Russian broadband market survey 20070418

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Russian broadband market survey 20070418

  1. 1. Russia Broadband Market Survey Sirena Cheng Apr. 16, 2007 AgendaGlobal Broadband TrendRussian ICT market situationRussian Fixed Network MarketRussian Wireless Network MarketTop 10 things need to do in Russian branchQ&A Sirena Cheng
  2. 2. Global Broadband TrendBroadband Access Market forecast Sirena Cheng Source: Cisco IBSG, January 2005
  3. 3. Ценность NGN для бизнеса: Технология Sirena ChengCurrent Internet Traffic Characteristics High-speed networks (Mbps →Gbps →Tbps) High-volume traffic Variety of Applications Streaming media (Windows Media, Real Media, Quicktime) P2P traffic Network Games Network Security Attacks Etc. Sirena Cheng
  4. 4. Broadband in Enterprise: Wealth of Opportunities Front Office Sales Tools • Reinvent your business processes • Enhanced management options POS, Back OfficeDigital Signage Solutions • Cost saving• Queue management (Banks) • Data exchange• New revenues stream (Retail) • Credit Card Verification, SAP, etc.• Engaging, entertaining and informing customers LAN (optional) Business Continuity • Backup to terrestrial network • Increased network resiliencee-Learning/Training File Distribution • Cost saving (fraud reduction)• Cost saving • Cost saving• Customer satisfaction and sales uplift • Consistent and confirmed• Increases competitiveness delivery Sirena Cheng satisfaction • Customer Global Broadband Situation Sirena Cheng
  5. 5. Description of the market Competing Subscriber Property net Metro net Backbone Service Service Providers Telephony Telephony PSTN (telephone) network PSTN (telephone) network TV TV Cable (TV) network Cable (TV) network Video on Demand Video on Demand Internet Internet connection connection ASP/SSP/ ASP/SSP/Subscriber Co-location Co-location Municipal network provider Smart home & Smart home & Municipal network provider Property services Property services Property network Property network Communication operator Wireless Wireless communication communication Shop & Shop & Order Hotel Services Hotel Services Delivery Sirena Cheng Payment Infrastructure levels Services Stimulating the market to invest Active network Dark fiber Municipality / housing associations participating / Ducts paying for the passive network Sirena Cheng Competition of service level and not on infrastructure level!
  6. 6. The matrix network products Core Access CPE Network Network Customer Carrier 1st & 2nd Tier ISP Large Enterprise, Type SOHO/SMB Bandwidth Fiber Optical Fiber Optical Fiber Optical or ADSL 10GB/40GB+ 10GB/2.5GB depend on different Area Fiber optical Single Mode Single Mode and Multi-mode and LAN type DWDM Multi Mode cable CWDM Product Very Large SI Large SI Large SI – Large Sales channel Enterprise, Distributors- SOHO/SMB Sirena Cheng Access Network Evolution Program Geographical capillary coverage can be achieved with operator- owned microwave links, rather than with 3rd party leased lines Benefits: 2G BSC High 2G/3G Radio Avoidance of higher long- Access Network or short-term CapEx investment term CapEx for new leased 3G RNC in operator-owned access Grooming Microwave link line acquisition node Upper level microwave link transmission networks X x STM-1 Replacement of 3rd party Reduction of volume-driven X x STM-1 ADM leased lines with operator- OpEx costs and QoS Hub TXC owned microwave circuits controlled by the operatorGrooming SDH Support of higher-bandwidth node node Transport Creation of high-capacity and demanding data traffic Network scalable transmission expected to accompany 3G network, leveraging network uptake and new revenue• Description: vendors’ UTRAN – PDH generating opportunities by• Design and implementation of an operator- combined technologies reselling network owned access transmission network based transmission resources to 3rd on PDH radio links (RBS linked to parties grooming and hub nodes, then connected to telephony exchange centers via the SDH Dependencies/linkages: transport network)• Replacement of 3rd party leased lines with • Need to synchronize with radio, core network PDH links and property infrastructure evolution projects• Design and implementation of new O&MSirena Cheng• Impacts on OSS evolution projects organization, processes and procedures
  7. 7. Core Network Evolution Program The target of wireless operators is to run their business over one full IP- based signaling and transport network for both real and non real time traffics OSS/BSS ATM transport Sub-network Signalling Monitoring Pure IP Signalling Billing Pre-paid SS7-like IP routing Billing mediation Benefits: Service Farm IP-based and O&M MSC Meeting bandwidth Deployment of Gbps switching IP Sub-networkIntelligent Network Signalling network, replacing obsolescent nodes requirements of new 3G/3.5G Services SDP service UMMS MSC New hardware providing more CapEx avoidance as new bandwidth and more resilient . MG MG MG equipment is cheaper connections for corporate customers . W W. W Pro-active monitoring and planning O&M OpEx reduction, due to and Improvement of performance/SLA automatic and faster problem monitoring identification and resolution Convergence of 2G/3G services in Saving in support costs one scalable CS/PS network Long-term cost reduction due to • Description: Enhanced traffic engineering to decommissioning of legacy • Consolidation of legacy networks into one new IP enable VoIP equipment and systems network and migration of services onto the new network (e.g. one common network for voice, data and management) • Evolve signaling from SS7 to SigTran Dependencies/linkages: • IP-based roaming signaling (e.g. next generation • Need to synchronize with radio, property & service interconnect) infrastructure (especially for IN services porting to IP) • Service migration to the new network (e.g. full VoIP evolution projects solution) Sirena • Impacts on OSS evolution projects Cheng Broadband Satellite Demand: Growing Globally at 15% CAGR Sirena Cheng
  8. 8. Broadband Satellite Services: Where the Profits Are Sirena ChengApplications and Services for WiMAX Sirena Cheng
  9. 9. Global WiMax Deployments Sirena Cheng Russia ICT Market
  10. 10. Autonomous Areas in Russia Sirena ChengThe growth for Russian IT industry up to 2015 Model of Russian IT 2009 2015 market Total volume (US$B) 29.2 56 Russian It as the part of world 2.2% 3.4% market Annual Growth 16.7% Hardware 60.1% 50.9% Software 9.4% 9.2% Services 17.3% 16.8% Internal Corporate IT expenses 13.2% 23.1% Sirena Cheng Source: Inforus, Cnews 2006
  11. 11. Prospects for PC and Internet Growth/Internet Revenues Internet Access Service Revenue 2 PC and Internet Growth 1.8 30 1.6 25 20 1.4 Revenue ($B) 15 1.2 10 1 5 0.8 0 1998 1999 2000 2001 2002 2003 2004 2010 0.6 Number of Internet users (M) Number of PC users (M) 0.4G-27611 P 03/30/05 0.2• Boosted by eRussia initiative 0 2000 2001 2002 2003 2004 2010 – $2.6B investment (2002–2010) to raise IT exports to $1B+/yr Cheng Sirena CAGR ~ 21% (for ’98 – ’02 period) Russian Broadband Market Projections Sirena Cheng
  12. 12. Internet Growth with incredible speed Sirena Cheng ウクライナ (Ukraina) 概況経済動向 Sirena Cheng
  13. 13. Russia Telecom Infrastructure Sirena Cheng
  14. 14. Main fiber optic infrastructure (TTC) Sirena ChengRussian International Bandwidth Sirena Cheng
  15. 15. Russia International connectivity Sirena Cheng BANDWIDTH IN RUSSIA Sirena Cheng
  16. 16. Russian Backbone Network (RBnet) Sirena ChengERMC(Europe-Russia-Mongolia-China) Sirena Cheng
  17. 17. Russia’s Telecom Development in 2006 • Russia’s telecoms and IT market exceeds $20 billion per year and the market is expected to grow by a further 50% in 2006. Russia now has one of the most diverse and rapidly developing telecom and information technology markets in the world. • An estimated 84% of the population now uses mobile telecoms and broadband access is growing at a fast rate. IP telephony sales equaling $260 million, a 53% increase. • Russia currently spends more than $2.5 billion every year on imported telecoms equipment, making up 60% of the market. • The Russian broadband internet market is now worth $1 billion and 40% of the population is expected to be using the internet by 2008. Sirena Cheng Russian Network Market Growth Forecast Sirena Cheng
  18. 18. Traffic to Non-Moscow Russian Cities Traffic to Non-Moscow Russian Cities 200,000 180,000 C hernogolovka 160,000 E katerinburg Dubna 140,000 P rotvino Megabytes 120,000 N ovos ibirs k 100,000 Samara C helyabins k 80,000 P us hc hino 60,000 I rkuts k 40,000 V ladivos tok 20,000 I zhevs k Kazan - T oms k T ver a vk rg lo na bu go V oronezh ub in o 2002-05 no vin er D k er at ot 2002-04 ir s a Ch Ek ar Pr ib 2002-03 m os k ns Sa ov o 2002-02 in bi k N ch ya ts 2002-01 sh ku el k to 2001-12 Ch Pu Ir k os vs n 2001-10 iv he City za ad Iz Ka sk Vl m er To Month Tv zh ne ro Vo Sirena Cheng А есть ли рынок? Источник: Fast Web, 2005 Sirena Cheng
  19. 19. Платное телевидение и Интернет в Москве Источник: Система Масс Медиа, 2005 Sirena ChengПотенциал развивающихся рынков Potential of the developing markets 250% Отношение к показателям США 200% 150% США Германия 100% Россия Китай 50% Индия 0% Рост ВВП Проникновение Проникновение Проникновение стационарной т мобильной связ интернет елефонии и ИСТОЧНИК: THE WORLD FACTBOOK 2004 Sirena Cheng
  20. 20. Russian Federation: Organizational Details• Kurchatov Institute (Dr. Velikhov), Russian Academy of Science (Dr. Velikhov), Joint Supercomputing Center (RAS), Ministry of Industry, Science & Technology, Ministry of Communications, Ministry of Education, Ministry of Atomic Energy. (TransTelecom: likely network provider) Sirena Cheng TIM Portfolio OverviewCumulative financing Media/Otherprovided to date: €2.2 billion Mobile 35% 24%Current portfolio: €675 millionCovers 22 CEE and CIS countries87 deals ranging from €10 millionto € 125 million and including: – mobile telecoms – fixed line operators – ISPs – submarine cables – software developers Fixed line/Integrated – terrestrial TV – systems integrators Telcos 41% – cable TV – outdoor advertising Source: EBRD Sep. 2006 Sirena Cheng
  21. 21. Selected Transactions: TelecomsHungary 2001Loan syndication Russian Federation 2001 Albania 2003 Orange Slovakia€350 million (total) 2001 Equity private Loan syndication and Loan syndication€100 million (own placement quasi-equity package €85 million (total) $180 million (total) €35 million (ownaccount $20 million (own $138 million (total)underwriting) account) $30 million (own account) account) Poland 2001 Romania1997-2002 Russian Federation 1999 Loan syndication Loan syndication IPO €650 million (total) $300 million (total) $135 million (total) Zloty equivalent of $105 million (own $35 million (own account) €75 million (own account) account) Sirena Cheng Russia Wireless Network
  22. 22. Russian Wireless Network opportunity Sirena Cheng DIRECWAY in Russia/NIS • Twelve countries in the region • Services • New Moscow office with local • Region-wide DIRECWAY service via Ku-band sales/support satellites (Express, YAMAL, Eutelsat, Intelsat) • Major oil/gas,tenergy, banking, and government customers • DIRECWAY products licensed throughout region • Over 15,000 sites in five • Full turnkey program management, installation, countries service, and support • Ten DWAY Service Providers Russia/NIS BELARUS MOSCOW MOLDOVA UKRAINE RUSSIA GEORGIA ARMENIA KAZAKHSTAN AZERBAIJAN TURKMENISTAN UZBEKISTAN COVERAGE KYRGYZSTAN Sirena Cheng TAJIKISTANG-26708 P 03/29/04
  23. 23. Target Market Sirena ChengMoscow Internet exchange situation Sirena Cheng
  24. 24. Russian Mobile Market in 2005CIS 通信部門地域共同体(RSS: Regional Commonwealth in the field ofCommunication/ http://www.rcc.org.ru/en/index.htm)資料 Sirena Cheng WiMAX CPE ASP Curve Drops Sirena Cheng
  25. 25. How to success in Russia Market ? Top 10 things must do in Russia branch in 2H of 2007Working items period Target date1. To build Russian website 8 weeks2. To make Russian version company profile, 4-6 weekscatalogues and sales kit etc.3. To make Russian sales/marketing plan 2 weeks4. To offer the sales training and to understand 1 weekRussian employees’ past experiences to start thesales activities.5. To attend the local exhibitions, seminars and toexecute road show to build good businessrelationship in Russia.6. To announce Edimax product news in Russiamarket7. To find out the custom importing process, taxand the related regulation in Russia. Sirena Cheng
  26. 26. D-Link Russian website Sirena Cheng Sirena Cheng
  27. 27. Sirena ChengSirena Cheng
  28. 28. Sirena ChengSirena Cheng
  29. 29. Sirena ChengInterop Moscow May 30-31, 2007 Sirena Cheng
  30. 30. Interop Moscow Forum Hall Sirena Cheng Thanks you! / Спасибо! Q&A Sirena Cheng

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