FOR IMMEDIATE RELEASE
Feb. 12, 2008

Ongoing fall in viewer retention overshadows 36% mobile TV growth
Survey of 34,000 mobile users reveals revenue potential for operators if quality and reliability improve

Mobile World Congress, Barcelona — A survey of mobile subscribers in Europe and North America reveals a mixed report card for mobile TV services. The M:Metrics study1, commissioned by Tellabs, highlights a $270 million opportunity — but only if operators meet user demands for quality and reliability improvements in the coming 12 months.

This conservative revenue projection is based on operators reversing an alarming trend: former mobile TV users grew 68% in 2007, outpacing the growth of the total market (36%).2 A year after Tellabs' first M:Metrics survey, users still point to weaknesses in mobile TV services.

After price, mobile users still cite quality and reliability as the second most important reason for their disenchantment. Yet those ex-users grant operators a clear window of opportunity: 60% would pay to watch mobile TV again if service quality and reliability significantly improved in the coming year. By regaining just half the potential market lost due to quality and reliability issues, operators could secure the revenue projection.3

Users send clear message
"Users decide which new services succeed, not the industry," said Pat Dolan, vice president for EMEA, Tellabs. At Mobile World Congress, the mobile industry is debating how operators can raise new revenues by bringing new services to market. These results come as a timely reminder as to who's in charge.

"It's challenging for operators to make a living as mere pipe vendors," added Dolan. "By offering mobile content users enjoy, operators can increase revenue. Yet this necessitates network enhancements, as acceptance of high-bandwidth services depends on the quality, reliability and capacity of the mobile backhaul. Tellabs is working with many operators in addressing these issues, and we are confident the industry will progress further."

Revealing year-on-year and country comparisons
The Tellabs-commissioned research on mobile TV users' attitudes was conducted by M:Metrics in the United Kingdom, Germany, Italy, France, Spain and for the first time this year, the United States.

While the growth of ex-users outpaces growth in current users of mobile TV across all geographies studied, the authoritative results also highlight country-specific trends:

• The UK had the highest ratio of ex-users citing quality and reliability as reasons for not watching mobile TV.
• The United States has the lowest ratio of ex-users to users, at 1.3. Yet the attitudes of U.S. ex-users with regards to quality and reliability are very much in line with their European counterparts.
• Overall mobile TV penetration in the United States lags behind all European markets but Germany.
• Interestingly Germany showed a staggering 159% growth in ex-users, while Italy has the highest percentage of mobile TV viewers.

M:Metrics defines opportunity for 2008
"It's tempting to celebrate the 36% growth in audience for mobile TV," said Paul Goode, senior analyst, M:Metrics. "Yet operators will be disappointed; while the marketing dollars invested in this nascent industry appear to be working, the trend in ex-user growth is undoing all of this good work. The challenge and opportunity for 2008 is to win former users back with better network quality and reliability — while getting it right with new users first time around."

Solving the capacity crunch issues
High-bandwidth services such as mobile TV combined with the increasing number of mobile users cause strain on backhaul networks. This capacity crunch can directly affect the quality and reliability of 3G services. Operators need a backhaul architecture that automatically assures bandwidth and priority to prevent bottlenecks. To ensure users can enjoy mobile TV, operators are migrating to pseudowire-based platforms that enable Ethernet backhauling with strict Quality of Service and high reliability.

The Tellabs® IntegratedMobileSM solution, showcased at MWC, enables operators to migrate to new services quickly and cost-effectively. Tellabs' growing customer base is a clear indicator that operators are keen to act now and seize the window of opportunity highlighted through the research.

1. Source: M:Metrics' Survey of British, German, French, Spanish, Italian and U.S. mobile subscribers aged 13 and above in October 2007, n=34,675. US ratio was 10,943 of total.

2. From January to November 2007

3. The estimate of $270 million revenue is derived from the assumption of retrieving a potential 932,000 ex-users who were disenchanted due to quality and reliability issues, plus gaining an additional 3,151,000 first time viewers currently held back by the same issues. Assuming half of these (2,000,000) subscribed for a year with an average monthly fee of $11.30, this alone would result in an 54% increase in audience and an estimated $270 million extra in revenue.

4. See appendix for statistics from Europe and USA.

About Tellabs
Tellabs advances telecommunications networks to meet the evolving needs of users. Solutions from Tellabs enable service providers to deliver high-quality voice, video and data services over wireline and wireless networks around the world. Ranked among the BusinessWeek InfoTech 100, Tellabs (NASDAQ: TLAB) is part of the NASDAQ-100 Index, NASDAQ Global Select Market, Ocean Tomo 300™ Patent Index and the S&P 500. www.tellabs.com

About M:Metrics
M:Metrics is the mobile media authority. As the only research firm to measure the audience for mobile media, M:Metrics provides the most accurate metrics on actual mobile content consumption by applying trusted media measurement methodologies to the mobile market.

M:Metrics' monthly syndicated data service gives clients the critical insights and intelligence required to inform smart business strategies and the competitive benchmarks needed to evaluate the performance of competitors and partners. M:Metrics is a private, venture-funded corporation headquartered in Seattle, with offices in San Francisco and London.

About M:Metrics Data
Based on continually refreshed samples of nationally representative mobile phone consumers, M:Metrics reports summarise market size, device reach, and key demographic and mobile phone usage characteristics.

The data presented here is drawn from an extensive survey questionnaire that collects specific device model and carrier subscription information from each month's sample of mobile phone subscribers, and also drills down into specific details related to current and past usage of various mobile phone applications and content. Data collected from each sample are statistically balanced and projected to the total national population of mobile phone subscribers.

Appendix

MEDIA CONTACTS:

Beatrice Martin-Vignerte
+44.870.238.4761

Ariana Nikitas
+1.630.798.2532

INVESTOR CONTACT:

Tom Scottino
+1.630.798.3602

(View media contact list.)

Tellabs® and the Tellabs logo are trademarks of Tellabs or its affiliates in the United States and/or other countries. Any other company or product names mentioned herein may be trademarks of their respective companies.