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Fiber-To-The-Home (FTTH)An Overview
Ehrhardt & Ehrhardt
January 2003
Website: www.ehrhardt2.com
Merger and Acquisition Specialists in IT, Telecom and Media| Proprietary and Copyright | Ehrhardt & Ehrhardt | 1
Merger and Acquisition Specialists in IT, Telecom and Media| Proprietary and Copyright | Ehrhardt & Ehrhardt | 2
Contents
• Background
• Introduction
• Business Issues
• Business Models
• The Market
• Products & Services
• Technology
• Case Studies
• Finance
• Glossary
Merger and Acquisition Specialists in IT, Telecom and Media| Proprietary and Copyright | Ehrhardt & Ehrhardt | 3
Background
Merger and Acquisition Specialists in IT, Telecom and Media| Proprietary and Copyright | Ehrhardt & Ehrhardt | 4
Background
• Objectives
• Approach Framework
Merger and Acquisition Specialists in IT, Telecom and Media| Proprietary and Copyright | Ehrhardt & Ehrhardt | 5
Background
Objectives
Merger and Acquisition Specialists in IT, Telecom and Media| Proprietary and Copyright | Ehrhardt & Ehrhardt | 6
We aim to understand the market for Fiber To The Home
BACKGROUND: OBJECTIVES
Objectives
To understand:
• Market drivers for Fiber To The Home (FTTH)– How the market has developed
– Where the market is today
– What future trends we see
• What are the overall business drivers for implementing FTTH solutions.
• Where are operators and service providers in implementing these solutions.
Merger and Acquisition Specialists in IT, Telecom and Media| Proprietary and Copyright | Ehrhardt & Ehrhardt | 7
Background
Approach Framework
Merger and Acquisition Specialists in IT, Telecom and Media| Proprietary and Copyright | Ehrhardt & Ehrhardt | 8
Framework FTTH Market
Analysis
Framework FTTH Market
Analysis
FTTH BusinessFTTH Business FTTH Products & ServicesFTTH Products & Services
FTTH CasesFTTH CasesFTTH TechnologyFTTH Technology
Approach
BACKGROUND: APPROACH FRAMEWORK
The framework we used for our FTTH analyses
• Description of the technology and technological issues of FTTH
• Description of the technology and technological issues of FTTH
• Describing the business issues, business models and market potential of FTTH
• Describing the business issues, business models and market potential of FTTH
• Description of the products and services that become possible with FTTH
• Insight into the uptake of products & services
• Description of the products and services that become possible with FTTH
• Insight into the uptake of products & services
• Description of FTTH implementations around the world
• Insight into the financials of a case
• Description of FTTH implementations around the world
• Insight into the financials of a case
Merger and Acquisition Specialists in IT, Telecom and Media| Proprietary and Copyright | Ehrhardt & Ehrhardt | 9
Introduction
Merger and Acquisition Specialists in IT, Telecom and Media| Proprietary and Copyright | Ehrhardt & Ehrhardt | 10
Introduction
• Understanding Broadband
• Trends
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Introduction
Understanding Broadband
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INTRODUCTION: UNDERSTANDING BROADBAND
What is bandwidth?
Bandwidth refers to the throughput capacity of a given communications network
• Historically the term bandwidth was used by radio communication engineers to refer to the amount of radio communications spectrum available or necessary for carrying an (often analog) signal.
– For example a telephone call uses four KHz of bandwidth while a television signal uses eight KHz*.
• In relation to digital transmission of data, the amount of bandwidth between the sender and the recipient determines how much data can be transmitted per unit of time. It’s measured in bits per second (bps) or Kbps, Mbps, Gbps, etc.
– A typical residential modem for example, may transmit in the range of 28.8 Kbps through to 56 Kbps.
* Six in the US
Merger and Acquisition Specialists in IT, Telecom and Media| Proprietary and Copyright | Ehrhardt & Ehrhardt | 13
INTRODUCTION: UNDERSTANDING BROADBAND
What is broadband?
Broadband is a transmission capacity of more 200 kbit/s
64 kbit/s 144 kbit/s 200 kbit/s ? Gbit/s
The term broadband has become a moving target!The term broadband has become a moving target!
Merger and Acquisition Specialists in IT, Telecom and Media| Proprietary and Copyright | Ehrhardt & Ehrhardt | 14
INTRODUCTION: UNDERSTANDING BROADBAND
The more advanced applications we want, the more bandwidth we need
Browsing144 Kbps
Music CDs160 Kbps
Music
½ Screen Video300Kbps
TV Shows
Full Screen600Kbps – 1.5Mbps
Live Events Pay Per View
High Resolution 6-8 Mbps
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INTRODUCTION: UNDERSTANDING BROADBAND
Different Technologies Are More or Less Suited to Particular Segments and Environments
• HDSL• Fibre to the curb• Leased Line
• SDSL• Fixed
wireless• Fibre to the
curb
• ADSL• Cable • Broadband
Satellite• UMTS• Fibre to the home
• SDSL • Fixed
wireless• UMTS
• ADSL• Cable• Broadband
Satellite• UMTS• DTT • fiber to the
neighborhood
• ADSL• Fixed wireless• Broadband
Satellite • DTT
Corporate
SME
Residential
Dense Urban Suburban Rural
• HDSL• Leased Line
• HDSL• Fixed Wireless
• SDSL• Fixed Wireless
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INTRODUCTION: UNDERSTANDING BROADBAND
Wired access technologies
Dia
l-up
ISD
N
Voice T
eleph
ony
Modem
acce
ss
ADS
L Li
te
Video
Confer
encin
g
HD
SL
ADS
L
High sp
eed
Inter
net a
cces
s
Full m
otion
vide
o
Applic
ation
Ser
vice p
rovid
ing
Cable modem
DPL Fibe
r
VDSL
Corporate
Small /MediumEnterprise
Residential
10 Mbit/s 100 Mbit/s100 Kbit/s 1 Mbit/s10 Kbit/s
FiberTwisted pair Power line Coax cable based
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INTRODUCTION: UNDERSTANDING BROADBAND
Wired access technology problem. “The last mile bandwidth bottleneck”
Personal computing networks (e.g networks in the office or networks at home)
Bandwidth bottleneck(the last mile, or first mile it’s sometimes called is
the biggest problem today for broadband services)
National backbones(the networks normally show an enormous amount of
over capacity, sometimes only 10% is used)
Merger and Acquisition Specialists in IT, Telecom and Media| Proprietary and Copyright | Ehrhardt & Ehrhardt | 18
INTRODUCTION: UNDERSTANDING BROADBAND
Characteristics of some wired access technologies
Technology Definition Bandwidth Advantages Disadvantages
ADSL
Asymmetric Digital Subscriber Line
Transmission of voice and data over copper
• Up to 8 Mbit/sdownstream
• Up to 1.5 Mbit/supstream
• Makes full use of existing copper
• Ideal for allways on webbrowsing
• Good platform for voice
• Limited video capability
• Distance limitation
• Limited upstream bandwidth
VDSL
Very high rate Digital Subscriber Line
Transmission of video, voice and data over copper
• Up to 52 Mbit/sdownstream
• Up to 26 Mbit/supstream
• Supports broadcast video, Video on Demand, Interactive TV
• Allways on network for voice, video and data
• Requires short distance
• Non standard products and technology
• Limited scalability
HFC
Hybrid FibreCoax
Transmission of video, voice and data over coaxial and fibrecable
• 10 to 42 Mbit/sdownstream
• Up to 2 Mbit/supstream
• Supports broadcast video, Video on Demand, Interactive TV
• Allways on network for voice, video and data
• Voice requires special engineering
• Difficult to guarantee speed
A Pure fibre access network would solve most of the scalability and distance disadvantages, but is still expensive!
A Pure fibre access network would solve most of the scalability and distance disadvantages, but is still expensive!
Source:Myrrill Lynch
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INTRODUCTION: UNDERSTANDING BROADBAND
Although Fiber is still expensive, its cost will go down
Low cost
High cost
High scalability
Low scalability
Fiber optics
ADSL
CoaxialISDN
Analog
VDSL
Price/performance of access technologies
Broadband Technology Cost Per Household 1999-2005E
$USD
/Hou
seho
ld (e
st)
0
500
1,000
1,500
2,000
2,500
99 00E 01E 02E 03E 04E 05E
Fiber
ADSL Upgrade
Cable Modem Upgrade
Year
Note: Technology will vary depending on existing infrastructure and urban versus suburban locations. Costs are relative numbers and do not include customer premise equipmentSource: Ovum: Access@Ovum, 10/00; executive interviews; Ernst & Young and Cap Gemini Ernst & Young analysis
Merger and Acquisition Specialists in IT, Telecom and Media| Proprietary and Copyright | Ehrhardt & Ehrhardt | 20
INTRODUCTION: UNDERSTANDING BROADBAND
Advantages of using fiber for the last mile
• FTTH can offer a very large bandwidth starting from 10 Mbitsup to almost no limits
– Upgrade will be very easy
• As a passive network, there are no active components from the Central Office to the end user minimizing the network maintenance cost and requirements
– Immunity to electrical interference
– Constant error-free transmission
– Long distance between repeaters (>40’000 feet)
• Optical Fiber is reliable, scalable, and secure and has lower cost for communication circuit.
• There are three broad stages in the evolution of fiber as it gets closer and closer to the home:
– FTTN: fiber to the neighborhood - brings a fiber to a small geographic area delivering the service to 100 or more house
– FTTC: Fiber to the curb - brings the fiber closer to a small group of homes or businesses
– FTTH: Fiber to the home - extends the fiber directly into the home
• Although the major obstacle to the fiber propagation has been the price is getting lower but it will be a reality only inareas of high population density
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INTRODUCTION: UNDERSTANDING BROADBAND
Capital spending is shifting from transport to broadband local access
Global Telecom Equipment Spending 1999-2003E
3,000
6,000
9,000
12,000
15,000
18,000
21,000
24,000
27,000
30,000
0
Transport Fiber and Cable
Access Data and Broadband
10,134
7,835
12,15713,411 13,616
18,605
14,842
24,703
16,029
30,743
99 00E 01E 02E 03E
TransportFiber and
CableCAGR
12%
Data andBroadband
AccessCAGR
41%
$USD
(Mill
ions
)
For the first time, capital investment in local access broadband capacity will exceed transport investment.
For the first time, capital investment in local access broadband capacity will exceed transport investment.
Source: Sanford Bernstein: Telecom Equipment: 2001 Carrier Equipment Spending to Decelerate 9/00,; IDC: Service Provider Gigabit and Terabit Routers 1999-2005 forecasts, 6/00,
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INTRODUCTION: UNDERSTANDING BROADBAND
Example of a value chainC
onte
nt c
reat
ors
/ rig
hts
owne
rs
Con
tent
Pac
kage
rsISP (portals)
TV (channels)
Others (media)
Telco (brands)
FTTH
Housing/Hosting
End
Use
r(R
esid
entia
l, S
ME
, Ind
ustry
)
LocalHousing
Corporations
Local Municipalities
OwnershipAssociations
Property OwnersNetwork Providers
Real estateDevelopers
Bank & Investors
ActiveInfrastructure
providers
PassiveInfrastructure
Providers
FTTHService
Management
Con
tent
Pro
vide
rs
CONTENTSERVICES
INFRA-STRUCTURE
CUSTOMERACCESS
Merger and Acquisition Specialists in IT, Telecom and Media| Proprietary and Copyright | Ehrhardt & Ehrhardt | 23
INTRODUCTION: UNDERSTANDING BROADBAND
Examples of parties in the value chain
End UsersAccess Providers Service Providers
Content Providers
NBC Internet
Infrastructure VendorsContent
Packagers
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INTRODUCTION: UNDERSTANDING BROADBAND
Why broadband matters
• Most people today connect to the internet over a phone line, typically using a modem with a speed of 28.8 or 56 kbit/s. This narrowband communication is slow.
• An estimate of one third of user time online is spent waiting, reducing the convenience and ease of use.
• Broadband services offer significantly faster data rates and always onconnections. As we move to a broadband economy we can therefore expect:
Higher connectivity
– People tend to spend more time online with a broadband connection
New value added services
– Broadband makes possible new services not feasible over narrowband
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INTRODUCTION: UNDERSTANDING BROADBAND
What use is all that bandwidth?
Downloading A music CD containing 660 Mbytes of data
• 56 Kbit/s PC Model 26.2 Hours
• 500 Kbit/s Cable Modem 2.93 Hours
• 1024 Kbit/s ADSL Modem 1.43 Hours
• 10 Mbit/s Fiber-To_The-Home connection 8.8 Minutes
• 100 Mbit/s Fiber-To-The-Home connection 53 Seconds
• 1 Gbit/s Fiber-To-The-Home connection 5.3 Seconds
Download speeds
Although the bandwidth of 1 Gbit/s seems immense, the next generation will probably find use for it!
Although the bandwidth of 1 Gbit/s seems immense, the next generation will probably find use for it!
Merger and Acquisition Specialists in IT, Telecom and Media| Proprietary and Copyright | Ehrhardt & Ehrhardt | 26
0 10 20 30 40 50 60 70 80 90 100
Browsing
Downloading software
Researching purchasing made online
Buying consumer products
Chat
Using online financial services
Playing games
Buying software
Time spend online (hours per week)
INTRODUCTION: UNDERSTANDING BROADBAND
Comparison of time spend online
The two factors of higher speed and always on enhance the user experience significantlyThe two factors of higher speed and always on enhance the user experience significantly
BroadbandNarrowband
Source: Broadband changes eveything, McKinsey 2000
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• Many countries have opened their markets to competition, leading to substantial infrastructure investment, declines in prices, greater service diversity and product innovation. Markets have become more contestable.
• There is a relative increase in the data traffic as compared with voice traffic and digitisation of communication networks. This has facilitated a change in the design philosophy of such networks, away from fixed path circuit switching, towards variable path packet switching.
• The traditional consortium approach to cable investment and control is being eroded. In many cases independent carriers have end-to-end customer access arrangements thus bypassing the need for inter-carrier settlements.
• New wholesale markets for communications capacity have emerged. Bandwidth has become a tradable commodity. There are two kinds of bandwidth market intermediaries:
Bandwidth exchanges
– Facilitates contact between buyers and sellers of bandwidth
Bandwidth brokers
– Operates their own facilities to which buyers and sellers connect their networks.
• Municipalities and/or other utilities have also entered the communications business either directly or by having facilities managed on their behalf. Examples of this can be found all over the world (e.g Stokab in Sweden and Palo Alto in the US).
TrendsINTRODUCTION: TRENDS
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INTRODUCTION: TRENDS
Bandwidth paradigm shift
The Legacy The Transition The Bandwidth cloud
Copper Wireless
Telephony Television
• The traditional model was based on the vertically integrated supply of what was essentially a single product based on an exclusive relationship between service, supply and end-use.
Copper Wireless Coax
Telephony Television Internet
• More access technologies arrived and many access technologies are capable of delivering the same services*.
CopperCoax
Wireless
SatelliteFiber
• All access technologies are working on a packet based protocol (probably IP). As networks evolve these underlying technologies will become more and more invisible.
TelephonyTelevision
Internet
* Offcourse there are more access technologies than mentioned in this example.
Access will become more and more transparent!Access will become more and more transparent!
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Broadband Access Technologies
Business Sphere Public Sphere
Personal security
Disaster information system
Information services for Pagers:NewsWeather forecastsFinancial information
Electronic newspapersElectronic shoppingTelevised shoppingHome schooling system
Portable televisionInteractive televisionInteractive gamesVideo-on-demand
Karaoke-on-demandMusic-on-demand
Video-based
Information services
DatabaseE-mail
Video-conferencing
Mobile Videophone Traffic
information system
Private Sphere
Remote supervision system
INTRODUCTION: TRENDS
Broadband applications will become less dependent of broadband access technologies
Source: “W-CDMA Makes Possible a World of Mobile Multimedia”, www.nttdocomo.com.
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Business issues
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Business issues
• The who goes first issue
• The convergence issue
• Regulatory issues
Merger and Acquisition Specialists in IT, Telecom and Media| Proprietary and Copyright | Ehrhardt & Ehrhardt | 32
Business issues
The who goes first issue
Merger and Acquisition Specialists in IT, Telecom and Media| Proprietary and Copyright | Ehrhardt & Ehrhardt | 33
BUSINESS ISSUES: THE WHO GOES FIRST ISSUE
FTTH is one of the few races where the gold medal might not be for the occupant of the first position!
High costs combined with high uncertainties and high competitiveness create a first mover disadvantage!
High costs combined with high uncertainties and high competitiveness create a first mover disadvantage!
Which customers should I target?
Which services should I
introduce? At what price?
How soon will technological
advances make my active components
obsolete?
What alliances should I develop?
How soon will CPE be available and
affordable?
How and who to finance the last
mile?
What technical standards will
emerge?
Merger and Acquisition Specialists in IT, Telecom and Media| Proprietary and Copyright | Ehrhardt & Ehrhardt | 34
Business issues
The convergence issue
Merger and Acquisition Specialists in IT, Telecom and Media| Proprietary and Copyright | Ehrhardt & Ehrhardt | 35
BUSINESS ISSUES: THE COVERGENCE ISSUE
FTTH is driving Convergence, but…
Entertainment Technology
Information Technology
Communication Technology
Age >100 years >100 years 30 years
Change Change from real to virtual
Changing from fixed to mobile
Changing from PC to network centric
Focus Physical distribution & Copyrights
Voice, Reliability and Capacity, standards
Internet, openness, scalability
Storage Local, non copyablephysical media
N/A
(Voice-mail)Network-servers
Totally Different Business Paradigms Will Not Make Convergence Easy.Totally Different Business Paradigms Will Not Make Convergence Easy.
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BUSINESS ISSUES: THE COVERGENCE ISSUE
Convergence also challenges all players to redefine their role in the value chain
• Companies can be in one or several roles in this business system.– Some major players cover larger parts, while others are more focused.
• Strategic moves will happen (vertical integration).– Partnerships, strategic alliances, mergers and acquisitions will continue to happen.– No one can survive alone in this environment.
• Alternative and complementing distribution alternatives must be considered.– Accessing the same content via fixed, wireless and satellite is an increasingly compelling customer proposition (Multi channel access)
Play
er
Studios
• TV studios
• Web pages
• User created content
• TV studios
• Web pages
• User created content
TV Authoring Tools
• Traditional Authoring Tools:– Avid
• Traditional Authoring Tools:– Avid
Content Creation
Content Aggregation
Web page creators
Content Authoring Tools
Distribution
Interactive Authoring Tool Providers
Interactive Application Designers
Interactive Designers
Operators Middleware Providers
Conditional Access
End User Interface
Channels
• Channels:– CNN
• Portals BBC.co.uk
• Channels:– CNN
• Portals BBC.co.uk
• Software developers
• Software developers
• Developers of interactive applications
• Developers of interactive applications
• Application design houses to customiseservices
• Application design houses to customiseservices
• FTTH providers:– For TV
– For PC
– Telephony
• FTTH providers:– For TV
– For PC
– Telephony
• Middle software manu-facturers
• Middle software manu-facturers
• Conditional access software manu-facturers
• Conditional access software manu-facturers
• Set top box manu-facturers
• TV manu-facturers
• PC manu-facturers
• Set top box manu-facturers
• TV manu-facturers
• PC manu-facturers
Interactive Enablers
Portals PC manufacturersBroadband ISPs
Players must select which roles to take in the value chain.Players must select which roles to take in the value chain.
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Business issues
Regulatory issues
Merger and Acquisition Specialists in IT, Telecom and Media| Proprietary and Copyright | Ehrhardt & Ehrhardt | 38
A multitude of international, national & local regulations must be taken into consideration
BUSINESS ISSUES: REGULATORY ISSUES
• .Backbone- Internet Highway
Backbone- Internet Highway
Metropolitan Area Network (MAN)- Middle Mile / City Loop
Metropolitan Area Network (MAN)- Middle Mile / City Loop
Access- Last MileAccess- Last Mile
• Large Businesses
• SOHO’s
• Residential Customers
Content Caching
• Fibre Optic Lines– DWDM
• Satellite Systems
• Point to Point Microwave
• Sonet/SDH Rings
• Gigabit Ethernet
• 10 GigE
• Copyright and intellectual property laws
FTTB
FTTH
• Ownership, Interconnect, Access & digging rights
• Operating licenses
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Business Models
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Business Models
• Business Model Parameters
Merger and Acquisition Specialists in IT, Telecom and Media| Proprietary and Copyright | Ehrhardt & Ehrhardt | 41
Business Models
Business Model Parameters
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The Business issues that have to be tackled are...BUSINESS ISSUES: BUSINESS MODEL PARAMETERS
• Market Segmentation.– Assess and define optimal mix of client-base (residential, SME, corporate), in line with physical FTTH-site roll-
out (Greenfield, renewal and existing).
• Value chain positioning– Choice of roles in the FTTH value chain (access only, service provisioning and full service operator).– No one can survive alone in this environment.
• Content provisioning strategy– Buy and/or make content
• Products & services roll-out map– Make a selection of what when to roll out
• Ownership “first mile”– Assess and decide upon ownership (capex/opex) of “first mile”, from local municipalities, housing corporations
to private companies
• FTTH technical design– Assess and define required FTTH technical architecture: single mode, fiber only, passive optical network, hybrid
solutions, etc
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BUSINESS ISSUES: BUSINESS MODEL PARAMETERS
Market Segmentation
Residential opportunities including SOHO
FTTH could become a commercially viable option if implemented on new local sites (Greenfield), provided no other alternative physical infrastructure is constructed, and alternative service providers are willing to purchase fiber-connectivity on a wholesale basis
Greenfield
FTTH could become a commercially viable option if implemented on new local sites (Greenfield), provided no other alternative physical infrastructure is constructed, and alternative service providers are willing to purchase fiber-connectivity on a wholesale basis
Renewal
FTTH could become a commercially viable option if multi-tenant dwellings in highly dense populated urban areas are targeted; given possible coax/copper penetration, a twofold approach is advised: offer unique services (VOD), and/or consider strategic partnerships with existing infrastructure/service providers (ADSL).
Existing
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One has to determine what position to take in the value chain
BUSINESS ISSUES: BUSINESS MODEL PARAMETERS
Con
tent
cre
ator
s / r
ight
s ow
ners
Con
tent
Pac
kage
rsISP (portals)
TV (channels)
Others (media)
Telco (brands)
FTTH
Housing/Hosting
End
Use
r(R
esid
entia
l, S
ME
, Ind
ustry
)
LocalHousing
Corporations
Local Municipalities
OwnershipAssociations
Property OwnersNetwork Providers
Real estateDevelopers
Bank & Investors
ActiveInfrastructure
providers
PassiveInfrastructure
Providers
FTTHService
Management
Con
tent
Pro
vide
rs
CONTENTSERVICES
INFRA-STRUCTURE
CUSTOMERACCESS
Merger and Acquisition Specialists in IT, Telecom and Media| Proprietary and Copyright | Ehrhardt & Ehrhardt | 45
The depth of the service is a strategic choiceBUSINESS ISSUES: BUSINESS MODEL PARAMETERS
Depth of the service provided
Business model is focused around offering access to broadband services, provided by other parties (content and/or service providers). revenue-drivers are based upon initial set-up fee and monthly access subscription revenues.
Infrastructure access
Business model is focused upon a combination of access and value added services for both service providers and end-consumers (subscriber management, content management, housing/hosting, billing, etc). revenue-drivers are based upon initial set-up fee and monthly value added services revenues.
Access and Service
Provisioning
Business model encompasses total ownership of customer, and as aconsequence is build up of access, service and content revenues from both residential end-users as well as content/service providers.
Fully Integrated Services
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Television
“Open Garden”-model
‘
ExclusiveBroadbandOfferings
“Walled Garden”-model
“Flower Garden”-model
Internet
Telephony
End-user FTTH-Company
Content positioning modelBUSINESS ISSUES: BUSINESS MODEL PARAMETERS
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Content positioning model explainedBUSINESS ISSUES: BUSINESS MODEL PARAMETERS
Possible content “Gardens”
So-called “open garden” model does not restrict the end-user access to information and/or services. Standardisation will become an serious issue. Model requires critical mass, in order to work successfully. Operator loses (control of) certain cash-flows, since its role is reduced to providing access, and optional subscriber services.
Open Garden
Best of both worlds model, combining preferential high-quality, easy-to-use value-added broadband services to end-users, thereby not restricting access to other sources and services. Focus is to retain customers within the “flower-garden”, to ensure revenue-flows.
Flower Garden
So-called “walled garden” model implies exclusivity towards content & service Providers (revenue-sharing Deals), as well as limited access to content & services from the end-user point-of-view. This approach allows rapid roll-out, the delivery of quality of service, and solves standardisation issues (set-top boxes, etc).
Walled Garden
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The Business Model WebBUSINESS ISSUES: BUSINESS MODEL PARAMETERS
Access OnlyAccess Only
Access + ServicesAccess + Services
”Open Garden””Open Garden”
”Flower Garden””Flower Garden”
Integrated ServicesIntegrated Services
”Closed Garden””Closed Garden”
FTTH business model web
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Most of the time products and services get launched in a certain order
BUSINESS ISSUES: BUSINESS MODEL PARAMETERS
Revenue margins Motivation
• Network roll-out drives market share
• Services roll-out drives revenues and margins
• A substantial subscriber base is needed to get the interest of content suppliers, but you need interesting content to get subscribers and to reduce churn (chicken-egg dilemma)
• Bredband, eBiscom and HanseNet use this roll-out scenario. HanseNet will start delivering VoD services in Q4 2001. The others have already started.
Time
Broadband access
Access revenues
Network cost
Telco services
Flat rate revenues
Interconnection cost
TV services (VoD)
TV revenues
Content cost
Portal services
Advertising/e-commerce revenues
Content cost
Community services
Usage revenues
Application cost
Service
Revenue drivers
Costs drivers
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Ownership passive
infrastructure including
telecomhouse
Commercialoperators
Propertydevelopers
Housingcorporations
Ownership active infrastructure
Government /local
municipality
Service Providers
BUSINESS ISSUES: BUSINESS MODEL PARAMETERS
Ownership scenario’s first mile
Service Providers Service Providers Service Providers
Combinations are possible
Combinations are possible
Residential End UsersUsage fiber infrastructure
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Bredband (Sweden)• Drive long-term Company value by owning
the end-user and maximizing available services
• Bredband branded access & telephony services
– Leverage company expertise
• Bredband co-branded media & entertainment services
– Bredband to provide content providers with QoSdistribution, billing & support services
– The key is focus and execution
Stokab (Sweden)• Stokab is building and operating a fiber-
optic network, on an operator-neutral basis.
• Stokab acts as a wholsaler, offering dark fiber to operators that provide services to business and residential customers. The customers must provide the electronic equipment necessary for transmission of telecommunications traffic.
• Help ensure that insufficient network capacity does not impede the establishment of new businesses on the telecom market.
e-Biscom (Italy)• eBiscom has two primary ventures are
Metroweb and Fastweb
• Metroweb is developing a high capacity fiber optic network. Fastweb provides integrated broadband communications services to business and residential customers.
• eBiscom’s objective is to become the leading creator and developer of broadband communications in Europe. It’s pursuing this goal by carrying out projects in several segments of the value chain in telco, Internet and media.
BUSINESS MODELS: BUSINESS MODELS
Examples of initiatives around the world
Palo Alto (US)• Drive long-term Company value by owning
the end-user and maximizing available services
• Bredband branded access & telephony services
– Leverage company expertise
• Bredband co-branded media & entertainment services
– Bredband to provide content providers with QoSdistribution, billing & support services
– The key is focus and execution
Lynchburg (US) Western Integrated Networks (US)
• Main objectives for the site were to efficiently link all computer systems involved in city government, and to allow the sharing of costly resources (such as Internet access, system monitoring, and GIS information).
• To bring the network to local homes, making advanced services available throughout the community
• To secure multiple services & providers, promoting competition for lower-cost services
• Western Integrated Networks is dedicated tobuilding the first "state-of-the-art broadbandnetwork" to every home in each market thatwe serve.
• By building the first broadband network WIN is positioned to be the nation's first true full-service provider of voice, video and data services.
• WIN's market approach will give its customersthe highest quality and choice, the convenience of one-stop shopping, and the value of a bundled service offering.
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BUSINESS ISSUES: BUSINESS MODEL PARAMETERS
Overview Service Levels vis-à-vis Ownership “First Mile”
Fully Integrated
Services
Almere (NL)
Palo Alto (USA)
Stokab (SW)
KPN (NL)
E.Biscom (IT)
Bredbandsbolaget (SW)Western Integrated Services (US)
Planned
Pilot / trialHanseNet (GE)
Operational
Access & Service
ProvisioningFree market
approach
Government-controlled approachProduct-driven approachInfra-
structure Access
Property Developers
Commercial operators
Government / Local
municipality
Housing cooperations / house owners
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Open Garden
Flower Garden
Walled Garden
Almere (NL)Palo Alto (USA)
Stokab (SW)
KPN (NL)Bredbandsbolaget (SW)
Government / Local
municipality
Commercial operators
Housing cooperations / house owners
Property Developers
Planned
Pilot / trial
Operational
Free market approach
Government-controlled approachProduct-driven approach
BUSINESS ISSUES: BUSINESS MODEL PARAMETERS
Overview Acces to Information vis-à-vis Ownership “First Mile”
Western Integrated Services (US)
E.Biscom (IT)
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The Market
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The Market
• Market potential
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The Market
Market Potential
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THE MARKET: MARKET POTENTIAL
Overview Service Levels vis-à-vis Ownership
“First Mile”Per Capita Telecom Expenditures (Euro)
409
686
528
359314
509
682
492
700 728
495
337
551
662
563
724
574
0
100
200
300
400
500
600
700
800
B DK D EL E F IRL I L NL A P FIN S UK USJA
P
Source: Yankee Group, Forrester, EITO
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Products & Services
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Products & Services
• Types of products & services
• Uptake of products & services
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Products & Services
Types of products & services
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PRODUCTS & SERVICES: TYPES OF PRODUCTS & SERVICES
Like other broadband access technologies, FTTH is still focussed on three main channels
Motivation
• The cable company UPC has three mainstream offerings:
– UPC Telephony (Priority Telecom)
– UPC Internet (Chello)
– UPC TV (Digital)
• The telecom company KPN has two mainstream offerings and is starting to trial the third:
– KPN Telephony
– KPN Internet (ADSL) MxStream
– KPN TV (Trial)
• The FTTH company Bredband has three mainstream offerings:
– Bredband Telephony
– Bredband Internet
– Bredband TV
Telephony
FTTH Broadband InternetTelevision
?
The enormous FTTH bandwidth will enable things we cannot imagine yet!The enormous FTTH bandwidth will enable things we cannot imagine yet!
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PRODUCTS & SERVICES: TYPES OF PRODUCTS & SERVICES
Products and services can be developed within each of the channels
Internet Television Telephony
Telephone services
Additional lines
Voice mail
Fax
Hotline
Directory services
ISP services (internet access,
e-mail, chat, hosting)
E-commerce
Streaming audio/video
Video conferencing
Distant learning
Educational services
Healthcare services
Bandwidth on demand
Virtual private networking
Portal services (news)
Games, multiplayer gaming
Application service providing
Music on demand
Games on demand
TV channels (thematic channels)
Video on demand
Personalized television
Interactive television
Especially the on demand services, like VoD, make FTTH so special!Especially the on demand services, like VoD, make FTTH so special!
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PRODUCTS & SERVICES: TYPES OF PRODUCTS & SERVICES
Some examples of Bredband Sweden and eBiscomItaly
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PRODUCTS & SERVICES: TYPES OF PRODUCTS & SERVICES
Most of the time products and services get launched in a certain order
Revenue margins Motivation
• Network roll-out drives market share
• Services roll-out drives revenues and margins
• A substantial subscriber base is needed to get the interest of content suppliers, but you need interesting content to get subscribers and to reduce churn (chicken-egg dilemma)
• Bredband, eBiscom and HanseNet use this roll-out scenario. HanseNet will start delivering VoD services in Q4 2001. The others have already started.
Time
Broadband access
Access revenues
Network cost
Telco services
Flat rate revenues
Interconnection cost
TV services (VoD)
TV revenues
Content cost
Portal services
Advertising/e-commerce revenues
Content cost
Community services
Usage revenues
Application cost
Service
Revenue drivers
Costs drivers
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Products & Services
Uptake of products & services
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PRODUCTS & SERVICES: UPTAKE OF PRODUCTS & SERVICES
Factors affecting the demand for bandwidth
Value of multimedia applications
Need for faster CPE processing
Lower prices
Demand for Bandwidth
Increased availability
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156 151
149
54
71
83 13434
73
134
62
81
0
100
200
300
400
500
600
700
Dial UpHouseholds
BroadbandHouseholds
Minutes PerDay
Change
Total 16%
Net Media1 111%
Internet 61%
CD/Tape 14%
VCR/DVD 15%
Radio -9%
TV -3%
635
547522
0
100
200
300
400
500
600
700
AllHouseholds
Dial UpHouseholds
BroadbandHouseholds
Minutes PerDay
PRODUCTS & SERVICES: UPTAKE OF PRODUCTS & SERVICES
Factors affecting the demand for bandwidth
Daily U.S. Consumption of ElectronicMedia and Entertainment
Breakdown of Media Consumptionin U.S. Households
Broadband is snacking technology. With broadband’s convenience you will eat more.Broadband is snacking technology. With broadband’s convenience you will eat more.
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Increases In Internet Usage Before and After Broadband Access (Hours Per Month)a
2.2
6.8
6.8
7.51.9
1.9
3
3.2
1.3 1.1
0.9
0.6
0
5
10
15
20
25
Portals/ISPs
Entertainment
Community
ConsumerTransactions
News
Others
Average usage while on Narrow-bandMarch 2000
Average usage after switching to Broadband
Sept 2000
15.9 hours
Composition of Additional Online TimeIn Entertainmenta
Sports10% Adult
3%
Others*
12%
Games75%
21.4 hours
Hou
rs
So Far, Broadband Consumers Are Quickly Realizing the Value of Broadband Entertainment...
PRODUCTS & SERVICES: UPTAKE OF PRODUCTS & SERVICES
Entertainment-centric content is the primary beneficiary of increased Internetusage due to broadband.
Entertainment-centric content is the primary beneficiary of increased Internetusage due to broadband.
Source: aMedia Metrix March 2000, September 2000; CGEY Analysis. *Note: Others includes animation, multimedia, television, kids, hobbies, and lifestyle content.
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PRODUCTS & SERVICES: UPTAKE OF PRODUCTS & SERVICES
Consumer content is a crucial piece of the jigsaw
50% • Consumer created content is a crucial element of online programming
• Loyalty
• Traffic growth
• Longer visits
• Why ?
Source: Jupiter Communications
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BACKGROUND / INTRODUCTION: TRENDS
Quotes
“FTTH is the technologist’s dream and the finance director’s nightmare”
“Building FTTH is like builing a six-way driveway to your doorstep…..”
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Technology
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Technology
• Technology
• Architecture
• Active Equipment (CPE + COE)
• Organizational aspects
• Alternatives
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Technology
Technology
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TECHNOLOGY: TECHNOLOGY
Technology: 3 Main Issues
• Architecture of physical infrastructure– Describing the way the ducts, cables, cabinets and houses are configured
• Active equipment (CPE + COE)– Describing the functionality of the active network components at the customers premises
(CPE) and the Central Office Equipment (COE) in the Street Cabinets and Telecom Houses
• Organisational aspects– Describing the related operational aspects to operate and maintain the physical
infrastructure, the active equipment and the services
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Basic PrerequisitesTECHNOLOGY: TECHNOLOGY
• In order to make a big step, in all cases FTTH is considered to be part of the solution
• When comparing the options a greenfield (new building sites) is considered
• All considerations are done for providing services to homes and small offices
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TECHNOLOGY: TECHNOLOGY
Technology Impact
• Selecting an architecture for the physical infrastructure may have a high cost impact on required equipment and operations and viceversa
• The total cost of ownership can only be achieved considering allthree parts integrally
• Choice of architecture will make FTTH a success or a failure
• The existing situation (services and equipment) should take intoaccount
• Needs for a long period of migration
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Technology
Architecture
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• The physical infrastructure should last at least 20 to 40 years and cater for possible unforeseen changes in customer needs and technology developments
• The basic duct system should enable reconfiguration without the need to dig or open up streets
• The infrastructure should be suitable for current services and allow for a wide variety of (partly unknown) new services
• The infrastructure should allow for cheap and easy connection ofthe active equipment
• The infrastructure should have high availability
• The infrastructure should be easy-maintenance, allowing for low operational costs
TECHNOLOGY: ARCHITECTURE
Design Criteria
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Telecom House
Central OfficeEquipment
Street Cabinet
DuctCablewith 1 or 2 fibers
fiber
PatchPanel
Cable with many fibers, normally ring structure
AreaHousing
ActiveEquipment
To national network
TECHNOLOGY: ARCHITECTURE
Design Options - Physical Infrastructure
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Designing the architecture of the physical infrastructure means selecting the best combination of:
TECHNOLOGY: ARCHITECTURE
Design Options - Physical Infrastructure
• Location of Telecom House, Area Houses and Street Cabinets– Close or remote to homes
– Active equipment in Street Cabinet?
– Need for Area Houses?
• Type of ducts– Allowing changing of cables by blowing new cables or only for cable protection
• Type of cable– Fiber only; fiber and copper; fiber, copper, coax
– One fiber or two fibers per home
– Type of fiber: single-mode of multi-mode
Every choice has impact on type of equipment and operational costs
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TECHNOLOGY: ARCHITECTURE
Design Options - Physical Infrastructure
• Alternative 1: Future proof– Central Telecom House within 5 km of homes
– No Area Houses
– Street Cabinets without active equipment
– Ducts only for cable protection
– Two single-mode fibers per house
• Remarks– Future proof concept due to the single-mode
– Expensive due to long cables and fibers
– Need to convert existing services for optical transport, this requires expensive equipment at customer site
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Design Options - Physical InfrastructureTECHNOLOGY: ARCHITECTURE
• Alternative 2: Hybrid concept (fiber, copper, coax)– Central Telecom House within 5 km of homes
– No Area Houses
– Street Cabinets with active equipment for conversion from optical to coax
– Ducts only for cable protection
– Three cables per house
– Two single mode fibers per house
• Remarks– Future proof concept due to the single mode
– Expensive due to long cables and fibers and additional copper & coax
– No need for additional equipment for existing services (POTS & CATV)
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Design Options - Physical InfrastructureTECHNOLOGY: ARCHITECTURE
• Alternative 3: Growth Alternative (hybrid: fiber + copper)– Central Telecom House within 5 km of homes
– Street Cabinets within 500 m of houses with Ethernet Access Switch
– Ducts for future cable blowing
– Two multi-mode fibers per home + copper
• Remarks– Need for replacement of fiber in future
– Higher operational costs due to active equipment in street cabinet
– Low initial investment cost for fiber and CPE
– Need for additional CPE for CATV
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Design Options - Physical InfrastructureTECHNOLOGY: ARCHITECTURE
• Alternative 4: Growth Alternative (hybrid: fiber + copper + coax)– Central Telecom House within 5 km of homes
– Street Cabinets within 500 m of homes with active CATV equipment & Ethernet Access Switch
– Ducts for future cable blowing
– Two multi-mode fiber per house + copper + coax
• Remarks– Need for replacement of fiber in future.
– Higher operational costs due to active equipment in street cabinet
– Low initial investment cost for fiber and CPE
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Design Options - Physical InfrastructureTECHNOLOGY: ARCHITECTURE
• Alternative 5: Broadband PON– Central Telecom House within 5 km of homes
– Area Houses with active equipment
– Street Cabinets without active equipment (only fiber splitters)
– Ducts for future cable blowing
– One ???-mode fiber per house
– POTS on separate wavelength
• Remarks– Need for replacement of fiber in future.
– Higher operational costs due to active equipment in Area Houses
– Low initial investment cost for fiber and CPE
– Need for additional CPE for CATV
– Need for special CPE for POTS (technology is already used in CATV systems)
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Design Options - Physical InfrastructureTECHNOLOGY: ARCHITECTURE
• Only 5 alternatives are given here, many more can be defined
• Heavily dependent on design considerations:– Possibility of High Initial Investments versus Pay as you grow
– Does the home owner pay for the ducts only or also for the fiber cable (the first mile)?
– Is there enough room for Area Houses in the new building area?
– Size of the particular new building site
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Technology
Active equipment (CPE + COE)
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Design criteriaTECHNOLOGY: ACTIVE EQUIPMENT (CPE + COE)
• Customer Premises Equipment will have more functionality and will continuously become cheaper.
• Equipment in Telecom House, Area Houses and Street Cabinets may have to be upgraded every 5 years.
• We have to provide the existing services with the same Quality of Service as experienced nowadays
• In the future all customer equipment will be IP-based, also many more home equipment (refrigerators, washing machines) will get an IP interface.
• All CPE will have an ethernet interface connected to in-house wiring• There will also be a trend that the functions of PC’s and TV will blur;
people may want to see movies on the PC and surf the internet (and download movies) on the TV or enjoy new possibilities like videoconferencing, gambling or gaming with other residents
• We should cater for the existing customer equipment such as Telephones, TV’s, Radio’s, Alarm equipment
• Measures have to be taken to prohibit unauthorised copying of digital content
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Customer Premises Equipment
O/ESwitch fiber
In-house wiring
Coax
IP - POTSConverter
PSTN
TECHNOLOGY: ACTIVE EQUIPMENT (CPE + COE)
The dotted lines can only be implemented when a hybrid physical infrastructure is implemented, it allows the user to use the traditional services in the standard way. The set-top box and IP-POTS converter are not necessary in this case.
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Customer Premises Equipment TECHNOLOGY: ACTIVE EQUIPMENT (CPE + COE)
• Major challenge for the introduction of fiber is the cost of the CPE– These components are currently not available and will only be cheap when massive
deployment takes up
• Additional costs comprises– The required Optical/Electrical converter
– An in-house IP-switch if more services are connected through IP
– Converters for translating IP-services to existing analogue equipment or new IP-phones and IP-television sets
• Minimal requirements– An O/E converter and a simple switch for connecting PC. In this case all new services
can be accessed by the PC-only and future IP-based CPE
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Technology
Organisational aspects
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FTTH Delivery AspectsTECHNOLOGY: ORGANIZATIONAL ASPECTS
• Service Delivery– An operational organisation has to be set-up to manage and maintain the access network
• Service Level– When the traditional services are provided over the fiber infrastructure, these services
define the required Quality of Service. This will be a big challenge since new technology is used with inherent child-diseases
– In the case hybrid infrastructures are used, POTS and CATV services can rely on their traditional infrastructures and service provider organisations
• Voice over IP– Providing the POTS service over IP using fiber requires special measures to translate the
currently known features by the customers in the IP-environment
• Customer Self Care
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FCAPS should be implementedTECHNOLOGY: ORGANIZATIONAL ASPECTS
•• FFault management• The service are delivered by a complete chain including active Customer Premises
equipment. This requires that the CPE can be managed from the network for troubleshooting purposes
•• CConfiguration Management• Introducing IP-based services in a residential environment requires configuration of the
home
•• AAccounting
•• PPerformance
•• SSecurity
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Technology
Alternatives
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TECHNOLOGY: ALTERNATIVES
An overview of some alternativesPhysicalInfrastructure
CPE equipment Operational issues Overall remarks Conclusion
Future Proof Expensive O/E, IP-Converters; limitationexisting services
Need to deliverTelephony grade serviceimplies expensiveorganisation
High initial investmentsand high operational costs
CGEY: Notcommercially viable
Hybrid Concept CPE costs limited to O/Einterface for 1 Gb/s
Use of existingoperational excellence forPOTS & CATV, only neworganisation forbroadband access andnew services
Are enough customersinterested in broadbandand new services to payback the initial additional
investments
Technical feasibilityand financial analysisneeds to be prepared
GrowthAlternative I
CPE costs limited, CATVconverter needed, enablingdirect new services on TV
How to manage thegrowth for differentcustomers.
Needs intensivecalculation of BusinessCase, with unclear factorwhen upgrade has to take
place
Technical feasibilityand financial analysisneeds to be prepared
GrowthAlternative II
CPE equipment cheapest,cheap O/E interface
Limited impact onoperational challenges
Business case heavilydepended on costs multi-mode cable versus optical
interface
Technical feasibilityand financial analysisneeds to be prepared
Broadband PON Additional costs needed forO/E converters
Limited impact onoperational challenges
Business case heavilydepended on costs optical
components
Technical feasibilityand financial analysisneeds to be prepared
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Case Studies
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Case Studies
• Overview of FTTH initiatives
• Specific Dutch situation
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Case Studies
Overview of FTTH initiatives
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CASE STUDIES: OVERVIEW OF FTTH INITIATIVES
Where are the FTTH initiatives located?
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CASE STUDIES: OVERVIEW OF FTTH INITIATIVES
Bredband Sweden
ProfileName : Bredband
Ownership : Commercial
Location : Sweden
Startdate : December 1999
Status : Operational
Key figures
• Installation fee 500 euro
• Subscription fee 50 euro/month
• 130.000 homes installed
• 30.000 homes connected
Strategy
• Drive long-term Company value by owning the end-user and maximizing available services
• Bredband branded access & telephony services
– Leverage company expertise
• Bredband co-branded media & entertainment services
– Bredband to provide content providers with QoS distribution, billing & support services
– The key is focus and execution
Channels:Service Offer:
Infrastructure
Service provisioning
Content provisioning
Content packaging
√√√√
√√√
Telephony
Internet
Television
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CASE STUDIES: OVERVIEW OF FTTH INITIATIVES
Stokab Sweden
ProfileName : StokabAB
Ownership : Municipality
Location : Sweden
Startdate : 1994
Status : Operational
Key figures
• Stokab has more than 3,500 kilometres of fibre-optic cable with a total of more then 400,000 kilometres of fibre
Strategy• Stokab is building and operating a
fibre-optic network, on an operator-neutral basis.
• Stokab acts as a wholsaler, offering dark fibre to operators that provide services to business and residential customers. The customers must provide the electronic equipment necessary for transmission of telecommunications traffic.
• Help ensure that insufficient network capacity does not impede the establishment of new businesses on the telecom market.
Channels:Service Offer:
√ Telephony
Internet
Television
Infrastructure
Service provisioning
Content provisioning
Content packaging
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CASE STUDIES: OVERVIEW OF FTTH INITIATIVES
eBiscom Italy
ProfileName : eBiscom
Ownership : Commercial
Location : Italy
Startdate : June 1999
Status : Operational
Key figures• 5300 customers (31/12/2000)
• Subscription unlimited use 50-55 euro/month residents
• Subscription business 30-35 euro/month
• Revenue (31/12/2000) 42.400.000 euro
• Net income (31/12/200) (102..600.000) euro
Strategy• eBiscom has two primary ventures
are Metroweb and Fastweb
• Metroweb is developing a high capacity fiber optic network. Fastweb provides integrated broadband communications services to business and residential customers.
• eBiscom’s objective is to become the leading creator and developer of broadband communications in Europe. It’s pursuing this goal by carrying out projects in several segments of the value chain in telco, Internet and media.
Channels:Service Offer:
Telephony
Internet
Television
Infrastructure
Service provisioning
Content provisioning
Content packaging
√√√√
√√√
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CASE STUDIES: OVERVIEW OF FTTH INITIATIVES
HanseNet Germany
ProfileName : HanseNet
Ownership : Commercial
Location : Germany
Startdate : June 2001
Status : Operational
Key figures
Channels:Service Offer:
Telephony
Internet
Television*
Infrastructure
Service provisioning
Content provisioning
Content packaging
√√
√√√√
√*planned
• Subscription unlimited use 50-55 euro/month residents
Strategy• eBiscom bought 80% of HanseNet
and want to copy its formula to get a footprint in Germany
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CASE STUDIES: OVERVIEW OF FTTH INITIATIVES
Palo Alto United States
ProfileName : Palo Alto
Owenership : Municipality
Location : United States
Startdate : June 2000
Status : Operational Trial
Key figures• Investment $753.000
• Operating cost $16.400/year
• Revenues sources 10 Mbit/s 100 Mbit/s– Installation cost $1200 $2400
– Connection fee $45/month $100/Month
– ISP fee $43/month $70/month
• Trial size 100 homes
• Cost recovery in 10 yearsStrategy• The goal is to bring the enormous
information bandwidth of the Internet to residents' homes. The method is to create a citywide Fiber to the Home data network.
• City of Palo Alto Utilities will build, own and maintain the physical network.
• Darwin Networks will operate the network and provide ISP services and access tot the Internet.
Channels:Service Offer:
Infrastructure
Service provisioning
Content provisioning
Content packaging
√√
Telephony
Internet
Television√
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CASE STUDIES: OVERVIEW OF FTTH INITIATIVES
Lynchburg United States
ProfileName : Lynchburg
Owenershp : Municipality
Location : United States
Startdate : May 1996
Status : Operational
Key figures• The system has grown steadily since then, and currently
encompasses some 40 miles of fiber-optic cable, connecting:
– 26 municipal buildings
– 20 school buildings
– 37 traffic signals
– 2 city contractors
– 3 quasi-governmental agencies
Strategy• Main objectives for the site were to
efficiently link all computer systems involved in city government, and to allow the sharing of costly resources (such as Internet access, system monitoring, and GIS information).
• To bring the network to local homes, making advanced services available throughout the community
• To secure multiple services & providers, promoting competition for lower-cost services
Channels:
√Service Offer:
Telephony
Internet
Television
Infrastructure
Service provisioning
Content provisioning
Content packaging
√√
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CASE STUDIES: OVERVIEW OF FTTH INITIATIVES
Lina.Net Iceland
ProfileName : Lina.Net
Ownership : Commericial
Location : Iceland
Startdate : February 2001
Status : Operational Triall
Key figures• 13.5M dollar investment
• 100 Mbit/s offering
• 12.000 homes
Strategy• Lina.Net was founded by the
Reykjavik Energy Company
• The main objectives of the company are to establish a carrier system for telecommunications within the Reykjavik Metropolitan area, and to establish a distribution system for telecommunications within residential areas
Channels:Service Offer:
√ Telephony
Internet
Television
Infrastructure
Service provisioning
Content provisioning
Content packaging
√√
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CASE STUDIES: OVERVIEW OF FTTH INITIATIVES
Western Integrated Networks United States
ProfileName : Western Integrated Networks
Ownership : Commericial
Location : United States
Startdate : November 1999
Status : Operational
Key figures• $ 830M investment
• $ 2000 investment per household
• 10 Mbit/s offering
• Current active regions show a potential market of 1.65 million homes
• The company expects each market to become profitable within 18 months of rollout
Strategy• Western Integrated Networks is
dedicated to building the first "state-of-the-art broadband network" toevery home in each market that we serve.
• By building the first broadbandnetwork WIN is positioned to be the nation's first true full-serviceprovider of voice, video and data services.
• WIN's market approach will give itscustomers the highest quality and choice, the convenience of one-stopshopping, and the value of a bundledservice offering.
Telephony
Internet
Television
√√√
Channels:Service Offer:
√√√√
Infrastructure
Service provisioning
Content provisioning
Content packaging
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Case Studies
Specific Dutch situation
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Dutch Newspaper HeadlinesCASE STUDIES: SPECIFIC DUCTH SITUATION
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Dutch Newspaper HeadlinesCASE STUDIES: SPECIFIC DUCTH SITUATION
Sources:A - Automatiserings Gids, 2001/06/29B - Automatiserings Gids, 2001/07/13C - Automatiserings Gids, 2001/07/13D - Automatiserings Gids, 2001/07/13E - Automatiserings Gids, 2001/06/29
A B
C
D
E
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Finance
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Finance
• Financial data
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Finance
Financial data
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FINANCE: FINANCIAL DATA
Cost drivers year 4 including CPE and Telcohouse costs
10%
3%
29%
45%
1%
0%
7%
0%
3%
1%
Capacity lease(fiber)
Active networkinfrastructure
Passive networkinfrastructure
CPE
Telecom house
Consultancy andsystem integration
Software andapplications
Hardware
Organisation andmanagement
Marketing andsalescosts
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FINANCE: FINANCIAL DATA
Revenue PotentialActual spend per NL household in January 2001
Other software & media spends excluded!
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Glossary
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GLOSSARY: ABBREVIATIONS & ACRONYMS
Abbreviations & Acronyms - “A / B”
ACD Automatic Call DistributionACTEW Australian Capital Territory Electricity & WaterADSL Asymmetrical Digital Subscriber LineAIU Administrative Interface UnitAOL America OnlineARPL Average Revenue Per LineATM Asynchronous Transport ModeBDT Broadband Digital TerminalBNU Broadband Network UnitBPS BDT Power SupplyBTA Basic Trading AreaBWOD BandWidth On Demand
ACD Automatic Call DistributionACTEW Australian Capital Territory Electricity & WaterADSL Asymmetrical Digital Subscriber LineAIU Administrative Interface UnitAOL America OnlineARPL Average Revenue Per LineATM Asynchronous Transport ModeBDT Broadband Digital TerminalBNU Broadband Network UnitBPS BDT Power SupplyBTA Basic Trading AreaBWOD BandWidth On Demand
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GLOSSARY: ABBREVIATIONS & ACRONYMS
Abbreviations & Acronyms - “C / D”
CAPEX Capital ExpendituresCATV Community Antenna TelevisionCDSL Consumer Digital Subscriber LineCENTREX Centralized Exchange ServiceCEV Controlled Environment VaultCLASS Custom Local Area Signaling Services CLEC Competitive Local Exchange CarrierCoMPAS City of Morganton Public Antenna SystemCOPA City of Palo AltoCPAU City of Palo Alto UtilitiesCPE Customer Premises EquipmentCVI Cablevision IndustriesDID Direct Inward DialingDISA Direct Inward Service ArrangementsDLC Digital Line ConcentratorDS Digital SignalDSL Digital Subscriber LineDSLAM Digital Subscriber Line Access MultiplexerDWDM Dense Wave Division Multiplexing
CAPEX Capital ExpendituresCATV Community Antenna TelevisionCDSL Consumer Digital Subscriber LineCENTREX Centralized Exchange ServiceCEV Controlled Environment VaultCLASS Custom Local Area Signaling Services CLEC Competitive Local Exchange CarrierCoMPAS City of Morganton Public Antenna SystemCOPA City of Palo AltoCPAU City of Palo Alto UtilitiesCPE Customer Premises EquipmentCVI Cablevision IndustriesDID Direct Inward DialingDISA Direct Inward Service ArrangementsDLC Digital Line ConcentratorDS Digital SignalDSL Digital Subscriber LineDSLAM Digital Subscriber Line Access MultiplexerDWDM Dense Wave Division Multiplexing
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GLOSSARY: ABBREVIATIONS & ACRONYMS
Abbreviations & Acronyms - “E / F / G / H”
EBITDA Earnings Before Income Tax and DepreciationEMS Element Management SystemEOY End-of-YearFAX FacsimileFCC Federal Communications CommissionFDI Feeder Distribution InterfaceFTTC Fiber-to-the-CurbFTTH Fiber-to-the-HomeFTTN Fiber-to-the-NodeFWA Fixed Wireless AccessG&A General and AdministrationGHz GigaHertz (1 billion cycles-per-second)HDSL High-bit-rate Digital Subscriber LineHDTV High-Definition TelevisionHFC Hybrid-Fiber CoaxHH HouseHoldHHP Households PassedHO HeadQuarters
EBITDA Earnings Before Income Tax and DepreciationEMS Element Management SystemEOY End-of-YearFAX FacsimileFCC Federal Communications CommissionFDI Feeder Distribution InterfaceFTTC Fiber-to-the-CurbFTTH Fiber-to-the-HomeFTTN Fiber-to-the-NodeFWA Fixed Wireless AccessG&A General and AdministrationGHz GigaHertz (1 billion cycles-per-second)HDSL High-bit-rate Digital Subscriber LineHDTV High-Definition TelevisionHFC Hybrid-Fiber CoaxHH HouseHoldHHP Households PassedHO HeadQuarters
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GLOSSARY: ABBREVIATIONS & ACRONYMS
Abbreviations & Acronyms - “I / J / K / L”
ILEC Incumbent Local Exchange CarrierINA Integrated Network ArchitectureIP Internet ProtocolIRR Internal Rate of ReturnIS Industry StandardISDN Integrated Services Digital NetworkISP Internet Service ProviderIT Information TechnologyJIT Just-In- TimeJV Joint VentureKHz KiloHertz (1,000 cycles per second)KTS Key Telephone SystemLAN Local Area NetworkLD Long Distance
ILEC Incumbent Local Exchange CarrierINA Integrated Network ArchitectureIP Internet ProtocolIRR Internal Rate of ReturnIS Industry StandardISDN Integrated Services Digital NetworkISP Internet Service ProviderIT Information TechnologyJIT Just-In- TimeJV Joint VentureKHz KiloHertz (1,000 cycles per second)KTS Key Telephone SystemLAN Local Area NetworkLD Long Distance
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GLOSSARY: ABBREVIATIONS & ACRONYMS
Abbreviations & Acronyms - “M / N / O”
MAN Metropolitan Area NetworkMBU Multiple Business UnitMCG Media Connections GroupMDU Multiple Dwelling UnitMFS Metropolitan Fiber SystemsMHz MegaHertz (1,000,000 cycles per second)MIRR Modified Internal Rate of ReturnMUX Multiplex, MultiplexerNCIH North Carolina Information HighwayNID Network Interface DeviceNIU Network Interface UnitNLC Next Level CommunicationsNPV Net Present ValueOC Optical CarrierODU Optical Distribution UnitOlE OpticlElectronicONU Optical Network UnitOSP Outside PlantOSS Operations Support Systems
MAN Metropolitan Area NetworkMBU Multiple Business UnitMCG Media Connections GroupMDU Multiple Dwelling UnitMFS Metropolitan Fiber SystemsMHz MegaHertz (1,000,000 cycles per second)MIRR Modified Internal Rate of ReturnMUX Multiplex, MultiplexerNCIH North Carolina Information HighwayNID Network Interface DeviceNIU Network Interface UnitNLC Next Level CommunicationsNPV Net Present ValueOC Optical CarrierODU Optical Distribution UnitOlE OpticlElectronicONU Optical Network UnitOSP Outside PlantOSS Operations Support Systems
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GLOSSARY: ABBREVIATIONS & ACRONYMS
Abbreviations & Acronyms - “P / Q / R”
PA Per AnnumPBX Private Branch ExchangePCS Personal Communications SystemPMP Point-to-MultiPointPON Passive Optical NetworkPOTS Plain Old Telephone Service (Basic Telephone Service)P-P Point-to-PointPPP Purchasing Power ParityPPV Pay-Per-ViewPRI Primary Rate InterfacePSTN Public Switched Telecommunications NetworkQAM Quadrature Amplitude ModulationRAA Rendall and AssociatesRBS Radio Base StationRDU Raleigh-Durham International AirportRFI Request For InformationRJ-45 Connector for 10BaseT CableRMT Remote TerminalRTP Research Triangle Park
PA Per AnnumPBX Private Branch ExchangePCS Personal Communications SystemPMP Point-to-MultiPointPON Passive Optical NetworkPOTS Plain Old Telephone Service (Basic Telephone Service)P-P Point-to-PointPPP Purchasing Power ParityPPV Pay-Per-ViewPRI Primary Rate InterfacePSTN Public Switched Telecommunications NetworkQAM Quadrature Amplitude ModulationRAA Rendall and AssociatesRBS Radio Base StationRDU Raleigh-Durham International AirportRFI Request For InformationRJ-45 Connector for 10BaseT CableRMT Remote TerminalRTP Research Triangle Park
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GLOSSARY: ABBREVIATIONS & ACRONYMS
Abbreviations & Acronyms - “S / T”
SAM Service Access MultiplexerSBC Southwestern Bell CorporationSBU Strategic Business UnitSCE Service Creation EnvironmentSDA Switched Digital AccessSDH Synchronous Digital HierarchySDSL Symmetric Digital Subscriber LineSDV Switched Digital VideoSMS Service Management SystemSOHO Small Office, Home OfficeSONET Synchronous Optical NetworkSTB Set Top BoxTAF Technically Affluent FamilyTIU Telephony Interface UnitTOC Town of CaryT/R Transmit/ReceiveTVA Tennessee Valley AuthorityTVPPA Tennessee Valley Public Power AssociationTWC Time Warner Cable
SAM Service Access MultiplexerSBC Southwestern Bell CorporationSBU Strategic Business UnitSCE Service Creation EnvironmentSDA Switched Digital AccessSDH Synchronous Digital HierarchySDSL Symmetric Digital Subscriber LineSDV Switched Digital VideoSMS Service Management SystemSOHO Small Office, Home OfficeSONET Synchronous Optical NetworkSTB Set Top BoxTAF Technically Affluent FamilyTIU Telephony Interface UnitTOC Town of CaryT/R Transmit/ReceiveTVA Tennessee Valley AuthorityTVPPA Tennessee Valley Public Power AssociationTWC Time Warner Cable
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GLOSSARY: ABBREVIATIONS & ACRONYMS
Abbreviations & Acronyms - “U / V / W”
UADSL Universal Access Digital Subscriber LineUSAM Universal Services Access MultiplexerVDSL Very-high-bit-rate Digital Subscriber LineVOD Video On DemandVolP Voice Over Internet ProtocolVPN Virtual Private NetworkWAM Wide Area ManagementWAN Wide Area NetworkWLL Wireless Local LoopWWW World Wide Web
UADSL Universal Access Digital Subscriber LineUSAM Universal Services Access MultiplexerVDSL Very-high-bit-rate Digital Subscriber LineVOD Video On DemandVolP Voice Over Internet ProtocolVPN Virtual Private NetworkWAM Wide Area ManagementWAN Wide Area NetworkWLL Wireless Local LoopWWW World Wide Web
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GLOSSARY: GLOSSARY OF TERMS
Glossary of Terms
DSL: Digital Subscriber Line
DSL provides high-speed digital connections that work over copper telephone-typelines. DSL uses a different part of the frequency spectrum than analog voicesignals, so it can work in conjunction with standard analog telephone service, sharing the same pair of wires.
It should be noted that actual transmitted bandwidth depends on the length of the copper loop from the DSL line card to the end user. The condition of the loop facilities is also an issue.
There are several versions of DSL, which has led to the common designation of "xDSL" when referring to this type of technology in general.
DSL: Digital Subscriber Line
DSL provides high-speed digital connections that work over copper telephone-typelines. DSL uses a different part of the frequency spectrum than analog voicesignals, so it can work in conjunction with standard analog telephone service, sharing the same pair of wires.
It should be noted that actual transmitted bandwidth depends on the length of the copper loop from the DSL line card to the end user. The condition of the loop facilities is also an issue.
There are
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several versions of DSL, which has led to the common designation of "xDSL" when referring to this type of technology in general.
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GLOSSARY: ABBREVIATIONS & ACRONYMS
Glossary of Terms
ADSL (Asymmetric Digital Subscriber Line) can support downstream bandwidths of upto 8 Mbps and upstream bandwidths of 1.5 Mbps The copper loop must typically beless than 12,000 feet.
A variation of ADSL is G.Lite, DSL-Lite or UADSL, and is a notched down versionaimed at the short-term consumer market. Going by many brand names thisservice provides speeds up to 1.5 Mbps downstream and 384 Kbps upstream. The copper loop can be as much as 18,000 feet.
HDSL (High-bit-rate Digital Subscriber Line) is intended as an improved way to provideT1/E1 (15/2.0 Mbps) services by the telephone companies. It uses 4 copper wires(2 pairs) and offers a wider coverage area the previous methods.
SDSL (Symmetric Digital Subscriber Line) is an enhanced version of HDSL requiringonly one pair of wires It provides the same bandwidth in both directions.
VDSL (Very-high-bit-rate Digital Subscriber Line) is targeted at high-access demandingapplications and can support speeds of 52 Mbps downstream and 13 Mbps upstream. The copper loop must be about 4,000 feet or less.
ADSL (Asymmetric Digital Subscriber Line) can support downstream bandwidths of upto 8 Mbps and upstream bandwidths of 1.5 Mbps The copper loop must typically beless than 12,000 feet.
A variation of ADSL is G.Lite, DSL-Lite or UADSL, and is a notched down versionaimed at the short-term consumer market. Going by many brand names thisservice provides speeds up to 1.5 Mbps downstream and 384 Kbps upstream. The copper loop can be as much as 18,000 feet.
HDSL (High-bit-rate Digital Subscriber Line) is intended as an improved way to provideT1/E1 (15/2.0 Mbps) services by the telephone companies. It uses 4 copper wires(2 pairs) and offers a wider coverage area the previous methods.
SDSL (Symmetric Digital Subscriber Line) is an enhanced version of HDSL requiringonly one pair of wires It provides the same bandwidth in both directions.
VDSL (Very-high-bit-rate Digital Subscriber Line) is targeted at high-access demandingapplications and can support speeds of 52 Mbps downstream and 13 Mbps upstream. The copper loop must be about 4,000 feet or less.
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