US TRIPLE PLAY Where we are and where we are going


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US TRIPLE PLAY Where we are and where we are going

  1. 1. GLGi: Triple Play Market Update
  2. 2. <ul><li>Council Member Biography </li></ul><ul><li>Joby Upton is the President of Upton Consulting, a company providing consulting services to the telecom sector. Mr. Upton is experienced in wireline, wireless and emerging broadband services. He is knowledgeable in products and services from AT&T, Verizon, Qwest, Windstream, Century Tel, Tellabs, Alcatel-Lucent, Dycom, Mastec, Vyyo, Time Warner, Comcast, Cablevision, Adtran, ADC, and Quanta Services. Mr. Upton is also knowledgeable in AT&T's U-verse/Homezone and FIOS broadband plans from Verizon and equipment vendors associated with telecommunications, data, wireless, and video transmission systems. Previously, he was the General Manager- Supply Chain and Network at BellSouth/ATT. He has also held management positions as an emerging market (FTTX) expert at Pirelli Fiber Cable Manufacturing. </li></ul>
  3. 3. <ul><li>Table of Contents </li></ul><ul><li>Update on how triple play services are playing out within the plans of the various carriers </li></ul><ul><li>Update on FTTX and the various Passive Optical Networks (PONs) in regards to differences in architecture and likelihood of success </li></ul><ul><li>CATV update on vendors, video transmission, and MPEG2, 4 compression </li></ul><ul><li>Fiber cable equipment vendor update </li></ul>
  4. 4. <ul><li>About GLG Institute </li></ul><ul><li>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. </li></ul><ul><li>GLGi hosts hundreds of Seminars worldwide each year. </li></ul><ul><li>GLGi clients receive two seats to all Seminars in all Practice Areas. </li></ul><ul><li>GLGi’s website enables clients to: </li></ul><ul><ul><li>Propose Seminar topics, agenda items and locations </li></ul></ul><ul><ul><li>View and RSVP to scheduled and proposed Seminars </li></ul></ul><ul><ul><li>Receive a daily briefing with new posts on your favorite tickers, subject areas and from trusted Council Members </li></ul></ul><ul><ul><li>Share Seminar details with colleagues or friends </li></ul></ul>
  5. 5. <ul><li>Gerson Lehrman Group Contacts </li></ul><ul><li>John Aronsohn </li></ul><ul><li>Vice President </li></ul><ul><li>Gerson Lehrman Group </li></ul><ul><li>850 Third Avenue, 9th Floor </li></ul><ul><li>New York, NY 10022 </li></ul><ul><li>212-984-3673 </li></ul><ul><li>[email_address] </li></ul><ul><li>Christine Ruane </li></ul><ul><li>Senior Product Manager </li></ul><ul><li>Gerson Lehrman Group </li></ul><ul><li>850 Third Avenue, 9th Floor </li></ul><ul><li>New York, NY 10022 </li></ul><ul><li>212-984-8505 </li></ul><ul><li>[email_address] </li></ul>
  6. 6. <ul><li>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. </li></ul><ul><li>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. </li></ul>
  7. 7. US TRIPLE PLAY Where we are & where we are going Joseph Upton, Chief Operating Officer, SE Cable-X Holdings USA, LLC August 22-23, 2007
  8. 8. Table of Contents <ul><li>Major Triple Play Providers </li></ul><ul><li>Verizon (FIOS) </li></ul><ul><li>AT&T U-Verse </li></ul><ul><li>AT&T HomeZone </li></ul><ul><li>COMCAST </li></ul><ul><li>Time Warner </li></ul><ul><li>Cox Communications </li></ul><ul><li>CableVision </li></ul><ul><li>Qwest </li></ul><ul><li>Charter </li></ul><ul><li>FTTX PON Architectures </li></ul><ul><li>Video Transmission </li></ul><ul><li>Internet Speeds </li></ul><ul><li>RBOC/ILEC Equipment Vendors </li></ul><ul><li>CATV Equipment Vendors </li></ul><ul><li>Fiber Cable & Connectivity Equipment Vendors </li></ul><ul><li>US Broadband: Where are we today? (RVA 2007 REPORT) </li></ul><ul><li>Broadband Connections by State (RVA 2007 REPORT) </li></ul><ul><li>Major Factors Influencing Broadband Growth (RVA 2007 REPORT) </li></ul><ul><li>FTTH Providers (RVA 2007 REPORT) </li></ul><ul><li>TOP NA FTTH Service Providers (RVA 2007 Report) </li></ul><ul><li>Greenfields vs. Brownfields </li></ul><ul><li>FTTH Consumer Perspective </li></ul><ul><li>What can we expect from Triple Player providers in the next few months? </li></ul><ul><li>Conclusion </li></ul>
  9. 9. MAJOR TRIPLE PLAYERS <ul><li>Verizon (FIOS) </li></ul><ul><li>AT&T (U-verse and Homezone) </li></ul><ul><li>Comcast </li></ul><ul><li>Time Warner </li></ul><ul><li>Cablevision </li></ul><ul><li>Cox </li></ul><ul><li>Charter </li></ul><ul><li>MUNI’S AND DEVELOPERS </li></ul>
  10. 10. VERIZON (FIOS) VZ <ul><li> </li></ul><ul><li>FTTP: The Right Choice BUT Expensive </li></ul><ul><li>RF Video Transmission today </li></ul><ul><li>Over 1 Million Customers on it </li></ul><ul><li>$23B to be spent by 2010 to pass 18M customers </li></ul><ul><li>Issues with taking the FIOS and then the Copper connections disappear ($15 DSL vs. $30 FIOS data) </li></ul>
  11. 11. AT&T U-VERSE T <ul><li> </li></ul><ul><li> (ATT BLOG SITE) </li></ul><ul><li>51,000+ Customers so far </li></ul><ul><li>$6-6.5B to be spent in 2007 to pass 18M Customers by yearend </li></ul><ul><li>7-26-07 Connecticut - US Federal Court Case is hurting rollout speed </li></ul><ul><li>AT&T offering a year of free DISH network if you are in a U-Verse planned area </li></ul><ul><li>IPTV standards’ issues are a problem </li></ul><ul><li> </li></ul>
  12. 12. AT&T HOMEZONE <ul><li> </li></ul><ul><li> </li></ul><ul><li>JAN 2007 - Won Frost & Sullivan award for most innovative product </li></ul><ul><li>WIKIPEDIA: STD DEF 250GB hard drive, 2 TV outputs, HDMI, 2 remotes with built-in keyboards, ethernet, & 3 USB ports </li></ul><ul><li>To be available in non-U-Verse areas to 80% of AT&T customers </li></ul>
  13. 13. COMCAST CMCSA, CMCSK <ul><li>|754672987 </li></ul><ul><li>Dividing Nodes, DOCSIS modems, digital switched video </li></ul><ul><li>DirecTV lawsuit on HD quality claim </li></ul><ul><li>24.2M Customers </li></ul><ul><ul><li>13.3M digital cable customers </li></ul></ul><ul><ul><li>12.1M Internet </li></ul></ul><ul><ul><li>3M Voice </li></ul></ul>
  14. 14. TIME WARNER TWX <ul><li> </li></ul><ul><li>AOL, HBO, Turner Broadcasting, Newline Cinema, TIMEINC, Warner Bros </li></ul><ul><li>96K Employees </li></ul><ul><li>Programming and Content is big </li></ul><ul><li>26M TWC customers, 13.6M video,6.6M high speed data, 1.9M digital phone customers: Voice penetration 11% </li></ul><ul><li>+3.2M Adelphia customers (.8M to Comcast) </li></ul><ul><li>Bundled Sprint Wireless with all services </li></ul><ul><li>Dividing Nodes, Improving Plant situation </li></ul><ul><li>AOL offering free internet service to slow decline and churn </li></ul>
  15. 15. COX COMMUNICATIONS INC CCI <ul><li> </li></ul><ul><li>6M Customers, Analog & Digital (Lowest churn) </li></ul><ul><ul><li>2.2M Voice </li></ul></ul><ul><ul><li>3.5M Internet </li></ul></ul><ul><ul><li>3.6M Bundled “it’s still the bundle, baby!” Joe Rooney, Chief Marketing Officer, Cox </li></ul></ul><ul><li>San Diego launch of HD On Demand movies </li></ul><ul><li>Selling non-profitable pieces, using the money to build Triple Play </li></ul><ul><li>Installing VYYO, DOCSIS Modems, building fiber </li></ul>
  16. 16. CABLEVISION CVC <ul><li>|809455252 </li></ul><ul><li>Passed 4.5M Customers, 3+M IN NYC served today </li></ul><ul><li>Largest group in one location </li></ul><ul><li>Offering 4 Lines of digital voice </li></ul><ul><li>40 HD Channels (the most so far) </li></ul><ul><li>Beginning to spend money </li></ul><ul><li>Rainbow Media gone to Comcast </li></ul>
  17. 17. QWEST Q <ul><li> </li></ul><ul><li>Located in 14 STATES, 40K Employees, 14M access lines </li></ul><ul><li>VDSL video but not everywhere </li></ul><ul><li>National Network: Ultra Longhaul, up to 40GB for business </li></ul><ul><li>QWave Dark Fiber available </li></ul><ul><li>Future is uncertain </li></ul>
  18. 18. CHARTER CHTR <ul><li> </li></ul><ul><li>5.7M customers in 29 states, 16.5K Employees, HQ in St Louis </li></ul><ul><ul><li>1+M in the West US </li></ul></ul><ul><ul><li>1+M in the North Central US </li></ul></ul><ul><ul><li>2+M in the South US </li></ul></ul><ul><li>They don’t tell how many HD channels they have on the website, just that they are great </li></ul><ul><li>Selling nonprofitable properties and using the money to build better triple play at major headend cities </li></ul><ul><li>Want a bargain CATV Co? </li></ul>
  19. 19. FTTX/PON ARCHITECTURES <ul><li>Fiber to the Node (FTTN) </li></ul><ul><li>Fiber to the Curb (FTTC) </li></ul><ul><li>Fiber to the Premise (FTTP) </li></ul><ul><li>Active Point-to-Point </li></ul><ul><li>BPON </li></ul><ul><li>GPON (1.2, 2.4GBPS) </li></ul><ul><li>GePON/EPON </li></ul>
  20. 20. VIDEO TRANSMISSION <ul><li>Radio Frequency (RF) Verizon and CATV MSO’S use the same architecture </li></ul><ul><li>Internet Protocol (IPTV) is AT&T’S architectural choice </li></ul><ul><li>MPEG2 compression (18-20mbps) </li></ul><ul><li>MPEG4 compression (8-9mbps) </li></ul><ul><li>Direct broadcast satellite, DirecTV and DISH Network </li></ul>
  21. 21. INTERNET SPEEDS <ul><li>DSL (1.5 to 50+mbps) </li></ul><ul><li>Cable Modem (5 to 15+mbps) </li></ul><ul><li>Upstream vs. Downstream: Who is the best? What can be done? </li></ul><ul><li>What is the capability of the actual internet backbone? </li></ul>
  22. 22. RBOC/ILEC EQUIPMENT VENDORS <ul><li>TELLABS </li></ul><ul><li>ALCATEL-LUCENT </li></ul><ul><li>MOTOROLA (QUANTUM BRIDGE) </li></ul><ul><li>CALIX (INCLUDES FORMER OPTICAL SOLUTIONS INC) </li></ul><ul><li>WAVE 7 </li></ul><ul><li>ALLIED TELESIS </li></ul><ul><li>ERICSSON (ENTRISPHERE,REDBACK) </li></ul><ul><li>WORLDWIDE PACKETS </li></ul>
  23. 23. MORE RBOC/ILEC EQUIPMENT VENDORS <ul><li>ALLOPTIC </li></ul><ul><li>AFL TELECOMMUNICATIONS </li></ul><ul><li>HITACHI </li></ul><ul><li>PACKETFRONT </li></ul><ul><li>OCCAM </li></ul><ul><li>FUJITSU </li></ul><ul><li>PANNAWAY </li></ul><ul><li>TELCO SYSTEMS </li></ul>
  24. 24. MORE RBOC/ILEC EQUIPMENT VENDORS <ul><li>TELSTRAT </li></ul><ul><li>TXP </li></ul><ul><li>TENVERA </li></ul><ul><li>TERAWAVE </li></ul><ul><li>UTSTARCOM </li></ul><ul><li>ZHONE </li></ul>
  25. 25. CATV EQUIPMENT VENDORS <ul><li>MOTOROLA </li></ul><ul><li>ARRIS </li></ul><ul><li>CISCO (SCIENTIFIC ATLANTA) </li></ul><ul><li>VYYO (Includes EXTEND NETWORKS) </li></ul>
  26. 26. FIBER CABLE/CONNECTIVITY EQUIPMENT VENDORS <ul><li>CORNING CABLE SYSTEMS </li></ul><ul><li>OFS BRIGHTWAVE (FORMERLY LUCENT) </li></ul><ul><li>SUMITOMO </li></ul><ul><li>DRAKA COMTEQ (FORMERLY ALCATEL) </li></ul><ul><li>PRYSMIAN (FORMERLY PIRELLI) </li></ul><ul><li>TYCO </li></ul>
  27. 27. US BROADBAND WHERE ARE WE TODAY? <ul><li>Current Broadband stats </li></ul><ul><li>DLS VS Cable Modems are tied right now in volumes, with DSL gaining </li></ul><ul><li>Wireless: EDGE, 3G, 4G? Next? </li></ul><ul><li>Fiber-To-The-Whatever: Still the numbers are not huge, several million at the most, but growing faster than ever </li></ul>
  28. 28. BROADBAND CONNECTIONS BY STATE (FROM RVA 2007 FTTH: Advanced Broadband REPORT) <ul><li>CT 65.8%BB </li></ul><ul><li>NJ </li></ul><ul><li>MA </li></ul><ul><li>CA </li></ul><ul><li>NV </li></ul><ul><li>AZ </li></ul><ul><li>NH </li></ul><ul><li>UT </li></ul><ul><li>GA </li></ul><ul><li>FL </li></ul><ul><li>NY 58.7%BB </li></ul>
  29. 29. MAJOR FACTORS INFLUENCING BROADBAND GROWTH (FROM THE RVA 2007 FTTH: Advanced Broadband REPORT) <ul><li>HD Television </li></ul><ul><li>Internet </li></ul><ul><li>Time-Shifted Video (DVR’S) </li></ul><ul><li>Video on Demand </li></ul><ul><li>Video Conferencing </li></ul>
  30. 30. FTTH PROVIDERS (FROM RVA 2007 FTTH: Advanced Broadband REPORT) <ul><li>RBOCs: 1,006,500 Customers </li></ul><ul><li>341 other providers: 436,141 Customers </li></ul><ul><li>Other providers= other ILECs, CLECs, CLEC/Developers, Muni’s </li></ul>
  31. 31. TOP NORTH AMERICAN FTTH PROVIDERS (FROM RVA 2007 FTTH: Advanced Broadband REPORT) <ul><li>AT&T, VERIZON (RBOCs) </li></ul><ul><li>CONNEXION (DEV/CLEC) </li></ul><ul><li>DALTON UTILITIES (MUNI) </li></ul><ul><li>IPROVO (MUNI) </li></ul><ul><li>JACKSON, TN (MUNI) </li></ul><ul><li>SUREWEST (CLEC) </li></ul><ul><li>TDS (ILEC) </li></ul>
  32. 32. GREENFIELDS vs. BROWNFIELDS <ul><li>FTTH is Greenfield Architecture of choice </li></ul><ul><li>FTTP vs FTTN for Brownfields: Costs are high either way </li></ul><ul><li>CATV DOCSIS-To-The-Home for Greenfields </li></ul><ul><li>CATV overbuilds on the way: Some by entrepreneurs, some by the companies themselves </li></ul>
  33. 33. FTTH CONSUMER PERSPECTIVE: (FROM RVA 2007 FTTH: Advanced Broadband REPORT) <ul><li>High Internet Speeds </li></ul><ul><li>Good Customer Service from provider </li></ul><ul><li>Price for Fiber Service </li></ul><ul><li>Several Services on one bill </li></ul><ul><li>Reliability problems from previous Suppliers </li></ul><ul><li>Telephone Service/Features offered </li></ul><ul><li>Features available in the future via Fiber </li></ul><ul><li>Television with many channels </li></ul><ul><li>Previous Supplier Customer Service problems </li></ul><ul><li>Other Features now available via Fiber </li></ul><ul><li>Television with many HDTV channels </li></ul>
  34. 34. WHAT WE CAN EXPECT FROM TRIPLE PLAYERS IN THE NEXT 12 MONTHS <ul><li>AT&T : Heavy U-Verse rollout numbers by YE 2007 when the BellSouth numbers show up </li></ul><ul><ul><li>Watch the take rate, FTTP RFQs </li></ul></ul><ul><li>VERIZON : Continued Strong Activity </li></ul><ul><ul><li>Watch the costs & Copper situation </li></ul></ul><ul><li>CATV MSO’S : Digital switched video, bandwidth expansion, node division and node + one work, fiber placement, selling off properties to pay bills/new triple play cost coverage where they want to be </li></ul><ul><li>QWEST : They need to do something soon </li></ul><ul><li>OTHERS : CENTURY TEL, WINDSTREAM, 15k Independent Telcos are all on the move </li></ul>
  35. 35. THOUGHT FOR TODAY <ul><li>“ ONLY A LIFE LIVED FOR OTHERS IS A LIFE WORTHWHILE” </li></ul><ul><ul><ul><ul><ul><li>Albert Einstein </li></ul></ul></ul></ul></ul>