october, 2003 michael rouleau svp – business development [email protected]
TRANSCRIPT
Agenda
• Time Warner Telecom
• Key Strategies and Direction
• Time Warner Telecom Product and Roadmap
• Success
Time Warner TelecomA Unique Set of Network Assets
Greater than 17,000 local and regional fiber route miles across 44 marketsNearly 3,700 buildings lit with fiber based servicesNational footprint interconnected with fiber and an IP backbone
Time Warner Telecom’sHouston Network
• 853 Route Miles of Fiber
• 179 Buildings On-Net
• Hundreds of Buildings Passed
Houston
Time Warner TelecomChannel and Operations
• Channel Management• Direct Sales Executives
– Major Account Executives• Carrier Focus
– National Enterprise Account Executives
• Fortune 1,000– Account Executives
• “Unfortunate” 5,000– Associate Sales Executives
• SME Customers• Data Overlay Group
– Regional Data Specialists• Partner Channel Activities
– Cisco Powered Network• Metro Ethernet Emphasis
• Operations• Field Operations
– Customer Service Support Employees, Field Technicians
– Optical, Voice and Metro Ethernet Expertise
• National Operations Center– Provisioning, Monitoring,
Management• Tier 1, 2 & 3
– Internet Service NOC– Engineering
• VoIP• IP Services• Optical• Metro Ethernet
Time Warner TelecomStrong Financial Performance
• 2003 YTD Financial Results:– $327.785 Million in Revenue– $98.823 Million in POSITIVE
EBITDA
• Financially Disciplined– 17 Consecutive Quarters of
Positive EBIDTA– Manageable Debt Structure
• Metro Focused– Fiber facilities based provider– THE last mile solution into
many buildings– 41 Class 5 switches– 12 Markets with Media
Gateways and Softswitches
45%
38%
8%9%
Enterprise
Carrier
ISP
IntercarrierComp
Our Revenue Mix Is Increasingly Enterprise Focused…
While Data & IP RevenueGrew 10% 2Q03 over 2Q02
Time Warner Telecom 2Q03 Results
Current CommunicationsIndustry Trends
• Enterprise customers are building an increasingly diverse provider base– More than 70% of customers use
more than one provider for services• Customers are increasingly price
conscious– 36% of customers are likely to
switch local services– 75% of Verizon customers and
65% of Qwest customers would switch for better price
• Data Services offer higher retention– Commoditization is occurring– Customers churn less for price,
more for Customer satisfaction issues
# of Communications Providers Used
Four or More, 33%
Three, 12%Two, 26%
One, 29%
Morgan Stanley Telecommunications Services Survey, June, 2003
0% 20% 40% 60%
Very Unlikely
Somewhat Unlikely
Neither
Somewhat Likely
Very Likely
Data Service Churn
2002 2003
Current Customer Behaviors
• Customers looking for high quality providers to augment/replace current providers– Must have fairly complete bundle– Multiple provider strategy gives customers options
in meeting all of their communications needs– Robust data offer wins
• Customers demanding better ROI/TCO– VoIP– Metro Ethernet
• Customers demanding SLAs & QoS (with network tools, monitoring, management and visibility) as “ticket to play”– Managed Services
Market TrendsImplications For Time Warner Telecom
• Metro Ethernet– Market Leadership with comprehensive portfolio
strategy• 3 Services to meet customers’ applications and spending
needs– Product Extensions underway – Long Haul, 10G
• Target enterprise customers for Intranet• Layered services – Internet access and VoIP
– Challenge – Reach more buildings “off-net”• Voice over IP
– Calculated deployment strategy• Phase 1 – ISP Offload (3/01)• Phase 2 – Class 5 Replacement (1Q02)• Phase 3 – Next Gen Service Offerings (under dev)
Native LAN Services Architecture
Cisco15327
Cisco15454
Cisco15327
10/100
10/100
FE/GE
Cisco15454
Cisco15454
Cisco15454
FE/GE
10/100
10/100DWDM
DWDM
DWDM GE
GE
GE
GE
EthernetSW
E/SW
E/SW
GERing
10/100
10/100
E/SW
10/100
Customer Direct NLAN Point-to-Point Implementation Unmanaged, Aggressively
Priced Solution 10, 100 or 1,000 Mbps
Switched NLAN Any-to-Any Connectivity Ideal Implementation for Internet
Access Fully Managed Solution Protected Network 10, 100 or 1,000 Mbps
Ethernet over SONET NLAN Premium Point-to-Point or
Multipoint Implementation Protected Service Shared or Dedicated Ring Options Fully Managed Solution 10, 100, 622 or 1,000 Mbps
SwitchedNLAN
CD-NLAN
SONETNLAN
SONETNLAN
Metro Ethernet Service Comparison
Time Warner Telecom
Bell South
SBC Qwest Verizon ATT MCI XO Yipes Cogent On Fiber
10 Mpbs
50 Mbps (SONET)
100 Mbps
150 Mbps (SONET)
300 Mbps (SONET)
622 Mbps (SONET)
1 Gbps
Markets44 Markets
22 States9
States14
States14 States 3 States
69 Cities
Internet in 10 Cities
5 Markets40
Cities10
Cities21 Cities 12 Cities
ESCON
Fibre Channel
Transparent LAN
Internet Access
ICBAvailable Not AvailableSource: IDC May, 2003; Time Warner Telecom May, 2003
Met
ro E
ther
net A
cces
s Sp
eeds
Appl
icatio
ns
New Technology InfluencesStrategy and Direction
• Voice over IP
• Virtual Private Networking & Security
• Wireless– WiFi – 802.11a/b/g, 802.16
• Storage Networking
Time Warner TelecomProduct Direction
IntraNetand
IP Access
Value AddApps
VoIP IP Centrex, SIP Phone Support, SIP/H.323 Trunks, VoIP LD
Security Services, VPN, etc.
Extended NLAN (Ethernet over MPLS; any-to-any)
Switched NLAN (Ethernet over Fiber; any-to-any)
NLAN (Ethernet over SONET; PT-PT, MultiPoint)
Customer Direct NLAN (PT-PT, 10/100/1,000 Mbps)
Complete (or near) In Progress Planned (Future)
Long Haul Native LAN Service
Leverage Existing IP Backbone, MPLS
Fully Meshed Network Between all 44 Markets
Scalable – 2 Mbps to 1,000 Mbps Introduce New VoIP Bundles –
Long Distance, Voice VPN
Long Haul Native LAN
TWTC NLAN
TWTC NLAN
TWTCIP Backbone
Gig-E Ring
Gig-E Ring
SONET Ring
MPLS Tunnel
MPLS Tunnel
* Under Development
ElementManagement
Server
Redundant
Region1 Cities
Media Gateway xN
NFS/NTP x 2
Eth
ern
et
& I
P S
wit
ch
x 2
SS7 Gateway x 2
STP
STP Region2 Cities
Eth
ern
et
& I
P S
wit
ch
x 2
STP
STP Region3 Cities
Eth
ern
et
& I
P S
wit
ch
x 2
STP
STP
Server 2 Server 2 Server 2
City 1Softswitch
Call Control
City 2Softswitch
Call Control
City 3Softswitch
Call Control
Oracle DBServer
SS7 Gateway x 2
NFS/NTP x 2
Media Gateway xN
Media Gateway xN
NFS/NTP x 2
SS7 Gateway x 2
VoIP - Regional Network
TWTC IP Backbone
Application Notes Converged Network
Infrastructure – Voice and Data Networking
Distributed Media Gateways and SS7 Servers
Regional Softswitch Call Control
Centralized Feature Server Control
Cap and Grow Class 5 Technologies Efficient Network Deployment Optimizes CapEx Spend 3 Phase Approach To Packet Telephony:
- ISP Offload (3/01) - Class 5 Replacement (1/02) - Next Gen VoIP
Future VoIP & NLAN IntegrationSIP & H.323 Trunking
PSTN
Packet Telephony
Switch
Native LAN/Metro Ethernet
Gigabit Ethernet
SONET
TWTC Central Office
SIP Phones10/100 Mb NLAN
IP PBX, Gatekeeper
Ethernet transport carries VoIP to the PBX, desktop Support for SIP & H.323 trunking services QoS over Switched and SONET based Ethernet services* Under Development
VoIP Long Distance
TWTC IP Backbone
PSTN
Houston
PSTN
San Diego
MPLS Tunnel
Packet Telephony Switch
Packet Telephony Switch
ABC CompanyCorporate HQ &
Branch Office
Application Notes Leverage IP Backbone to carry
long distance voice – market-to-market
No impact to customer operational network
QoS via MPLS implementation Support for customer on-net
traffic Support for Voice VPN
Better Connections
Between Company
Sites!
* Under Development
• Time Warner Telecom’s Track Record of Success Means…
• Broad Fiber Optic Reach– Over 17,000 Route Miles of Fiber– Metro Ethernet available to Nearly 3,700 Buildings in 44 Markets
• Financial Strength to Grow in Tumultuous Market• Product and Service Innovation
– Industry Leading Data & IP Services• Metro Ethernet, IP Networks, VoIP
Tomorrow’s Network…TODAY!
Time Warner Telecom
Thank You