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Ceragon Networks The Premier Wireless Backhaul Specialist

Company Presentation February 2011

Safe Harbor

Statements contained in this presentation that are not historical facts, including statements regarding the consummation of the transaction, and the timing thereof, the expected benefits of the transaction, the future market for the companies' products, future financial and operating results, plans, objectives, expectations and intentions, including plans with respect to future products and the continued support of Nera customers after the closing of the transaction, are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are inherently subject to risks and uncertainties that could cause actual results to differ materially from these forward-looking statements. Many of these risks and uncertainties cannot be predicted with accuracy and some might not even be anticipated. Some of the factors that could significantly impact the forward-looking statements in this press release include the risk that the businesses will not be integrated successfully; the risk that any synergies from the transaction may not be fully realized or may take longer to realize than expected; disruption from the transaction making it more difficult to maintain relationships with customers, employees or suppliers, the risk that Nera business may not perform as expected, and other risks, some of which are discussed in Ceragons annual reports on Form 20-F filed with the Securities and Exchange Commission under the caption Risk Factors. Any forward-looking statement is qualified by reference to these risks factors. These risks and factors are not exclusive, and Ceragon undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this release. Ceragons public filings are available from the Securities and Exchange Commissions website at or may be obtained on Ceragons website at

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Ceragon and Nera a combination that delivers MORE

Nera Networks

Incorporation: 1947 Revenues in 2009: $292 M A wholly owned subsidiary of Eltek ASA, traded on the Oslo Stock Exchange under [ELT] Leadership in long-haul products Established project management capabilities

Ceragon Networks

Incorporation: 1996 Revenues in 2010: $184 M NASDAQ: CRNT Leadership in short-haul products

Combination creates the Premier Wireless Backhaul Specialist

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Why Premier Wireless Backhaul Specialist?

Capacity Cost-Efficiency Innovation Integration Attention



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MORE Market Share

Global Total Microwave Revenue
$1,200,000 300,000

Global Total Microwave Shipments











Rolling 4 Quarter 4Q 09 - 3Q 10 [source: SLR]

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MORE Scale
Stronger presence in every region

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MORE Customers

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Two Product Lines Pre Merger

Short Haul
NetMaster Network Management System

Long Haul
Evolution Long Haul by NERA

Evolution by NERA

LH All Indoor

LH Split mount Evolution IP LH (XPAND-IP / Metro)

XPAND-IP / Metro

PolyView Network Management System

FibeAir by CERAGON

FibeAir Long Haul by CERAGON

LH All Indoor IP -10 / 1500R

LH Split mount FibeAir LH (IP-10 / 3200T)

Long Haul
Long Experience Base by Nera

SDH Long Haul radios since 1993 More than 60,000 TRX installed base Patented technologies results in
OPEX savings

Common platform concept with

unique flexibility with SDH/SONET or Native Ethernet

Turn Key specialists with extensive

system design and services expertise

Services Expertise
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Short Haul
More IP capabilities with Ceragon

Ethernet High Capacity radios since 2000

More than 120,000 IP-10 installed base Culture of innovation Risk free migration to LTE/4G Exceptional Reliability >112 Years Highest possible capacities Operational Excellence for mass volume production Reliable

IP Capabilities
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Comprehensive Products & Solutions

Short Haul Access Aggregation Long Haul Trunk

High Volume Cost Efficiency & Operational Excellence

Turn-Key, Services Experience & Project Management Expertise

Network Management System FibeAir IP-10 E-series & G-series

Ethernet or Eth+TDM

Evolution IP Long Haul

Ethernet or Eth+TDM

FibeAir 1500R

Compact LH 1+1/ 2+2 Split Mount/ All-Indoor All-Indoor


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NMS - Network Management System

PolyView NetMaster

FibeAir Network

Evolution Network


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MORE Services
Strong Project Management & Turnkey Capabilities







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Global Organization
President & CEO Ira Palti

EVP PMI Per Arne Henaes

EVP Global Business Eran Westman VP Projects & After Sale Ole Lars Oye VP Channel & KAM Trevor Gordon

EVP LH Eyal Assa

EVP SH Hagai Zyss

EVP Marketing & BD Udi Gordon

EVP Operations Gil Solovey

EVP HR Sharon Ganot

EVP & CFO Tsipi Kagan

VP Product Strategy Eirik Nesse

VP Legal & General Counsel Donna Gershowitz VP Finance Uzi Sharabi

Ram Prakash Tripathi

APAC Peter Humphreys

Europe Thomas Knudsson

John Early

North America
Jayne Leighton

Latin America
Billy Cain


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Why Ceragon
Complete and innovative product portfolio: All packet microwave radio Optional risk free migration from TDM to Ethernet Integrated networking functions, TDM and Ethernet Highest possible capacities Exceptional system gain and spectral efficiency Company: Widely deployed largest microwave specialist Proven turnkey project expertise Culture of innovation A range of channel and solution partnerships Financially sound and rapidly growing


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Portfolio Overview and Technology

Making 3G/4G Broadband Profitable

3 simple steps for successful wireless transport design

1. Squeeze maximum capacity from available spectrum
- Maximize return on investment

2. Focus on Quality of Experience

- Differentiated services for differentiated revenues

3. Choose a modular risk-free approach

- Keep revenue generating services

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One Platform, More Benefits

Less is MORE



Synchronization Options

MORE FibeAir IP-10

Redundancy Options

System Gain

Service Management Capabilities


Migration Options

Carrier Ethernet Functionality


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Evolution IP-10 Fully Meets Any Network Scenario

Provides optimal and flexible solution for operators network strategy

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Unique Features for Microwave Backhaul

Increasing Capacity & spectral efficiency Increasing QoS, reducing latency Improving E2E synchronization
Enhanced QoS Packet Cut Through Sync Optimized Transport

Adaptive Bandwidth Recovery (ABR)

Asymmetrical Links

Advanced Multi Radio

Adaptive Power ACM

Enhanced Header Compression

Payload Compression

Building Blocks for enhanced Network Performance

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Capacity: Efficiency at All Levels


Modulation Spectrum classes Packet compression Latency/PDV System gain Adaptive Power ACM QoS mechanism Resiliency (ABR, ) Asymmetricity


Wireless Network


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Enhanced Compression Techniques

Multi-Layer Header Compression Payload compression






Compressed Payload


Compressed Payload

CH = Compressed Header

Compressed Payload


Compressed Payload

Up to 150% more capacity

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Enhanced packet compression mechanism

Improved Ethernet throughput over the radio link No affect on user traffic
Band width (MHz) Modulation Radio Capacity (Mbps) Ethernet Capacity L2 Header Compression (Mbps) 64 Byte 58 78 111 151 188 229 255 268 Traffic Model 2 * 48 64 92 124 155 189 210 221 Ethernet Capacity Multilayer Header and Payload Compression (Mbps) Traffic 64 Byte Model 2 * 113 55 152 74 220 106 295 144 365 179 447 218 495 242 529 256

Average Packet Size ETSI 28 ETSI 28 ETSI 28 ETSI 28 ETSI 28 ETSI 28 ETSI 28 ETSI 28 QPSK 8 PSK 16 QAM 32 QAM 64 QAM 128 QAM 256 QAM 256 QAM 41 55 78 105 130 158 176 186

* ITU G.8261 Traffic Model 2 in collaboration with 3GPP 60% of the load, size packets (1518 octets) 30% of the load, size packets (64 octets) 10% of the load, size packets (576 octets)

~40% gain

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Asymmetric Bandwidth Capability


Allocate more capacity to downlink traffic Uniquely available from Ceragon within an existing Point-toPoint FDD frequency planning environment



Asymmetric channel within FDD frequency plan


Aggregation Network Aggregation / Hub site

50% More Downlink Capacity - at no extra cost!

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Asymmetrical links PMP like in any bands

For better DL burst capability We use one 28MHz channel: Transmit to 4 directions (same information), and receive 4 flows of 7MHz from each direction (28MHz channel divided to 4 frequencies). f2


1 Sector Antenna or 4 Antennas




28 MHz

Mediation device






Average 50Mbps for each LTE site, but we allow burst of up to 200Mbps (before compression)

At the UL side, each tail have capacity of 7MHz (up to ~50Mbps) At the DL we get a bandwidth allowing rates of up to 200Mbps to any site

Better spectral utilization

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IP-10 based Wireless Native2 rings


FibeAir IP-10


Tail site #1


FibeAir IP-10

Ring site #1
FibeAir IP-10

Packet or TDM based fiber aggregation network or leased lines

FibeAir IP-10


Tail site #2


Wireless Native2 Ring


Fiber site

FibeAir IP-10


Ring site #2



FibeAir IP-10

Ring site #3
FibeAir IP-10

Tail site #3

Redundancy And Network Level Resiliency

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Doubles the Ring Capacity

Protected-ABR uses Standby Capacity for Ethernet
TDM Voice
500 450 400 350 300 250 200 150 100 50 0

Ethernet Data

Calculation assumptions:

Normal operation: up to 6 times higher Ethernet capacity

1) 2) 3) 4)

Assuming a 28 Mhz wireless ring. All 72 E1s are delivered at all times 64 bytes frame size In terms of additional capacity for Ethernet traffic 5) Worst case and best case with SNCP 1+1 is the same 6) In SNCP 1+1 no difference between normal and failure states

SNCP 1:1 in normal operation with Protected-ABR

SNCP 1+1 in normal operation or worst case for SNCP 1:1 with Protected-ABR

Double the capacity for data

No impact on TDM in failure state

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Radio Technology Leader Unique RFIC Technology


MTBF > 112 years Highly integrated RFIC All SMT Very low component count Very easy manufacturing (excellent yield) RFU-C

Technological Breakthrough - The most complex RFIC in the world

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RF Units
Base-band unit can work with one of the following:


RFU-HP / Sp.Div

RFU-C Outdoor Standard Power 6-38 GHz

Indoor or Outdoor High Power 6-11 GHz

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Base-band units
Ethernet Only
IP-10 E-Series IP-10Q

Ethernet + TDM
IP-10 G-Series

Carrier Eth switch Nx FE, Nx GbE Scalable for multi carriers

Full GE pipes Ultra-high density 4 carriers at 1RU

Access & Aggregation

Carrier Eth switch Nx FE, Nx GbE Scalable for multi carriers Full redundancy nxE1/DS1, ch-STM-1/OC3 T1 Cross Connect

Optimized Offering for Different Market Segments

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Evolution IP-10 G-Series

T-Card slot Fans drawer

Craft Terminal (DB9)

External Alarms (DB9) User Channel (optional) (RJ45)

16 x E1/DS1s (optional) Protection Interface (RJ45) 2 x GE combo ports Electrical (RJ45) or Optical (SFP) 5 x FE Electrical (RJ45)

Engineering order-wire (optional)

RFU interface (N-Type)

GND Power -48V DC (dual-feed option)

Split-mount architecture - Compatible with all RFUs. Dimensions: Height - 1RU , width < 19" , Depth < 12" (ETSI)
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T-Cards for IP-10 G-Series Optional add-on cards

STM1/OC3 Mux T-Card

16 x E1/DS1 T-Card

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Evolution IP-10 Integrated Nodal Solution

Same 1RU IP-10 unit can be used for terminal and nodal solution The solution is stackable and modular Forms a single unified nodal device
Common Ethernet Switch Common E1/DS1s Cross Connect Single IP address Single element to manage

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IP-10 - Carrier Ethernet functionality

Standardized services
MEF-9 & MEF-14 certified for all service types (EPL, EVPL and E-LAN)


Quality of Service
Advanced CoS classification Advanced traffic policing/rate-limiting CoS based packet queuing/buffering with 8 queues support Hierarchical scheduling schemes Traffic shaping Tail-drop or WRED Color-awareness (CIR/EIR support)


Service Management
Extensive multilayer management capabilities Ethernet service OA&M 802.1ag and Y.1731. Advanced Ethernet statistics

Up to 1Gbps per radio carrier Up to 2Gbps per channel (with XPIC) Multi-Radio Integrated non-blocking switch with 4K VLANs 802.1ad provider bridges (QinQ) Scalable nodal solution Scalable networks (1000s of NEs)

Highly reliable & integrated design Fully redundant 1+1/2+2 HSB & nodal configurations Hit-less ACM (QPSK 256QAM) for enhanced radio link availability RSTP/MSTP Wireless Ethernet Ring/Mesh support 802.3ad link aggregation Fast link state propagation <50msec restoration time (typical)

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Sync Optimized Transport

Synchronization using native E1 trails
Dont disconnect the last E1 yet

PTP optimized transport LTE-ready!

Support IEEE-1588, NTP, etc. Requires ultra-low PDV A challenge for microwave with ACM and narrow channels

SyncE input and output (G.8262) End-to-End Synchronization distribution for nodal configurations PRC grade (G.811) performance for pipe (regenerator)

An optimal and flexible solution for every network and migration strategy
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Delay Variation in Wireless Transport

for Sync over Packet Protocols (e.g. IEEE-1588)

Quality of recovered clock depends on Packet Delay Variation (PDV)

Slow variation are most harmful, not averaged well by the receiver

Affecting factors
"Head-of-Line blocking - High priority frame wait until the end of transmission
of current frame

ACM causes changes in per hop delay Modem coding latency is different in each modulation Different modulations per direction may occur Lower radio link capacity higher per-hop packet delay
Example: An IEEE-1588 frame over 28MHz channel
Minimum delay: 110sec (256QAM and no frame started transmission before) Worst case delay: 800sec (QPSK and 1,518 byte frame started transmission before) 690sec variation at each hop !
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Meeting Latency requirements

Advanced delay & delay-variation optimization techniques

IEEE-1588/NTP control frames

Ultra-low delay variation

PTP optimized transport

Controlled delay / delay-variation Flow Classifier

Control, CES, VoIP

(< 120sec* / 40sec*) Frame-cut through

Latency Optimized Radio link

Low delay
Browsing, Streaming, Peer-to-peer, etc.

(<210sec*) Enhanced QoS capabilities

* Values are for 200Mbps radio link and frame size of up to 300 bytes for CES / VoIP frames

Improve QoE by providing highly optimized delay & delay-variation performance for each application and service type
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Evolution Series Long Haul Overview


Evolution Long Haul IP or SDH on one platform

GENERAL Frequency bands: 4, 5, L6, U6, 7, 8, 10, 11,13 GHz Multi channel system, up to 10 RF channels on one polarization Transceivers cover full band Space Diversity IF Combiner and XPIC Outdoor version with 4 channels per polarization Most power efficient system in the market (~70W/channel) ETHERNET Multi-gigabit Ethernet Interface (Native Ethernet up to 2 Gbit/s) 8+0 Channel Aggregation (ABC) ACM SDH/SONET STM-1/OC-3, STM-4/OC-12, Gigabit Ethernet (up to 600 Mb/s PoS) N+1 protection switching (N7) DXC Unit or Frame option Option for 2Mb/s Ethernet wayside
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All-IP, Mixed Ethernet/TDM, All-TDM

Native Ethernet up to 2 Gb/s per Link with Multichannel ABC (Adaptive Bandwidth Control) 6 x 1000BASET ports (2xSFPs) L2 switch, QoS, RMON, VLAN, QinQ, RSTP Adaptive Coding and Modulation (ACM) TDM transport (E1/DS1)
STM1/OC3 and nxE1/nxT1 interface SNCP ring protection

155 Mb/s and 311Mb/s XCVR capacity STM1/OC3 and STM4OC12 interface Embedded ADM mux / Xconnect 63E1,84T1, 3xE3/DS3 Ethernet over SDH/SONET Mapping into VC4,VC3,VC12,STS3, STS1,VT1.5 600 Mb/s link CCDP with XPIC 2 Mb/s Ethernet Wayside

Ethernet and TDM Xconnect, 4 directions

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Leading Microwave Technology

XCVR unit
Capacity and modulation independent (covers 10 - 440 Mb/s) 4 to 256 QAM/MLCM Direct RF modulation with adaptive power amplifier control IF Combiner Space Diversity with 3dB combiner gain The transceiver covers a complete frequency band single spare! No FANs convection cooling only 20 dB ATPC range Same unit for All-Indoor and Split Mount configurations Same unit for SDH and All-IP
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Interfaces/Base band Architecture

Scalable BB system, 2 ch per Universal IFU
SW-package defines Native Ethernet or SDH/SONET transport Plug-in Units IFUs connected via back-panel XPIC interconnection for Co-channel operation

XPAND IP - Native Ethernet & TDM interfaces


25xE1 16xT1

STM-1 (channelised) OC-3

SDH/SONET main interfaces

STM-1 OC-3

STM-4 OC-12



25xE1 16xT1


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All Indoor vs. Split Mount

XCVR & branching

Elliptical Wave Guide

Coax cable

Less heat

Less WG loss Less Investment

All Indoor Radio-Terminal
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IDU Baseband part

Multichannel - Adaptive Bandwidth Control (ABC)

Multichannel ABC is an effective technology for transporting packets
over multiple dynamic links Works on layer 1 and is independent of frame types and packet flows Automatically scales with available channels/links Aggregated payload (Layer2) upto 8 channels ~ 2 Gb/s

Adaptive Channel Modulation Failure

Degraded channel, remove from mapper

Dynamic channel capacity

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Migrate from SDH to IP

Flexible migration

Ethernet Switch & Controller Unit Controller Unit

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Thank You