J A N U A R Y Welcome to Our World. The Global VoIP Company NASDAQ: IBAS 12/05

Transcription

1 J A N U A R Y Welcome to Our World The Global VoIP Company NASDAQ: IBAS 12/05

2 Safe Harbor Statement Except for historical information, all of the expectations, plans and assumptions contained in the foregoing press release constitute forwardlooking statements under Section 21E of the Securities Exchange Act of 1934 and involve risks and uncertainties. Statements regarding the proposed transaction between the Company and Royal KPN, including the expected timetable for completing the transaction, the expected dividend payment, future financial and operating results, benefits and synergies of the transaction, future opportunities for the combined company and products and any other statements regarding the parties future expectations, beliefs, goals or prospects, also constitute forward-looking statements. Important factors that could cause actual results to differ materially from such forward-looking statements include, but are not limited to, (i) the Company s ability to execute its business plan; (ii) the extent of adoption of the Company's services and the timing and amount of revenue and gross profit generated by these services; (iii) fluctuations in the market for and pricing of these services; (iv) the success of the Company s plans to contest the FCC ruling on prepaid calling cards; (v) the ability of the Company and Royal KPN to consummate the proposed transaction due to regulatory restrictions, the failure to receive shareholder approval, the ability to successfully integrate their operations and employees, the ability to realize anticipated synergies, the emergence of new competitive initiatives resulting from rapid technological advances or changes in pricing in the market, business conditions and volatility and uncertainty in the markets that the Company and Royal KPN serve, (vi) the Company s inability to meet the requirements of the NASDAQ Stock Market for continued listing of the Company s shares; and (vii) the other factors described in the Company s Quarterly Report on Form 10-Q for its most recently completed fiscal quarter and Annual Report on Form 10-K for its most recently completed fiscal year and Royal KPN s Annual Report on Form 20-F for its most recently completed fiscal year all of which are available at Such forward-looking statements are only as of the date they are made, and we have no current intention to update any forward-looking statements. This communication may be deemed to be solicitation material in respect of the proposed transaction between ibasis and Royal KPN. In connection with the proposed transaction, ibasis intends to file relevant materials with the SEC, including a proxy statement on Schedule 14A. SHAREHOLDERS OF IBASIS ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING IBASIS S PROXY STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain the documents free of charge at the SEC's web site, and ibasis s shareholders will receive information at an appropriate time on how to obtain transaction-related documents for free from ibasis. Such documents are not currently available. Participants in Solicitation Royal KPN and its directors and executive officers, and ibasis and its directors and executive officers, may be deemed to be participants in the solicitation of proxies from the holders of ibasis Common Stock in respect of the proposed transaction. Information about the directors and executive officers of Royal KPN is set forth in the Annual Report on Form 20-F for the year ended 2005, which was filed with the SEC on March 14, Information about the directors and executive officers of ibasis is set forth in ibasis proxy statement for its 2006 Annual Meeting of Shareholders, which was filed with the SEC on March 23, Investors may obtain additional information regarding the interest of such participants by reading the proxy statement regarding the transaction when it becomes available.

3 Global VoIP: It s Our World! Revenue In Millions Q4 Q Minutes 2.9 Billion Revenue $133.5 Million Gross Profit $15.6 Million F Minutes In Billions Q F * Assuming stable ARPM * 2006 Standalone Revenue $510 - $520 Million

4 ibasis Including KPN Global Carrier Svcs. 1,250 1, Revenue In Millions 2006 Combined Revenue: $ billion F* Minutes In Billions ibasis $0 to $1 Billion in 10 years! F * 2006 combined guidance *

5 ibasis/kpn Transaction Structure Pre Transaction Public Shareholders 100% 100% KPN Global Carrier Services KPN to contribute 100% of KPN Global Carrier Services into ibasis with $21 M of cash on the balance sheet KPN to make a cash payment of $55 M to ibasis Post Transaction Public Shareholders 49% $113 M 51% $55 M ibasis to issue new shares to KPN representing 51% of diluted shares ibasis to pay a post-closing special dividend of $113 M to its pre-closing shareholders 100% KPN Global Carrier Services Cash Equity ownership

6 The Expanded ibasis: KPN Merger Logic Scale Complementary Footprint Cost Synergies Strength in Growing Markets and Stable Captive Base Strong Financial Profile One of the five largest international voice wholesalers in the world Combination of complementary sales forces and network footprint to generate new sales opportunities Pre-tax cost synergies expected to exceed $10 M per annum in the medium term Accelerate migration of KPN Global Carrier Services traffic to IP Better termination rates thanks to stronger purchasing power Back office integration Strength in mobile and consumer VoIP, the fastest growing segments of global telecom Stable base from ibasis and KPN retail traffic Solid balance sheet and positive cash flow to underpin ibasis s continued growth strategy

7 Telefonica Telia-Sonera Primus BT Cable & Wireless We Are Almost # 1! International Voice Traffic Current Combined Run-rate ibasis KPN Global Carrier Svcs. Verizon ibasis/kpn AT&T Teleglobe IDT Telecom Italia France Telecom Sprint Deutsche Telekom Telegeography 2006 data for 2004 and company traffic data

8 Favorable Competitive Environment International wholesale economics doesn t fit with incumbent economics: 5% vs. 40% EBITDA Margin Incumbents continue to lose market share Consolidation SBC + AT&T Verizon + MCI VSNL + Teleglobe + ITXC Belgacom + Swisscom Telefonica + Cesky Telmex + Embratel Outsourcing DT => Eutex & Calltrade Separation of wholesale Telecom Italia => Sparkle Private equity is trolling the market TDC, DT, Eircom, Americatel

9 International Traffic Projections: It s a BIG MARKET, and Growing In billions of minutes '00 '01 '02 '03 '04 '05 '06 '07 '08 Telegeography 2006

10 We May Be Among the Biggest, But with 7% Market Share, Plenty of Room to Grow In billions of minutes Telegeography 2006

11 If We Were a Country Top 20 Countries: Outbound International Traffic Current Combined Run-rate Carriers in most countries lack scale required for profitable international transport 4 U.S. ibasis/kpn U.K. Germany France Canada Italy Spain Hong Kong Switzerland Netherlands 0 Australia U.A.E. China Japan Taiwan Belgium Saudi Arabia Singapore Mexico Sweden Telegeography 2006 data for 2004 and company traffic data

12 The Long Tail: More Than 20% To Other Destinations U.S. Outbound Traffic Mexico U.K. Philippines Germany El Salvador Brazil China Ecuador Australia Pakistan From France Germany Italy Netherlands U.K. % to Other 29% 26% 33% 27% 33% Other % of Total

13 More Than 400 ibasis Customers

14 Positioned to Capture Traffic 1,000+ Points of Presence in >100 Countries Internet Central Offices ibasis Offices

15 The Next 10 Years International Voice Market Is Growing More Traffic Moving to Wholesale Prices Stabilizing Competitors Are Weakening The World Is Shifting to All-IP Playing To Our Strength

16 Financial Summary Welcome to Our World

17 Financial Performance by Product Q Dollars in Millions Trading Retail Total Revenue $109.3 $24.2 $133.5 Gross Profit $12.7 $2.9 $15.6 Gross Margin % 11.7% 11.9% 11.7%

18 Good Progress Over Last Year Q3 06 vs. Q % 36% Revenue Gross Profit ($ in millions) Q3 '05 Q3 '06 9 Q3 '05 Q3 '06

19 Mixed over Previous Quarter Q3 06 vs. Q2 06 5% 4% 135 Revenue 17 Gross Profit ($ in millions) Q2 '06 Q3 '06 11 Q2 '06 Q3 '06

20 Thank you. Welcome to Our World