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1
KT’s FTTH Service ScenarioKT’s FTTH Service Scenario
September 4, 2006
Jong-Lok Yoon
2
ContentsContents
TelcoTelco’’s Threat & Opportunitys Threat & Opportunity
TelcoTelco’’s Challenge to Crisis (C2C)s Challenge to Crisis (C2C)
Service Mega Trends & Service Mega Trends & KTKT’’ss Service EvolutionService Evolution
System & Network StrategySystem & Network Strategy
Pilot ProjectsPilot Projects
Concluding RemarkConcluding Remark
II
IIII
IIIIII
IVIV
VV
VIVI
2
TelcoTelco’’s Threat & Opportunitys Threat & OpportunityII
4
Limitless Competition [1]Limitless Competition [1]
Internet service
Broadband Internet penetration rate in Korea
158.8
52.9
27.2
0.252.34
3.5
(Cents/Mbps)
Internet connection fee per 1Mb/s
1994 1996 1998 2000 20022000 2001 2002 2003 2004 2005 2006. 7
0%
20%
40%
60%
80%
100%
Bro
adb
and
pen
etr
ati
on
rate
(3,870)
(10,410)
(13,720)83%
∗
: Number of household [thousand]∗
23%
47%
67%
(11,920)
73%72%
63%
3
5
Limitless Competition [2]Limitless Competition [2]
(unit: thousands)
* MIC (Ministry of Information and Communication)
WirelessInternet
CableModem
DialModem
W-LANISDNxDSL WirelessInternet
CableModem
DialModem
W-LANISDNxDSL WirelessInternet
CableModem
DialModem
W-LANISDNxDSL
(unit: %)
* NIDA (National Internet Development Agency of Korea)
Fixed Line/Mobile subscribers in Korea Types of Internet connection
Mobile subscribers surpass fixed line
6
Biz Boundary Collapse [1]Biz Boundary Collapse [1]
Competition beyond the traditional value chain boundary
Producing Brokering Delivery Service Providing
Future
Competition within the same value chain boundary
4
7
Biz Boundary Collapse [2]Biz Boundary Collapse [2]
IIC(Inter Industrial Collaboration)
Intra-IndustryConvergence
Inter-IndustryCollaboration
Stand-Alone Convergence/Fusion
Next Growth EngineNext Growth EngineCurrent Growth EngineCurrent Growth Engine
Semi-Conductor
Oil & Chemical
ICT
Vehicles
ShipsRemoteMedical
CareU-Vehicles
Network PC
Home Robot
Nano ITDNA
Computer
Bio-ITBio
Sensor
ICT: Information & Communication Technology, BT;BioTech., NT:Nano Tech.ET: Environment Tech.ST:Space Tech., CT:Culture Tech.
ICT,BT
NT,ET
ST,CT
ICT,BT
NT,ET
ST,CT
Based on ICT & Networks
8
Asymmetric Regulations in KoreaAsymmetric Regulations in Korea
Telecommunication-Broadcasting convergence services
The law and regime of Telecom/broadcasting convergence services are not yet fixed in Korea
Internet/VoIP of SO/MSO is permitted by law
IPTV of Telco is prohibited by law
Dominant market leader regulation
Definition of dominant market leader
Single company which has more than 50% of market share
Less than three companies which have more than 75% of market share
Regulation
Ban of bundle services
Permission of price & agreement of services by government
LLU
5
9
Network NeutralityNetwork Neutrality
Definition
“All Internet sites and traffic must be treated equally”
3 basic principles
Non discrimination
Interconnection: Right & obligation for mutual interconnection
Access: Connection between end-users(human/modem/switch/device)
Key issues (Telco’s view points)
Net neutrality will retard the network innovation
Net neutrality will collapse the free competition system (Different service & priority, different price)
The latest news
The USA Senate rejected the net neutrality (06/27/2006)
10
TelcoTelco’’s Challenge to Crisiss Challenge to CrisisIIII
6
11
Market Value of Traditional TelcoMarket Value of Traditional Telco
Google (16.2)
0.5
1.0
0.0
1.5
2.0
3.0
4.0
5.0
>10.0Yahoo (7.9)
Value in-flow
Value out-flow
High
Low
High Low
Market ValueSales
Value dragging
Operating Profit Growth
Microsoft(5.2)
Disney (2.0)
KT (1.4)KTF (1.4)
Brokering or Service Providing
Delivery(Traditional Comm.domain)
Ebay (9.5)
Verizon (1.8)
12
Premium Services [1]Premium Services [1]
• Free/cheap, Unstable Quality, Unmanaged, Insecure
• Fee-based, Guaranteed Quality,
• Managed, Secure
Strategic
Direction
Differentiated services on differentiated infrastructure
step 1: basic application services over the premium infra
step 2: innovative ICT-based life/work application services
over the consolidated premium infrastructure
Analogy From plain seaside to water park
Quality-guaranteed, secure IP network
Quality-guaranteed, secure IP networkBest Effort InternetBest Effort Internet
7
13
Premium services [2]Premium services [2]
Premium Services through the Premium N/W
Service differentiation by network differentiation
Premium network with the high level of QoS & availability
• Strengthen bandwidth control of wire & wireless networks
• Offer 99.99 ~ 99.999% of availability for broadcasting service
BestEffort
Services
PCNon-PC Edge Router
Best effortNetwork
PremiumNetwork
Access Network
(wire/wireless)
Premium Services IP-TV,
Video-Conferencing,Video-Learning,
etc..
RGW
14
Importance of TPS (Triple Play Service)
Incremental revenue Restraining churn-out
Benefit of TPS for customer
Convenience: single bill, single A/S call number, etc
Economy: discounted price (bundle effect)
Incremental Revenue
Video
Data
Voice
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
Cable + Data Cable + Phone Data + Phone Cable + Data+ Phone
Total Service ProviderTotal Service Provider
0
2
4
6
8
10
12
2004E 2005E 2006E 2007E 2008E 2009E 2010E
Retained Voice High-Speed Date Video
Video
Source : 2005, Telcordia
Data
Voice
0.9 %
1.0 %
1.2 %
0.7 %
Source : 2005, Cox
8
15
Harmonizing the Free & Charged ServicesHarmonizing the Free & Charged Services
Free services round up customers and extend the market size
Examples: UCC, P2P, On-demand services (free & best-effort)
Charged services differentiate the services from the competitor’s and increase the revenue
Examples: IPTV, VoIP, Video telephony, On-demand services (charged & premium)
16
Service Mega Trends & Service Mega Trends & KTKT’’ss Service EvolutionService EvolutionIIIIII
9
17
Visitors (per million)Visitors (per million) New York TimesNew York Times
You TubeYou Tube
Personalization & ParticipationPersonalization & Participation
Personal Broadcasting, Video Blog
Exceed 4.8 Million Channels just in 10 months
Afreeca Personal Broadcasting TV in Korea
18
Source : BBCSource : BBC
On Demand Broadcasting (VoD casting)On Demand Broadcasting (VoD casting)
10
19
UCC: User Created Contents
Potential of VoD Casting in News ServicePotential of VoD Casting in News Service
Pseudo Real timePseudo Real time comparing to Conventional VoD
Simple & EasySimple & Easy comparing to Web surfing
Quality SelectiveQuality Selective comparing to IPTV or UCC
Deep & DetailDeep & Detail comparing to IPTV or UCC
Personalization Personalization comparing to Conventional TV
20
KT Vision 2010KT Vision 2010
Vision2010
VisionVision201020102004 2005
NewGrowthBase
NewNewGrowthGrowthBaseBase
GrowthEngineGrowthGrowthEngineEngine
UbiquitousSociety
UbiquitousSociety
2006
2010
WiBroWiBroIP TVIP TV
ContentsContents
MediaMedia
IT ServiceIT Service
Convergence Voice & Date
ConvergenceWire & Wilreless
FTTH, BcN, IPv6, All IP Network
ConvergenceCommunication & Broadcasting
VendorVenture
Carrier
11
21
KT 2.0 [1]KT 2.0 [1]
ICT Mega Trends
Blue OceanBlue Ocean
Solution ProviderSolution Provider
Venture SpiritVenture Spirit
CreativenessCreativeness
Mix-Match IndustryMix-Match Industry
Dynamic IdentityDynamic Identity
Red OceanRed Ocean
Network ProviderNetwork Provider
Labor-intensiveLabor-intensive
Traditional ILECTraditional ILEC
Unity & Reconciliation Unity & Reconciliation
Public CompanyPublic Company
Telco 1.0 Telco 2.0
Network
Technology
Convergence
Voice Data Computing Power
Bandwidth Security Intelligence
Service Convergence Inter-Industry Collaboration
Technological and Industrial Trends requires Telco to shift to Telco 2.0 Management Paradigm.
Tech & Industry Trends
Management Paradigm Shift
22
KT 2.0 [2]KT 2.0 [2]
Network provider Solution provider
Telco will be transformed into “total solution provider”through the new business paradigm shift.
As-Is
Mid-term
Communication Service Provider
Multimedia Service Aggregator
TotalSolution Provider
Communication/Broadband Biz
Cultural Complex Biz
Contents Biz
Computing Power Biz
S/W Solution Biz
Knowledge Consulting Biz
New Growth Engine
To-Be Model Potential Partner
12
23
KT 2.0 [3]KT 2.0 [3]
Open R&D and IIC Strategy
Tech. Environment
Value Value IntegrationIntegration
LeaderLeaderKT Lab@Research
KT Lab@Industry
SearchTech.
TradeTech.
SellTech.
DevelopTech.
ObtainTech.
KT Lab@Univ.
KT is seeking more cooperative relationships for core technology & New Biz. with Open R&D & IIC Strategy.
u-Construction
u-Auto Mobileu-Hospital
u-Environment
KT
Open R&D IIC : Inter-Industry Collaboration
24
Format : H.264Middleware : ACAPSecurity : CAS
Service Provider
StableNetwork
Security
SeamlessService
RobustSystem
Customer
Economics
Variety of Services
High Quality Service
KT IPTV Services [1]KT IPTV Services [1]
Service & Technical Requirement
13
25
11
Real VoD
Subscription VoD
Near VoD(PPV)
33
Terrestrial Channels
Program Provider
PPC (Pay per Channel)
T-information
T-Commerce
T-Entertainment22
T-Communication
T-Learning
KT IPTV Service [2]KT IPTV Service [2]
Service Classification
Conventional TVConventional TV
VOD ServicesVOD Services
Bidirectional ServicesBidirectional ServicesShopping, Banking, Delivery etc.
Weather, Traffic News etc.
Game, Karaoke etc.
SMS, Messenger
Language school etc.
26
System & Network StrategySystem & Network StrategyIVIV
A drawing of the first Ethernet system by Bob Metcalfe
14
27
Why FTTH ?Why FTTH ?
QoS / Bandwidth
To provide minimum bandwidth guarantee regarding to user traffic
Service Availability
Availability required for broadcasting service :
~99.999% 0.4min/month of service discontinuity
OPEX Saving
More than 50% reduction effect for RBOC (2005. Telcordia)
10% failure rate reduction effect for KT
45% operation cost down effect for KT
28
System requirementsSystem requirements
FTTH SystemRequirements
•Beyond the Bandwidth• QoS manageability•High Availability
•Beyond the Bandwidth• QoS manageability•High Availability
•To setup reasonable trade off between complexity vs cost by using mass producible components
•To promote system development in worldwide
•To setup reasonable trade off between complexity vs cost by using mass producible components
•To promote system development in worldwide
•Long Life cycle•Easy management•Minimized Inventory cost
•Long Life cycle•Easy management•Minimized Inventory cost
•Green/Brown field•Easy connection using the existing customer premise infrastructure
•Green/Brown field•Easy connection using the existing customer premise infrastructure
OPEX saving technology
TPS platform
Deployable in any field
Standardized technology
15
29
Commercial FTTH Deployment StatusCommercial FTTH Deployment Status
Massive deployment in the metropolitan, single dwelling unit area
20 thousands subscribers already connected at the end of 2005
About 120 thousands subscribers more to be connected by the end of 2006
Internet & on demand services
Massive deployment in the apartment area
To provide FTTH service in the newly built / remodeled / existing MDU
Multicasting(IP-TV…) / symmetric(VoIP…) / personalized services
NOW
Future
30
KT’s WDM-PONKT’s WDM-PON
CPE box
basementMDF
RNFx/UTP
/TP
1.25Gbps
CO
OLTONU
λ1· · · λ32
1.25Gbps×32 ch
32 split
1.25Gbps
MDU solution
OLTONTRN
M/H
SDU solution
λ1· · · λ32
100Mbps×32 ch100Mbps
100M WDM-PON
1G WDM-PON
Development project group
• Multiple vendors are participating in this development project group
Joint development
2003~2005
• Joint development bet KT & NoveraOptics Korea
2006~
16
31
SDUSDU
MDUMDU
FTTH RoadmapFTTH Roadmap
2005-20062005-200620102010
Seoul
(20,000)
Gwangju
(2,000)
SDUSDU
MDUMDU
FTTC + UTP/VD니
Internet Access
FTTH
Triple Play Service
AONAON
WDMWDM--PONPON
EE--PONPONNationwideNationwideNationwide
32
Pilot ProjectPilot ProjectVV
17
33
FTTH Pilot Project in Gwangju City FTTH Pilot Project in Gwangju City
Outline
Title : FTTH(Fiber to the Home) Service Development Pilot Project
Period : Y2005 ~ Y2009 (5 years)
Total Budget : 119.4 Billion Won ($119.4 Million)
Goals
Deploying FTTH infra to 20 thousand subscribers in 5 years
Providing Convergence Services through 100Mb/s Optical Pipe
Technical Evaluation of FTTH based Service Platform
34
FTTH ServiceFTTH Service
KT Megapass (FTTH)Internet Access
KT HomeN VoD (Movie, TV Drama, Animation, Kids Education, Sports, Health, etc)
Video on Demand
Electronic Program Guide Service (EPG)
Network-based Personal Video Recorder (N-PVR)
Network-based Time-shifted TV Service
Network-based Video Recording Service
Value Added Service
IP TV : over 22 channelsBroadcasting
Service Main Screen
EPG, IPTV
N-PVR
VOD
IP STB for FTTH Service
Services Details
18
35
FTTH Deployment in GwangjuFTTH Deployment in Gwangju
FTTH Service CenterHead-End, Server Farm,
Routers, Monitoring System
KT North Gwangju BranchWDM-PON OLT
KT South Kwangju BranchWDM-PON OLT
KT Sang-MuBranch
WDM-PON OLT
WDM-PON based
FTTH Area
36
FTTH Service PlatformFTTH Service Platform
KT HomeNVOD DB Srv
KT HomeNVoD Srv.
TV UI N-PVR Srv
Firewall
App. Srv(EPG)
IP TV Monitoring System
IP-TV HEIP-TV HE
KORNETKORNET
TV UI Server/N-PVR Server FarmAAA Server Farm
EPON OLT Internet
POTS
IP TV
IP STB
OLT FDF
RN(1:32)- WDM-PON : AWG- E-PON : Splitter
IDF
IDF
ONT
Central Office FTTH Feeder & Distribution Line Home
MDU USE
SDU UseDistribution
Fiber
DistributionFiber
OpticaOutlet
IDF OpticalOutlet
UTPWDM-PONOLT
Drop Cable
OJC
ONT
In-DoorCable
OJC……
1
32
1
32
1
1FeederCable
IPTV Head End System
KT HomeNAuthentication Server
19
37
National BcN Pilot ProjectNational BcN Pilot Project
Incheon
(200)
Area
5 Big Cities (Seoul, Incheon, Daejeon, Daegu, Gwangju)
Services
Voice and Data Convergence
• Video Phone, Video Messaging
• High quality Voice Phone
Wire and Wired Convergence
• WCDMA Connected
Communication and Broadcasting Convergence
• T-Commerce, TV Portal
U-Service
• U-Learning, U-Farm
Daejeon(200)
Gwangju
(200)
Seoul(200)
Outline Y2005-2006 Deployment
BcN : Broadband Convergence Network
( ) Number of Subscribers
Daegu(150)
38
National BcN InfrastructureNational BcN Infrastructure
메시징서버
Open Service G/W
Media Server
SSW(POTS,MMS)
L3 SwitchFirewall
Open Service Application
Server
Shared Platform
PLS/IM
Hub
IP-TV
SIPVideo Phone
WGW
Wireless
KTF
SIP Video Phone
PC
SIP Video Phone
VDSL
PC
PONONU PON OLT
Seoul
Gwangju
SSW(MMS)
L3 SwitchFirewall
AAA
BcN Backbone
Contents
VDSL
Daejeon
WibroOther
Consortium N/W
KOREN
Hub PONONU PON OLT
VDSLPC
Connection Control Platform
Access&ControlPlatform
NumberingVDSL
PC
PC
VDSL
PSTN
SIP Video Phone
20
39
Concluding RemarksConcluding Remarks
Business boundary has already collapsed
Telco should leap up to change from network provider to total solution provider
Growth Strategy
Service differentiation through FTTH
Service migration for PC to TV and portable devices
Strengthen the IIC(Inter-Industrial Collaboration)
40
Thank You!