FTTH Conference 2009 Jess Julin Ibsen Denmark

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  • 1. An incumbent’s approach to a financially feasible FTTH Strategy Jess Julin Ibsen Executive Vice President & CTO Networks TDC A/S FTTH Council Europe Conference, Feb. 2009
  • 2. Price decreases in the Danish telecommunications market “The health sector, restaurants and hotels as well as bread and cereals, among others... are more expensive in Denmark than the EU9 average. On the other hand, fish and communications (post, telecoms equipment and telecoms services) are significantly less expensive… Especially the price of telecoms services is lower than the EU9 average.” Competition Report 2007 Telephony prices Int ernet and Broadband prices 700 3000 600 2500 500 K ro ne r 2000 400 K ro ne r 300 1500 200 1000 100 500 0 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1998 2000 2002 2004 2006 2008 fastnet 900 min (kvartalspris) internet 600 min (kvartalspris) År År mobil 270 min (kvartalspris) ADSL 512/128 (månedspris) mobil 450 min (kvartalspris) ADSL 2048/512 (månedspris) Kilde: ITST: Hallo, hallo, ved du hvad det koster? November 2008 11-02-2009 FTTH Council Europe Conference/Jess J. Ibsen, TDC A/S 2
  • 3. Denmark is #1 in broadband penetration Denmark DSL Netherlands Sw itzerland Cable Korea Norw ay Fibre/LAN Iceland Finland Other Sw eden Canada Belgium United Kingdom Australia France Luxembourg United States Japan Germany Austria Spain New Zealand Italy Ireland Portugal Czech Republic Hungary Poland Greece Slovak Republic Turkey Mexico 0,0 5,0 10,0 15,0 20,0 25,0 30,0 35,0 40,0 Source: OECD, June 2007 11-02-2009 FTTH Council Europe Conference/Jess J. Ibsen, TDC A/S 3
  • 4. Focus on the customers’ needs… The potential to achieve added value is not in the product itself, but in what the Danish customers can use the product for in their lives and businesses. Our customers require content through Dual-play, Triple-play and combinations with mobile telephony and mobile broadband. They DO NOT care about the media or underlying solution (fiber/copper). Currently few customers require 20 Mbit/s+ solutions ”We do get customers, but they are coming more slowly than we had expected. We have not yet seen an increased demand for fiber based upon new services. So the sales of high speeds and add-on services have disappointed compared to our original expectations”. Flemming Poulsen, Chairman of the Board, Midt Vest Broadband A/S 11-02-2009 FTTH Council Europe Conference/Jess J. Ibsen, TDC A/S 4
  • 5. Strategic intent – financial feasibility A sound business case require: Technology availability Customer needs/requirements for content and services Content/services must require the technology How far ahead can we see the market development ? (price erosion/technology development/technology degredation) Fiber is the technology of the future TDC develops our network reacting to customer requirements rather than to technology blueprints Sound ROI Services delivered in a “hybrid model” optimizing the usage of as well our fiber as our copper access networks (FTTC/FTTN) TDC believe that the existing copper access network can deliver sufficient bandwidths for 90 percent of all users for at least the next 5 years. 11-02-2009 FTTH Council Europe Conference/Jess J. Ibsen, TDC A/S 5
  • 6. Architecture – functional it’s about protocols... an incumbent’s challenge Service layer Duét Business Private IP trunking VoIP centrex Landline VoIP Mobile network Control layer softswitch IMS Transport SDH WDM ATM IP MPLS Ethernet PDH Access Cable WiFi, Fibre SDH PSTN 2G/3G xDSL PON modem Wimax etc. Ethernet PDH ISDN Copper Physical media Coaxial Fiber Radio pairs Terminals 11-02-2009 FTTH Council Europe Conference/Jess J. Ibsen, TDC A/S 6
  • 7. Architecture – all-IP NGN The challenge of managing a considerable set of legacy services and platforms. TDC operates all main NGN platforms today, thus realizing all-IP is primarily a matter of decommissioning legacy platforms and migrating legacy services. 11-02-2009 FTTH Council Europe Conference/Jess J. Ibsen, TDC A/S 7
  • 8. The current status TDC has more than 45,000 km trunk fiber to approx. 2,000 nodes – more than 600 Gbps used capacity More than 250,000 km of copper access network and 12,000 km of fiber access network TDC has access fiber network to more than 60,000 Danish households TDC has more than 10,000 dedicated business access fibers We expand the fiber access network to more than xx,000 new builds yearly And whenever we replace existing Copper Access connections, we do it using fiber (hybrid cables) But we do not believe that the market is ready for us to deliver our services over fiber – yet…. We would not currently have a financially feasible business case for the specific services delivered to end-users 11-02-2009 FTTH Council Europe Conference/Jess J. Ibsen, TDC A/S 8
  • 9. Coverage is key Exchange areas TDC utilizes it’s existing exchange area infrastructure and investments in buildings and housing for GPON and DSLAM deployments All exchange areas and nodes are fiber connected Denmark is divided into 1,183 exchange areas (EAs). On average, the exchange areas cover 30 sq km. 11-02-2009 FTTH Council Europe Conference/Jess J. Ibsen, TDC A/S 9
  • 10. What we do: A compound build-out strategy TDC builds fiber for: trunk/transport network Distribution network (to DSLAM’s (FTTC/FTTN), GPON’s, mobile masts) Business customers (FTTB) – P2P – more than 1,000 new customers annually Access network (hybrid fibers) Replacement of degraded fiber (20 year old fiber turns milk-white) TDC builds access: TDC is currently deploying fiber to the node (FTTN)/fiber to the curb (FTTC) GPON for the residential market P-2-P fiber solutions for businesses Clearly defined service road map: Copper– 20 Mbit/40 Mbit/50 Mbit/80 Mbit/100 Mbit GPON based residential services Increased speeds on P-2-P FTTB solutions 11-02-2009 FTTH Council Europe Conference/Jess J. Ibsen, TDC A/S 10
  • 11. TDC’s network structure, mid-2008 Trunk network Access network Fiber to business Large distance to exchange, customers limited bandwidth Fiber to mobile masts E X X X E X X X Land development sites + X maintenance/repair Land development sites Short distance to exchange, with hybrid fiber high bandwidth possible Exchange building Fiber in the trunk E with ADSL and VDSL2 network Fiber in the access Fiber distribution point X network Copper in the access Copper distribution point X network ~10,000 ~12,000 km ~60,000 11-02-2009 FTTH Council Europe Conference/Jess J. Ibsen, TDC A/S 11
  • 12. 2008 – 2009: DSLAM’s – larger bandwidth on the copper network, fiber closer to the customer Trunk network Access network Fiber to business Possibility of bandwidths customers exceeding 20 Mbps New micro node E with VDSL2 and fiber connection M X X E X X X Land development sites + X maintenance/repair Exchange building with Fiber in the trunk E ADSL and VDSL2 network Fiber in the access Fiber distribution point X network Copper distribution Copper in the access X point network Micro node M with VDSL2 11-02-2009 FTTH Council Europe Conference/Jess J. Ibsen, TDC A/S 12
  • 13. 2009- :Fiber closer to the customer – basis of further development Trunk network Access network Fiber to business customers Fiber to mobile masts E M X X E X X X Land development sites + X maintenance/repair Introduction of fiber services using GPON and splitters Exchange building with Fiber in the trunk E ADSL, VDSL2 and FTTH network Fiber in the access Fiber distribution point X network Copper distribution Copper in the access X point network Micro node with M VDSL2 11-02-2009 FTTH Council Europe Conference/Jess J. Ibsen, TDC A/S 13
  • 14. FTTH deployment strategy GPON technology Up to 64 customers on one fiber port Passive optical split (1:64) in the primary distribution cabinets 2.5/1.25 Gbps overall capacity per fiber port 3,500-7,000 customers per rack Two fibers Two fibers per Exchange customer Fiber primary Customer distribution cabinet Splicing point 100-1,000 customers Main distribution network Distribution network Drop cable GPON system Optical distribution frame Through-splicing of two fibers per Modular splitters customer typically 2-5 km typically 500-1,000 m 11-02-2009 FTTH Council Europe Conference/Jess J. Ibsen, TDC A/S 14
  • 15. Services Strategy: Products ready to launch when customers has the req’t. 2009: (Jan) TDC launches integrated Dual-play and Triple-play packages 20 Mbit/s standard service offerings 40 Mbit/s standard service offerings Dual-pair service offerings doubles existing access speeds Quad-play services FemtoCell based services for Business and Residential markets 2010-: TDC launch of first fiber based services to the residential market (Dual-play, Triple- play and Quad-play) on GPON when we see the commercial requirement 50 Mbit/s standard service offerings + dual-pair Increased speed on FTTB solutions Large amount of VOD services Higher speeds on most platforms 11-02-2009 FTTH Council Europe Conference/Jess J. Ibsen, TDC A/S 15
  • 16. Conclusion: “Build the Boat while sailing…” Yes, fiber is the technology of the future – but the future is not today What our customers wants are services – Dual-play, Triple-plays and combinations with mobility Our customers should not care about the underlying technology – as long as speed, stability and quality meet their expectations TDC questions the FTTH strategy employed by the Danish Utility Companies – it is not financially feasible TDC will launch the first fiber based services the moment our customers has the requirements – and we can make a healthy business case But we will continue to deliver high speed and high quality services on as well fiber as copper for years to come TDC strongly believes that combinations of FTTH, FTTB and copper based solutions are the only financially feasible approach Do it intelligently – this is Business – not Philanthropy 11-02-2009 FTTH Council Europe Conference/Jess J. Ibsen, TDC A/S 16