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GLGi: Lightspeed vs. FiOS . Council Member Biography
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Council Member Biography • Joseph Savage is the Managing Director at Telecom ThinkTank Inc., a telecommunications consultancy. Mr. Savage is also the President of the Fiber to the Home Council, North America, a market advocacy group of 130 high-tech companies. He has more than 30 years of experience in telecommunications networking and services. He has been a consultant to equipment vendors, analyst firms, and service providers in the areas of strategic, business, technology and product line planning. He has worked on accounts for Alcatel, Lucent, ECI Telecom, Huawei, SBC, Verizon, Bell South, NTT, British Telecom, Teradyne and FastWeb. Previously, he was the President and Chief Executive Officer at Broadnet Technologies Inc., Radiant Photonics Inc, Geyser Networks Inc.; and Vice President-Research at RHK.
Table of Contents • Description and comparison of the different network architecture approaches • Pros and cons of FTTN and FTTH in regards to capabilities and service performance • Current status of each project including issues confronted and resolved and those still outstanding • Future trends and possible changes to the network architectures
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LightSpeed vs. FiOS September, 2007 Presented by Joe Savage TTTCo FTTX Status - 7
Telecom ThinkTank Team • Joe Savage has more than 35 years of optical networking experience - in management, consulting, venture capital and telecommunication networking. Joe was Ass’t General Manager of NEC America’s Fiber Optic Transmission Division, and Vice President Planning and Engineering for Fujitsu’s Transmission Division. He was VP, Research at RHK, Inc from 1996 to 2000. Joe has also served as CEO and on the Board of Directors for Geyser Networks, Radiant Photonics and Broadnet Technologies. Joe holds an MSEE from Georgia Tech.
North America Ramping Up • USA - FTTP Verizon, FTTN/P AT&T • Canada - FTTN and DSL, FTTH SaskTel, Telus • Mexico - Community Trials Underway, Monterrey
Cable Operators Fierce Triple-Play Competition • Cable MSOs - $110 Billion Network Investment from 1994 to 2007 • Voice Service Deployments Accelerating • HDTV ubiquitous in 2006 • DVR, PVR part of service offerings • Interactive offerings increasing • Pursuing Business Customers • Footprint expanding to offer leased line and IP Services, Seeking Cellular Backhaul • Comcast, Time-Warner, Cox, Cablevision, Rogers, Shaw
Current Status of Fixed Connectivity 1.2% of US Households are FTTH Subscribers Source: 2007 RVA
FTTH Homes Passed(Cumulative – North America) Source: 2007 RVA
FTTH Homes Connected(Cumulative – North America) Source: 2007 RVA
FTTH Other Providers Source: 2007 RVA
FTTH Industry Overview - RBOCs • Verizon passing 3 million homes per year – Tellabs (BPON/GPON), Motorola (BPON/GPON) and Alcatel (GPON) • AT&T passing 0.3 million homes per year – Alcatel (FTTN, GPON), Ericsson • Qwest has no public FTTH plans • Bell Canada –Lucent (FTTN) TTTCo Lightspeed vs FiOS-
Verizon FTTP Deployment 2Q’07 Deployment Status: • 8 M premises passed in 16 states • 1.1M premises connected 0.5 M FiOS TV Subscribers 2007 Deployment Trends: • Pass 9M premises • 1.5 M Subscribers 2010 Deployment Objectives • Pass 18M premises by 2010 • Over 50% of households • 7.1 M FiOS Subscribers • 4 M FiOS TV Subscribers FTTP Deployed • CapEx $23 billion 2004 to 2010 • $0.10 dilution per share from FiOS roll out TTTCo Lightspeed vs FiOS - 16
Video Franchise Status Number of Franchises 4Q’05 Current 2006 Projected Households with Franchises (M) Statewide legislation passed or local franchises granted Other State Franchises in N. Carolina, S. Carolina, Michigan, …. 50% US population 4Q’05 Current 2006 Projected TTTCo Lightspeed vs FiOS- - 17
FiOS Data – Early Results Subscribers/Penetration % Homes Marketed To 35-40% 17M 6M – 7M 15% 5M 725K • 55% market share by 2010 goal TTTCo Lightspeed vs FiOS- - 18
Early FiOS TV Results Verizon FiOS TV Subscribers • Monthly Churn less than 1.5% • 99.4% subscribe to Premier Tier • 60% have HD and/or DVR • 37% subscribe to movie or sports package • 12% of gross sales have included Home Media DVR 175K FiOS TV Subscribers About two-third of subscribers are cable defectors TTTCo Lightspeed vs FiOS- - 19
Penetration – FiOS Video Subscribers/Penetration % Open for Sale 20-25% 15M 3M – 4M 10% 1.8M 175K Target - 26% market share by 2010 TTTCo Lightspeed vs FiOS- - 20
Distribution Terminal Verizon Access Network Status Legend: GPON -- Gigabit Passive Optical Network OLT -- Optical Line terminal Cost Per Premises Passed • Lower material cost • New & improved technology • Innovations • Training & productivity TTTCo Lightspeed vs FiOS- - 21
Verizon Maintenance (OpEx) Savings Network Report Rate - Outside Plant 80% Total field maintenance dispatches and OSP-related dispatches showing solid declines TTTCo Lightspeed vs FiOS- - 22
Strong Demand for Bundles FiOS TV Customer Base • 99% of FiOS TV base has 2nd product • Bundled line churn is 50% lower than voice-only lines • 56% of FiOS TV sales include FiOS Internet Triple Play 79% FiOS TV Only FiOS TV + Data FiOS TV+ Voice TTTCo FTTX Status - 23
Compare Verizon and AT&T: TTTCo FTTX Status - 24
AT&T (and Bell South) • AT&T – FTTN passing 18 million homes by 2008 (behind schedule) • New technology issues (VDSL, MSoft) • Cost of Outside Plant higher than planned - $250 per home passed more like $700 • U-verse in 23 Markets, but limited reach • Some FTTH (Alcatel 7342 B/G PON) • Video Transport in Place, VSO’s in construction (Scientific Atlanta partner) TTTCo Lightspeed vs FiOS- - 25
AT&T Lightspeed StatusJuly 2007 • Markets – • 1Q – 15 Cities • 2Q – 23 Cities • Homes Passed • 1Q – 2 Million est • 2Q – 4 Million • Subscribers • 1Q – 20,000 • 2Q – 51,000 • End 2007 Goals • 8 Million Homes Passed • 200,000 Subscribers • 2008 Goals • 18 Million Homes Passed • 5 M Subscribers? TTTCo Lightspeed vs FiOS- 26
AT&T In North Texas FTTN in Frisco TX FTTH Pearson’s Farms TTTCo Lightspeed vs FiOS- - 27
Bell Canada • Bell Canada – only customer for Lucent Stinger products (Lucatel merger issues) • Committed to FTTN architecture, “split node” migration to FTTH • FTTN issues with HDTV • Voip from CATV MSOs very successful TTTCo Lightspeed vs FiOS- - 28
Qwest • Qwest Still Limited by debt • Issued RFP for GPON FTTH equipment • Pushed by Planned Community Builders • Uses Alcatel xDSL and FTTH gear • Numerous Municipal and Open Networks in its area TTTCo Lightspeed vs FiOS- - 29
Market Forecast – KMI – Dated 2004 16 million subscribers in 2011 AE – Muni’s, Utopia, Overbuilders PON – RBOC’s, IOCs, Utilities 2007 transition year BPON to GPON Almost zero GEPON TTTCo Lightspeed vs FiOS- - 30
Thank You For Your Attention www.tttco.com LightSpeed vs. FiOS September, 2007 TTTCo FTTX Status - 31