Alpha — Call Transcript 2014

Mar 27, 2014

4Q13 Results Investor Conference March 14, 2014

Safe Harbor Statement

Except for statement in respect of historical matters, the statement contained in this release are “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual performance, financial condition or results of operations of Alpha Networks Inc. to be materially different from any future performance, financial condition or results of operations implied by such forward-looking statements.

Agenda

2013 Financial Reviews

• Mason Liu, Vice President

2013 Business Updates & 2014 Company Outlook

• Harrison Chang, President

2014 Growth Drivers - Tim Kang, CTO

Q&A - John Lee, Chairman

• Harrison Chang, President - Tim Kang, CTO - Mason Liu, Vice President

2013 Financial Reviews

Presented by Mason Liu Vice President

4Q13 Consolidated Income Statement & QoQ Comparison

Unit: NT$ million	4Q13	3Q13 QoQ Changes
Net Sales Cost of Goods Sold Gross Profit Operating Expenses Operating Income Non-Op. Inc. (Loss) Income Before Tax Net Income1 EPS (NT$)	Amt % 6,809 100.0 5,810 85.3 999 14.7 694 10.2 305 4.5 42 0.6 347 5.1 289 4.2 0.59	Amt % % 6,370 100.0 6.9 5,333 83.7 8.9 1,037 16.3 -3.7 732 11.5 -5.2 305 4.8 - 18 0.3 133.3 323 5.1 7.4 241 3.8 19.9 0.50

1 Attributable to stockholders of parent company, excluding non-controlling interests.

2013 figures are unaudited

4Q13 Non-op. Income / Loss Breakdown & QoQ Comparison

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Unit: NT$ million 4Q13 3Q13
(6) 0
Interest Gain (Expense)
45 3
FX Gain / (Loss)
Others 3 15
Total 42 18
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2013 figures are unaudited

2013 Consolidated Income Statement & YoY Comparison

Unit: NT$ million	2013	2012 YoY Change
Net Sales Cost of Goods Sold Gross Profit Operating Expenses Operating Income Non-Op. Inc. (Loss) Income Before Tax Net Income1 EPS (NT$)	Amt % 24,104 100.0 20,394 84.6 3,710 15.4 2,876 11.9 834 3.5 130 0.5 964 4.0 780 3.2 1.60	Amt % % 24,907 100.0 -3.2 21,033 84.4 -3.0 3,874 15.6 -4.2 2,826 11.4 1.8 1,048 4.2 -20.4 (91) (0.4) 242.9 957 3.8 0.7 742 3.0 5.1 1.46

1 Attributable to stockholders of parent company, excluding non-controlling interests.

2013 figures are unaudited

2013 Non-op. Income / Loss Breakdown & YoY Comparison

Unit: NT$ million 2013 2012 (18) (41) Interest Gain (Expense) 112 FX Gain / (Loss) (77) 36 Others 27 Total 130 (91)

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Copyright © 2014 Alpha Networks Inc. All rights reserved 2013 figures are unaudited 8
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Dec .31’ 2013 Consolidated Balance Sheet & YoY Comparison

Unit: NT$ million	Dec.31, 2013	Dec.31, 2012 YoY change
Cash Account Receivable Inventory Other Assets Total Assets Current Liabilities L-T & Other Liabilities Total Liabilities Common Stock Shareholders’ Equity	Amt % 1,543 8.6 6,005 33.3 4,394 24.3 6,108 33.8 18,050 100.0 7,187 39.8 1,076 6.0 8,263 45.8 4,943 27.4 9,787 54.2	Amt % % 2,003 11.9 -23.0 5,865 35.0 2.4 3,625 21.6 21.2 5,282 31.5 15.6 16,775 100.0 7.6 6,259 37.3 14.8 1,022 6.1 5.3 7,281 43.4 13.5 5,138 30.6 -3.8 9,494 56.6 3.1

2013 figures are unaudited

2013 Business Updates 2014 Company Outlook

Presented by Harrison Chang President

4Q13 Revenue Breakdown by Products & QoQ Comparison

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3Q13 4Q13 LAN/MAN
18% 0% Wireless
15% [0%]
42% 12%
14% 51% Mobile & Broadband
22%
Digital Multimedia
26%
Others
NT$M
3Q13 4Q13
4,000 30 % QoQ
3,000
- 8% QoQ
2,000
3,468 - 9% QoQ - 13% QoQ
2,668
1,000
1,660 1,523
866 787 1,133 989
0
LAN/MAN Wireless Mobile & Digital
Broadband Multimedia
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Copyright © 2014 Alpha Networks Inc. All rights reserved 2013 figures are unaudited 11
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2013 Revenue Breakdown by Products & YoY Comparison

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2012 2013
LAN/MAN
14% 2% Wireless
18% [0%]
8%
11% 46% Mobile & Broadband
27% 49% 25%
Digital Multimedia
Others
NT$M
2012 2013
15,000
-9 % YoY
10,000
- 12 % YoY
5,000 12,183 11,078 24 % YoY 25 % YoY
6,779
5,948
2,087 2,595 3,453 4,311
0
LAM/MAN Wireless Mobile & Digital
Broadband Multimedia
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Copyright © 2014 Alpha Networks Inc. All rights reserved 2013 figures are unaudited 12
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2014 Company Outlook

 Expanding cloud business and first–tier customers

• Taking off with 4G/LTE

• Evolving with Internet of Things (IoT)

• Capacity expansion in Changshu, China.

• A more favorable product mix

2014 Growth Drivers

Presented by Tim Kang CTO

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Alpha Data Center Experience
2440GE
4100GE
3240GE
SDN
40GE
4810GE + 640GE
2410GE + 440GE
SDN
10GE
Copyright © 2014 Alpha Networks Inc. All rights reserved 15
Core
Aggregation
Access
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Data Center/SDN Switch

SDN/Legacy Software Experience on 40G/100G, Data Center, Chassis based Switch

192 40GE Ports 768 10GE Ports

White Box Switch ( 10% by 2015 )

LTE Small Cell & Fixed CPE Application

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Operator
Management Security/ HeNB
IMS Gateway
Mobile Internet
Network
Broadband
Access
xDSL/Cable/Fiber
Broadband
Residential
Router
4G Base Small Cell
Stations
4G Base LTE & WiFi
Stations
4G Integrated
Small Cell
Fixed 4G
WiFi 4G
LTE CPE
WiFi
Laptop
Smartphone
Tablet
Copyright © 2014 Alpha Networks Inc. All rights reserved 17
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LTE Small Cell & Fixed CPE

IAD ( CSFB, VoLTE )

3G/4G + WiFi + PoE

IOT experience with Alpha software

Smart Home Gateway Application

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Operator’s Cloud &
APP Store
“Smart”
Home Gateway
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Smart Home Gateway

Be able to meet specific requirements - Telco, Internet Company, Retail Complete Solutions

• VoLTE, DLNA, Z-Wave, etc.

- OpenWRT, OSGI, TR-069, oneM2M,etc.

IEEE 802.11ac

Router ( White Box )

Enterprise AP ( Hotspot 2.0, KAPWAP )

Indoor & Outdoor

24 GHz Intelligent Sensor

Patent

Detect Range for Short/Long Range Existence of the Object Distinguish the Object

Application Automotive Radar System Lighting Control Oil Level sensor Security Surveillance Contactless Health Monitoring

IP-Cam

Cloud Device ( Smart phone, Tablet, etc. )

LinknLook ( Cloud Software Platform ) Retail -> Telco

OTT Box / STB AOS ( Alpha Operating System )

DLNA, UPnP, Miracast Hybrid IP-STB

Q&A

Copyright © 2014 Alpha Networks Inc. All rights reserved