FTTHAn Overview

Fiber-To-The-Home (FTTH)
An Overview
Ehrhardt & Ehrhardt January 2003 Website: www.ehrhardt2.com
Merger and Acquisition Specialists in IT, Telecom and Media

| Proprietary and Copyright | Ehrhardt & Ehrhardt | 1
Contents
Background Introduction Business Issues Business Models The Market Products & Services Technology Case Studies Finance Glossary

Background

Background
Objectives Approach Framework

Background
Objectives

BACKGROUND: OBJECTIVES
We aim to understand the market for Fiber To The Home

Objectives To understand:
Market drivers for Fiber To The Home (FTTH)

How the market has developed Where the market is today What future trends we see
What are the overall business drivers for implementing FTTH

solutions.
Where are operators and service providers in implementing these

solutions.

Background
Approach Framework

BACKGROUND: APPROACH FRAMEWORK
The framework we used for our FTTH analyses

Approach FTTH Business FTTH Business
Describing the business issues, Describing the business issues, business models and market business models and market potential of FTTH potential of FTTH
FTTH Products & Services FTTH Products & Services

Description of the products and Description of the products and services that become possible services that become possible with FTTH with FTTH Insight into the uptake of Insight into the uptake of products & services products & services
Framework Framework FTTH Market FTTH Market Analysis Analysis FTTH Technology FTTH Technology
Description of the technology Description of the technology and technological issues of and technological issues of FTTH FTTH
FTTH Cases FTTH Cases

Description of FTTH Description of FTTH implementations around the implementations around the world world Insight into the financials of a Insight into the financials of a case case

Introduction

Introduction
Understanding Broadband Trends

Introduction
Understanding Broadband

INTRODUCTION: UNDERSTANDING BROADBAND
What is bandwidth?
Bandwidth refers to the throughput capacity of a given communications network
Historically the term bandwidth was used by radio communication engineers to refer to the amount of radio communications spectrum available or necessary for carrying an (often analog) signal.
For example a telephone call uses four KHz of bandwidth while a television signal uses eight KHz*.
In relation to digital transmission of data, the amount of bandwidth between the sender and the recipient determines how much data can be transmitted per unit of time. Its measured in bits per second (bps) or Kbps, Mbps, Gbps, etc.
A typical residential modem for example, may transmit in the range of 28.8 Kbps through to 56 Kbps.
* Six in the US

What is broadband?
Broadband is a transmission capacity of more 200 kbit/s
64 kbit/s
144 kbit/s
200 kbit/s
? Gbit/s
The term broadband has become a moving target! The term broadband has become a moving target!
The more advanced applications we want, the more bandwidth we need
Browsing 144 Kbps Music CDs 160 Kbps
Screen Video 300Kbps Full Screen 600Kbps 1.5Mbps
High Resolution 6-8 Mbps
Music
TV Shows
Live Events
Pay Per View

Different Technologies Are More or Less Suited to Particular Segments and Environments
HDSL Fibre to the curb Leased Line
HDSL Leased Line
HDSL Fixed Wireless
Corporate
SME
SDSL Fixed
wireless
SDSL Fixed
wireless
SDSL Fixed Wireless
Fibre to the
curb
UMTS
Residential
ADSL Cable Broadband

Satellite
ADSL Cable Broadband

Satellite
ADSL Fixed wireless Broadband

Satellite
UMTS Fibre to the home
UMTS DTT fiber to the

neighborhood
DTT
Dense Urban
Suburban
Rural
Wired access technologies

ice pr ov idi ng Te lep od ho em ny ac ce ss H In igh te sp rn e et ed ac ce ss V Co ideo nf er en cin g Ap pl ica tio n Vo ice vid eo Se rv
Corporate
ADSL
HDSL
Dial-up
ADSL Lite
DPL Cable modem
Residential 10 Kbit/s 100 Kbit/s Twisted pair
1 Mbit/s Power line
10 Mbit/s Fiber
100 Mbit/s
Coax cable based

Fiber
Small / Medium Enterprise
ISDN
VDSL
Fu ll m ot ion
Wired access technology problem. The last mile bandwidth bottleneck

Personal computing networks
(e.g networks in the office or networks at home)
Bandwidth bottleneck
(the last mile, or first mile its sometimes called is the biggest problem today for broadband services)
National backbones
(the networks normally show an enormous amount of over capacity, sometimes only 10% is used)

Characteristics of some wired access technologies

Technology
ADSL Asymmetric Digital Subscriber Line VDSL Very high rate Digital Subscriber Line
Definition
Transmission of voice and data over copper
Bandwidth
Up to 8 Mbit/s
downstream
Advantages
Makes full use of
existing copper
Disadvantages
Limited video
capability
Up to 1.5 Mbit/s
upstream
Ideal for allways on

webbrowsing
Distance limitation Limited upstream

bandwidth
Good platform for

Transmission of video, voice and data over copper
Up to 52 Mbit/s
downstream
Up to 26 Mbit/s
upstream
voice Supports broadcast video, Video on Demand, Interactive TV
Requires short
distance
Non standard
products and technology
Allways on network
for voice, video and data
Limited scalability Voice requires

special engineering
HFC Hybrid Fibre Coax
Transmission of video, voice and data over coaxial and fibre cable
10 to 42 Mbit/s
downstream
Supports broadcast
video, Video on Demand, Interactive TV
Up to 2 Mbit/s
upstream
Difficult to guarantee
speed
Allways on network
for voice, video and data
Source:Myrrill Lynch
A Pure fibre access network would solve most of the scalability and A Pure fibre access network would solve most of the scalability and distance disadvantages, but is still expensive! distance disadvantages, but is still expensive!
Although Fiber is still expensive, its cost will go down

Price/performance of access technologies Broadband Technology Cost Per Household 1999-2005E
2,500
Low cost
$USD/Household (est) Analog ISDN Coaxial 2,000
Fiber
High scalability
ADSL VDSL
1,500
Low scalability
1,000
Fiber optics
500
Cable Modem Upgrade
ADSL Upgrade
High cost
99
00E
01E
02E
03E
04E
05E
Year
Note: Technology will vary depending on existing infrastructure and urban versus suburban locations. Costs are relative numbers and do not include customer premise equipment Source: Ovum: Access@Ovum, 10/00; executive interviews; Ernst & Young and Cap Gemini Ernst & Young analysis

Advantages of using fiber for the last mile

FTTH can offer a very large bandwidth starting from 10 Mbits
up to almost no limits
Upgrade will be very easy
As a passive network, there are no active components from

the Central Office to the end user minimizing the network maintenance cost and requirements
Immunity to electrical interference Constant error-free transmission Long distance between repeaters (>40000 feet)
Optical Fiber is reliable, scalable, and secure and has lower

cost for communication circuit.
There are three broad stages in the evolution of fiber as it

gets closer and closer to the home:
FTTN: fiber to the neighborhood - brings a fiber to a small geographic area delivering the service to 100 or more house FTTC: Fiber to the curb - brings the fiber closer to a small group of homes or businesses FTTH: Fiber to the home - extends the fiber directly into the home
Although the major obstacle to the fiber propagation has

been the price is getting lower but it will be a reality only in areas of high population density
Capital spending is shifting from transport to broadband local access

Global Telecom Equipment Spending 1999-2003E
Transport Fiber and Cable 30,000 27,000 $USD (Millions) 24,000 21,000 18,000 15,000 12,000 9,000 6,000 3,000 0 99 00E 01E 02E 03E
12,157 10,134 7,835 13,411 13,616 18,605 16,029 14,842 24,703 30,743
Access Data and Broadband
Data and Broadband Access CAGR 41% Transport Fiber and Cable CAGR 12%
For the first time, capital investment in local access broadband capacity For the first time, capital investment in local access broadband capacity will exceed transport investment. will exceed transport investment.
Source: Sanford Bernstein: Telecom Equipment: 2001 Carrier Equipment Spending to Decelerate 9/00,; IDC: Service Provider Gigabit and Terabit Routers 1999-2005 forecasts, 6/00,

Example of a value chain
TV (channels) Content creators / rights owners ISP (portals) Content Packagers Content Providers Telco (brands) Others (media)
Real estate Developers Active Infrastructure providers FTTH Service Management Passive Infrastructure Providers Bank & Investors
Local Municipalities
FTTH Housing/Hosting Network Providers
Ownership Associations
Property Owners
SERVICES CONTENT INFRASTRUCTURE ACCESS CUSTOMER

End User (Residential, SME, Industry)
Local Housing Corporations
Examples of parties in the value chain

End Users Access Providers Service Providers
Content Providers Content Packagers

NBC Internet
Infrastructure Vendors

Why broadband matters

Most people today connect to the internet over a phone line, typically using a modem with a speed of 28.8 or 56 kbit/s. This narrowband communication is slow. An estimate of one third of user time online is spent waiting, reducing the convenience and ease of use. Broadband services offer significantly faster data rates and always on connections. As we move to a broadband economy we can therefore expect:
Higher connectivity People tend to spend more time online with a broadband connection
New value added services Broadband makes possible new services not feasible over narrowband

What use is all that bandwidth?

Downloading A music CD containing 660 Mbytes of data
Download speeds
56 Kbit/s PC Model 500 Kbit/s Cable Modem 1024 Kbit/s ADSL Modem 10 Mbit/s Fiber-To_The-Home connection 100 Mbit/s Fiber-To-The-Home connection 1 Gbit/s Fiber-To-The-Home connection 26.2 Hours 2.93 Hours 1.43 Hours 8.8 Minutes 53 5.3 Seconds Seconds
Although the bandwidth of 1 Gbit/s seems immense, the next generation will probably Although the bandwidth of 1 Gbit/s seems immense, the next generation will probably find use for it! find use for it!
Comparison of time spend online

E-mail Browsing Downloading software Researching purchasing made online Buying consumer products Chat Using online financial services Playing games Buying software Time spend online (hours per week) Broadband Narrowband
10
20
30
40
50
60
70
80
90
100
The two factors of higher speed and always on enhance the user experience significantly The two factors of higher speed and always on enhance the user experience significantly
Source: Broadband changes eveything, McKinsey 2000

INTRODUCTION: TRENDS
Trends
Many countries have opened their markets to competition, leading to substantial infrastructure investment, declines in prices, greater service diversity and product innovation. Markets have become more contestable. There is a relative increase in the data traffic as compared with voice traffic and digitisation of communication networks. This has facilitated a change in the design philosophy of such networks, away from fixed path circuit switching, towards variable path packet switching. The traditional consortium approach to cable investment and control is being eroded. In many cases independent carriers have end-to-end customer access arrangements thus bypassing the need for inter-carrier settlements. New wholesale markets for communications capacity have emerged. Bandwidth has become a tradable commodity. There are two kinds of bandwidth market intermediaries:
Bandwidth exchanges Facilitates contact between buyers and sellers of bandwidth
Bandwidth brokers Operates their own facilities to which buyers and sellers connect their networks.
Municipalities and/or other utilities have also entered the communications business either directly or by having facilities managed on their behalf. Examples of this can be found all over the world (e.g Stokab in Sweden and Palo Alto in the US).

Bandwidth paradigm shift
The Legacy
The Transition
The Bandwidth cloud
Copper
Wireless
Copper
Wireless
Coax Copper Wireless Satellite Coax Fiber
Telephony
Television
Telephony
Television
Internet
Television Telephony Internet The traditional model was based on the vertically integrated supply of what was essentially a single product based on an exclusive relationship between service, supply and end-use. More access technologies arrived and many access technologies are capable of delivering the same services*. All access technologies are working on a packet based protocol (probably IP). As networks evolve these underlying technologies will become more and more invisible.
* Offcourse there are more access technologies than mentioned in this example.
Access will become more and more transparent! Access will become more and more transparent!
Broadband applications will become less dependent of broadband access technologies
Business Sphere
Mobile Videophone
Traffic information system
Public Sphere
Videoconferencing
Personal security
Disaster information system Database E-mail Remote supervision system
Broadband Access Technologies

Information services for Pagers: News Weather forecasts Financial information
Information services
Private Sphere
Video-based Karaoke-on-demand Music-on-demand
Portable television Interactive television Interactive games Video-on-demand
Electronic newspapers Electronic shopping Televised shopping Home schooling system
Source: W-CDMA Makes Possible a World of Mobile Multimedia, www.nttdocomo.com.

Business issues

Business issues
The who goes first issue The convergence issue Regulatory issues

Business issues
The who goes first issue

BUSINESS ISSUES: THE WHO GOES FIRST ISSUE
FTTH is one of the few races where the gold medal might not be for the occupant of the first position!
How and who to finance the last mile? Which customers should I target? How soon will technological advances make my active components obsolete?
Which services should I introduce? At what price?
How soon will CPE be available and affordable?
What alliances should I develop?
What technical standards will emerge?
High costs combined with high uncertainties and high competitiveness High costs combined with high uncertainties and high competitiveness create a first mover disadvantage! create a first mover disadvantage!
Business issues
The convergence issue

BUSINESS ISSUES: THE COVERGENCE ISSUE
FTTH is driving Convergence, but
Entertainment Technology Age >100 years Change from real to virtual Physical distribution & Copyrights Local, non copyable physical media
Communication Technology >100 years Changing from fixed to mobile Voice, Reliability and Capacity, standards N/A (Voice-mail)
Information Technology 30 years Changing from PC to network centric Internet, openness, scalability Network-servers
Change
Focus
Storage
Totally Different Business Paradigms Will Not Make Convergence Easy. Totally Different Business Paradigms Will Not Make Convergence Easy.
BUSINESS ISSUES: THE COVERGENCE ISSUE
Convergence also challenges all players to redefine their role in the value chain
Companies can be in one or several roles in this business system.
Some major players cover larger parts, while others are more focused.
Strategic moves will happen (vertical integration).

Partnerships, strategic alliances, mergers and acquisitions will continue to happen. No one can survive alone in this environment.
Alternative and complementing distribution alternatives must be considered.

Accessing the same content via fixed, wireless and satellite is an increasingly compelling customer proposition (Multi channel access)
Content Creation
Studios Web page creators
Content Aggregation
TV Authoring Tools Content Authoring Tools Traditional Traditional Authoring Authoring Tools: Tools:
Avid Avid
Interactive Enablers
Interactive Authoring Tool Providers Software Software developers developers Interactive Application Designers Interactive Designers Operators
Distribution
Middleware Providers Broadband ISPs Conditional Access End User Interface PC manufacturers Set top box Set top box manumanufacturers facturers TV manuTV manufacturers facturers PC manuPC manufacturers facturers
Channels Portals
Player
TV studios TV studios Web pages Web pages User User created created content content
Channels: Channels:
CNN CNN
Portals Portals BBC.co.uk BBC.co.uk
Developers Developers Application Application of design of design interactive houses to interactive houses to applications customise applications customise services services
FTTH FTTH providers: providers:

For TV For TV For PC For PC Telephony Telephony
Middle Middle software software manumanufacturers facturers
Conditional Conditional access access software software manumanufacturers facturers
Players must select which roles to take in the value chain. Players must select which roles to take in the value chain.
Business issues
Regulatory issues

BUSINESS ISSUES: REGULATORY ISSUES
A multitude of international, national & local regulations must be taken into consideration
Backbone . Backbone
-- Internet Highway Internet Highway
Metropolitan Area Network (MAN) Metropolitan Area Network (MAN)

-- Middle Mile // City Loop Middle Mile City Loop
Access Access
-- Last Mile Last Mile
Operating licenses
Large Fibre Optic Lines
DWDM
Businesses
Sonet/SDH Rings Gigabit Ethernet 10 GigE
FTTB
Satellite Systems Point to Point Microwave
SOHOs
FTTH
Residential
Ownership, Interconnect, Access & digging rights
Customers
Content Caching
Copyright and intellectual property laws

Business Models

Business Models
Business Model Parameters

Business Models
Business Model Parameters

BUSINESS ISSUES: BUSINESS MODEL PARAMETERS
The Business issues that have to be tackled are...

Market Segmentation.
Assess and define optimal mix of client-base (residential, SME, corporate), in line with physical FTTH-site rollout (Greenfield, renewal and existing).
Value chain positioning

Choice of roles in the FTTH value chain (access only, service provisioning and full service operator). No one can survive alone in this environment.
Content provisioning strategy

Buy and/or make content
Products & services roll-out map

Make a selection of what when to roll out
Ownership first mile

Assess and decide upon ownership (capex/opex) of first mile, from local municipalities, housing corporations to private companies
FTTH technical design

Assess and define required FTTH technical architecture: single mode, fiber only, passive optical network, hybrid solutions, etc

Market Segmentation
Residential opportunities including SOHO
FTTH could become a commercially viable option if implemented on new local sites (Greenfield), provided no other alternative physical infrastructure is constructed, and alternative service providers are willing to purchase fiber-connectivity on a wholesale basis
Greenfield
Renewal
FTTH could become a commercially viable option if implemented on new local sites (Greenfield), provided no other alternative physical infrastructure is constructed, and alternative service providers are willing to purchase fiber-connectivity on a wholesale basis
Existing
FTTH could become a commercially viable option if multi-tenant dwellings in highly dense populated urban areas are targeted; given possible coax/copper penetration, a twofold approach is advised: offer unique services (VOD), and/or consider strategic partnerships with existing infrastructure/service providers (ADSL).

One has to determine what position to take in the value chain

TV (channels) Content creators / rights owners ISP (portals) Content Packagers Content Providers Telco (brands) Others (media) Active Infrastructure providers FTTH Service Management Passive Infrastructure Providers Bank & Investors Real estate Developers Local Housing Corporations
Local Municipalities
FTTH Housing/Hosting Network Providers
Ownership Associations
Property Owners
SERVICES CONTENT INFRASTRUCTURE ACCESS CUSTOMER

End User (Residential, SME, Industry)
The depth of the service is a strategic choice

Depth of the service provided
Infrastructure access
Business model is focused around offering access to broadband services, provided by other parties (content and/or service providers). revenuedrivers are based upon initial set-up fee and monthly access subscription revenues.
Access and Service Provisioning
Business model is focused upon a combination of access and value added services for both service providers and end-consumers (subscriber management, content management, housing/hosting, billing, etc). revenuedrivers are based upon initial set-up fee and monthly value added services revenues. Business model encompasses total ownership of customer, and as a consequence is build up of access, service and content revenues from both residential end-users as well as content/service providers.
Fully Integrated Services

Content positioning model

End-user FTTH-Company
Television
Internet Exclusive Broadband Offerings
Telephony
Walled Garden-model
Open Garden-model
Flower Garden-model

Content positioning model explained

Possible content Gardens
So-called open garden model does not restrict the end-user access to information and/or services. Standardisation will become an serious issue. Model requires critical mass, in order to work successfully. Operator loses (control of) certain cash-flows, since its role is reduced to providing access, and optional subscriber services. Best of both worlds model, combining preferential high-quality, easy-to-use value-added broadband services to end-users, thereby not restricting access to other sources and services. Focus is to retain customers within the flower-garden, to ensure revenue-flows.
Open Garden
Flower Garden
Walled Garden
So-called walled garden model implies exclusivity towards content & service Providers (revenue-sharing Deals), as well as limited access to content & services from the end-user point-of-view. This approach allows rapid roll-out, the delivery of quality of service, and solves standardisation issues (set-top boxes, etc).

The Business Model Web
Access + Services Access + Services
Access Only Access Only
Integrated Services Integrated Services
FTTH business model web
Open Garden Open Garden
Closed Garden Closed Garden Flower Garden Flower Garden

Most of the time products and services get launched in a certain order
Revenue margins
Community services Usage revenues Application cost Portal services Advertising/e-commerce revenues Content cost TV services (VoD) TV revenues Content cost Telco services Flat rate revenues Interconnection cost Broadband access Access revenues Network cost
Motivation
Network roll-out drives market share Services roll-out drives revenues and margins A substantial subscriber base is needed to get the interest of content suppliers, but you need interesting content to get subscribers and to reduce churn (chicken-egg dilemma) Bredband, eBiscom and HanseNet use this roll-out scenario. HanseNet will start delivering VoD services in Q4 2001. The others have already started.
Service Revenue drivers Costs drivers
Time
Ownership scenarios first mile

Combinations are possible
Ownership passive infrastructure including telecomhouse
Government / local municipality
Commercial operators
Property developers
Housing corporations
Ownership active infrastructure
Service Providers
Service Providers
Service Providers Service Providers
Combinations are possible
Usage fiber infrastructure
Residential End Users

BUSINESS MODELS: BUSINESS MODELS
Examples of initiatives around the world

Bredband (Sweden)
Drive long-term Company value by owning the end-user and maximizing available services Bredband branded access & telephony services
Leverage company expertise
Stokab (Sweden)

Stokab is building and operating a fiberoptic network, on an operator-neutral basis. Stokab acts as a wholsaler, offering dark fiber to operators that provide services to business and residential customers. The customers must provide the electronic equipment necessary for transmission of telecommunications traffic. Help ensure that insufficient network capacity does not impede the establishment of new businesses on the telecom market.
e-Biscom (Italy)

eBiscom has two primary ventures are Metroweb and Fastweb Metroweb is developing a high capacity fiber optic network. Fastweb provides integrated broadband communications services to business and residential customers. eBiscoms objective is to become the leading creator and developer of broadband communications in Europe. Its pursuing this goal by carrying out projects in several segments of the value chain in telco, Internet and media.
Bredband co-branded media & entertainment services

Bredband to provide content providers with QoS distribution, billing & support services The key is focus and execution
Palo Alto (US)
Drive long-term Company value by owning the end-user and maximizing available services Bredband branded access & telephony services
Lynchburg (US)
Main objectives for the site were to efficiently link all computer systems involved in city government, and to allow the sharing of costly resources (such as Internet access, system monitoring, and GIS information). To bring the network to local homes, making advanced services available throughout the community To secure multiple services & providers, promoting competition for lower-cost services
Western Integrated Networks (US)
Western Integrated Networks is dedicated to building the first "state-of-the-art broadband network" to every home in each market that we serve. By building the first broadband network WIN is positioned to be the nation's first true fullservice provider of voice, video and data services. WIN's market approach will give its customers the highest quality and choice, the convenience of one-stop shopping, and the value of a bundled service offering.
Bredband co-branded media & entertainment services


Overview Service Levels vis--vis Ownership First Mile

Fully Integrated Services E.Biscom (IT) Western Integrated Services (US) Bredbandsbolaget (SW) KPN (NL) HanseNet (GE) Access & Service Provisioning
Free market approach Government -controlled approach Productdriven approach
Planned Pilot / trial Operational
Almere (NL) Palo Alto (USA) Infrastructure Access Stokab (SW)
Government / Local municipality
Housing cooperations / house owners
Property Developers
Commercial operators

Overview Acces to Information vis--vis Ownership First Mile

Open Garden Almere (NL) Palo Alto (USA) Stokab (SW)
Planned Pilot / trial Operational
Flower Garden
Free market approach Government -controlled approach Productdriven approach
Bredbandsbolaget (SW) KPN (NL) Western Integrated Services (US) Walled Garden Government / Local municipality Housing cooperations / house owners E.Biscom (IT) Property Developers Commercial operators

The Market

The Market
Market potential

The Market
Market Potential

THE MARKET: MARKET POTENTIAL
Overview Service Levels vis--vis Ownership First Mile

Per Capita Telecom Expenditures (Euro)
800 700 600 500 400 300 200 100 0 409 686 528 359 509 682 728 662 551 492 495 337 563 574 724
700
314
Source: Yankee Group, Forrester, EITO

JA P
FIN
EL
IR L
DK
NL
UK
US
Products & Services

Products & Services
Types of products & services Uptake of products & services

Products & Services
Types of products & services

PRODUCTS & SERVICES: TYPES OF PRODUCTS & SERVICES
Like other broadband access technologies, FTTH is still focussed on three main channels
Motivation
The cable company UPC has three mainstream offerings:
UPC Telephony (Priority Telecom) UPC Internet (Chello) UPC TV (Digital)
Telephony
The telecom company KPN has two mainstream offerings and is starting to trial the third:
Television
FTTH Broadband
Internet
KPN Telephony KPN Internet (ADSL) MxStream KPN TV (Trial)
The FTTH company Bredband has three mainstream offerings:

Bredband Telephony Bredband Internet Bredband TV
The enormous FTTH bandwidth will enable things we cannot imagine yet! The enormous FTTH bandwidth will enable things we cannot imagine yet!
Products and services can be developed within each of the channels

Internet Television Telephony
ISP services (internet access, e-mail, chat, hosting) E-commerce Streaming audio/video Video conferencing Distant learning Educational services Healthcare services Bandwidth on demand Virtual private networking Portal services (news) Games, multiplayer gaming Application service providing Music on demand Games on demand TV channels (thematic channels) Video on demand Personalized television Interactive television Telephone services Additional lines Voice mail Fax Hotline Directory services
Especially the on demand services, like VoD, make FTTH so special! Especially the on demand services, like VoD, make FTTH so special!
Some examples of Bredband Sweden and eBiscom Italy

Most of the time products and services get launched in a certain order
Revenue margins
Community services Usage revenues Application cost Portal services Advertising/e-commerce revenues Content cost TV services (VoD) TV revenues Content cost Telco services Flat rate revenues Interconnection cost Broadband access Access revenues Network cost
Motivation
Network roll-out drives market share Services roll-out drives revenues and margins A substantial subscriber base is needed to get the interest of content suppliers, but you need interesting content to get subscribers and to reduce churn (chicken-egg dilemma) Bredband, eBiscom and HanseNet use this roll-out scenario. HanseNet will start delivering VoD services in Q4 2001. The others have already started.
Service Revenue drivers Costs drivers
Time
Products & Services
Uptake of products & services

PRODUCTS & SERVICES: UPTAKE OF PRODUCTS & SERVICES
Factors affecting the demand for bandwidth
Value of multimedia applications
Lower prices
Need for faster CPE processing
Increased availability
Demand for Bandwidth

Factors affecting the demand for bandwidth
Daily U.S. Consumption of Electronic Media and Entertainment
Breakdown of Media Consumption in U.S. Households

Change
700 600
522 547
635
700
73
Total 34 83 71 54 149 134 81 CD/Tape 62 VCR/DVD 134 Radio Net Media1 Internet
16% 111% 61%
600 500 400 Minutes Per Day 300 200 100
500 Minutes Per Day 400 300 200 100 0 All Households Dial Up Households Broadband Households
14% 15% -9%
156
151
TV
-3%
Dial Up Households
Broadband Households
Broadband is snacking technology. With broadbands convenience you will eat more. Broadband is snacking technology. With broadbands convenience you will eat more.
So Far, Broadband Consumers Are Quickly Realizing the Value of Broadband Entertainment...
25
Increases In Internet Usage Before and After Broadband Access (Hours Per Month)a
21.4 hours
Composition of Additional Online Time In Entertainmenta

Sports 10% Adult 3% Others* 12%
20
3.2
0.9
15.9 hours
Hours
15 Others
1.9
3
0.6
News Consumer 10 Transactions
1.9
7.5
Games 75%
Community 5
Entertainment
6.8 6.8 2.2 1.3 1.1

Average usage after switching to Broadband Sept 2000
Portals/ISPs
Average usage while on Narrow-band March 2000
Entertainment-centric content is the primary beneficiary of increased Internet Entertainment-centric content is the primary beneficiary of increased Internet usage due to broadband. usage due to broadband.
Source: aMedia Metrix March 2000, September 2000; CGEY Analysis. *Note: Others includes animation, multimedia, television, kids, hobbies, and lifestyle content.

Consumer content is a crucial piece of the jigsaw
50% Why ?
Consumer created content

is a crucial element of online programming
Loyalty
Traffic growth
Longer visits
Source: Jupiter Communications

BACKGROUND / INTRODUCTION: TRENDS
Quotes
FTTH is the technologists dream and the finance directors nightmare
Building FTTH is like builing a six-way driveway to your doorstep..

Technology
Mergers and Acquisition Specialists in IT, Telecom and Media

| Proprietary and Confidential | Ehrhardt & Ehrhardt
Technology
Technology Architecture Active Equipment (CPE + COE) Organizational aspects Alternatives

Technology
Technology

TECHNOLOGY: TECHNOLOGY
Technology: 3 Main Issues
Architecture of physical infrastructure

Describing the way the ducts, cables, cabinets and houses are configured
Active equipment (CPE + COE)

Describing the functionality of the active network components at the customers premises (CPE) and the Central Office Equipment (COE) in the Street Cabinets and Telecom Houses
Organisational aspects
Describing the related operational aspects to operate and maintain the physical infrastructure, the active equipment and the services

Basic Prerequisites
In order to make a big step, in all cases FTTH is considered to

be part of the solution
When comparing the options a greenfield (new building sites)

is considered
All considerations are done for providing services to homes

and small offices

Technology Impact
Selecting an architecture for the physical infrastructure may have

a high cost impact on required equipment and operations and vice versa
The total cost of ownership can only be achieved considering all

three parts integrally
Choice of architecture will make FTTH a success or a failure The existing situation (services and equipment) should take into
account
Needs for a long period of migration

Technology
Architecture

TECHNOLOGY: ARCHITECTURE
Design Criteria
The physical infrastructure should last at least 20 to 40 years and
cater for possible unforeseen changes in customer needs and technology developments
The basic duct system should enable reconfiguration without the

need to dig or open up streets
The infrastructure should be suitable for current services and

allow for a wide variety of (partly unknown) new services
The infrastructure should allow for cheap and easy connection of

the active equipment
The infrastructure should have high availability The infrastructure should be easy-maintenance, allowing for low
operational costs

Design Options - Physical Infrastructure
Telecom House
Area Housing Street Cabinet Patch Panel
Central Office Equipment
Active Equipment
fiber
To national network Cable with 1 or 2 fibers Duct Cable with many fibers, normally ring structure


Designing the architecture of the physical infrastructure means selecting the best combination of:
Location of Telecom House, Area Houses and Street Cabinets

Close or remote to homes Active equipment in Street Cabinet? Need for Area Houses?
Type of ducts
Allowing changing of cables by blowing new cables or only for cable protection
Type of cable
Fiber only; fiber and copper; fiber, copper, coax One fiber or two fibers per home Type of fiber: single-mode of multi-mode
Every choice has impact on type of equipment and operational costs


Alternative 1: Future proof
Central Telecom House within 5 km of homes No Area Houses Street Cabinets without active equipment Ducts only for cable protection Two single-mode fibers per house
Remarks
Future proof concept due to the single-mode Expensive due to long cables and fibers Need to convert existing services for optical transport, this requires expensive
equipment at customer site


Alternative 2: Hybrid concept (fiber, copper, coax)
Central Telecom House within 5 km of homes No Area Houses Street Cabinets with active equipment for conversion from optical to coax Ducts only for cable protection Three cables per house Two single mode fibers per house
Remarks
Future proof concept due to the single mode Expensive due to long cables and fibers and additional copper & coax No need for additional equipment for existing services (POTS & CATV)


Alternative 3: Growth Alternative (hybrid: fiber + copper)
Central Telecom House within 5 km of homes Street Cabinets within 500 m of houses with Ethernet Access Switch Ducts for future cable blowing Two multi-mode fibers per home + copper
Remarks
Need for replacement of fiber in future Higher operational costs due to active equipment in street cabinet Low initial investment cost for fiber and CPE Need for additional CPE for CATV


Alternative 4: Growth Alternative (hybrid: fiber + copper + coax)
Central Telecom House within 5 km of homes Street Cabinets within 500 m of homes with active CATV equipment & Ethernet
Access Switch
Ducts for future cable blowing Two multi-mode fiber per house + copper + coax
Remarks
Need for replacement of fiber in future. Higher operational costs due to active equipment in street cabinet Low initial investment cost for fiber and CPE


Alternative 5: Broadband PON
Central Telecom House within 5 km of homes Area Houses with active equipment Street Cabinets without active equipment (only fiber splitters) Ducts for future cable blowing One ???-mode fiber per house POTS on separate wavelength
Remarks
Need for replacement of fiber in future. Higher operational costs due to active equipment in Area Houses Low initial investment cost for fiber and CPE Need for additional CPE for CATV Need for special CPE for POTS (technology is already used in CATV systems)

Only 5 alternatives are given here, many more can be defined Heavily dependent on design considerations:
Possibility of High Initial Investments versus Pay as you grow Does the home owner pay for the ducts only or also for the fiber cable (the first mile)? Is there enough room for Area Houses in the new building area? Size of the particular new building site

Technology
Active equipment (CPE + COE)

TECHNOLOGY: ACTIVE EQUIPMENT (CPE + COE)
Design criteria
Customer Premises Equipment will have more functionality and will
continuously become cheaper.
Equipment in Telecom House, Area Houses and Street Cabinets may have
to be upgraded every 5 years.
We have to provide the existing services with the same Quality of Service
as experienced nowadays
In the future all customer equipment will be IP-based, also many more
home equipment (refrigerators, washing machines) will get an IP interface.
All CPE will have an ethernet interface connected to in-house wiring There will also be a trend that the functions of PCs and TV will blur;
people may want to see movies on the PC and surf the internet (and download movies) on the TV or enjoy new possibilities like videoconferencing, gambling or gaming with other residents
We should cater for the existing customer equipment such as Telephones,

TVs, Radios, Alarm equipment
Measures have to be taken to prohibit unauthorised copying of digital

content

Customer Premises Equipment
In-house wiring
IP - POTS Converter
PSTN
Switch
fiber
O/E
Coax
The dotted lines can only be implemented when a hybrid physical infrastructure is implemented, it allows the user to use the traditional services in the standard way. The set-top box and IP-POTS converter are not necessary in this case.
Customer Premises Equipment

Major challenge for the introduction of fiber is the cost of the CPE
These components are currently not available and will only be cheap when massive deployment takes up
Additional costs comprises

The required Optical/Electrical converter An in-house IP-switch if more services are connected through IP Converters for translating IP-services to existing analogue equipment or new IP-phones and IP-television sets
Minimal requirements
An O/E converter and a simple switch for connecting PC. In this case all new services can be accessed by the PC-only and future IP-based CPE

Technology
Organisational aspects

TECHNOLOGY: ORGANIZATIONAL ASPECTS
FTTH Delivery Aspects

Service Delivery
An operational organisation has to be set-up to manage and maintain the access network
Service Level
When the traditional services are provided over the fiber infrastructure, these services
define the required Quality of Service. This will be a big challenge since new technology is used with inherent child-diseases
In the case hybrid infrastructures are used, POTS and CATV services can rely on their
traditional infrastructures and service provider organisations
Voice over IP
Providing the POTS service over IP using fiber requires special measures to translate the
currently known features by the customers in the IP-environment
Customer Self Care

TECHNOLOGY: ORGANIZATIONAL ASPECTS
FCAPS should be implemented

Fault management
The service are delivered by a complete chain including active Customer Premises
equipment. This requires that the CPE can be managed from the network for troubleshooting purposes
Configuration Management
Introducing IP-based services in a residential environment requires configuration of the
home
Accounting Performance Security

Technology
Alternatives

TECHNOLOGY: ALTERNATIVES
An overview of some alternatives

Physical Infrastructure
Future Proof
CPE equipment
Expensive O/E, IPConverters; limitation existing services
Operational issues
Need to deliver Telephony grade service implies expensive organisation
Overall remarks
High initial investments and high operational costs
Conclusion
CGEY: Not commercially viable
Hybrid Concept
CPE costs limited to O/E interface for 1 Gb/s
Are enough customers Use of existing operational excellence for interested in broadband POTS & CATV, only new and new services to pay back the initial additional organisation for investments broadband access and new services How to manage the growth for different customers. Needs intensive calculation of Business Case, with unclear factor when upgrade has to take place Business case heavily depended on costs multimode cable versus optical interface Business case heavily depended on costs optical components
Technical feasibility and financial analysis needs to be prepared
Growth Alternative I
CPE costs limited, CATV converter needed, enabling direct new services on TV
Technical feasibility and financial analysis needs to be prepared
Growth Alternative II
CPE equipment cheapest, cheap O/E interface
Limited impact on operational challenges
Technical feasibility and financial analysis needs to be prepared Technical feasibility and financial analysis needs to be prepared
Broadband PON
Additional costs needed for O/E converters
Limited impact on operational challenges

Case Studies

Case Studies
Overview of FTTH initiatives Specific Dutch situation

Case Studies
Overview of FTTH initiatives

CASE STUDIES: OVERVIEW OF FTTH INITIATIVES
Where are the FTTH initiatives located?

Bredband Sweden
Profile
Name Ownership Location Startdate Status : Bredband : Commercial : Sweden : December 1999 : Operational Installation fee 500 euro Subscription fee 50 euro/month 130.000 homes installed 30.000 homes connected
Key figures
Strategy
Drive long-term Company value by
owning the end-user and maximizing available services
Bredband branded access &

telephony services
Service Offer:
Bredband co-branded media &
entertainment services
Channels:
Infrastructure Service provisioning Content provisioning Content packaging
Telephony Internet Television

Stokab Sweden
Profile
Name Ownership Location Startdate Status : StokabAB : Municipality : Sweden : 1994 : Operational Stokab has more than 3,500 kilometres of fibre-optic cable with a total of more then 400,000 kilometres of fibre
Key figures
Strategy
Stokab is building and operating a
fibre-optic network, on an operatorneutral basis.
Stokab acts as a wholsaler, offering

dark fibre to operators that provide services to business and residential customers. The customers must provide the electronic equipment necessary for transmission of telecommunications traffic.
Service Offer:
Channels: Telephony Internet Television
Help ensure that insufficient

network capacity does not impede the establishment of new businesses on the telecom market.

eBiscom Italy
Profile
Name Ownership Location Startdate Status : eBiscom : Commercial : Italy : June 1999 : Operational
Key figures
5300 customers (31/12/2000) Subscription unlimited use 50-55 euro/month residents Subscription business 30-35 euro/month Revenue (31/12/2000) Net income (31/12/200) 42.400.000 euro (102..600.000) euro
Strategy
eBiscom has two primary ventures
are Metroweb and Fastweb
Metroweb is developing a high

capacity fiber optic network. Fastweb provides integrated broadband communications services to business and residential customers.
Service Offer:
Channels:
eBiscoms objective is to become

the leading creator and developer of broadband communications in Europe. Its pursuing this goal by carrying out projects in several segments of the value chain in telco, Internet and media.

HanseNet Germany
Profile
Name Ownership Location Startdate Status : HanseNet : Commercial : Germany : June 2001 : Operational
Key figures
Subscription unlimited use 50-55 euro/month residents
Strategy
eBiscom bought 80% of HanseNet
and want to copy its formula to get a footprint in Germany
Service Offer:
Channels:

Telephony Internet Television*
*planned
Palo Alto United States

Profile
Name : Palo Alto Owenership : Municipality Location Startdate Status : United States : June 2000 : Operational Trial
Key figures
Investment $753.000 Operating cost $16.400/year Revenues sources
Installation cost Connection fee ISP fee
10 Mbit/s
$1200 $45/month $43/month
100 Mbit/s
$2400 $100/Month $70/month
Strategy
The goal is to bring the enormous
information bandwidth of the Internet to residents' homes. The method is to create a citywide Fiber to the Home data network.
Trial size 100 homes Cost recovery in 10 years
City of Palo Alto Utilities will build,

own and maintain the physical network.
Service Offer:
Channels: Telephony
Darwin Networks will operate the

network and provide ISP services and access tot the Internet.
Internet Television

Lynchburg United States

Profile
Name : Lynchburg Owenershp : Municipality Location Startdate Status : United States : May 1996 : Operational
Key figures
The system has grown steadily since then, and currently encompasses some 40 miles of fiber-optic cable, connecting:
26 municipal buildings 20 school buildings 37 traffic signals 2 city contractors 3 quasi-governmental agencies
Strategy
Main objectives for the site were to
efficiently link all computer systems involved in city government, and to allow the sharing of costly resources (such as Internet access, system monitoring, and GIS information).
To bring the network to local homes,

making advanced services available throughout the community
Service Offer:
Channels: Telephony
To secure multiple services &

providers, promoting competition for lower-cost services
Internet Television

Lina.Net Iceland
Profile
Name Ownership Location Startdate Status : Lina.Net : Commericial : Iceland : February 2001 : Operational Triall 100 Mbit/s offering 12.000 homes
Key figures
13.5M dollar investment
Strategy
Lina.Net was founded by the
Reykjavik Energy Company
The main objectives of the company

are to establish a carrier system for telecommunications within the Reykjavik Metropolitan area, and to establish a distribution system for telecommunications within residential areas
Service Offer:
Channels: Telephony
Internet Television

Western Integrated Networks United States

Profile
Name Ownership Location Startdate Status : Western Integrated Networks : Commericial : United States : November 1999 : Operational $ 830M investment $ 2000 investment per household 10 Mbit/s offering Current active regions show a potential market of 1.65 million homes The company expects each market to become profitable within 18 months of rollout
Key figures
Strategy
Western Integrated Networks is
dedicated to building the first "stateof-the-art broadband network" to every home in each market that we serve.
By building the first broadband

network WIN is positioned to be the nation's first true full-service provider of voice, video and data services.
Service Offer:
Channels:
WIN's market approach will give its

customers the highest quality and choice, the convenience of one-stop shopping, and the value of a bundled service offering.

Case Studies
Specific Dutch situation

CASE STUDIES: SPECIFIC DUCTH SITUATION
Dutch Newspaper Headlines

CASE STUDIES: SPECIFIC DUCTH SITUATION
Dutch Newspaper Headlines
Sources: A - Automatiserings Gids, 2001/06/29 B - Automatiserings Gids, 2001/07/13 C - Automatiserings Gids, 2001/07/13 D - Automatiserings Gids, 2001/07/13 E - Automatiserings Gids, 2001/06/29

Finance

Finance
Financial data

Finance
Financial data

FINANCE: FINANCIAL DATA
Cost drivers year 4 including CPE and Telcohouse costs

29%
Capacity lease (fiber)

3%
Active network infrastructure Passive network infrastructure
10%
CPE Telecom house Consultancy and system integration
1% 0%
7%
Software and applications Hardware

3% 45%
0% 1%
Organisation and management Marketing and salescosts

FINANCE: FINANCIAL DATA
Revenue Potential
Actual spend per NL household in January 2001
Other software & media spends excluded!

Glossary

GLOSSARY: ABBREVIATIONS & ACRONYMS
Abbreviations & Acronyms - A / B
ACD ACD ACTEW ACTEW ADSL ADSL AIU AIU AOL AOL ARPL ARPL ATM ATM BDT BDT BNU BNU BPS BPS BTA BTA BWOD BWOD
Automatic Call Distribution Automatic Call Distribution Australian Capital Territory Electricity & Water Australian Capital Territory Electricity & Water Asymmetrical Digital Subscriber Line Asymmetrical Digital Subscriber Line Administrative Interface Unit Administrative Interface Unit America Online America Online Average Revenue Per Line Average Revenue Per Line Asynchronous Transport Mode Asynchronous Transport Mode Broadband Digital Terminal Broadband Digital Terminal Broadband Network Unit Broadband Network Unit BDT Power Supply BDT Power Supply Basic Trading Area Basic Trading Area BandWidth On Demand BandWidth On Demand
Links
AB CD EFGH IJKL MNO PQR ST UVW Glossary

Abbreviations & Acronyms - C / D
CAPEX CAPEX CATV CATV CDSL CDSL CENTREX CENTREX CEV CEV CLASS CLASS CLEC CLEC CoMPAS CoMPAS COPA COPA CPAU CPAU CPE CPE CVI CVI DID DID DISA DISA DLC DLC DS DS DSL DSL DSLAM DSLAM DWDM DWDM
Capital Expenditures Capital Expenditures Community Antenna Television Community Antenna Television Consumer Digital Subscriber Line Consumer Digital Subscriber Line Centralized Exchange Service Centralized Exchange Service Controlled Environment Vault Controlled Environment Vault Custom Local Area Signaling Services Custom Local Area Signaling Services Competitive Local Exchange Carrier Competitive Local Exchange Carrier City of Morganton Public Antenna System City of Morganton Public Antenna System City of Palo Alto City of Palo Alto City of Palo Alto Utilities City of Palo Alto Utilities Customer Premises Equipment Customer Premises Equipment Cablevision Industries Cablevision Industries Direct Inward Dialing Direct Inward Dialing Direct Inward Service Arrangements Direct Inward Service Arrangements Digital Line Concentrator Digital Line Concentrator Digital Signal Digital Signal Digital Subscriber Line Digital Subscriber Line Digital Subscriber Line Access Multiplexer Digital Subscriber Line Access Multiplexer Dense Wave Division Multiplexing Dense Wave Division Multiplexing
Links

Abbreviations & Acronyms - E / F / G / H
EBITDA EBITDA EMS EMS EOY EOY FAX FAX FCC FCC FDI FDI FTTC FTTC FTTH FTTH FTTN FTTN FWA FWA G&A G&A GHz GHz HDSL HDSL HDTV HDTV HFC HFC HH HH HHP HHP HO HO
Earnings Before Income Tax and Depreciation Earnings Before Income Tax and Depreciation Element Management System Element Management System End-of-Year End-of-Year Facsimile Facsimile Federal Communications Commission Federal Communications Commission Feeder Distribution Interface Feeder Distribution Interface Fiber-to-the-Curb Fiber-to-the-Curb Fiber-to-the-Home Fiber-to-the-Home Fiber-to-the-Node Fiber-to-the-Node Fixed Wireless Access Fixed Wireless Access General and Administration General and Administration GigaHertz (1 billion cycles-per-second) GigaHertz (1 billion cycles-per-second) High-bit-rate Digital Subscriber Line High-bit-rate Digital Subscriber Line High-Definition Television High-Definition Television Hybrid-Fiber Coax Hybrid-Fiber Coax HouseHold HouseHold Households Passed Households Passed HeadQuarters HeadQuarters
Links

Abbreviations & Acronyms - I / J / K / L

ILEC ILEC INA INA IP IP IRR IRR IS IS ISDN ISDN ISP ISP IT IT JIT JIT JV JV KHz KHz KTS KTS LAN LAN LD LD Incumbent Local Exchange Carrier Incumbent Local Exchange Carrier Integrated Network Architecture Integrated Network Architecture Internet Protocol Internet Protocol Internal Rate of Return Internal Rate of Return Industry Standard Industry Standard Integrated Services Digital Network Integrated Services Digital Network Internet Service Provider Internet Service Provider Information Technology Information Technology Just-In- Time Just-In- Time Joint Venture Joint Venture KiloHertz (1,000 cycles per second) KiloHertz (1,000 cycles per second) Key Telephone System Key Telephone System Local Area Network Local Area Network Long Distance Long Distance
Links

Abbreviations & Acronyms - M / N / O

MAN MAN MBU MBU MCG MCG MDU MDU MFS MFS MHz MHz MIRR MIRR MUX MUX NCIH NCIH NID NID NIU NIU NLC NLC NPV NPV OC OC ODU ODU OlE OlE ONU ONU OSP OSP OSS OSS Metropolitan Area Network Metropolitan Area Network Multiple Business Unit Multiple Business Unit Media Connections Group Media Connections Group Multiple Dwelling Unit Multiple Dwelling Unit Metropolitan Fiber Systems Metropolitan Fiber Systems MegaHertz (1,000,000 cycles per second) MegaHertz (1,000,000 cycles per second) Modified Internal Rate of Return Modified Internal Rate of Return Multiplex, Multiplexer Multiplex, Multiplexer North Carolina Information Highway North Carolina Information Highway Network Interface Device Network Interface Device Network Interface Unit Network Interface Unit Next Level Communications Next Level Communications Net Present Value Net Present Value Optical Carrier Optical Carrier Optical Distribution Unit Optical Distribution Unit OpticlElectronic OpticlElectronic Optical Network Unit Optical Network Unit Outside Plant Outside Plant Operations Support Systems Operations Support Systems
Links

Abbreviations & Acronyms - P / Q / R

PA PA PBX PBX PCS PCS PMP PMP PON PON POTS POTS P-P P-P PPP PPP PPV PPV PRI PRI PSTN PSTN QAM QAM RAA RAA RBS RBS RDU RDU RFI RFI RJ-45 RJ-45 RMT RMT RTP RTP Per Annum Per Annum Private Branch Exchange Private Branch Exchange Personal Communications System Personal Communications System Point-to-MultiPoint Point-to-MultiPoint Passive Optical Network Passive Optical Network Plain Old Telephone Service (Basic Telephone Service) Plain Old Telephone Service (Basic Telephone Service) Point-to-Point Point-to-Point Purchasing Power Parity Purchasing Power Parity Pay-Per-View Pay-Per-View Primary Rate Interface Primary Rate Interface Public Switched Telecommunications Network Public Switched Telecommunications Network Quadrature Amplitude Modulation Quadrature Amplitude Modulation Rendall and Associates Rendall and Associates Radio Base Station Radio Base Station Raleigh-Durham International Airport Raleigh-Durham International Airport Request For Information Request For Information Connector for 10BaseT Cable Connector for 10BaseT Cable Remote Terminal Remote Terminal Research Triangle Park Research Triangle Park
Links

Abbreviations & Acronyms - S / T

SAM SAM SBC SBC SBU SBU SCE SCE SDA SDA SDH SDH SDSL SDSL SDV SDV SMS SMS SOHO SOHO SONET SONET STB STB TAF TAF TIU TIU TOC TOC T/R T/R TVA TVA TVPPA TVPPA TWC TWC Service Access Multiplexer Service Access Multiplexer Southwestern Bell Corporation Southwestern Bell Corporation Strategic Business Unit Strategic Business Unit Service Creation Environment Service Creation Environment Switched Digital Access Switched Digital Access Synchronous Digital Hierarchy Synchronous Digital Hierarchy Symmetric Digital Subscriber Line Symmetric Digital Subscriber Line Switched Digital Video Switched Digital Video Service Management System Service Management System Small Office, Home Office Small Office, Home Office Synchronous Optical Network Synchronous Optical Network Set Top Box Set Top Box Technically Affluent Family Technically Affluent Family Telephony Interface Unit Telephony Interface Unit Town of Cary Town of Cary Transmit/Receive Transmit/Receive Tennessee Valley Authority Tennessee Valley Authority Tennessee Valley Public Power Association Tennessee Valley Public Power Association Time Warner Cable Time Warner Cable
Links

Abbreviations & Acronyms - U / V / W

UADSL UADSL USAM USAM VDSL VDSL VOD VOD VolP VolP VPN VPN WAM WAM WAN WAN WLL WLL WWW WWW Universal Access Digital Subscriber Line Universal Access Digital Subscriber Line Universal Services Access Multiplexer Universal Services Access Multiplexer Very-high-bit-rate Digital Subscriber Line Very-high-bit-rate Digital Subscriber Line Video On Demand Video On Demand Voice Over Internet Protocol Voice Over Internet Protocol Virtual Private Network Virtual Private Network Wide Area Management Wide Area Management Wide Area Network Wide Area Network Wireless Local Loop Wireless Local Loop World Wide Web World Wide Web
Links

GLOSSARY: GLOSSARY OF TERMS
Glossary of Terms
DSL: Digital Subscriber Line DSL: Digital Subscriber Line DSL provides high-speed digital connections that work over copper telephone-type DSL provides high-speed digital connections that work over copper telephone-type lines. DSL uses a different part of the frequency spectrum than analog voice lines. DSL uses a different part of the frequency spectrum than analog voice signals, so it can work in conjunction with standard analog telephone service, signals, so it can work in conjunction with standard analog telephone service, sharing the same pair of wires. sharing the same pair of wires. It should be noted that actual transmitted bandwidth depends on the length of the It should be noted that actual transmitted bandwidth depends on the length of the copper loop from the DSL line card to the end user. The condition of the loop copper loop from the DSL line card to the end user. The condition of the loop facilities is also an issue. facilities is also an issue. There are several versions of DSL, which has led to the common designation of There are several versions of DSL, which has led to the common designation of "xDSL" "xDSL" when referring to this type of technology in general. when referring to this type of technology in general.
Links

Glossary of Terms
ADSL (Asymmetric Digital Subscriber Line) can support downstream bandwidths of up ADSL (Asymmetric Digital Subscriber Line) can support downstream bandwidths of up to 8 Mbps and upstream bandwidths of 1.5 Mbps The copper loop must typically be to 8 Mbps and upstream bandwidths of 1.5 Mbps The copper loop must typically be less than 12,000 feet. less than 12,000 feet. A variation of ADSL is G.Lite, DSL-Lite or UADSL, and is a notched down version A variation of ADSL is G.Lite, DSL-Lite or UADSL, and is a notched down version aimed at the short-term consumer market. Going by many brand names this aimed at the short-term consumer market. Going by many brand names this service provides speeds up to 1.5 Mbps downstream and 384 Kbps upstream. The service provides speeds up to 1.5 Mbps downstream and 384 Kbps upstream. The copper loop can be as much as 18,000 feet. copper loop can be as much as 18,000 feet. HDSL (High-bit-rate Digital Subscriber Line) is intended as an improved way to provide HDSL (High-bit-rate Digital Subscriber Line) is intended as an improved way to provide T1/E1 (15/2.0 Mbps) services by the telephone companies. It uses 4 copper wires T1/E1 (15/2.0 Mbps) services by the telephone companies. It uses 4 copper wires (2 pairs) and offers a wider coverage area the previous methods. (2 pairs) and offers a wider coverage area the previous methods. SDSL (Symmetric Digital Subscriber Line) is an enhanced version of HDSL requiring SDSL (Symmetric Digital Subscriber Line) is an enhanced version of HDSL requiring only one pair of wires It provides the same bandwidth in both directions. only one pair of wires It provides the same bandwidth in both directions. VDSL (Very-high-bit-rate Digital Subscriber Line) is targeted at high-access demanding VDSL (Very-high-bit-rate Digital Subscriber Line) is targeted at high-access demanding applications and can support speeds of 52 applications and can support speeds of 52 Mbps downstream and 13 Mbps upstream. The copper loop must be about 4,000 Mbps downstream and 13 Mbps upstream. The copper loop must be about 4,000 feet or less. feet or less.
Links


FTTHAn Overview

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FTTHAn Overview

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Fiber-To-The-Home (FTTH)

Ehrhardt & Ehrhardt January 2003 Website: www.ehrhardt2.com

Merger and Acquisition Specialists in IT, Telecom and Media

Merger and Acquisition Specialists in IT, Telecom and Media

Merger and Acquisition Specialists in IT, Telecom and Media

Objectives Approach Framework

Merger and Acquisition Specialists in IT, Telecom and Media

Merger and Acquisition Specialists in IT, Telecom and Media

We aim to understand the market for Fiber To The Home

Market drivers for Fiber To The Home (FTTH)

What are the overall business drivers for implementing FTTH

Where are operators and service providers in implementing these

Merger and Acquisition Specialists in IT, Telecom and Media

Merger and Acquisition Specialists in IT, Telecom and Media

BACKGROUND: APPROACH FRAMEWORK

The framework we used for our FTTH analyses

FTTH Products & Services FTTH Products & Services

FTTH Cases FTTH Cases

Merger and Acquisition Specialists in IT, Telecom and Media

Merger and Acquisition Specialists in IT, Telecom and Media

Understanding Broadband Trends

Merger and Acquisition Specialists in IT, Telecom and Media

Merger and Acquisition Specialists in IT, Telecom and Media

INTRODUCTION: UNDERSTANDING BROADBAND

Bandwidth refers to the throughput capacity of a given communications network

Merger and Acquisition Specialists in IT, Telecom and Media

INTRODUCTION: UNDERSTANDING BROADBAND

INTRODUCTION: UNDERSTANDING BROADBAND

The more advanced applications we want, the more bandwidth we need

Browsing 144 Kbps Music CDs 160 Kbps

Screen Video 300Kbps Full Screen 600Kbps 1.5Mbps

High Resolution 6-8 Mbps

Pay Per View

Merger and Acquisition Specialists in IT, Telecom and Media

INTRODUCTION: UNDERSTANDING BROADBAND

HDSL Fibre to the curb Leased Line

HDSL Leased Line

HDSL Fixed Wireless

SDSL Fixed Wireless

ADSL Cable Broadband

ADSL Cable Broadband

ADSL Fixed wireless Broadband

UMTS Fibre to the home

UMTS DTT fiber to the

Merger and Acquisition Specialists in IT, Telecom and Media

INTRODUCTION: UNDERSTANDING BROADBAND

Wired access technologies

DPL Cable modem

Residential 10 Kbit/s 100 Kbit/s Twisted pair

1 Mbit/s Power line

Coax cable based

Merger and Acquisition Specialists in IT, Telecom and Media

Small / Medium Enterprise

INTRODUCTION: UNDERSTANDING BROADBAND

Wired access technology problem. The last mile bandwidth bottleneck

Merger and Acquisition Specialists in IT, Telecom and Media

INTRODUCTION: UNDERSTANDING BROADBAND

Characteristics of some wired access technologies

Ideal for allways on

Distance limitation Limited upstream

Good platform for

voice Supports broadcast video, Video on Demand, Interactive TV