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Broadband By Land, Sea or Air. Richard Callahan Chairman and CEO. Broadband Wireless Forum San Francisco - February 19,2001. Broadband is on the verge of an explosion. The internet is a key driver of broadband demand in the SME and Residential market
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Broadband By Land, Sea or Air Richard Callahan Chairman and CEO Broadband Wireless Forum San Francisco - February 19,2001
Broadband is on the verge of an explosion • The internet is a key driver of broadband demand in the SME and Residential market • Broadband Delivers what customers want - have rising expectations • Speed, quality, quantity, customization • Promised technologies have left the drawing boards and moved into operation. • Regulators are driving alternative solutions and operators • Always-on, high bandwidth Internet connectivity has created a new, distributed service environment • Applications constrained only by our imagination
Multiple network solutions • Target Customers • Res/SME • SME • Res/SME • Large Business/Res Entertainment • PIM/Messaging/Voice • Large Business Technology • DSL • Fixed Wireless • Cable • Satellite • Third Generation Mobile • Fiber
The Challenges for Carriers Continuing to deploy capital for upgrades and expansion Driving higher margin traffic through the networks Establishing a strong, differentiated competitive position Re-engineering operational processes to enable the delivery of “next generation” application services/
Broadband Value Chain Content Applications Access Value Added Services Aggregator Portal/Vortal
Focus on three lines of Business Cable Communications Broadband Wireless Applications Infrastructure Services
Callahan Associates is one of the largest cable communications operators in Europe* • Germany - Baden-Württemberg • North Rhine Westphalia France - Numéricâble Spain and Portugal - ONO * Post closure of Baden Württemberg acquisition anticipated early 2001, subject to certain closing conditions.
Callahan Associates is one of the largest cable communications operators in Europe* • Approximately 20 million franchise homes • Approximately 12 million homes passed • Approximately 7 million subscribers • Operations in 4 of western Europe’s top markets • Operational control in all ventures • Building or upgrading all networks for broadband communications * Post closure of Baden Württemberg acquisition anticipated early 2001, subject to certain closing conditions.
Our current environment Multiple Broadband Access Alternatives… • Public policy Stimulate competition and encourage multiple networks • Technology Interactive Networks with IP capabilities • Competition Multiple Broadband network providers • Creates a new market need … customers seek product packages to meet lifestyle needs and simplify choices … moving us to customer centred model
The Customer Centered Business Design • Access Technology Determine network capabilities required… perform make/buy analysis • Deploy rapidly to achieve time to market • Cost Approach Invest in capabilities to meet high value needs • Management Objective Maximise share of available cash in the market Value driven by focusing on the customer
Key Beliefs • Broadband Access Demand Will Be Strong • Execution on operations is paramount • Geographic clusters of broadband access properties will create additional value for individual properties • Opportunities for expansion will come from consolidation and selective new licensing • Partnerships with IDC/ASP’s to provide solutions to SME customers is critical
Three Market Segments Developing Markets Developed Medium markets – the city state Developed large metro markets.
Huge number of businesses unable to satisify their access demands High pricing for 64 kbps dedicated circuits High Dial up penetration and high interest in dedicated services at the right price PLDT focused on increasing teledensity and financial restructuring Other landline providers less prevalent and have a focus on meeting POTS build out obligations. Phillipines market --- Developing Market
Less than *2% of Swiss SME have a permanent high speed connection to the Internet Up to now: Too few applications for broadband Prices were too high No competition in the local loop Not actively marketed by Swisscom Market education required Swiss Market --- Develped Medium Market
We plan to be a Broadband Services Provider, not a WLL Access Company • Chose Broadband Fixed Wireless Access (TDMA LMDS Point-to-Multipoint) equipment for our entry technology, focusing on the SME market. • In the future, other wired broadband access solutions such as DSL or Fiber, or wireless solutions in other frequency domains will be added to our existing broadband access network.
Simplified ASP Revenue Sharing Commission Incl. Hosting fees onSpirix ASP Partners Customer Usage Usage
Carriers and “Higher Layer” Services Carriers entering the applications market have to address a number of key issues: Will I risk “losing relevance” in the business services value chain? Do I want to be in the software distribution business? Can my BSS/OSS support for service delivery of software applications? Will I be able to hire and retain entrepreneurial, IP-aware staff? What is my core business, anyway?
Provisioning • Security • SLA Mgnt. • Billing • ASP Services Application Application Management Platform Presentation Session Transport (OSI Layers 4-7) (OSI Layers 1-3) Network Carrier Access Networks Data Link Physical Network Moving up the OSI Stack Broadband access carriers need to build, buy or lease applications management infrastructure
The Functionality of the Middleware Provisioningand ServiceActivation Dynamic Customer Portal Reliable Messaging SecurityServices CRMTroubleTicketing Transformation Workflow Network andApplication FaultManagement Billing
Providing infrastructure outsourcing(managed security, storage and high-availability servers) along with application/content hosting for internal IT departments, ISVs/ASPs and Carriers • Enabling turn-key solutions for broadband network service providers to capitalize on the telecoms industry shift in value from access and dial-tone related services to enabling the delivery of real-time applications, content and multi-media from the Internet and private sources to consumers and business Nupremis -- A next-generation Internet and IP Infrastructure Provider
“Computers in the future may weigh no more the 1.5 tons” Popular mechanics, 1949
“ “I think there is a world market for maybe five computers” Thomas Watson, Chairman IBM – 1943
“But what is it good for?” Engineer at the Advanced Computing Division of IBM regarding the Microchip – 1968
“ “ There is no reason anyone would want a computer in their home” Ken Olson, president, chairman and founder of Digital Equipment –1977
“ This “telephone” has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us” Western Union internal memo – 1876
“”640k ought to be enough for anybody” Bill Gates – CEO Microsoft - 1981