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Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
Lightspeed vs. FiOS
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Lightspeed vs. FiOS

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  • 1. GLGi: Lightspeed vs. FiOS
  • 2.
    • Council Member Biography
    • Sam Greenholtz is the Co-Founder and Principal of Telecom Pragmatics, a consulting and market research company specializing in telecommunications markets and related technologies. He specializes in the telecom sector, t limited to FTTx, optical networking, switching and routers, VoIP, Ethernet, packet switching, wireless technology, cell towers, Wi-Max, 3G, CDMA and EV-DO. Previously, Mr. Greenholtz was a Senior Analyst at CIR, Inc.; and an Engineer at Verizon. He is knowledgeable on OSS, signaling, and billing, capital expenditure budgets, standards, and lab testing. He is a member of several Board of Directors, Technical Advisory Boards and the as IEEE, and OSA. He has published documents and articles in the telecom industry.
  • 3.
    • Table of Contents
    • Is Verizon doing the right thing in building out fiber to the home. What are the advantages and the disadvantages to this plan?
    • What are the key differences in the Verizon Plan (FiOS) versus LightSpeed at AT&T and cable TV offerings by Qwest?
    • What are the hidden advantages to all of the plans?
  • 4.
    • About GLG Institute
    • GLG Institute (GLGi SM ) is a professional organization focused on educating business and investment professionals through in-person meetings. It is designed to revolutionize the professional education market by putting the power of programming into the hands of the GLG community.
    • GLGi hosts hundreds of Seminars worldwide each year.
    • GLGi clients receive two seats to all Seminars in all Practice Areas.
    • GLGi’s website enables clients to:
      • Propose Seminar topics, agenda items and locations
      • View and RSVP to scheduled and proposed Seminars
      • Receive a daily briefing with new posts on your favorite tickers, subject areas and from trusted Council Members
      • Share Seminar details with colleagues or friends
  • 5.
    • Gerson Lehrman Group Contacts
    • John Aronsohn
    • Vice President
    • Gerson Lehrman Group
    • 850 Third Avenue, 9th Floor
    • New York, NY 10022
    • 212-984-3673
    • [email_address]
    • Christine Ruane
    • Senior Product Manager
    • Gerson Lehrman Group
    • 850 Third Avenue, 9th Floor
    • New York, NY 10022
    • 212-984-8505
    • [email_address]
  • 6.
    • IMPORTANT GLG INSTITUTE DISCLAIMER – By making contact with this/these Council Members and participating in this event, you specifically acknowledge, understand and agree that you must not seek out material non-public or confidential information from Council Members. You understand and agree that the information and material provided by Council Members is provided for your own insight and educational purposes and may not be redistributed or displayed in any form without the prior written consent of Gerson Lehrman Group. You agree to keep the material provided by Council Members for this event and the business information of Gerson Lehrman Group, including information about Council Members, confidential until such information becomes known to the public generally and except to the extent that disclosure may be required by law, regulation or legal process. You must respect any agreements they may have and understand the Council Members may be constrained by obligations or agreements in their ability to consult on certain topics and answer certain questions. Please note that Council Members do not provide investment advice, nor do they provide professional opinions. Council Members who are lawyers do not provide legal advice and no attorney-client relationship is established from their participation in this project.
    • You acknowledge and agree that Gerson Lehrman Group does not screen and is not responsible for the content of materials produced by Council Members. You understand and agree that you will not hold Council Members or Gerson Lehrman Group liable for the accuracy or completeness of the information provided to you by the Council Members. You acknowledge and agree that Gerson Lehrman Group shall have no liability whatsoever arising from your attendance at the event or the actions or omissions of Council Members including, but not limited to claims by third parties relating to the actions or omissions of Council Members, and you agree to release Gerson Lehrman Group from any and all claims for lost profits and liabilities that result from your participation in this event or the information provided by Council Members, regardless of whether or not such liability arises is based in tort, contract, strict liability or otherwise. You acknowledge and agree that Gerson Lehrman Group shall not be liable for any incidental, consequential, punitive or special damages, or any other indirect damages, even if advised of the possibility of such damages arising from your attendance at the event or use of the information provided at this event.
  • 7. General
    • Copyright 2007 by Telecom Pragmatics and GLG.
      • All rights reserved.
    • Information may only be reproduced within the company receiving the presentation.
      • Otherwise, no information on these slides may be reproduced in total or in part without prior written approval of GLG.
    • Neither the information nor the opinions presented in this presentation should be construed as a recommendation for buying or selling any security.
    • Telecom Pragmatics obtained information from sources that we believe to be reliable.
      • As with any market research, neither its completeness nor its accuracy can be guaranteed.
        • Opinions stated in this report are based on our interpretation of available information and are subject to change.
  • 8. Technology & Industry Fundamentals
  • 9. Fiber Optics
    • Light signals on very thin glass fibers
      • Advantages over electronic transmission on copper
      • Theoretically, no capacity limitations
      • Movement to replace copper will take decades
      • Relatively recent shift to fiber to homes in a big way
  • 10. Copper & DSL Source: IEC
  • 11. Public Network Segmentation Source: IETF
  • 12. Fiber to the X Source: IEC
  • 13. PONs Source: IEC APON EPON GPON BPON
  • 14. RBOC Landscape Source: Wikipedia
  • 15. Verizon’s FiOS
  • 16. FTTN/VDSL 2 vs. FTTH Summary All major cities in close proximity; fewer headends required Cities spread far apart; harder to achieve economies with video architectures Topology BPON settled in well; outlook for GPON good; eventually wavelength PON; IPTV only used for broadband on demand now IPTV & VDSL 2 immature; deploying fibers to DSLAM dedicated to individual homes in anticipation of FTTH Technology Relatively far out on learning curve; impressive cost reductions achieved A lot of deployment in Europe, but fewer channels & less demand for content Experience Straight fiber results in immediate location of faults; many fixes can be performed via software at CO Can be hard to troubleshoot; difficult to design & engineer networks; issues with policing traffic Operations Very secure (though tapping not impossible) Less secure than fiber Security Much fewer issues with cleaner fiber; mainly only backhoe situations creating problems Significant cost with copper that can be several decades old; lots of truck rolls Maintenance Theoretically future proof (testing 100 MB/S); unlimited content & user flexibility with eventual all-IPTV over fiber Limited (in reality, hard to get > 50 MB/S); 2-3 HDTV sets in home problematic; exaggerated claims would need node on premises Capacity Very huge investment -- a total focus to exclusion of almost everything else; mitigated by passing large businesses Moderate increases as needed; copper already in place; though reality is that FTTP needed within 5 years CAPEX Often > desired 3 years; no guarantees; will not string fiber directly to home without contract; < 50% of territory to get FTTH Reasonable period of time; using lots of employees for video services ROI Verizon’s All-Optical Approach AT&T’s Fiber/Copper/IPTV
  • 17. Verizon & FTTH
    • Vision of CEO, Ivan Seidenberg
    • FCC ruling on no requirement to unbundle
      • Extremely quick deployment -- fear of regulatory change
    • Huge maintenance & operations savings
    Source: Verizon
  • 18. Main Verizon Goal: Enterprise
    • Residential not reaching 3-year payback
      • Getting closer though
    • Focus on I-95 corridor from Boston to Richmond
      • Fortune 2000 customer locations
      • Pass every business park, etc.
  • 19. Future Plans & Deployment
    • Goals of current CTO, Mark Wegleitner
      • FTTH total amount not likely to exceed 30-40% of area
      • Eventually to all-IPTV (currently uses IPTV for video on demand)
        • More user control
          • Ex. Camera angles
        • Potential for unlimited content delivery
    Source: Verizon
  • 20. Big Pipes are Not Enough
    • Content differentiation critical in getting residents to switch from MSO
      • Verizon is looking at gaming & unique on-demand events
        • Broadway shows, local sporting events, etc.
    Source: IEC
  • 21. FiOS Take-Rates
    • For video services higher outside of traditional footprint
      • Dallas, Los Angeles, Tampa
        • Lack prejudice against “Verizon” name
          • Not their incumbent telco
    Source: Verizon
  • 22. AT&T’s Lightspeed
  • 23. FTTN/VDSL 2 vs. FTTH Summary All major cities in close proximity; fewer headends required Cities spread far apart; harder to achieve economies with video architectures Topology BPON settled in well; outlook for GPON good; eventually wavelength PON; IPTV only used for broadband on demand now IPTV & VDSL 2 immature; deploying fibers to DSLAM dedicated to individual homes in anticipation of FTTH Technology Relatively far out on learning curve; impressive cost reductions achieved A lot of deployment in Europe, but fewer channels & less demand for content Experience Straight fiber results in immediate location of faults; many fixes can be performed via software at CO Can be hard to troubleshoot; difficult to design & engineer networks; issues with policing traffic Operations Very secure (though tapping not impossible) Less secure than fiber Security Much fewer issues with cleaner fiber; mainly only backhoe situations creating problems Significant cost with copper that can be several decades old; lots of truck rolls Maintenance Theoretically future proof (testing 100 MB/S); unlimited content & user flexibility with eventual all-IPTV over fiber Limited (in reality, hard to get > 50 MB/S); 2-3 HDTV sets in home problematic; exaggerated claims would need node on premises Capacity Very huge investment -- a total focus to exclusion of almost everything else; mitigated by passing large businesses Moderate increases as needed; copper already in place; though reality is that FTTP needed within 5 years CAPEX Often > desired 3 years; no guarantees; will not string fiber directly to home without contract; < 50% of territory to get FTTH Reasonable period of time; using lots of employees for video services ROI Verizon’s All-Optical Approach AT&T’s Fiber/Copper/IPTV
  • 24. Current Game Plan for AT&T
    • FTTN
      • Incremental method with new technology
      • Lowest cost alternative
      • Use of IPTV
        • Instead of traditional RF
    • FTTH for greenfield
    • Satellite
    • Potentially extend BellSouth FTTC to home
  • 25. Technological Challenges
    • Long lengths of copper from node
      • Capacity constraints
        • Hundreds of channels; HDTV; video on demand; interactive services; etc.
    • IPTV & VDSL 2
      • Immature solutions
        • Difficult to design & engineer networks
      • Scalability concerns
      • Possible policing of traffic problems
  • 26. Impact of New Leadership
    • Strong belief in shift to FTTP direction
      • Probably need to move this way in 5 years anyway
        • Already deploying a lot of fibers to DSLAMs
          • Dedicated to individual subscribers
            • Infrastructure passing Fortune 500 businesses
    Source: AT&T
  • 27. U-verse Video Customers
    • Appears over half are AT&T employees
    • Will continue to penetrate new markets
      • More of a deliberate way than aggressive
      • Big focus on former BellSouth territory
    Source: AT&T
  • 28. Topological Constraints
    • AT&T lacks Verizon’s geographical edge
      • Cities far apart
        • Can not take advantage of super headends
          • Exception somewhat on CA west coast
            • San Francisco-Los Angles-San Diego
          • Look to take advantage of sectors of cities relatively close together
            • Ex. Texas triangle of Dallas, Houston, & San Antonio
  • 29. Qwest Solution’s Satellite?
  • 30. Qwest & Video Services
    • Reselling DirecTV as part of bundle
    • Partnership with Microsoft for PC VOD
    • VDSL
    • Potential new directions with new leadership
    • FTTx trials being held near Salt Lake City
    Source: Qwest
  • 31. Future of RBOC Video Services
    • Three-year CAPEX outlook
      • Strong AT&T ramp-up
      • Verizon finished with major construction in 2008
    • Changes in subscriber fees & in churn rates expected to be moderate
    • CATV triple play threat
      • Can be effective in offering up to $40/month savings for telephone, modem, and video
      • Cablevision has defended position exceptionally well including in lucrative areas of New York
        • MSO using FTTH itself
  • 32. Staying Power of RBOCs in Video Services
    • Verizon
      • Good chance it eventually exits -- just focus on enterprise business
        • Short-term franchise agreements
        • Would be high level of interest in CATV firms in buying FTTH networks
    • AT&T
      • Much likely to stay in market given size
        • A satellite company purchase still possibility
  • 33. Supplier Competition & Other Industry Trends
  • 34. Key Vendors
    • ADC
    • Alcatel-Lucent
    • CommScope
    • Corning
    • Emerson
    • Ericsson
    • Motorola
    • Tellabs
    • Others
  • 35. PON Semiconductor Supplier Differentiation
  • 36. Effects of Access Investment on Metro & Long Haul
    • Higher capacity multiplexed signals on backbones
      • Need for more optical networking gear in these spaces
        • DWDM, optical cross-connects, etc.
    • Long-haul wholesale pricing not expected to improve very much
    Source: IEC
  • 37. Detrimental Effects of Fiber Installations to CLECs
    • Verizon often disconnects copper line after installing fiber
      • Can make life more difficult for CLECs
        • Apparently stopped outright removal of copper
          • Still, inviting potential investigations from regulators
    Source: IEC
  • 38. Look for Lots of Landline Territory Sold By RBOCs
    • Verizon sale to Fairpoint of N. NE just the start
      • Western portions of NY, PA, MD, & VA along with all of WV up for purchase
        • Lack of interest in bringing broadband to these areas
          • Will still have to satisfy state PUCs
    • AT&T will probably sell huge portions as well
  • 39. Voice & Data
    • Burgeoning growth of data will continue
    • VoIP market will continue to expand gradually
      • Total replacement by soft switches at Verizon & AT&T as early as 10 years
      • Still quality of service issues
        • Enterprises still tend to use it more for internal communications
    Source: AT&T
  • 40. Dark Fiber Source: Qwest
  • 41. Thank You

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