Telcos’ views of openness.ppt

1、,Roland MONTAGNE Director Telecoms Business Unit +33 6 80 85 04 80,Telcos views of openness,Introduction,DigiWorld Summit 2009,Agenda,Telcos landscape Usages Growth Globalization NGN/NGA challenges FTTH LTE IDATE views on the Future of Telcos Telcos are leaving the Network The sm

2、art pipe Two Sided Business Questions,Telcos landscape,Usage challenge: the iceberg effect,Notes: (1) An SMS/MMS or e-mail is considered as a 30 second call.,2005,2006,2007,2008,2009,FRANCE TOTAL COMMUNICATIONS MARKET (billions of call minutes and equivalents),2010,Stable usage Revenues threatened b

3、y multiple alternatives and technology disruptions,TELEPHONY,EMERGING COMMUNICATIONS,Fast increasing usage Not monetizable through traditional pricing models,1,The growth challenge: the wireline market is stagnating,EU 5 PSTN/ISDN lines net adds (000s),Outgoing call minutes per year in the UK (billi

4、on minutes),Fixed line loss is generalizing across Western Europe,while usage is declining under fixed mobile substitution,resulting in high deflationary pressure on wireline voice,EU 5 fixed voice market 04-08 evolution (bn),barely compensated by broadband growth,EU 5 fixed services market evolutio

5、n ($bn),2,while the mobile market is loosing steam,Mobile market penetration (% pop.),Mobile ARPU (/month),Penetration saturation is looming across Europe,and ARPU continues to decrease,Mobile revenue growth in EU 5,2,Globalization challenge: impact on markets are now clear,Mobile markets will incre

6、asingly be driven by emerging countries,2005,2010,Top 10 mobile markets worldwide (M subs),Fixed broadband regional breakdown (M subs),and fixed broadband will see a high dominance of the Asia Pacific region,3,Emerging markets: lands of growth,Compared to 2005, China Mobile is now well installed in

7、the Top 10 with a growth of 20.9% in 2008. BRIC + Mexico representing 33% of worldwide telecoms services market to be compared to 20% in 2002 We can now identified in the ranking, European Telcos now clearly positioned in Emerging countries such as Telefonica (Lat. Am, China), Vodafone (India, Turke

8、y) or France Telecom (Africa) BT is the only Telco not claiming a Fixed Mobile strategy as the right choice. Even Vodafone is today engaged in a Fixed Mobile strategy,Source: IDATE,3,1 Excludes MCI, which was consolidated in Q4 2005 2 Excludes Vodafone KK, acquired by Softbank / 3 Does not include O

9、2 4 AT&T Incorporation (SBC before November 2005),(*) Fiscal year ended March 31, 2009,NGN/NGA challenges,FTTH: APAC has already a strong leadership,In terms of operators, the gap between Asia and the rest of the world is important Among the globes ten largest FTTx operators, seven are Asian, two ar

10、e North American and one is from Russia. No Western European operators in the Ranking NTT is still the largest FTTH/B operator with a base of 11.8 million subscribers but probably no more for a long time Indeed China Telecom is now counting 11.2 million FTTx subscribers at June 2009 being mainly FTT

11、x/LAN (EPON LAN/DSL),Worlds top 10 FTTx operators in terms of subscribers at June 2009,Source: IDATE,(1) 560 000 FTTH subscribers and 10.6 millions FTTx/LAN subscribers,1,FTTH in Europe - Overview: Projects,IDATE has identified 233 FTTH/B projects in Europe of which 120 are new initiatives since Jun

12、e 2005 Some significant FTTH/B European deployments at June 2009,Source: IDATE for FTTH Council Europe,The diversity of players involved in FTTH/B in Europe,2,FTTH key variables for costs: Dwelling-unit type ,Density Vertical structures,Civil engineering and cable costs based on population density f

13、or GPON technology ( per outlet) Source : IDATE,-30%,-30%,Civil engineering and cable costs based on average number of apartments per buildingfor GPON technology ( per outlet) Source: IDATE,3, International benchmark Dwelling Type in Europe,In Europe, countries like Spain, Italy, Germany are well po

14、sitioned for FTTH It will be more expansive to deploy FTTH in the UK for example,3,Infrastructure competition vs Wholesale & Open Model,Wholesale & Open Model OFCOM in the UK promoting ALA (Ethernet Wholesale) 2 or 3 Layers Open Model in Sweden, Denmark or the Netherlands Infrastructure competition:

15、 Portugal & France sharing ducts Incumbents ducts are an essential infrastructure Access to Incumbents civil engineering must be guaranteed to allow all operators to invest,Source : OFCOM,4,LTE deployments announced,Earliest LTE deployments announced for end-2010 The forerunners of LTE deployment ar

16、e NTT DOCOMO and Verizon Wireless A host of other big-name MNOs is committed to deploying the technology from 2011 onwards,Source: IDATE,5,Major operators LTE commercial deployment schedule,Geographical mapping of early LTE commercial deployment,Modelling LTE deployment CapEx,Considering the case of

17、 a MNO already operating GSM and 3G networks, the total cumulated investment for the LTE RAN overlay deployment amounts to 223 million EUR during 7 year period It does not take into account the cost of a national radio licence for 20 MHz of paired spectrum in the 2.6 GHz band which is valued at 80 m

18、illion EUR, nor backhauling costs estimated at 112 million EUR. Then Total investment represents 415 million EUR This is the figure to be considered for a territory of 10 million inhabitants with a 75% population coverage in urban and suburban areas,Source: IDATE - LTE deployment model,6,IDATE views

19、 on the Future of Telcos,First option: Telcos are leaving the Network,Source: IDATE - FB,1,The physical network is built and operated by a third party: Housing company, Local Body, Neutral operator,Source: IDATE - FB,Outsourcing of the network: Network sharing and outsourcing have gathered significa

20、nt momentum in recent years and became mainstream even for tier 1 operators in major markets Regulatory options: Functional separation (UK) or Structural separation (NBN in Australia),Network outsourcing deals worldwide,Source: IDATE,Exemple of Open Network Business Model: Familje Bostader, Housing

21、Company in Stockholm,Government National action vs Local investments,Government National Approach: Greece Development of an open-access passive network that will provide FTTH to approx. 2,000,000 homes and businesses, in Athens, Thessaloniki and at least 54 other cities across Greece. Indicative pro

22、ject budget: 2.1 billion EUR There is a decision for project co-funding by the state and private investment. Local Approach: France and investment of Regional & Local networks These rollouts represent an investment of over 2 billion EUR (50% being private funds), have had a real impact especially on

23、 the development of unbundling and on bringing FTTx access to business parks and public sites,1,Second option: The smart pipe,The Telco strategy is to built and operate the best network available The Telco is operating as a wholesaler The operator is addressing customers such as Corporates but also

24、Google, Yahoo, Microsoft, Media companies,2,21st CN by BT,Third option: Two Sided Business,The Fully integrated Telco is not really a privileged option Two Sided Business Telco provides services to upstream service providers and downstream end-users by enabling them to interact via a platform operated by the Telco The operator Collects revenue from either or both sides Going from a “Dump Pipe” Model to a “Full Service” Model implementing a Service Delivery Platforms and Open APIs Open APIs can be Outside-In (Platform aggregator) o