Gunnar Alcatel Lucent Open Networks

Scandinavian Open Access Networks5 years of success…and a few lessons learned

Gunnar Florus <[email protected]>

Manchester, June 22nd 2009

2 | Manchester Open Networks | June 2009 Copyright © 2009 Alcatel-Lucent. All rights reserved.

Investing in FibreMarket Drivers and Services1


NG game consolesw/Internet

(PS3, Xbox 360, Wii: Nintendo forecasts 16M

units in ’07)Multimedia-capable

PCs (25 Mio sold in ‘06,10% growth)

Digital photography (20% of BB subs used

Internet upload services)

MP3 players (35 Mio sold in ’06,

30% growth)

Multimedia applications drive the demand for UHS broadband

Heavy Reading FTTH Market in Europe 2006-2011

High-definition TV sets

(50% of TVs purchased are HD-

ready(5% in ’05))

Consumer-focus

Note:UHS = Ultra High Speed (optical fibre networks); ADSL/ADLS2+/VDSL/VDSL2 are considered as VHS (Very High Speed) networks

Digital cameras (Owned by 60% of

households end ’06)

Mass-market multimedia devices are changing our personal lifestyle


High-definition images exchange

UHS broadband as engine for local social and economic development

Citizen-focus

Tele-assistance, Tele-monitoring

Interactive remote learning

Tele-working Home and premises video surveillance

Large file-sharing

Remote back-up, storage

Network-hosted applications

Business-focus

Note:UHS = Ultra High Speed (optical fibre networks); ADSL/ADLS2+/VDSL/VDSL2 are considered as VHS (Very High Speed) networks

The service-oriented economy and information society


Business Services Public ServicesResidential Services

Ultra High-speed Internet

Multi-stream IPTV

Interactive TV

VoIP

Multi-player gaming

Tele-assistance

Home surveillance

Security & Alarm Services

Data VPN

IP Telephony

Collaboration tools

Mobility / Telecommuting

Campus/building surveillance

“Hospitality” services

Online learning

Utility metering

Web services

Public safety

Emergency

Healthcare

Home Healthcare

Information

Education

High crime area CCTV

Public transportation (rail, road)

Secure municipal network

One-stop administration portal

Innovative services with ‘no-limit’ UHS broadband open networks


Open Access NetworksA Business Model that Works2


Design and build the network Manages site & civil engineering work Owns the fibre

Infrastructureowner

Infrastructureowner

NetworkoperatorNetworkoperator

End userEnd user

Rights of way

Rights to operate the network

Rights to offer services on

Network Operator portal

Owns the network (edge/core/access) equipments up to the customer premises

Operates the network Manages the delivery of the services on behalf

of the retail service providers Provides connectivity to end-users & retail

service providers Provides end-user portals for service

subscription (self-registration & auto-provisioning)

Interconnects the network to the Internet backbone and to other telco networks

Owns the service and the application servers

Operates the service

Provides end-user support for delivered service

Provides customer support for service delivery, connectivity and network issues

Provides customer support for fibre

Retail ServiceProvider

Retail ServiceProvider

Right to Choose!

Open Network structure, roles and responsibilities


Passive Infrastructure Provider

Active Network Provider

Retail Service Provider

Integrated or separated? Passive Infrastructure

Provider

Active Network Provider

Retail Service Provider

The Layered Model – Do what you do best!

Retail Services(residential, public & business)


Active Network(network equipments,

business & operation support)



Passive Infrastructure(trenches, ducts, fibre)


End-userEnd-user


Open networks are:

1. Technology-agnostic and open to all end users.

2. Non-exclusive, enabling multiple retail service providers to offer competitive services to end users.

3. Open for all access technologies, all vendors, all network operators and all service providers.

4. Future-ready, because a fibre infrastructure is a long-term, low-risk investment and because the active network is highly flexible and easily upgraded.

5. Financially sustaining, because they are paid for by subscribers, not tax payers.









End-userEnd-user

Open Networks – Just how Open is Open?


Open Networks – End to End Architecture

Optical transport

Integrated network, service and subscriber management

Optical core

AccessNodes

forxDSL,PON,

EthernetWiMAX

Broadband Service

Aggregator

BroadbandService Router

Scalable and distributed subscriber, service and application policy enforcement

Centralized policymanagement

IPTVProviders

High SpeedInternet

providers

IP/MPLS

IPcommunication

providers

Fiber

RG residential gateway

Digitalhome

Otherservice

providers

Residential

Business

Public


A look to SwedenSwedish City Networks3


Sweden, among leading FTTH countries

FTTH subscribers – end ‘05

CITYNETS

• 5th FTTx broadband country worldwide

98% households BB enabled

155 City Networks offering FTTH, mainly on open access infrastructure

Over 800,000 active FTTH users, more than 50% via city nets

Rated as country with the best value for bandwidth in OECD

The Swedish broadband market


- 155 City Network Operators covering 60% of municipalities

- 18 Regional Networks, some connected to Finland and Norway

- Total investment 1,9 Billion EUR

- Funding from Swedish government 0,5 Billion EUR

- Funding from EU 200 Million EUR

- Yearly investment 150 Million EUR

- 3 500 000 km fibre deployed,

- 95% offers dark fibre

- 1,3 million homes passed

- 550 000 active customers

- 74% operating according to the OAN

- From 55 SP´s in 2002 – 400 in 2007

Sources: SSNF, 2008

The Swedish CityNet Market


Swedish Urban Network Association

Bredband &Samhälle

Lobbying (EU, Sweden)

Education & Training

Recommendations

Yearly conferences

Common set top box for Open IP TV

Own magazine

Certification of products and

solutions (SKA certificate)

Visit http://www.ssnf.org/


Things we’ve doneand lessons learned4


A few lessons learned

There is no Crystal Ball

Build for Change

Maximum Flexibility

Educate the End-Users

Confusing Content Freedom?

Community Involvement

Local Content Generation

Small and Large share common problems

The network and operational challenges of a small buildingblock in Norway and of AT&T in USA are remarkably similar…

Hence one common design blueprint for everyone to benefit

Municipal Involvement

Vital for rural area development

Working together is twice the fun and quadruple the profit…


P2P FibreBPONGPON

80+ FTTx (VDSL, PON, P2P)

20+ nation-wide operators, 60+ Municipalities/Utilities

25+ as end-to-end IP network vendor

FTTH integrator (Nordics, France, Spain, Kuwait, Switzerland)

Some Further Examples


www.alcatel-lucent.comwww.alcatel-lucent.com


Retail ServiceProviders


NetworkOperatorNetworkOperator

InfrastructureOwner

InfrastructureOwner

End-userEnd-user

Muni/UtilityMuni/Utility

IndependentOperator

IndependentOperator

Any ServiceProvider

Any ServiceProvider

End-userEnd-user

NetworkOperatorNetworkOperator

InfrastructureOwner

InfrastructureOwner

Service feesService fees

Network feesNetwork fees

Infrastructure feesInfrastructure fees

(Accommodationor other utility)

(Accommodationor other utility)

Connection feesConnection fees

$

$

$

$$



InfrastructureOwner

InfrastructureOwner

NetworkOperatorNetworkOperator End-userEnd-userServicesDark Fibre IP-bitstream

access

Rights of way Rights to operate the network

Rights to offer services on

Network Operator portal

Appoints

Wholesale Ethernet

IP-bitstream access offer



Value chain

Model Revenue streams

Business Model Value Chains


Distinct competitive advantage to attract citizens and businesses

Introduce new on-line capabilities to better serve their citizens

Enhance their public service offerings to all

Boost socio-economic development, even in underserved or remote areas

Pay-by-itself public infrastructure: sustained by subscribers, not taxpayers

Provide high-quality broadband at affordable prices

Interconnect their offices to save cost

Bridge the digital divide which has recently shifted from Internet access to ultra high-speed Internet access

Key Drivers for Municipalities


Diversification & new revenue streams

Telecom as part of a bundle offer (4th utility)

Cost synergies at infrastructure level

Operational cost savings and green initiatives

smart metering capabilities new building management services

(remote monitoring, access control, energy management)

Anticipate future legislative requirements in energy savings

Key Drivers for Utilities


www.alcatel-lucent.comwww.alcatel-lucent.com

Gunnar Alcatel Lucent Open Networks

Technology

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