Telefónica Broadband Access Strategy Panel contribution Telefónica Deutschland GmbH

Transcription

1 Telefónica Broadband Access Strategy Panel contribution WIK-Conference Panel: The reaction of national broadband operators to VDSL- the German Case Dr. Alwin Mahler, VP Strategy, Bonn

2 Index 01 Background on German Broadband Market & Telefónica 02 Telefónica Broadband Access Investment & Services 03 Broadband Access Regulation 04 Summary and Outlook 2

3 01 Background on German Broadband Market DSL as Basis for Convergence Broadband (DSL-) penetration uptake -> ~15 Mio lines (growth: 5 Mio `06) Broadband basis for VoIP -> Take-off in Germany 2005 Lines > 6 MBit/s (with ADSL 2+) -> basis for IPTV/VoD Established solution in many countries: -> Telefónica in Spain: Imagenio Base for Broadband & Convergence develops BB/IP-Access Basis for Services DSL Internet Access Device Set Top Box VoIP DECT Broadband WLAN TV/Video Market Structure & Regulation Broadband Marketstructure (End `06): ~96% DSL technology Of which ~70% T-DSL (incl. Resale) -> Dominant technology and DTAG Access regulation und conditions crucial ULL/TAL: Success story / fees significant LS: Since `05 fee decision, model in D Bitstream: Not available in D -> Consistent and consequent regulation (still) necessary Competition drives Market Dynamics Dynamics especially depend on infrastructure invests of OLOs -> Massive roll-out of OLOs Innovative & differentiated offers -> Convergence: Invest- & Adoption- Driver Access regulation: Stimulis for development -> Prerequisite for dynamics (still and ongoing) Consistent access regulation & competition guarantees innovation, invest and penetration 3

4 01 Background Telefónica in Germany: Leading alt. platform of convergent / NGN Broadband Services Broadband Investments Decision for significant Investment in BB Access Design anticipates convergence (up to 25 Mbit/s / ADSL2+) All over IP : Next Generation Network Aprroach (NGN) Future proof: Triple Play capable (incl. HDTV) (s. Darkfiber Backbone basis for Rich-Media-Content) ~60% pop coverage by Q3 or ~ 500 cities (today: > 40%) Positioning Wholesale-Focus: Components & plattform for 3rd parties Full-Service Infrastructure Provider: NB/BB, IP Voice Single/Double/Triple-Play accordording to customer needs Partnering agreemens with major ISPs and Carriers (AOL, Hansenet, 1&1, Freenet) ~ 300 mio revenues / 450 employees First choice wholesale, enabling our partners 4

5 02 Telefónica Positioning: TDe targets three main customer segments, serving to market leaders across the board Retail Narrowband Access Broadband Access (ZISP, ULL) Voice (Class IV, Class V, etc.) Completing features Consumer Business Telefónica Deutschland B2B Carrier Business xdsl services VoIP over DSL Completing features Hosting VPN building blocks Connectivity Voice termination IP Transit VoIP interconnection MPLS Network Department 5

6 02 Massive ULL roll-out within last 18m (targeting ~ 60% pop) Well positioned for ULL growth with key ISPs contracts ULL Coverage per competitor ~ DSL line shares German broadband market (in %, 2Q2006) Other Versatel 3 4 ARCOR TDe has contracts with all major ISPs without own infrastructure United Internet (1&1) HanseNet / AOL T-COM Arcor M-Net Telefónica Plusnet Versatel Hansenet Ewetel Net- Cologne Others T-Online Freenet Tiscali * Coverage 90% 57% 60% 55% 60% 51% 35% 20% 15% 8% 8% 6% TDe wholesale customers planned * Take over by Freenet in Q1/07 6

7 02 Infrastructure enables convergent services, including IPTV/VoD: Parallel IPTV-Streams and TV-signal in High Definition (HD)TV Required Bandwidth / content Bandwidth (in Kbit/s) ADSL2 ADSL Fast Browsing Content (per Stream) Regular Browsing / Picture Download Half Screen Video Full Screen Video IPTV (DVD Quality) IPTV IPTV (HD) 16:9 (SD) 1) Pictures News Sports Filme Good Video-/TV-Quality (SD) starting at ~ 2-3 Mbit/s Bandwidth & convergence allows for new forms of interactivity and services 7

8 02 Video many bandwidth driver: New video coding technologies are reducing bandwidth requirements Today H.264 HD = 8Mbps H.264 SD = 2Mbps 2009 H.264 HD = 5Mbps H.264 SD = 1.5Mbps New video coding technologies are expected to further reduce bandwidth requirement 8

9 02 Realization of QoS key also within IP / NGN based networks: Example of IP based voice services Network Operator, seeking for termination to A Content SIP-Server of application Service Provider Signaling Internet CPE of A Current scenario: IP based voice telephony (as any other application) becomes independent from network Application Service Provider and Network Operator are autarkic Quality (QoS) can not be guaranteed within this scenario 9

10 02 Realization of Quality (QoS) within IP / NGN networks: Example of guaranteed IP based Voice Telephony Interconnection Partner, seeking termination to A Signaling SIP-Server of application service provider IP-Network physical interconnection, dedicated for VoIP Content Endgerät A Application service provider & IP-Network operator secure quality of IP-Data from interconnection point throughout to the terminal Requires dedicated interconnection, securing quality of signaling and of data stream (i.e. via Session Boarder Controller) Securing Quality of Service fundamental for voice and other time/quality sensitive convergent applications (requiring respective quality securing mechanism) 10

11 03 Broadband Access Regulation fundamental for further development ACCESS TRAFFIC End Customer Main Distribution Frame (MDF) POP 1) Router Splitter last mile (Kupfer) DSLAM # ~7.900 Backhaul Concentration network # 73 Backbone 2) Upstream Internet (WWW) Resale (with discount) T-DSL Resale Bitstream (n/a) DTAG ZISP ISP Gate T-OCdsl Wholesale products Line Sharing 2,35 TAL 10,65 Wettbewerb 3) 1) Point Of Presence 2) For example Telefónica Deutschland Backbone 3) DSLAM of OLO, like Telefónica Deutschland Access Regulation 11 Fair, consistent pricing key (of all access products: TAL, LS, Bitstream) Equally important: SLAs (without discrimination)

12 03 also in respect to VDSL, especially in light of existing market structure and bottlenecks ACCESS TRAFFIC Fiber End Customer KVZ 1) MDF POP 1) Router last mile Splitter (copper) DSLAM Backbone Concentration Network Upstream Internet (WWW) # ~ # ~7.900 DTAG VDSL based on Bottleneck resources (from monopoly times) OLOs in significant disadvantage without access regulation (i.e. street cabinets, ducts or wholesale capacity at MDF) Telefónica ADSL 2+ NGN network allows for similar services (no new market) -> Equal access obligations: No basis for exemption of OLOs / access regulation -> Exemption would equal undermining OLO invest (since bn; 8 bn plan) -> Risk premium and discussion of suitable mechanism to cope with acknowledged 1) Street Cabinet 12

13 Summary & Outlook: Telefónica as wholesaler well positioned; consistent access regulation pre-requisite Telefónica Positioning Market and Access Regulation Conclusion BB-Access basis for all Services / Bundles (Voice and increasingly rich media content / TV) Telefónica ULL investment allowing for convergent services, IP / NGN based, covering 60% of population Partners: Major ISPs and Carriers Market structure dominated by DSL and DTAG Market currently divided up before saturation -> level playing field is vital Consistent & consequent access regulation (still) necessary (incl. all aspects: TAL, LS, Bitstream) Equally for VDSL, demand for access at MDF (at min. before any resale product) Competition and equal, consistent access regulation key for innovation and continued broadband dynamics Wholesale access to V-DSL infrastructure (on MDF-Level) 13

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