Fibre to the Home: Taking your life to new horizons!

Chris Holden, President of the Board, FTTH Council EuropeHartwig Tauber, Director General, FTTH Council EuropeRoland Montagne, Director Telecoms BU, IDATE

Press Conference Milan 9 February 2011Press Conference - Milan, 9 February 2011

FTTHFTTH Council Europep

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FTTH Council Europe

Our Vision: A sustainable future enabled by Fibre to the Home

Our MissionOur Mission• To accelerate FTTH adoption through information and

promotion in order to enhance the quality of life, contribute t b tt i t d i d titito a better environment and increased competitiveness

OrganisationOrganisation• Founded in 2004, non-profit industry organisation• More than 150 member companies

Europe in the slow lane?Europe  in the slow lane?ar

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FTTH Global panorama end-2010 – Total subscribers

3.9 M 45 M8.8 M

4.2 M

0.3 M

… and FTTH continues to grow

FTTH Global Ranking – end 2010

FTTH European Ranking – end 2010

FTTH European Ranking – end 2010Highest progressions (>1%) in the European Ranking during 2H2010

Source: IDATE for FTTH Council Europe, February 2011Note: FTTH/FTTB definitions by the Global FTTH Councils

► Latvia +4.4%

g est p og ess o s ( %) t e u opea a g du g 0 0

► Portugal

► Lithuania

+2.2%

+2%► Lithuania

► Slovenia

+2%

+1.8%

► Russia +1.6%

► Norway

► Turkey

+1.6%

+1.26%► Turkey 1.26%

FTTH in Europe - end 2010Source: IDATE for FTTH Council Europe, February 2011

> 3.9 million FTTH/B subscribers(+ 4.2 million in Russia)

Europe, February 2011Note: FTTH/FTTB definitions by the Global FTTH Councils

> 22.3 million Homes Passed(1)

(+ 10 6 illi i R i )(+ 10.6 million in Russia)

Average penetration rate : 17,5%

Growth rates 2H2010 (excluding Russia)Growth rates 2H2010 (excluding Russia)+18% FTTH/B Subscribers (vs 19% 1H2010)+23% FTTH/B Homes Passed (vs +5% 1H2010)

Expanding FTTH/B coverage is still an issue for players

(1) Our figures have already been processed to avoid overestimating homes passed when one home is passed by several operators in some countries.

Countries with more than 200,000 subscribers

4 500 000 Market ith still a

3 500 000

4 000 000

4 500 000 Market with still a huge potential

2 500 000

3 000 000

Stable market, New entrant,

1 000 000

1 500 000

2 000 000 waiting for further deployments

New entrant, dynamic player

0

500 000

1 000 000

Source: FTTH European Ranking, IDATE for FTTH Council Europe, February 2011N t FTTH/FTTB d fi iti b th Gl b l FTTH C il

Russia Sweden France Italy Lithuania Norway Netherlands Slovakia Turkey

December 2008 December 2009 December 2010

Note: FTTH/FTTB definitions by the Global FTTH Councils

FTTH homes passed in Europe – mid-2010

Countries > 1 million FTTH/B Homes Passed at end 2010

12 000 000

Countries > 1 million FTTH/B Homes Passed at end 20102 players covering same buildings in

8 000 000

10 000 000

Beeline/Kyivstar HP

15 cities

2 000 000

4 000 000

6 000 000 Beeline/Kyivstar HP

0

2 000 000

Russia France Italy Ukrainia Portugal Sweden Lithuania Bulgaria

Source: FTTH European Ranking, IDATE for FTTH Council Europe, February 2011Note: FTTH/FTTB definitions by the Global FTTH Councils

December 2008 December 2009 December 2010

Note: FTTH/FTTB definitions by the Global FTTH Councils

FTTH Panorama 

Methodology & Conclusions

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FTTH Panorama - Methodology

• Deliverable:• Deliverable:• Comprehensive overview of FTTH deployments in

Europe 36 (EU 27 + Norway, Iceland, Switzerland, p ( y, , ,Andorra, Russia, Ukraine, Croatia, Serbia and Turkey) and in 14 Middle East countries

M th d l• Methodology:• Desk research

Direct contacts with FTTH players• Direct contacts with FTTH players• Information exchange with FTTH Council Europe

membersmembers• Direct contacts with IDATE’s partners in several

European countries

FTTH Definitions

INCLUDEDINCLUDED• FTTHome – Complete Fibre Path to Home

– in-building cables: house copper or fibre or wireless

• FTTBuilding – Fibre to Apartment/Office Building– in-building cables: building copper or fibre regarded as a transitional stage to

FTTH

• Both defined in global FTTH Councils, FTTH Definitions Document www.ftthcouncil.eu/documents/studies/FTTH-Definitions-Revision_January_2009.pdf

NOT INCLUDED• FTTCurb / FTTNode – Fibre to Street Cabinet

– distribution and drop cables using telco copper (DSL) or new copper– categorised as DSL technologies.

FTTH players►3 main categories involved in FTTH/B deployments►3 main categories involved in FTTH/B deployments

Municipalities & Utilities

Alternative operators / MSOs

European incumbentsUtilities

More numerous

operators / MSOs

Most dynamic

incumbents

Challenged on BB

Local deployments only National or local deployments

National deployments

8% of total FTTH/B Homes Passed at

end 2010

73% of total FTTH/B Homes Passed at

end 2010

19% of total FTTH/B Homes Passed at

end 2010end 2010 end 2010 end 2010

• Decrease in Homes Passed by Municipalities & UtilitiesFTTH Players

y p• Projects getting aggregated in Northern European countries:

• Stedenlink in Netherlands, Netixopen in Finland, , p ,Waoo in Denmark

• Several objectives• Several objectives• Knowledge sharing• Improvement in operating FTTH/B networks• Improvement in operating FTTH/B networks• Respect of coverage targets

Branding & mutualisation of services offers to end• Branding & mutualisation of services offers to end users (Waoo)

FTTH Technologies• In December 2010, the main architecture deployed is still FTTB, p y

• Regarding technology, players have mainly chosen Ethernet

• MDUs are still the principal target for Fibre deployments in Europe

FTTH 37% 34% 33%

Main architecture deployed(homes passed segmentation) Dec 2010 June 2010 Dec 09

FTTH 37% 34% 33%FTTB 63% 66% 67%

Main technology deployed D 2010 J 2010 D 09

PON 27% 26% 24%Ethernet 73% 74% 76%

gy p y(homes passed segmentation) Dec 2010 June 2010 Dec 09

MDU 77% 76% 75%

Dwellings deployed(homes passed segmentation) Dec 2010 June 2010 Dec 2009

SDU 23% 24% 25%

Main conclusions for FTTH

►Steady growth of European FTTH/B market (+40% in subscribers Y2010)►Steady growth of European FTTH/B market (+40% in subscribers Y2010)

►Future growth to be led by Eastern European countries (incl. Russia)

►Turkey new entrant in the European Ranking►Turkey new entrant in the European Ranking

• Italy, France & Russia are no more the only large economies in the EU ranking

►European incumbents getting more concerned by FTTH

• Nearly all have a plan for FTTH or are deploying

• 73% of Homes Passed by Alternative operators & MSOs

►National plans take over local initiatives and trigger players’ tannouncements

►FTTH benefits are not perceived by Consumers / Businesses

Main challenges for FTTH

►FTTH benefits are not perceived by Consumers / Businesses Especially in Europe: low penetration rate!

- At mid 2010: Japan at 39%, USA at 34%- And Europe at end 2010: 17.5% ... France: 8% !!

►Property Managers: interest to arouseIn Europe: 63% of FTTB Homes Passed at end 2010In Europe: 63% of FTTB Homes Passed at end 2010

►FTTH business: sometimes too complex to run for Municipalities/Utilities Main Danish regional Power Utility (Dong Energy) resold its FTTHMain Danish regional Power Utility (Dong Energy) resold its FTTH

activity to the incumbent TDC

►Co-investment: the key for large scale national roll-out?SAnnouncements by main players in Italy, Switzerland, France

One objective: covering non dense areas

(1) subscribers/Homes Passed

What next?ar

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European Region FTTH Forecast

35000

25665

32604

30000

35000

0s

1943020000

25000

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lds,

000

8265

11065

14476

10000

15000

nnec

ted

Hou

18923509

5519

0

5000

Con

Source: Heavy Reading for FTTH Council Europe, February 2011

02007 2008 2009 2010 2011 2012 2013 2014 2015

Note: Households connected directly to fibre (FTTH) and apartments connected via basement fibre termination (FTTB)

Europe in Context: the Race to Fibre MaturityCountry 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

After 2020Country 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2020

Japan

Korea

China

Taiwan

Australia

India

USA

Canada

BrazilBrazil

Russia

France

Germany

Italy

UK

SpainSweden

Netherlands

Portugal

S H R di f FTTH C il E F b 2011

Portugal

Switzerland

Denmark

EUROPEAN UNION

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020Source: Heavy Reading for FTTH Council Europe, February 2011

Summary

Over 32m households connected to FTTH/B at end-2015 in countries Over 32m households connected to FTTH/B at end-2015 in countries covered by this forecast = about 11% of all homes in the region

In the EU only, the total will touch 19m, or 10% of all homes Seven of the 21 nations analyzed should achieve “fibre maturity” (20%

penetration) by 2015: Slovenia, Sweden, Denmark, Norway, Finland, Portugal and Slovakia. Five more should reach this figure by 2016

Seven of the 21 nations still under 10% penetration at end-2015: Greece, UK, Poland, Belgium, Spain, Germany, Italy and Czech Rep

Unlike most other regions, incumbents are not currently the major g , y jproviders of FTTH, and this will remain the case

The most striking feature of the market through the next five years will be its fragmentation across every dimension

European Commission Digital Agenda: 50% of European households connected to 100 Mbps by 2020

be its fragmentation across every dimension

Thank you for your attention!y y

www.ftthcouncil.eu