Transcript Presentation Title

Monetizing bandwidth: The connection as a
strategic asset
Market Trends
The Shift in Voice the Past 10 Years
U.S. Phone Lines: 1999 to 2009
65 M
163 M
1999
VoIP
POTS
Cellular
Cable VoIP
21 10
M M
112 M
270 M
2009
WASHINGTON (MarketWatch) -- Verizon Communications Inc. on Monday
reported a 30% decline in third-quarter profit as consumers and businesses cut
spending on wireline-phone service. (Oct. 26, 2009)
Competitive Shifts: Service and Retention
1999
2009
POTS
Voice
POTS
Voice
DSL HSIA
DSL HSIA
IOC
IOC
IPTV
Cable TV
Cable TV
Cellular
Voice
Cellular
Voice
Text
Cable HSIA
Cable HSIA
Voice
Internet
Copper ROI for POTS
Time
Dollars Per Line
2009
• Dropped Service
• Lower rates
• Less Use
ROI
OAM Costs
Rate of cost and revenue decline accelerates
• Rehab
• Repair
• Labor
• Truck roll
• Loop power
• Management
• Equipment
Traditional Services are Changing
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Home phone service decline
trending 28% per year nationally
TVs replaced (HD, 3D) but numbers
of channels and content remain the
same
Global Internet traffic growth 44%
CAGR – driven by video
Subscriber network must reflect where revenue sources
exist based on consumer needs.
The Money Trail:
Government investments (next 10 years)
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Broadband Infrastructure
(stimulus)
– Rural access
– Last mile FTTx
– Mid Mile FTTx
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USF
– From POTS to broadband
– Wired or wireline
– E-Rate (education technology
funding)
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Medical and Telehealth
– ARRA/Meaningful Use
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Utility – smart grid
– Green initiatives & smart grid
funds
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Security – Homeland Security
Community benefit
$ Billions will be disbursed by the
Government…
Creating new business opportunities
For technology companies
Broadband Ethernet: game changer….lifestyle maker
 High capacity fiber network
 The Cloud
 Ubiquitous Ethernet/IP connectivity
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Residents
Businesses
Communities
Anchor institutions
Business
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Data Centers
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SAS
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Information
Utilities
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Smart Grid
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Smart Home
Work anywhere – Communicate everywhere
Real-time communications next door or next continent
A world of Connected Services
New Service Drivers
New Generation of Video Services
• Content revenues bypass
service providers
• Ad revenues bypass
service providers
• Cuts into both cable and
Telco TV business
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How to compete with it?
How to capitalize on it?
Bandwidth the enabler
The connection the
strategic asset
• You own it – place a value
on it
Supporting cloud based video-centric services
 By January 2010, 15 hours of video
content is uploaded per minute on You
Tube, equal to Hollywood releasing
86,000 movies to theaters per week.
Broadband Properties, April 2010
 73% of all bits moving on the Internet
today are video and this trend will
continue…
CNET report, June 2010
 Global Internet traffic growth 44% –
driven by video
Wall Street Journal, September 2010
Over the Top Usage
From Linear to OTT Video
Impacts already being felt
How are service models affected?
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POTS is no longer the ‘core’ revenue business
Revenues shift to Internet content
Advertising shifts to Internet content
Consumer value proposition changes – less willingness to pay
for linear television services
• Ability to ‘monetize’ content as a service declines
Conclusion:
1.
2.
3.
The only value asset is the subscriber service network
Consumers will place more value on bandwidth than the service
bundle
Therefore, bandwidth is the primary source of revenue growth
Monetizing Technology Investment
 An ultra-fast connection to the home can be
monetized
 Bandwidth itself becomes a strategic asset
 To subscribers as well as content providers,
bandwidth has greater value and provider
loyalty than does the service bundle itself.
Video Impacts to FTTH Bandwidth
Moving towards symmetrical IP traffic
Downstream
Upstream
Market Study: Sweden
Source: Ventura team LLP
Broadband Properties, January 2010
1 Gb
100 Mb
Actual
1 0 Mb
Trend
1 Mb
128 Kb
1985
1990
1995
2000
2005
2010
2015
FTTx
Service Proofing Subscriber Access
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Ability to decide based on service
needs and not costs of technology
Ability to make an investment choice
rather than a budget limitation
FTTx costs continue to improve
Putting FTTH Into Perspective
The large expensive of
building fiber networks has
little to do with the
technology:
 In dense cities, the bill of
materials is as low as 20
percent. The cost of labor
per meter exceeds by far the
cost of a fiber cable or a
coaxial cable per meter.
Deploying fiber or coax or
copper wires would not
make much of a difference.
April 1, 2010
Herman Wagter
ars technica
The utility infrastructure law
from civil engineers:

"The closer you get to the
home, the more investment is
needed, averaged per home
connected." This law applies
to all parts of the physical
network, like water pipes,
sewage pipes, and electricity
cables. What are the
applicable numbers for
telecom cables?
Bandwidth Beyond Traditional TV
Service Proofing, not future proofing
 3D TV
– PC and TV applications
– 30+ Mb. bandwidth per stream
 IP Home Security
– HD cameras
– Real time streaming
 Peer-to-Peer Gaming
– High bandwidth “fast twitch” HD graphics
 Home Medical/Telemedicine
– Real-time imaging, monitoring, consultation
The home is where the action is
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New Internet connected
appliances
Converged device
functionality
Converged services and
applications
Driven by the Internet
Bandwidth & Connection?
Stop at the Demarc and
give service to others?
Beyond Residential Triple Play
Video takes center stage in commerce today
Digital Signage
Education, advertising, bulletin board
Medical Imaging
X-Rays, Diagnostics, treatment, R&D
IP Video Security
Business, traffic & safety, government, education
Video Networking
Video conferencing, distance learning,
Telemedicine
Broadband: Bringing the Cloud to local business
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Virtualization
Hosted services
Data warehousing
Private Line Ethernet
Virtual Ethernet LAN
Point-of-Sale
Multimedia services
Customer Challenge & Allied Solution: North Georgia fiber project
(NGN)
Project
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$44 M Terabit WDM ring from Atlanta to NC border
$32 M BTOP stimulus grant
Based on North Georgia creating economic
development through technology
Scope
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Gigabit FTTH for residential triple play
Up to 420,000 subscribers
Blue Ridge & Habersham existing Allied Telesis EMC
customers
Expand fiber Ethernet service served by ring to
governments, education, utilities, medical and
business/commerce.
Allied Telesis – NGN partnerships
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Workshops and joint marketing to other EMCs,
municipalities, education, medical and business
institutions to implement Ethernet infrastructure for
services
Create value to NGN by utilization of the backbone
network
Create new regional economic model
Rural Broadband Case Studies: Economic Impacts
Vernon Telephone
 Rural ILEC in Wisconsin
 First commercial IPTV deployment in U.S.
 Asked to provide IPTV services to Yakota
USAFB in Japan to American servicemen
 Asked to provide NOC center
management to Yakota AFB
 Allied Telesis coordinated, designed and
engineered IP deliver network to Japan:
– Fiber transport: Global Crossings & NTT
– Trained & implemented NOC
– Provides on site managed services organization
 Created new jobs and increased
revenues in VTC market
Broadband Case Studies: Economic Impacts
San Jose State University
 California University
 Built new 3500 room Campus Village
(student dorms)
 Allied Telesis designed and installed fiberto-the dorm network
 SJSU offers students IPTV, Internet
access & phone services for fees to
students
 Allied Telesis trained and maintained on
site support for SJSU network
 Allied Telesis support co-op advertising to
incoming students to market services
Examples of technology solutions
Lincor MEDIVista point- of- care computing
Patient Concierge Features
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IPTV service
HSIA service
Phone service
On demand video
In-stay information
 Administrative benefits
– Revenue generation
– Replace old TV’s and phones
– Improves patient satisfaction and well-being
Lincor MEDIVista point- of- care computing
 Clinician Features
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RFID/secure access to patient records
Access test and treatment results
Bar code scan prescription orders
Vital signs data
Language translation at bedside
 Clinician Benefits
– Records access from bedside terminal
– Increase workflow management
– Superior ROI
MEDIVista Networking Solution
IPTV
AT-x600
Management
Terminal
MEDIVista
VoD Server
AT-8100/S
VoIP
PACS
RIS
Lab
Pharmacy
Administration
Billing
Citrix
HIS
SwitchBlade-x908
SwitchBlade x3112
HSIA
IP Video Security: Axis & Milestone
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Traffic (municipal/regional)
Public safety
Homeland security
Schools/education
Retail/business
Residential
Allied Telesis switches
Axis Cameras
Milestone management software
Includes Web-based solutions
1-2-1 View Digital Signage
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Education
Municipal government
Libraries
Retail
Transportation
IP digital indoor & outdoor signage
Powered by Allied Telesis IP
networking equipment
 Broadband service connection
 Integrated web cam analytics
Indoor & Outdoor Emergency Systems:VoIP and analog
phones
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Education
Retail
Public transit
City parks and spaces
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VoIP emergency phone
AED option
IP video camera
Networked with Allied Telesis
switches
Echelon: IP Smart Metering Real-Time Energy Management
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Ethernet connected to iMG 726 BD
Utility company and home network VLAN partitioning
Mange home energy use using Home Area Network (HAN)
Allows utility real time management and meter reading
over broadband connection
RJ45
Ethernet
Cable
Utility monitoring & control - VLAN
RJ45
Ethernet
Cable
Home Network - VLAN
IP Technology Solution:Tele-health
 Home health monitor
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Blood pressure
Weight
Glucose meter
Oxymeter
 Kiosk system for nursing
homes or assisted living
 Self-test and monitoring
 Data transmitted to nurse or
doctor
 Private/personal
 Saves trips to doctor/hospital
 Lowers costs and improves
patient convenience
Home Version & service as well
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