carlson wireless investor 12 march 16

Copyright 2015 Carlson Wireless Technologies Inc. 1

Connecting the Next Billion

2Copyright 2015 Carlson Wireless Technologies Inc.

Who Is Carlson Wireless? Since 2000, CWT has been providing

mission-critical fixed wireless communications systems for rural, remote and difficult to reach areas throughout the globe.

We believe that the world has evolved to where the digital divide is causing a development divide.

We have optimized wireless technologies that will disrupt the fixed wireless service industry allowing affordable connectivity in multiple market sectors.


Addressable Market: Four Billion People Have No Internet Access

Carlson’s Next Generation Technology Enables Economically Feasible Broadband

49/1/14 Private & Confidential Not For Disclosure

The Reality of the Affordability & Reach Challenge (Source: Richard Thanki, University of Southampton, from UN & ITU Data)

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Billions of People on Earth

Average Annual Income (pa)

Affordable monthly communications spend

1st Billion $29,206 $205

2nd Billion $12,722 $53

3rd Billion $5,540 $23

4th Billion $2,987 $12

5th Billion $1,771 $7

6th Billion $1,065 $4.4

7th Billion $540 $2.25

Carlson Wireless TVWS can reasonably reach into the 5 th billion based on internet speeds required.


What is TV White Space Technology?And why is it important?

The transition of Television from Analog to Digital in the U.S. and around the world has opened up significant amounts of low-band unused spectrum known as TV White Spaces (TVWS).

Spectrum scarcity is a growing concern as more and more electronic devices are wireless, therefore using up available bandwidth.

These vacant TV channels are capable of delivering broadband signals via non-line-of-sight (NLOS) for long distances from a single antenna/base station, as opposed to higher frequencies which require much higher CAPEX for more towers and infrastructure costs.

TVWS offers superior signal propagation characteristics and can reach users in remote, rural and rugged locations.

TVWS offers a lower cost method of providing service where wired infrastructure does not exist, even for buildings in urban settings.

TVWS Technology is an affordable alternative to fiber, microwave and satellite technologies, needing minimal infrastructure to extend broadband coverage.


Before 2014, line-of-sight microwave was the only authorized part of the spectrum that could transmit sizable bandwidth. TV White Space can transmit at broadband speed.

Microwave can’t propagate through terrain or foliage obstructions. TV White Space does. The next best spectrum 900 MHz has been consumed by the electric meter industry. Higher frequencies are congested. TV White Space is open. Other spectrum options offer less attractive physics.

The Problem with Existing Wireless


The TV White Space Solution

Graphics illustrating mountain

Performance over a greater distance ….the physics are betterBetter coverage – ideal for greenfield installationsManage co-existence with TV channels via databaseAccess to additional spectrum without cost

25 Mbps


Carlson’s TV White Space Gen 3 Broadband Network

802.11af

External OMC: Authentication and management

4-Channel Base Station

Up to 28 km diameter

indooroutdoor

25/3 Mbps burst and 10/1 Mbps sustained service for 250 users

802.11af is non-line of site, using the TV White Space (TVWS) spectrum

Backhaul: 5GHz microwave or fiber


Technology – Solution vs. Population Density

CRC.CA graph of complexity vs. density

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www.crc.cawww.crc.cawww.crc.cawww.crc.caOptical fiber

Cable modem

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TVWS

Courtesy: Gerald Chouinard: [email protected] This is Canadian government slide about cost/subscriber vs pop density. TVWS was the best option up to ~1k/km2 (Orange County).Even in cities, there are gaps in cable/DSL where TVWS could help.

mailto:[email protected]


A Comparison of Spectrum Impairments

Courtesy: Gerald Chouinard: [email protected]

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NoiseFigure

Sweet SpotUHF TV

This is Canadian government slide about the best spectrum for wireless connectivity. UHF .3-1GHz was identified as most suitable. This is likely why UHF was selected originally for TV.

mailto:[email protected]


How the Data Base Works..

Regulator

•Spectrum Sharing: small slices between TV channels

•A Spectrum-database coordinates with TVWS radios so that there is clear signal

•Micro-geography, time, terrain, licensed or unlicensed

CloudDatabase

Direct

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Radio Location FCC assigns frequency geography via database

SW: tracks location of each TVWS radio SW: directs TVWS radio to open

frequency Cognitive Radio: changes frequency as

needed


TV Channel Spectrum AvailabilityAreas in green with 9 to 45 TVWS channels (6 MHz/ch.)

Signal availability is only a problem in the most urban environments


Spectrum Sharing Update (2016):Unlicensed in the TV Bands Worldwide (source: DSA)

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• United States – TVWS is permitted in the US. The Federal Communications Commission has launched a new proceeding to ensure nationwide availability and to increase flexibility (adjacent channels, higher power, higher towers, co-channel flexibility, etc.)

• Canada – Industry Canada has released regulations similar to those available in the United States, with some minor differences (RRBS –rural remote BB systems) and wireless mics).

• United Kingdom – Ofcom released its decision to implement TVWS regulations in 2015. The first databases have already been authorized. And, the first radios are in type approval.

• Singapore – The Infocomm Development Authority (IDA) released its decision to implement TVWS regulations with implementation in 2015.

• Finland – The government has authorized legislation permitting access to TV white spaces, but is yet to develop implementing regulation.

• Malawi – The Malawi Communications Regulatory Authority has launched a proceeding to permit access to the TV white spaces in 2015. A decision is expected soon.

• South Africa – The Independent Communications Authority of South Africa is expected to issue a draft opinion proposing license-exempt access to TV white spaces.

• The Philippines – The National Telecommunications Commission (NTC) is soon expected to release a Memorandum Opinion allowing access to TVWS for public sector verticals.

• New Zealand – The Ministry has opened a consultation on issuing trial licenses in 2015.• Pre-regulation pilots and deployments authorized and/or underway in many countries:

Bhutan, Botswana, Brazil, Cote d’Ivoire, Ghana, India, Indonesia, Japan, Kenya, Morocco, Namibia, Nigeria, the Philippines, South Korea, Tanzania, Taiwan, Uruguay.


Leading Features of IEEE 802.11af Frequency of Operation 54 MHz to 698 MHz Incumbent Band Protection via Geographic DB Signal ACLR to meet FCC (-55dBr) Modulation up to 256 QAM Carrier Aggregation up to 24 MHz Supports up to 4 x 4 MU- MIMO 144 FFT Based OFDM Range:100M indoors, up to 10km outdoors-6uSGI Maximum throughput 426.7 Mbps on 4xch 4x4


Carlson’s Value Proposition: Solving the Affordable “Last Mile” Problem

Cost-effective “greenfield” network builds to 34 million people currently with no access to broadband source: FCC.

Rural Much less expensive than fiber, DSL, cable, LOS wireless Much quicker to deploy than fiber, DSL & cable Self-install CPE ensures quicker start of billing cycle and < CapEx

Suburbs/Ex-Urbs Less expensive to extend existing network than fiber or DSL build out Covers 25% of the areas that cannot be served using LOS wireless

Urban Many urban areas have no broadband: 12% of SF has no BB White space signals penetrates walls into apartments & office buildings White space spectrum is available where microwave is not


34M U.S. Homes Lack Access to Broadband Lack of Connectivity Due to Costs of Expanding the Existing

Infrastructure, Terrain, and Low Density

White areas have no fixed broadband access


Demand for Carlson from U.S. Broadband Service Providers

Large Telcos - AT&T, CenturyLink, Frontier, Windstream will invest $9B of Connect America Funds over six years

Wireless ISPs Higher penetration rate with TVWS than Microwave Lower overall cost due to greater distance and fewer cell sites

State and Local Gov’t broadband TVWS build-outs and grants – Two examples:

Town of Thurman, NY CA PUC broadband grant for Cal.net


Carlson’s Value Opens up International Markets

CPE costs are the key variable for serving lower income populations

Gen 3 tech lowers CPE price by 66%As volumes reach 1M units and more, CPE production costs fall and with client sharing this makes broadband at $1/mo. economically feasible

This beats mobile smartphones by 10 to 1

Vast foreign markets open with low-cost equipment India , pop1.3B with 900M unserved Indonesia, pop 250M with 200M unserved Africa, pop 1.1B with 960M unserved China, pop 1.4B with 900M unserved Latin America, pop 620M, 380M unserved


Demand for Carlson from International Broadband Providers

Microsoft to build 500,000 TVWS networks in India. Demand from existing customers has been proven with

traction Gen2 POC sales Carlson is receiving 100+ unsolicited requests from

service providers and governments for large Gen 3 deployments

Projects we are currently in discussions with: Ethiopian health clinics, Kenya, South Africa, Inatel in Brazil, 20,000 villages in India, 600,000 units for China, a project in Myanmar


Carlson TVWS Deployments: Five Examples

• Cape Town, S.A. – Carlson/Google trial providing broadband to ten schools, operating since 2013

• Thurman, NY – Municipally-owned network in mountainous area, operating since 2015

• Orkney Islands, Scotland – Network providing broadband for ferries, operating since 2013

• Cal.net - Commercial ISP deployment in rural CA, operating since 2013

• Alaska Railroad – Network operating positive train control, spanning 461 miles of track


Huge Other Product Markets In Addition to Broadband Internet Access

Internet of Things Stationary/local objects not connected to wire

infrastructure Smart Cities Public Safety

Fed Gov’t First Net Transportation

Positive Train Control Cellular backhaul Oil & Gas Energy & Power Utilities


Timeline – Milestones and Projections

2012 2013

Carlson connects with FCC certified database

Providers Spectrum Bridge and iconectiv

Carlson receives

FCC Certification

4Q13

Carlson VHF Prototype

Cognitive RadioDeployed in U.S. Trials

2014

GoogleSelects Carlson for South Africa Wireless Project

1500 units2nd Carlson

RuralConnect Radio Run

3Q13

2015

FCC finalizes $9Bn subsidies

for rural broadband build out

Carlson conducts demo/trial of Gen 3 Solution, first IEEE 802.11af

Carlson files patents on

dual polarity flat panel antenna design

2016

Carlson uses 10W EIRP for

40km links in Africa

Carlson launches

Gen2 demo trials in 25 countries

Carlson reaches

50,000 unit sales

3Q 2017

2017

Carlson joins with

Ofcom TVWS kickoff

Singapore and Canada announce

TVWS rules approved


World-Class Team

Jim Carlson, CEO and Founder. 30 years in Radio dev with Optaphone used in over 75 countries, exit to Zhone in 1998. $60M in total revenue.

Steve Papa, Advisor, Parallel Wireless. Endeca CEO ($1B+ exit to Oracle), ex-SVP Oracle, Angel Investor.

Mark O’Connor, SVP and BD.Ex-DC Legal Counsel for Google, AOL, EarthLink, Omnipoint, MCI Worldcom. Angel Investor.

Michael Dorin, Sr. Software Engineer, developed GR303, SS7 and Wimax protocol stacks and test hardware for equipment manufacturers.

Sebastien Amiot, RF System and IC architect, 8 IEEE papers,11 patents. System definition for LTE RF front-end IC for mob terminals.

John Zott, CFO, 25 years’ finance and accounting experience. CFO for high-growth companies, including VC funding and IPO. Ex-KPMG and Target.

Capital Raise / Return Amount of bridge raise is $800,000 ($450,000 already committed) To meet massive market demand, we have priced this round

aggressively to close quickly and reward early investors Estimated exit in 2019, sales goal >$100m The vehicle is a convertible note with warrants:

• Note Conversion Price: Price set at Series A financing of $5M+• Warrants: One warrant priced at $.01 per share for every two shares obtained in

conversion of note, exercisable for 5 years• Price Cap on Conversion: $16.9M valuation (~$3.00 per share)• Interest of Note: Simple interest at the rate of 4% per annum • Collateral: Unsecured• Maturity date of Note: 24 months • Follow-on and Pro-Rata rights • Automatic Conversion at Series A financing of $5M+