Broadband Radio Access Networks. For more information, please visit http://www.etsi.org/bran/Summary.htm.