october 4-7, 2004 los angeles, ca tales from the trenches the real world of ip services launch and...

October 4-7, 2004 • Los Angeles, CA • www.itexpo.com

Tales from the TrenchesThe Real World of IP Services Launch and Enhancement

Flat-rate Internet access and VoIP to subscribers sustainable success formula for network operators.

What new services and bundles will drive ARPU, protect margins?

How are new service decisions made, what new ops challenges must be met?

Real-world data from North America, Europe, Asia reveal profitable, market-tunable service bundles, and how they are growing subscriber bases, revenues and margins.


Speaker IntroductionsChris Gatch, CTO of Cbeyond Communications, www.cbeyond.net. Heads Cbeyond Engineering, ongoing network technology, R&D. At Cbeyond since 1999 founding as VP business development, later VP product development, VP engineering, and now CTO. Previously Sr Director of Strategic Marketing at Intermedia Communications.

BS, Computer Engineering from Clemson University, MS, management of technology from Georgia Institute of Technology. On board of Cisco BTS 10200 Users Group, Service Provider Board of IPCC.

Arun Sobti, Chairman and CEO of IP Unity, www.ip-unity.com 30+ years technical, management leadership experience in communications industry. Previously Sr.VP of ADC, President, ADC Broadband Access and Transport Group.

At Motorola 24 years, running global businesses and Motorola's third generation wireless efforts. Ph.D. and MSEE at University of Kansas, BSE from Punjab Engineering College in India.

Oliver Davis, Level 3 VP product marketing, Wholesale Voice Services, www.level3.com Leads awareness, demand generation and sales enablement activities. Joined Level 3 after its acquisition of Telverse Communications where, as VP product management, he oversaw product management, product development, strategic alliances and marketing for its Business Tone service. Also in product management and business development at NorthPoint Communications, AT&T Wireless.


• Cbeyond Communications is a privately held, Atlanta-based carrier.

• Leader in the emerging local voice and broadband services market and the world's first 100% Voice over Internet Protocol (VoIP) local phone network.

• Using VoIP and a 100% Cisco network, Cbeyond delivers to small business customers in Atlanta, Dallas-Ft. Worth, Denver and Houston an integrated package:

High quality local and long distance telephony services,

High-speed Internet access and

Internet-based applications

For about the same price that small businesses typically pay for local and long distance service alone.

• Cbeyond is slated to open fifth market in Chicago in Q1 2005.


Founded: 1999, first to market in VoIP IP services

Focus: IP services for blended and converged networks

Solutions: Harmony6000TM Media Server & IP Services Messaging, Conferencing/Collaboration, Prepaid/Debit Services

Advantages: • Many services, many media via one system• Carrier-guided innovation• Leading in commercial deployments 130+ platforms in top NG carriers, ILECs and cable operators: BellSouth, Cablevision, Cbeyond, Level 3, Liberty Media, SBC, Qwest, TELUS

• Cost-disruptive service creation, customization

• Simplifed user experience, feature breadth to drive growth,

cut churn

• Convergence enabling – bridging wireless and wireline


Fiber Services

Gateway Services

Private Line Transatlantic & Backhaul

Wavelengths

IP & Data Services – 25% of Communications Revenue (1)

Crossroads & Internet

Advantage

Site Patrol & VPN

DSL Aggregation

(3)Packet

Softswitch Services – 48% of Communications Revenue (1)

Managed Modem

Voice Services

Level 3 Communications Service OfferingsService Offerings

(1) Percentages are based on second quarter 2003 Communications GAAP revenue of $434 million

Gateway Services

Fiber Services

Technical Support

Transport & Infrastructure Services – 27% of Communications Revenue (1)

© 2004 Level 3 Communications, Inc. All Rights Reserved. Level 3 and Level 3 Communications areService Marks of Level 3 Communications, Inc. in the United States, other countries, or both.


VoIP Services Portfolio• Consumer – Oriented Services

– (3)VoIP EnhancedSM Local: local and LD service for customers who operate own switching infrastructure

– HomeToneSM: turnkey, broadband agnostic, residential local and long distance voice services

• Segments Cable Operators Enhanced Service Providers IXCs ISPs RBOCs



VoIP Services Portfolio (Cont.)

• Enterprise – Oriented Services– (3)ToneSM Business: hosted voice services for

small/medium enterprises sold through partners– Developing larger enterprise voice service to address

PBX market – targeting 2005 introduction

• Partners• CLECs• VARs• Business ISPs• Systems Integrators• RBOCs / IXCs



VoIP Services Portfolio (Cont.)

• Wholesale Services– (3)VoIPSM Local Inbound and (3)VoIP Toll FreeSM:

local inbound and toll free voice services– (3)Voice® Termination: wholesale long distance

service

• Segments• Conferencing Providers• Calling Card Providers• Outsourced Call Centers• Carriers• Enhanced Service Providers



Tales from the TrenchesThe Real World of IP

Services Launch and Enhancement

Panel Discussion


EU Broadband Penetration Rates, 4Q03

20 % -

10 % -

15 % -

5 % -

Source: ECTA



Western EU Telecom Spending2003-2008

Source: IDC2003 2004 2005 2006 2007 2008

$100 b -

$75 b -

$50 b -

$25 b - IP data

Fixed voice



Baby Bell subscriber lines, 2001-2004

150 m

160 m

140 m

130 m

120 m

110 m

Source: The Wall Street Journal



VoIP As The “Killer App”Ability to buy cheaper, better IP-based voice service as an alternative to traditional, monopoly-provided wireline is a significant value proposition for broadband

VoIP growth will accelerate broadband penetration, in turn will increase development of and demand for Voice over IP

% US broadband households with Voice over IP

10 % -

8 % -

6 % -

4 % -

2 % -

Source: InStat/MDR



Radical Implications For Our Industry

“The business models that have worked for decades for Verizon and other phone giants are

showing signs of unraveling. The cable industry’s push into the phone business and a

torrent of innovations such as Internet calling … are threatening the foundations of the nation’s

$300 billion telecom industry.”

The Wall Street Journal, August 2004



Asian Markets Preference Map for FeaturesAsian Markets Preference Map for Features( It’s a varied market, country-specific)( It’s a varied market, country-specific)Asian Markets Preference Map for FeaturesAsian Markets Preference Map for Features( It’s a varied market, country-specific)( It’s a varied market, country-specific)

Video/WebApplicationsVideo/Web

Applications

Basic ServicesBasic Services

Video IntensiveApplications

Video IntensiveApplications

•Consumer entertainment:

GamingStreaming Content

• Enhanced/premium enterprise svcs: Video Conference/ChatVideo Mail, MMSGaming/CollaborationPTT

• General Trends•Heavier emphasis on Mobile

• Regional Trends•Pre-paid, Custom Ring tones, Text Messaging•Varied interest in Voice Mail•Audio conferencing just picking up

october 4-7, 2004 los angeles, ca tales from the trenches the real world of ip services launch and...

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