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® Adtran, Inc. 2012 All rights reserved
Global Broadband Trends
Robert Conger, Commsday 2013
1ADTRAN Company Confidential
2® Adtran, Inc. 2012 All rights reserved Proprietary and Confidential
Key Trends in Fixed Broadband Access
• Increased Inv...
3® ADTRAN, Inc. 2012 All rights reserved
GPON
Gigabit Service Delivery
Cloud
Connectivity
Residential
Broadband
Data Cente...
4® ADTRAN, Inc. 2012 All rights reserved
100 Mbps @ 550m with
vectoring
Vectoring
Gain
Vectoring eliminates Far End CrossT...
5® ADTRAN, Inc. 2012 All rights reserved
GPON and VDSL2 Market Analysis
Strong growth in
VDSL2 expected
over next 5 years
...
6® Adtran, Inc. 2007 All rights reserved Proprietary and Confidential
c
c
Success-Based Transition to FTTH
Fibre Aggregato...
7® Adtran, Inc. 2012 All rights reserved ADTRAN Company Confidential
Key Factors Driving FTTH Costs:
– Greenfield vs. Brow...
8® Adtran, Inc. 2012 All rights reserved ADTRAN Company Confidential
Google fiber Highlights:
– Launched service in July
2...
9® Adtran, Inc. 2012 All rights reserved ADTRAN Company Confidential
Industry Example: Deutsche Telekom
100Mbps Service De...
10® Adtran, Inc. 2012 All rights reserved ADTRAN Company Confidential
AT&T Project VIP Highlights:
– $14B capital investme...
11® Adtran, Inc. 2012 All rights reserved ADTRAN Company Confidential
Summary
Exchange
Remote Node
Success-Based
Transitio...
12® ADTRAN, Inc. 2011 All rights reserved ADTRAN Company ConfidentialProprietary and Confidential
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  1. 1. ® Adtran, Inc. 2012 All rights reserved Global Broadband Trends Robert Conger, Commsday 2013 1ADTRAN Company Confidential
  2. 2. 2® Adtran, Inc. 2012 All rights reserved Proprietary and Confidential Key Trends in Fixed Broadband Access • Increased Investment in Fixed Access – Focus over past few years has been LTE rollout, but recently increased focus on wireline investment – AT&T, DT, NBN Co., and others announced large increases in Capex over next few years – New entrants into the market driving competition: Google Fiber, utilities and municipalities, etc. – Focus on cloud connectivity and business services • GPON, VDSL2, and DOCSIS 3.0 Leading – Investment focused on two key access technologies: GPON and VDSL2 w/ vectoring – VDSL2 w/ vectoring offers a mass-market 100 Mbps while GPON is focused on 1 Gbps service delivery – DOCSIS 3.0 key enabler of 100M services – P2P Ethernet is still growing in niche segments
  3. 3. 3® ADTRAN, Inc. 2012 All rights reserved GPON Gigabit Service Delivery Cloud Connectivity Residential Broadband Data Center Connectivity Mobile Services Expansion Fibre Investment: – Strong growth – Mix of Applications:  Residential broadband  Enterprise connectivity  Mobile backhaul – Very targeted markets:  Greenfield  Areas with limited copper  Utilities and municipalities
  4. 4. 4® ADTRAN, Inc. 2012 All rights reserved 100 Mbps @ 550m with vectoring Vectoring Gain Vectoring eliminates Far End CrossTalk (FEXT) and allows service providers to deploy 100 Mbps out to >1 km over two pairs of copper VDSL2 with Vectoring Mass-Market 100 Mbps Service Delivery VDSL2 w/ Vectoring: – Latest generation copper access technology for FTTN architectures – Mass deployable technology in 2013 – Delivers 100Mbps out to >1km with 2pr bonding – Enables cost-effective and widespread delivery of 100M services – Small form-factor DSLAMs optimized around vectoring coming to market
  5. 5. 5® ADTRAN, Inc. 2012 All rights reserved GPON and VDSL2 Market Analysis Strong growth in VDSL2 expected over next 5 years GPON market still very targeted GPON Revenue by Region: Q4 ‘12 Projected VDSL2 Growth by Region Source: Infonetics Q4 2012 Broadband Aggregation Report
  6. 6. 6® Adtran, Inc. 2007 All rights reserved Proprietary and Confidential c c Success-Based Transition to FTTH Fibre Aggregator / GPON OLT Splitter (Fibre Distribution Hub) Fibre Access Terminal Fibre Feeder Cable Fibre Distribution Cable Broadband Home Gateway $ FTTH (up to 1Gbps/sub) FTTx networks share common architecture for fibre build-out from exchanges. Investment in fibre vs. copper within last 1km driven by a number of factors. c FTTDP (200-500 Mbps/sub) FTTN (up to 100M/sub) $$ $$$ High Cost Area (last 1km) VDSL2 VDSL2/ G.fast GPON Common Network Architecture
  7. 7. 7® Adtran, Inc. 2012 All rights reserved ADTRAN Company Confidential Key Factors Driving FTTH Costs: – Greenfield vs. Brownfield – Aerial vs. Underground Utilities – Construction Costs – Subscriber Density – Customer Sign-up Rates Drivers for FTTH Deployment Costs c Fibre Access Terminal $$ $$$ High Cost Area (last 1km) GPON
  8. 8. 8® Adtran, Inc. 2012 All rights reserved ADTRAN Company Confidential Google fiber Highlights: – Launched service in July 2012 – 1 Gbps service in 180 “fiberhoods” in Kansas City – Simplified service options:  5 Mbps Internet (free after connection fee)  1 Gbps Internet ($75)  1 Gbps Internet & TV ($125) – Used “social marketing” model requiring minimum sign-ups to qualify neighborhoods as “fiberhoods” to lower initial construction costs Industry Example: Google fiber Gigabit Service Delivery
  9. 9. 9® Adtran, Inc. 2012 All rights reserved ADTRAN Company Confidential Industry Example: Deutsche Telekom 100Mbps Service Delivery w/ FTTCab/FTTN Highlights of DT Strategy: – €6B investment for VDSL2 w/ vectoring rollout in Germany – Mix of FTTCab/FTTN (90%) and FTTH (10%) – Increase coverage of FTTCab/FTTN from 36% to 65% by 2016 – €1000 per HH for FTTH vs. €300 per HH for FTTCab/FTTN (70% decrease) – Target rate of 100M down / 40M up (same as highest NBN Co. tier for residential today) (incremental progression towards FTTH with no wasted investment)
  10. 10. 10® Adtran, Inc. 2012 All rights reserved ADTRAN Company Confidential AT&T Project VIP Highlights: – $14B capital investment increase between 2013-2015 for broadband expansion ($6M to wireline) – Expansion of U-Verse to 8.5M more homes (33M total) by 2015 – Vast majority of wireline customers will be served by VDSL2-based FTTN network – Focus on cost-effective delivery of 75-100M services – Fibre build-out also focused on fibre expansion to business locations and cell sites Industry Example: AT&T FTTN Expansion
  11. 11. 11® Adtran, Inc. 2012 All rights reserved ADTRAN Company Confidential Summary Exchange Remote Node Success-Based Transition to FTTH VDSL2 GPON Summary of Global Trends: – Significant increases in wireline network investment in 2013 – VDSL2 w/ vectoring and GPON have emerged as primary two access technologies for 100M and 1G service delivery – Increase in fibre for FTTx networks, with each operator facing unique challenges to determine FTTN vs. FTTH – Success-based migration to FTTH has become the key theme
  12. 12. 12® ADTRAN, Inc. 2011 All rights reserved ADTRAN Company ConfidentialProprietary and Confidential

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