fastweb’s business model in the peculiar case of … erg...fastweb’s business model in the...
TRANSCRIPT
Turin – April 17th, 2007
Fastweb’s Business Modelin the peculiar case of the Italian market
PG. 2
Fastweb NGN investments
Fastweb’s role on the Italian broadband market
Italian NGN deployment
Regulation sustaining investments and innovation
Agenda
PG. 3
What is an NGN?
g A Next Generation Network (NGN) is a packet-based network able to provide services including Telecommunication Services and able to make use of multiple broadband, QoS-enabled transport technologies and in which service-related functions are independent from underlying transport-related technologies. It offers unrestricted access by users to different service providers. It supports generalized mobility which will allow consistent and ubiquitous provision of services to users
< ITU-T Recommendation Y.2001 (12/2004) - General overview of NGN>
Since 2000 Fastweb Network is NGN Compliant:bPacket-basedbQoS-enabledbIndependent from technologiesbOpenb4P ready
PG. 4
Core Network and Access Network
Access Network Home/OfficeCore NetworkServices
IP Core Network
FTTH
xDSL ULL / WS
WI-MAX
Voice, data and video
Fastweb NGN Network
MVNO
PG. 5
Fastweb Network in figures
Milano
Tokyo
21500 KmNew York
Los Angeles
Milano
Tokyo
21500 KmNew York
Los Angeles
23.500 km
4 billion euros invested since 1999 45% population coverage130 local areas
10.000.000 home passed850 Local Switches with ULL23.500 km network
PG. 6
Fastweb Metropolitan Area Network
FTTx Access
Mini PoP
CentralOffice
Large Business Access
Large Business Access
xDSL Access
Long Dist
ance
LD PoP
Metro PoP
MetropolitanArea Network
GigaEthernetRing
BB Equipment
LocalInterconnection
to TI PSTN Network
PG. 7
Innovative networks and innovative services on traditional network: from bundle to convergence
Diversification
Inte
grat
ion
commercialbundledoffers
advancedservices
convergentservices
Bundled services
POTS
Internet
IPTV
VoIP
Communication services on TV
voice/video callsMail box
Hybrid phone
Multimediaconference
Autoproduction andContent sharing
Presenceservices
New IP services Roadmap
PG. 8
Drivers for Bandwidth Demand
g Bandwidth demand is driven by Triple Play of VoIP, IP Video and Internetg Network Bandwidth dominated by IP Videog Access, Metro and Core
Internet Bandwidth
ICC Bandwidth
PiP Bandwidth
VoD Bandwidth
MulticastBandwidth
0
10,000
20,000
30,000
40,000
50,000
60,000
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
kbps
IP Video
Internet
VoIP
0
30,000
60,000
90,000
120,000
150,000
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Mbp
s
0
PG. 9
Fastweb NGN investments
Fastweb’s role on the Italian broadband market
Italian NGN deployment
Regulation sustaining investments and innovation
Agenda
PG. 10
Fastweb snapshot (FY 2006)
g Customer Base: 1.062.400
g Revenues: 1.260 (€mln)g 40% consumer
g 60% business
g EBITDA: 425 (€mln)
g EBITDA Margin: 34%
g CAPEX: 529 (€mln)
PG. 11
Fastweb services
g “Triple-play” offer is ready for MVNO and WiMax
Super ADSL 20 Mbps “Easy” offer New Videostation SKY IP-Tv
Con
sum
erB
usin
ess
EasyDouble Play
VPN - Fast.CompanyInternet – Fast.Net(from 1 Mbps to 10 Gbps)
Fast.VoIP IP CentrexManaged e Hosted
IP PABX
VDC HD
POTS/ISDN
BackboneIP MPLS
BackboneIP MPLS
PSTNPSTN
iMSSiMSS
POTS/ISDNPOTS/ISDN
BackboneIP MPLS
BackboneIP MPLS
PSTNPSTN
iMSSiMSS iMSSiMSSiMSSiMSSPSTNPSTN
BackboneIP MPLS
BackboneIP MPLS
iMSSiMSS
PSTNPSTN
BackboneIP MPLS
BackboneIP MPLS
iMSSiMSS iMSSiMSSiMSSiMSS
LAN
LAN
LAN
LAN
LAN
pop
pop
pop
poppop
pop
LAN
PABX
PABX
PABX
PABX
PABX
PABX
PABX
PABX
PABX
PABX
PABX
PABX
LAN
LAN
LAN
LAN
LAN
pop
pop
pop
poppop
pop
LAN
PABX
PABX
PABX
PABX
PABX
PABX
PABX
PABX
PABX
PABX
PABX
PABX
PABX
PABX
PABX
PABX
PABX
PABX
PABX
PABX
PABX
PABX
PABX
PABX
PG. 12
Fastweb, the first IPTV provider
2001 2002 2003 2004 2005 2006
PG. 13
FASTWEB11%
TI Wholesale13%
TI Retail71%
Other OLOs 5%
TI Retail67%
FASTWEB13%
Other OLOs7%
TI Wholesales
13%
Market Share of Broadband Market
Italian Broadband Connections and Market Shares
6.8 Million EoP 2005
Source: FASTWEB Elaboration on Analysts' Estimates
~ 8.4 Million EoP 2006E
FASTWEB is increasing its share in the broadband arena, exploiting the enlarged footprint and the enhanced product portfolio
The company consolidated its positioning as the real alternative to the incumbent
PG. 14
ADSL WS and CVP
FTTH
INDOOR
OUTDOOR
Fastweb strategic choices
ADSL ULL
20061999-2002 2002-2005 2007-20082007 2008+
WI-MAX
GPON / VDSL
MVNO
WI-MAX
PG. 15
Fastweb NGN investments
Fastweb’s role on the Italian broadband market
Italian NGN deployment
Regulation sustaining investments and innovation
Agenda
PG. 16
Geographic deployment and digital divide (today)
cities800 5000
FTTB
33%
Population
10%
ADSL Wholesale 12%
8100
ADSL ULL
Digital Divide
45%
40
Bandwidth ∞ 0 Mbit/s
PG. 17
Geographic deployment and digital divide (tomorrow)
Cities100 2000
FTTB50%
WiMAX / ADSL WS
20%
ADSL ULL
FTTx (Node, Cabinet) 30%
81001 Mbit/s∞Bandwidth
Population
PG. 18
Fastweb NGN investments
Fastweb’s role on the Italian broadband market
Italian NGN deployment
Regulation sustaining investments and innovation
Agenda
PG. 19
Regulatory innovation for technology innovation
g The aim of regulation should be to promote a competitive environment, investments and technological innovation
g Regulatory Innovation and not Regulatory Holiday
g Today the goals should be:
g NGN development
g Convergent services
g Contents regulation
PG. 20
What kind of regulatory approach
g Regulation should promote “competition among networks” to develop innovation in services
g The “NGN context” reproduces same environment as mobile networks start-up
g “Mobility Premium” has allowed the development of plurality of networks (in Italy: three 2G and four 3G)
g A “Broadband Premium” could promote NGN development
SAME RULES IN SAME CONTEXTS
COST ORIENTED REGULATION FOR
INTERCONNECTION
SYMMETRIC REGULATION
PG. 21
Termination charges
g Fastweb reverse termination revenues are 18% of its network investment depreciation, while, for an example, TIM’s annual termination revenues are more than 420% of its network investment depreciation
g MNO has already recovered most of its starting network investment and so current high mobile termination rates represent a source of extra-profits
02468
1012141618202224262830
….. 2000 2001 2002 2003 2004 2005 2006 2007
term
inat
ion
char
ge (€
cent
)
Incumbent Mobile Operators Fastweb
11,2 €cent
3,3 €cent
PG. 22
What kind of regulatory approach
g …this is the moment for a “far-sighted” approach to regulation to foster innovation and growth in competitive New Generation broadband Networks…
PG. 23
Disclaimer
This presentation contains forward-looking information that is subject to risks and uncertainties associated with FASTWEB and the telecommunications sector.
This information reflects FASTWEB management expectations, based on currently available information. The forward-looking statements reflect certain assumed market parameters and other fundamentals and may differ materially from actual future results.