The Connected Home The Service Provider Perspective Simple Steps to Success

1. The Connected Home The Service Provider Perspective Simple Steps to Success Martin Cullum, Bell Canada GM – Technology Development (Video Networks) martin.cullum@bell.ca Chairman – CABA

2. BCE Organizational Structure Leaders in Telecommunications solutions and Content

3. Competitive Pressures Voice services: Traditional POTS and features VoIP and new applications Long distance Cellular / mobility Business PBX and Centrex Professional Management Svcs Video services: Broadcast TV iTV and Program Guides VOD type services Data and Internet services: Dial-up and high speed Internet Corporate Data and VPN services ASP value add applications LAN provisioning and Management services The overall service, revenues and margin The ability to package and bundle The mutual loyalty and respect The relationship with the customer Bottom line = Long Term revenues and margin So what’s at risk ?

4. Bell Response Face competition head-on: Ensure customer satisfaction: Spend smartly – Best use of Capital: Continue to grow strengths Provide new value add services Grow availability of 3-play services Be a step ahead of competition Simplicity is critical (services, billing, support) Continued traditional Telco reliability Competitive pricing and packaging Leverage existing infrastructure investments Leverage existing services Leverage existing processes / IT Target investment where required Target investment when required BE BETTER - BE SMARTER – BE SIMPLER

5. Bell Access Network Many alternatives for consumer market: BROADCAST INTERACTIVE VOICE DATA VIDEO VIDEO/VOD HFC Trials completed and closed Copper 100% ILEC DBS ~ 100% footprint ADSL 78% footprint ADSL + DBS 78% footprint VDSL MDU target FTTH TBD – watching and waiting Winning solutions available now

6. Triple Play Solutions Broadcast Digital TV + Voice services including VoIP + High Speed Internet = the Triple Play Solution Note: current Canadian stats show over 2.5 TV sets/home… and we cannot forget stereo receivers, PIP sets and VCRs in simultaneous use Bundles/choice

7. Getting to the home - DBS • Development tactics and strategy: • Leverage existing content and DBS investments • Content aggregation for DBS and terrestrials access solutions • Leverage existing operation for DBS and terrestrial solutions • Order and Help desk • Billing • Conditional access • channel line-up • services and packages

8. Getting to the home - Wireline • Development tactics and strategy: • Leverage our largest investment – copper wire • Increased bandwidth on copper loops • Encourage R&D and creation of standards • Standards must reflect needs of Telco service provider/operators • commercially deployable (costs, time to market, power/heat, etc) • Continued deployment of fibre optics into the network towards FTTH

9. Starting Point • Development tactics and strategy: • Target deployment of VDSL Full Service architecture: • Focus on MDU market (in operation since Dec 1999) • Full service packages (TV, Data & Voice) • Leverage existing investments: • existing DBS and ISP services • Single points of contact: • One call – One order • One STB with 3 MPEG 2 decoders and data • reuse Cat 3 / WiFi and Coax • One technician – One truck – One visit • One happy and loyal customer ! Invest when required Invest where required

10. Existing Bell Phone Services TV2 TV3 26Mb/s 3Mb/s Sympatico HSE ExpressVu n Fail Message On-Line Network 3 NLC Select Guide Ch Up Menu Power 3 BCE Services over existing copper cable pair Ch Dn VDSL NID PC(s) EXISTING TELEPHONEEQUIPMENT Integrated STB for TV and Data

11. 3 Steps Forward #1: VDSL deployment • Follow FS-VDSL ITU-T architecture • Bell Canada: lowest cost, full service solution and is available now #2: OPI-DSLAM (ONU) • ADSL / VDSL capable • Easily deployable at DSA • Required NOW to grow higher speed DSL and Video opportunity #3: FTTH/FTTP • Extension off FS-VDSL ONU architecture • Required for greenfields in next 3-5 years

12. 1 2 1 4 4 3 3 2 Access Network – Ready for Action CSA DSA CO Feeder Conduit Closure Passive Optical Splitters CO DSLAM At the Central Office 4.7 km reach, 400Kbps- 3Mbps Remote DSLAM At the CSA 3 km reach, 1- 3Mbps Copper OPI-DSLAM ONU At the OPI (DSA) 1-1.5 km reach 6 - 26 Mbps Fiber FTTP ONU At the Customer Premise 50+ Mbps

13. Inside the home It should be as simple as riding a bicycle

14. VoXX Telephone Game Console Security Camera Power line Phone line Home Network BB Modem PDA LAN Cable Wireless COAX HN Sharing Device TV Set-top box Home Server PC Inside the home Ethernet ? HPNA, HomeRF, HomePlug, coax ? Bluetooth, Firewire, Structure cabling ? 802.11 a, b ,g ? Firewalls ? Costs ? Installation ? HELP ! It must be as simple as riding a bicycle

15. Don’t do it Alone Parental Controls Firewall Monitor Web Remote Access Voice Over IP • Development tactics and strategy: • Partner with industry leading CE manufacturers • Partner with CE retail / distribution • Co-promote each others products • Minimize Capital $ investment outlay • Minimize customer support costs – focus solutions – partnerships - simple • Follow industry advancements and contribute to standards • Accept the fact that internet sharing is essential • Continue search for those “killer applications”

16. let’s go make it happen ….. Thank you and enjoy this exciting industry !

17. Alexander Graham Bell