Telecommunications Business Overview. Clark Kinlin President & Chief Executive Officer Corning Cable Systems

Transcription

1 Telecommunications Business Overview Clark Kinlin President & Chief Executive Officer Corning Cable Systems

2 Forward Looking and Cautionary Statements Certain statements in this presentation constitute forward looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of Such forward looking statements are based on current expectations and involve certain risks and uncertainties. Actual results might differ from those projected in the forward looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward looking statements is contained in the Securities and Exchange Commission filings on the Company and at the end of this presentation. 2

3 Key Messages Telecom continues to deliver balance and stability Telecom macro trends remain strong Technology substitution from copper to optical will continue Innovation will strengthen Corning s market position 3

4 Agenda Corning s Telecom Segment Overview Market Trends and Growth Drivers Corning's Position and Opportunity 4

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7 Corning s Telecom Segment Overview ~ 30% of Corning s total sales ~ 40% of Corning s employees Corning s keystone component innovations in optical fiber have led the industry for decades Single-mode fiber Dispersion shifted fiber Single-mode ClearCurve fiber Multimode ClearCurve fiber Cable for all carrier / enterprise applications 7

8 Corning s Telecom Segment Overview We design and deploy network solutions for all applications Cable, connectors, hardware and equipment for carrier / enterprise networks Network services including network design, project management, installation and maintenance 8

9 Agenda Corning s Telecom Segment Overview Market Trends and Growth Drivers Corning's Position and Opportunity 9

10 Telecom in an attractive industry Telecom Segment Revenue CAGR 5% 10

11 Longer term, we expect telecom infrastructure spending to grow based on strong macro trends Telecom Macro Drivers Infrastructure Implications Bandwidth Demand Customer Financial Health Public Policy Regional Diversity Technology 11

12 Long Haul Optical has proven in over copper Long Haul & Metro Transmission Distance Long 20-1,000 km Bandwidth Demand Deployment & Operating Cost New Build % Optical 12

13 Long Haul Bandwidth demand is high & growing Long Haul & Metro Average Long Haul / Metro BW Transmission Distance Long 20-1,000 km 20 Bandwidth Demand Deployment & Operating Cost Growing Proven Gbps 10 CAGR 43% New Build % Optical ~100% F Source: Infonetics & Corning analysis 13

14 Access Optical continues to prove in over copper as data rates increase & deployment costs decrease Access Transmission Distance Growing 1-20 km Bandwidth Demand Deployment & Operating Cost New Build % Optical 14

15 Access Consumer bandwidth demand is growing as applications increase Access Transmission Distance Bandwidth Demand Deployment & Operating Cost New Build % Optical Growing 1-20 km Growing Mbps Mbps Peak Bandwidth Demand (Mbps) 25 Mbps 100 Mbps Source: Corning Incorporated analysis, Service Provider interviews 15

16 Access Optical solutions already prove in over copper for new builds & are closing the gap vs. overbuilds Access FTTH Costs Homes Passed + Homes Connected 2,600 Transmission Distance Bandwidth Demand Deployment & Operating Cost Growing 1-20 km Growing Declining $ Deployment Cost ,450 = $/HP = $/HC 1,300 New Build % Optical F 16

17 Access Delivering competitive service offerings will require more fiber in existing networks Transmission Distance Bandwidth Demand Deployment & Operating Cost New Build % Optical FTTH FTTC FTTN FITL Fiber to the Home Curb Node Loop Access Growing 1-20 km Growing Declining % Mbps Mbps Mbps Internet TVs Peak BW Bandwidth Demand Demand vs. BW Supply (Mbps) BW Supply 25 Mbps Internet DVR HDTV TVs 100 Mbps DVRs Gaming Telework Bandwidth BW Demand Internet Super HDTV HDTVs Tech Choice FTTH FTTC FTTN FITL % Fiber 100% 60-90% 30-60% 0-30% 17

18 Enterprise Optical continues to prove in over copper as data rates increase & deployment costs decrease LAN & Data Center Transmission Distance Static 10-2,000 m Bandwidth Demand Deployment & Operating Cost New Build % Optical 18

19 Enterprise Systems make extensive use of fiber in the campus backbone, building backbone & data center LAN & Data Center Transmission Distance Bandwidth Demand Static 10-2,000 m Growing Deployment & Operating Cost New Build % Optical 19

20 Enterprise Optical solutions continue to prove in over copper as data rates increase & deployment costs decrease LAN & Data Center Horizontal Primarily copper Transmission Distance Bandwidth Demand Static 10-2,000 m Growing Building Backbone 80% fiber & increasing Deployment & Operating Cost Declining New Build % Optical 20-60% Data Centers 60% fiber & increasing Campus Backbone 95% fiber & increasing Source: BSRIA and Corning Analysis 20

21 Agenda Corning s Telecom Segment Overview Market Trends and Growth Drivers Corning's Position and Opportunity 21

22 Corning Telecom has global manufacturing scale and strong relationships with leading operators Optical Fiber Optical Cable H&E Hardware & Equipment Commercial Centers 22

23 Corning wins through innovations that enhance network capability & reduce operator cost 23

24 Corning continues to bring new innovations for long-haul & metro applications SMF-28e fiber Most widely deployed singlemode fiber in the world LEAF fiber Optimized for multi-wavelength long-haul networks SMF-28 ULL fiber Optimized for long-haul terrestrial networks 24

25 Corning s innovations in the access network drive deployment & connection costs down Gel-Free Cables Reduced installation cost Corning OptiTap OptiTip Connectors Outside plant hardened connector Corning FlexNAP System Reduced installation cost 25

26 ClearCurve single-mode fiber allows installers to treat fiber like copper in challenging MDU environment 26

27 ClearCurve single-mode fiber allows installers to treat fiber like copper in challenging MDU environment Tight Bends Staples Cable Tension ClearCurve 2008 Update 60 introductions 50% initiated a trial or test Deployed on 4 continents Two large carriers standardized on ClearCurve singlemode fiber for MDU 27

28 The next challenge is the data center 28

29 The next challenge is the data center Customer Needs Higher density systems Simplified management Increased reliability Energy efficient infrastructure 29

30 Just announced ClearCurve multimode fiber increases flexibility & reliability in Enterprise applications Benefits Up to 10x better bend performance vs. standard 50 µm multimode fiber High bandwidth OM3 & OM4 capability Fully standards compliant Fully backward compatible Macro-bend loss, 850 nm, 2 turns (db) Standard OM3 Fiber ClearCurve OM3 Fiber Bend Radius (mm) 30

31 ClearCurve multimode fiber gives us the ability to deliver enhanced products for data center applications ClearCurve multimode fiber 10x better bend performance versus standard multimode fiber Optimized Cable Designs Current design New design Smaller diameter & bend radius Integrated Hardware Optimized density, installation efficiency & air flow 31

32 ClearCurve multimode fiber will enable Corning to revolutionize cable & hardware solutions From this to this Future 32

33 Key Messages Telecom continues to deliver balance and stability Telecom macro trends remain strong Technology substitution from copper to optical will continue Innovation will strengthen Corning s market position 33

34 Forward Looking and Cautionary Statements This presentation contains forward looking statements that involve a variety of business risks and other uncertainties that could cause actual results to differ materially. These risks and uncertainties include the possibility of changes or fluctuations in global economic conditions; currency exchange rates; product demand and industry capacity; competitive products and pricing; availability and costs of critical components and materials; new product development and commercialization; order activity and demand from major customers; capital spending by larger customers in the telecommunications industry and other business segments; the mix of sales between premium and non-premium products; possible disruption in commercial activities due to terrorist activity and armed conflict; ability to obtain financing and capital on commercially reasonable terms; acquisition and divestiture activities; the level of excess or obsolete inventory; the ability to enforce patents; product and components performance issues; and litigation. These and other risk factors are identified in Corning s filings with the Securities and Exchange Commission. Forward looking statements speak only as of the day that they are made, and Corning undertakes no obligation to update them in light of new information or future events. 34

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