CITI at the Columbia Business School: State of Telecom

Transcription

1 CITI at the Columbia Business School: State of Telecom Assessing the Economic Impact of Broadband Plans 23 October 2009 Chris Boam Director, International Public Policy and Regulatory Affairs Washington, DC

2 U.S. Broadband at a Glance U.S. Broadband Status: Broadband available to 94% of U.S. households 63% of households subscribe to broadband Over 80% of population has multiple choices of broadband platform and provider 50% of subscribers receive 3+ Mbps, 32% receive 6+ Mbps (actual speed) U.S. Government Activity: U.S. Economic Recovery Plan provides $7 billion to reach underserved FCC developing National Broadband Plan 117 Days to the Plan Support for high-tech classrooms, health information technology, and smart electric grids 2

3 U.S. Platform Diversity unique globally With the highest level of platform diversity globally, or nearly the highest, depending upon your measure. 58% of the U.S. broadband market is occupied by non-dsl technologies (cable, fiber, satellite, BPL, other) Wallsten: applying IDATE data (March 2009) 3

4 Private Investment has been Driving U.S. Broadband Deployment Private Capital Invested in U.S. Broadband Deployment: $367 Billion ( ) CAPITAL INVESTMENT BROADBAND INFRASTRUCTURE ( ) Annual Capital Investment in 2008 up 78% over 2003 Scale and scope of broadband construction greater than the Interstate Highway System in the 1950s and the Apollo Space Program in the 1960s 4

5 Expanding Deployment is a Key Social Policy Goal to which Verizon is Committed Capital Expenditures (in US$ billions) ** Verizon GE Exxon Mobile NTT Wal Mart Conoco Phillips AT&T Deutsche Telekom * GM France Telekom Vodafone Ford Telefonica British Telecom Intel Telecom Italia * Home Depot Time Warner Johnson ** & Johnson Procter & Gamble Korea Telecom Hew * lett-packard ** Pfizer Microsoft Google Walt Disney Boeing 3M DuPont New scorp Cablevision ** * Comcast IBM Citigroup Source: All values from Yahoo Finance data, with the exception of: * Ovum Global Capital Advisory Service (Mar. 2009) ** As depicted in respective 2008 year-end 10K and exhibits

6 Investing in Deployment and Innovation Core network global and U.S. Most U.S. state markets nearly 100% inter-office fiber by 2005 prior to launch of FiOS Field trials underway for 100G optical service (typical speeds today 10G and 40G) Fiber-to-the-Home FiOS By 2010 Verizon will have spent $23 billion deploying the nation s most advanced fiberoptic network to deliver the benefits of converged communications, information and entertainment services (covering roughly 18 million premises) FiOS FTTH services already available to 13.2 million homes and businesses to-date Wireless 3G and 4G (LTE) Verizon EV-DO (top end: 3Mbps down / 1Mbps up; average 1.4Mbps / 8Kbps) is in 245 major metro areas and 194 primary airports a potential population of 288 million Plans to develop and deploy its fourth generation mobile broadband network using Long Term Evolution (LTE) with commercial deployments beginning by YE 2009 Testing in collaboration with China Mobile and Vodafone LTE seen as technology for wireless broadband in global markets Applications: Open Development Initiative Joint Innovation Lab (JIL) developing applications with Vodafone, China Mobile, and Softbank 6

7 Comparative Data Broadband Basics The U.S. still ranks among the highest globally in terms of household take-up and availability of broadband Col 1: EU and NTIA surveys (2008); Col 2: OECD (ACMA for Aust.) OECD (May. 2009) 7

8 EU and Select ROW-US Broadband Comparisons By-household Jan. 2008, May 2009 Household Internet Adoption (% of households taking broadband) with additional countries overlaid South Korea: 93% 80 Iceland: 76% Japan: 67% Canada: 64% 09 Pew study Average: 63% (up from 55% at eoy 07) 50 Switzerland: 54% U.S. Average: 50.9% Australia: 43% EU Average: 35.4% N. Zealand: 34% 20 Mexico: 8% 10 0 NL DK NH AK MA SE CT UT RI WA CO FI HI OR NJ CA MD KS NV NY NE AZ GA VA FL MN LU WI DC IL BE WY DE OH ND ME FR PA TX SD NC UK IA VT MI ID MO EE MT NM LA IN TN MT KY SC SL OK AR AL AT MS DE WV CZ ES PL LV HU IT CY PT IE LT SK RO EL BG Source: EU Member States European Commission, DG-Information Society, E-communications Household Sruvey (June 2008), at 54. U.S. States U.S. Census Data, at reported in U.S. Dept. of Commerce, NTIA, Networked Nation: Broadband in America (January 2008), at Table B-3. Other countries OECD Broadband Statistics, Households with Broadband Access (November 2008). 8

9 Focus on Fiber and Mobile Broadband From September 2007 to September 2008, the number of FTTH connected homes in the U.S. increased from 1,478,597 to 3,760,000 (254%) For the same period, the number of homes and businesses passed with fiber in the U.S. increased from 8,003,000 to 13,825,000 (120%) By comparison, it was announced in early 2008 that Europe had reached its one-millionth FTTH connection (today, Europe has roughly 1.6 million). Europe s overall FTTH deployment growth rate in 2008 (comprising that 1.6 million) was 27% in homes passed and roughly 20% in subscriptions Europe s fiber leader Sweden had roughly 400,000 FTTH connections by the end of 2008 U.S. mobile broadband: Wireless broadband connections grew from 22.2 million to 50.9 million 128.7% growth between 2006 and 2007 alone. 3G mobile data coverage is very high in a number of countries, including Sweden, Korea, Luxembourg, Italy, the U.K. and the U.S. generally, mobile access to the Internet and the use of mobile applications is lagging in all but a few countries. Above data: IDATE, Fiber to the Home Councils (Europe and North America) (year-end 2008) 3G mobile data coverage: OECD, Broadband Growth and Policies (2008), at 36. 9

10 Using Broadband Has Profound Societal Impact Environment Broadband helps achieve energy independence & environmental goals Broadband use can reduce carbon emissions by 22% by 2020 Telework, smart grids and smart highway/transportation systems using broadband can reduce total U.S. oil consumption by up to 21% Healthcare Electronic health care records and remote monitoring tools using broadband will reduce both costs and medical errors Serving people with Disabilities Enables more effective communication, expands employment opportunities, increases education and social interaction via remote interpreting, and expands telemedicine for disabled 10

11 The Global Digital Economy 11 Lessons certainly Truisms a few Marching Orders not likely 1.7 billion Internet users global population 6.8 billion Global IP traffic will quintuple from 2008 to 2013 Overall 40% CAGR 08-13, mobile data 131%, consumer 42%, business IP 33% IP traffic growing fastest in the Middle East, Africa, followed by Latin America Key drivers are high definition video + high speed penetration [Cisco 2009] Ever increasing consumer-generated content For every 10% increase in high-speed Internet access, economic growth rises 1.3% [World Bank 2009] Networks and services and users are global Global fiber optic networks IP connectivity crossborder services Growth - through careful understanding of when legacy regulation is relevant i.e., markets are not one-sized-fits all, and the strategies that drive them, are different

12 National Broadband Plan: Challenges Connecting everyone Mapping Multiple technologies Appropriate government role Building upon globally unique market strengths Promoting adoption Scale applications and services Energy conservation Health care Education Remove barriers Cybersecurity Safety Countries that see the most productivity and economic advantage from broadband are those which have: Successfully and deeply integrated broadband connected technologies into their daily activities; Have learned how to use the full range of capabilities offered by connected digital technologies; and Have included all segments of society in the use of these technologies. Statement on the release of the 2008 Connectivity Report 12