VDSL and NGN access strategies - · PDF fileVDSL and NGN access strategies wik conference Königswinter, 21-22 March 2007. Seite 1 VDSL and NGN access · 21 March 2007 ... Mobile Internetas

VDSL and NGN access strategies

wik conferenceKönigswinter, 21-22 March 2007

Seite 1

VDSL and NGN access · 21 March 2007Wolfgang Kopf · PIR

Global trends in telecommunications

Mobilizationof Internet and Web 2.0

Personal communication in social networks as supplement to traditional voice and messaging services

Mobile Internet as Mega-Trend Internet Services, incl. IPTV,

independent of access (“multi-access”)Customer equipment and user interface

as possible differentiatorsBroadband everywhere

Seite 2


Changing market environment through convergenceThe IT sector broadens and competitive forces increase

Seite 3


Price and usage in the German broadband marketBroadband penetration rates do not tell the whole story

2526

2731

3435

3840

4143

5052

54

15 25 35 45 55

GermanyItaly

NetherlandsFranceSpain

SwedenUK

AustriaPortugal

SwitzerlandBelgium

DenmarkNorway

Ø 38 €

Average retail price for a 2 Mbit/s broadband connection and flat rate in Euro per month excl. PSTN line rental (Year-End 2005); one-time charges are amortized over 12 month. Source: JP Morgan 2006, Arthur D. Little 2007

Average retail price for 2 Mbit/s connection

36

30

28

28

27

26

22

20 25 30 35

France

Germany

Switzerland

Spain

Sweden

UK

ItalyØ 28.3 h

Average web usage time per Internet user per month (3Q 2006)

hours

Germany has the lowest broadband prices in Europe, indicating a very competitive market environment

In Germany, the average price level for the most common 2 MBit/s broadband flat rate subscription has declined 46 % between 2003 and 2005

Price decreases have been continuing throughout 2006

Frequency and duration of Internet usage in Germany are amongst the highest in Europe

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Heavy competition in the broadband sectorEffective competition in Germany renders excessive regulation unjust

49%60%

83%91%

9% 17%40%

51%

2003 2004 2005 2006

Deutsche Telekom Competitors Source: BNetzA JB 2006

0

2

4

6

8

10

12

2nd HY 2004 1st HY 2005 2nd HY 2005 1st HY 2006 Total

Deutsche Telekom Resale/BSA Own / LLU

Broadband Access Lines Net Adds in Mio.

Broadband Access Lines Competitors’ Shares

Source: CoCom

12,5

Effective competition is in place, the German broadband market is far from a monopoly situation: DT’s share of broadband access lines decreases significantly – drop down to 49 % in just three years

Competitors gain nearly all new broadband customers: DT’s share of net adds has plunged down from 57 % to just 5 % within 1 ½ years.

There is simply no requirement for currently imposed additional BSA obligations: Half of all competitors’ broadband net adds are realized by means of own infrastructure (Cable TV, Satellite, Powerline, and LLU).

57 %30 %

14 %

5 %

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Broadband strategy driven by Triple Play and Web 2.0/3.0Demand of bandwidth is increasing pursuant to Moore’s Law

continuous development

of new markets

Increasing deployment of bandwidth

Increasing demand of bandwidth by new applications

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Multi-platform competition for triple playOperators pursue different access strategies to “see, surf, and speak”

@@

HUNGER FOR

BANDWIDTH

HUNGER FOR

BANDWIDTH

ADSL 2+

VDSL

FTTH

TV Cable

3G +(UMTS / HDSPA)

WLAN

WiMAX

Satellite

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Year 2002 – 3 2003 - 4 2005 - 6 2007 – 9 Next decade

64 – 144 kbps 64 – 384 kbps 0.384 – 4 Mbps 0.384 – 7 Mbps 20+ to > 50 Mbps DL Throughput

Peak data rate reference values in good radio conditions

Multimedia Cellular

Enhanced Mobile Services

Enhanced Multimedia Mobile

Broadband Mobile Communication

GSM GPRS/EDGE

3G Initial Introduction

WCDMA-FDD

3G + HSDPA + HSUPA Downllink / Uplink Enhanced

WCDMA-FDD + overall HSPA Improvements

Optimized Multimedia Mobile

LTE Broadband radio, IP based wideband

Peer to Peer Future Wireless Cellular

GSM (GPRS / EDGE)

3G

Enhanced UMTS

Optimized UMTS

LTE

3G + HSDPA Downlink Enhanced

WCDMA-FDD

HSPA= HSDPA + HSUPA

Towards one integrated

network

LTE = Long Term Evolution

The Future: Mobile BroadbandFrom GSM to IP-based LTE

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Overlay construction of core network and expanding of access We mobilize personal and social networking

FTTC / ADSL2+

ISDN / ADSL

State of the art Gigabit-Ethernet platform is built up

PSTN / ATM platform to be transposed till 2012

For reliable consumer experience quality in IP networks will be key

core network

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Building the NGN access networkWe make the Triple Play future happen in Germany

IP TV for the mass market in 2007

Launch of IP TV via ADSL2+ in up to 750 cities

Increase T-Home IP TV coverage to 44 % / 17 Mio. homes

Premium VDSL quality: 8 Mio. homes

Mid term: VDSL in up to 50 cities

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Das Programm “Next Generation Factory” der Deutschen Telekom

Next Generation FactoryThe program “NG Factory” will fundamentally change the production of Deutsche Telekom until 2012

Enhancement of Performance in

production and of the customer oriented

Servicelevel

Increase of Flexibility (innovation rate,

time-to-market for new products/services)

Edge

Digital Home

Core

Service Delivery

Digital E

nterprise

On the Move

packet switched network (IP-based) simplified network architecture (“Schichten”) shared use of production resources large spectrum of applications, short time-to-market

Seite 11


Different variants of access network design

Next Generation Access NetworksEvolution Path

Present status,(reference)

VSt

HK

Street cabinet (KVz)

FTTC + VDSL

xDSL

VzK

FTTB + VDSL

FTTH

T-Net/ISDN

PSTN

xDSL

Splitter

optical

Powerfibre

copperMSAN

Subloop Distribution Frame (SDF)

Band

wid

th

Inve

stm

ent

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Next Generation Factory platform and migrationThe “inverse legacy” dilemma: What happens to the MDFs?

Maintenance of persisting network structures allows further amortization

State of the art NG Access Network secures sustainable bandwidth distribution

Additional investment needs and requirement of adoption to new network structure

Additional efficiencies due to sale of MDF buildings

Avoidance of migration costsHigher efficiencies of access network

Preservation of present business models Shift the core to the curb / to the home

Durability of existing access nodesIncrease of bandwidth via VDSL

Competitors’ concernsIntended “Dutch Model”

?Home Street Cabinet MDF BB-PoP

Current structure

Efficient FTTC structure

Seite 13


Competition in the local loop by Wilhelm.tel and others Fiber deployment does not rely on access to incumbent’s infrastructure

Have you found the bottleneck?

Not yet..

NetCologne FTTH in cologne areaBuilding costs of 100 € per meter are profitable

HanseNet Own access network in Hamburg areaRoughly 1 Mio. customers of Alice-DSL

KDG Plans to massively invest in broadbandKDG’s 3-play customers raised 6 times in 2006

... and others

Photos: Wilhelm.Tel workers deploying fiber home access infrastructure

Wilhelm.tel FTTH and Cable TV in Schleswig-HolsteinInternet market share of 71 % in Norderstedt area

Sour

ce: W

ilhel

m.te

lpre

sent

atio

n, N

ovem

ber 2

006

Seite 14


Innovation outlook: Failure of European ICT-sectorDoes regulation hinder catch-up with worldwide fiber revolution?

Chart: FTTH Council 2006Note: U.S. deregulation takes effect

Thank you for your attention!

Wolfgang Kopf, LL.M.

Senior Executive Vice President Public and Regulatory Affairs

Deutsche Telekom AG, D-53105 [email protected]

mailto:[email protected]

Documents

VDSL and NGN access strategies - · PDF fileVDSL and NGN access strategies wik conference Königswinter, 21-22 March 2007. Seite 1 VDSL and NGN access · 21 March 2007 ... Mobile Internetas