TSX: PHD Michael Vazquez, President and COO Gary Clifford, Chairman - - PowerPoint PPT Presentation

TSX: PHD Michael Vazquez, President and COO Gary Clifford, Chairman and CEO Investor Presentation Fall 2013

A multi branded Global Communications Company A multi branded Global Communications Company

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Disclaimer

This presentation contains forward-looking statements, which may be identified by words like "expects", "anticipates", "plans", "intends", "indicates" or similar expressions. These statements are not a guarantee of future performance and are inherently subject to risks and uncertainties. Phonetime’s actual results could differ materially from those currently anticipated due to a number of factors set forth in reports and other documents filed by the Company with Canadian securities regulatory authorities from time to time.

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Reliable Professional Effective

Customers Customers A leading global supplier of communication services A leading global supplier of communication services

Primary Competitors Primary Competitors Numerous small competitors Numerous small competitors

Management Management

• Gary Clifford – Chairman and Chief Executive Officer
• 10 years telecommunications experience
• Seasoned operator and M&A specialist
• Mike Vazquez – President, Phonetime
• 20 years telecommunications experience
• Seasoned operator, network and IT specialist
• Ali Guven Kivilcim – President of Tellza Technologies
• 20 years of telecommunications experience
• Network, IT and Software specialist
• Alec Gramont – General Manager, Route Dynamix
• 15 years telecommunications experience
• International business experience with both start ups and within corporate environments
• MBA in International Business and Finance
• Ruddy McGlashan – General Manager, GoLifeTel
• 3o years telecommunications experience
• International business experience with both start ups and within corporate environments
• Seasoned operator, network and IT specialist

Seasoned Management Team Seasoned Management Team

Financials Financials

For the three and six months ended June 30 2013 2012 2013 2012

Unaudited Unaudited Unaudited Unaudited Revenue 39,792 24,542 73,842 48,185 Cost of revenue 37,403 22,798 69,833 44,532 Gross margin 2,389 1,744 4,009 3,653 Operating expenses 1,037 1,094 1,913 2,366 EBITDA 1,352 650 2,096 1,287 Net and comprehensive income for the period 804 280 1,208 600 EPS - basic and diluted 0.01 0.00 0.01 0.00 Weighted-average number of common shares outstanding

• basic and diluted

151,231,492 158,731,492 151,231,492 158,731,492 As at June 30, March 31, December 31, 2013 2013 2012

Unaudited Unaudited Unaudited Cash 2,739 1,230 2,288 Total current assets 13,609 11,912 9,900 Total Assets 24,792 23,613 21,794 Bank Debt — — — Total Debt — — — Total current liabilities 12,267 11,846 10,383 Total liabilities 12,402 12,040 10,638 Total shareholders' equity 12,390 11,573 11,156 24,792 23,613 21,794 [amounts in thousands of U.S. dollars, except per share information]

Financial strength growing Financial strength growing

Stock Price History Stock Price History

Value recognition started; valuation multiple remains low Value recognition started; valuation multiple remains low

A Global Carrier to Carrier Service Provider for voice services A Global Carrier to Carrier Service Provider for voice services

• Phonetime is a global leader of international telecommunications services:
• Its highlights include:
• Has a current annual run rate revenue of $150 Million compared to 2012

revenue of $102 Million.

• Net Income profitable since 2011
• Provides 4 billion minutes of communication annually
• Averages 60 million phone calls per month
• Utilizes a powerful proprietary software-based Procurement Engine
• Has an experienced team of traders of minutes
• Is lead by an seasoned management team
• Boasts over 1000 commercial agreements worldwide and over 500 active

billing customers

A Global Carrier to Carrier Service Provider for SMS Services A Global Carrier to Carrier Service Provider for SMS Services

The SMS Initiative: Established July 2013

The SMS Space

• Tellza Group to take advantage of significant opportunities in the SMS

Market through a new Group Company called: Route Dynamix

• Global Market Volume: about 10 trillion SMS messages in 2012
• Worldwide SMS revenue in 2013 north of $150 billion for the first time
• SMS is the most widespread digital communications platform to date and

is still growing. The Cisco Visual Networking Index (VNI) Service Adoption Forecast predicts that 90% of global mobile subscribers will be using SMS by 2016, up from 74% in 2011

• SMS is an incredibly powerful communications medium. Text messages

can be sent even with a very low-strength cell signal or a congested

• network. SMS is asynchronous, inexpensive and predictably priced, and

works on any handset. In much of the world, SMS is often the only digital data that works, or works reliably

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Value creation opportunity within existing supply chain Value creation opportunity within existing supply chain

• Window of opportunity is NOW as OTT Messaging is spreading but SMS is

still “king” and will continue to be for some time

• OTT taking over more significantly in US and Europe. Latam, Asia, and

Africa will still represent considerable revenue opportunities

• MNO’s (our customers) are focusing on SMS intently; according to Ovum

Research, MNO’s will lose $23bn in mobile messaging revenue in 2012, as they lose customers to IP-based (OTT) social messaging services

• SMS is very profitable; according to PORTIO Research, SMS messaging

brings in $1,000 for every MB of data transmitted compared with 2 to 13 cents per MB that comes in from a wireless Internet data plan

• Platform selected and purchased
• Customizations and testing underway
• Traffic and revenue by the of 2013

Over-the-Top (OTT) messaging v SMS

Window of Opportunity

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SMS: Low risk high revenue and margin opportunity SMS: Low risk high revenue and margin opportunity

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By the Numbers

Message Trend OTT messages SMS messages MMS messages 2011 3,492 billion 7,844 billion 207 billion 2012 5,846 billion 8,600 billion 228 billion 2016 20,293 billion 9,554 billion 277 billion

Messaging has the potential to outpace voice business Messaging has the potential to outpace voice business

Mobile technology has become an extension of us Mobile technology has become an extension of us

The Mobile Initiative Established : August 2013

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Business Concept

GoLifeTel is seeking to become a Mobile Virtual Network Operator (“MVNO”) that will sell cell phones based on prepaid discount wireless airtime plans with a variety of comprehensive talk, text and data services for use in Domestic US. We are also seeking status to become a service provider to “Lifeline Program”.

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The Life Line Program

The U.S. Government is providing free cell phones and free plans to low-income families across America. A little-publicized program from the Reagan era that has been providing low-income households with free or subsidized phone services for more than 25 years has recently begun

• ffering free cell phones and plans in lieu of a land line. The program is known as Lifeline”, and

anyone with an income at or below 135% of the federal poverty guideline can qualify. For a family of three, that means an income of around $26,000 or less qualifies for a free cell

• phone. The person next to you might be on a free phone plan.

Lifeline is providing free cell phones in lieu of land lines because of the costs and cumbersome regulations governing traditional copper networks across America. Essentially, it costs more to provide land line services than it does to provide a free cell phone and free plan. The way it works is relatively straightforward. Carriers receive a flat payment of $10 per month for each family, which covers the cost of one basic phone and plan. There are no connection fees, installation charges, or wires to be installed, so the end result is a less expensive service with greater coverage and portability.

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Industry Analysis

• As of May 2012, the US wireless industry is valued at $195.5 billion dollars,

ranking it amongst the top industries in the nation

• In the US Market, prepaid wireless service is the fastest growing service

segment in the wireless industry

• By 2015 prepaid is expected to be 55% of market at 182M users, meaning 82M

users will be migrating to prepaid in the next 3-4 years

• Compared to Europe and the rest of the world, the US is behind in adopting this

new trend of prepaid packages

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Industry Analysis

US Cellular Technologies

Global System for Mobile Communications (“GSM”) Code Division Multiple Access (“CDMA”)

• SIM card based platform
• Customers can move wireless plan &

data from one handset to another by purchasing or bringing their own phone

• 80-85% of global market share
• Provides great opportunity to sell SIM

cards separate from the handset device

• Customer must purchase carrier specific

handsets

• Declining trend in activations due to

restrictions of handset choice & late adoption of smart phones on the CDMA networks

• Shortage of CDMA handsets in

marketplace Prepaid Market Segment:

• CDMA represents 75% of the US prepaid market – GSM have traditionally been less

aggressive in adopting wholesale MVNO partners

• Growth opportunity for GSM based MVNO’s as GSM-based handset use in the US

increases

• “Two out of three people who sign up for new wireless service in the US opt to go

prepaid, instead of being locked into a lengthy and costly contract” – New Millennium Research Council

Wireless Market

Prepaid Postpaid

20 Focused on un-banked, low/no credit, & immigrants Hybrid regional network carriers still building platform Main players in postpaid market

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• Localized neighborhoods
• Ethnic Target Segments

Shops in local market

• Bodegas
• Retail Locations
• Trends have indicated that

wireless handsets are very important to user

• More wireless users

migrating towards smart phones

• High Talk Users
• International Callers
• Big Data Appetites
• Infrequent communicators
• Unbanked
• Credit Challenged
• Bargain Wireless Shoppers
• Dissatisfied postpaid users
• Fixed Budget Customers
• Immigrants more familiar

with prepaid

Customer Target Segment Usage Needs and Behavior Shopping Channel Handset Device Type

Marketing & Sales

Tel3 is the best way to make cheap International calls Tel3 is the best way to make cheap International calls

Acquired : October 2013

TEL3 is the best way to make cheap international calls.

Simplicity meets Savings in International Calling.

TEL3

Still the leading innovator with alternative products, internal Software Development and Design team.

Founded Developed its own “calling card platform”

1994

Started the agent program

1999

2003

Expanded the program to over 20 countries 2012

17+ years in Business

COMPANY PROFILE

Trusted Brand

With our partnership with TrustPilot we started collecting feedbacks from our customers and currently rated as 4 stars. TEL3 has A+ Rating with BBB. Over 85% Customer Satisfaction Ratio for our Call Center.

COMPANY PROFILE

Digital Assets

TEL3 Website

17K users

TEL3Advantage Website

55K users

TEL3 Agent Network

267 agents

CRM Application

ASSET PROFILE

All TEL3 plans are prepaid Dial-Around International Long Distance Services. You can make International calls from any phone at a very low rate.

What is the Service?

PRODUCTS & SERVICES

Calling back from any country in TEL3 network to the U.S. is much cheaper (about 2¢ a min all continental U.S.) So, now users can take advantage of that and pay much less with TEL3.

Now call back from more than 20 countries is available.

PRODUCTS & SERVICES

Simple to use

Users can start using TEL3 in 60 seconds. Calling is pin-less and simple with many time saving features like speed dial and phone recognition.

Save anytime

Users will always be in control of their budget with the prepaid account and get recharge coupons via SMS, Facebook or Twitter messages.

Mobile

Make calling easier with free iPhone, Android and Cell Phone apps that dial directly from your address book.

Simplicity meets Savings with TEL3

PRODUCTS & SERVICES

Dial Direct from your cell phone.

Download TEL3 free app to your phone, and dial International numbers from your address book or direct – no pin, no account number to enter. Simple and fast. Apps for iPhone, Android, Blackberry + Java enabled phones.

PRODUCTS & SERVICES

Introduce International Access Numbers Add International Credit Cards Add Wireless Top Ups Add VoIP apps Introduce Intelligent Follow Me

• f the countries he is
• perating where ever

• f the countries he is
• perating where ever

New features -> new uses for customers

TEL3 is planning to add new products and services to enhance its service and be able to compete in this very competitive market.

New Services

PRODUCTS & SERVICES

A platform service provider to Communication Companies A platform service provider to Communication Companies

Acquired : October 2013

Technology

• Tellza has acquired and developed a number of Communication platforms

that can allow sales and marketing plans to be implemented cost effectively by business people wishing to be in the Communications business.

• We are presently rolling out our CSP (“Communications Service Provider”)

model to our industry:

• Our offering includes: enabling, managing, and or hosting services for

Carriers and Sales and Marketing Companies in the Communications space.

• Our platforms have been proven efficient and effective over billions of

minutes over the last 10 years.

• Our team of software developers is World Class and have worked together

for a number of years.

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Our Real Value Add to the Communications Industry Our Real Value Add to the Communications Industry

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Scalability Reporting and Control

Real time automated monitoring of Telco markets

Leading Routing, Switching, Monitoring & Billing Engine 24x7x365

Real time automated monitoring and control Real time automated monitoring and control

Compelling Investment Opportunity

• Tellza is an undervalued stock using several valuation metrics:

– Trading at 1.5X monthly revenue – Trading at 3X annual cashflow – NYSE: PTGI is trading at metrics 3X to Tellza

• Tellza is debt free and has over $2M in cash reserves
• Tellza Net Income and cash flow positive since 2011
• Tellza is trending toward 50% growth in 2013 compared to 2012
• Tellza is now deploying profits into new business opportunities:

– Messaging thru Route Dynamix – US Cellular thru GoLiveTel – US Retail thru Tel3 – Platform services thru Telza Technologies

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Our Real Value Add to the Communications Industry Our Real Value Add to the Communications Industry

TSX: PHD Michael Vazquez, President and COO Gary Clifford, Chairman and CEO Investor Presentation Fall 2013